advantage of the longer term of protection in EU member states if they are subject to a shorter term in the United States. Because some works protected under U.S. law already receive a longer term of protection than in the EU system, the longer terms provided by this legislation will have no effect on the term of protection they receive in Europe. Other U.S. works, however, are currently provided a shorter term of protection than in Europe, so will receive a longer term if the U.S. term is extended. - - In the U.S., works whose term is measured from the life of the author where the work is created outside an employment relationship and the author is known are currently granted a term of protection of the life of the author plus fifty years. If the U.S. term is modified to life of the author plus seventy years, these authors or their assigns will enjoy a longer term of protection in the EU member states. As a result, paintings, books, sculptures, plays, architectural drawings and other such works would enjoy twenty more years of protection in EU member states if H.R. 989 is passed. On the other hand, works made for hire are protected under current U.S. law for a term of seventy-five years from their publication or 100 years from their creation, whichever expires first. Right holders in works subject to this rule, such as the producers of sound recordings and films, currently enjoy a term of protection twenty five years in excess of that provided by the EU system, which is fifty years from first publication or communication to the public. Because the maximum term of protection for producers of sound recordings and films in the EU system is fifty years, increasing the work for hire term in the U.S. to ninety five years will have no effect on the term they are granted in the EU system. As I will now explain, however, there is a means through which U.S. film producers would benefit in Europe from term extension in the United States. If H.R. 989 or similar legislation is adopted, right holders in some U.S. works made for hire will be able to exploit these works in EU member states for up to twenty years longer than they can under the current system. The contracts under which these works are created typically permit the person for whom the work is created to exercise all economic rights granted to the actual creator of the work throughout the world. In the case of films, for example, directors are considered the authors under the EU system and are given a term of protection of life plus seventy years. These rights are in addition to, and more expansive than, those rights granted directly to the producer that I just mentioned. But pursuant to the contracts under which U.S. films are made, all rights granted to the directors of the films by EU member states are exploited by the producers of U.S. films. The term of protection granted directors of U.S. films in the EU system, however, is capped by the term granted the film in the United States. Currently, then, the life plus seventy year five year term granted in the United States. If the U.S. work for hire term is extended to ninety five years, the term of life plus seventy years granted directors of U.S. films in the EU system would be capped at ninety five years rather than seventy five years. Directors of such films would therefore receive and the producers who hold their rights would therefore enjoy up to twenty years more protection in EU member states, depending on the life span of the director. - - Consequently, if the U.S. extends its copyright term in accordance with this legislation, some U.S. right holders will be able to collect revenues from the exploitation of their works in Europe for up to an additional 20 years. - - The countries of the European Union are a large and affluent market for U.S. copyrighted works. The population of the member states of the EU ever increasing in number is now nearly 370 million. Moreover, the reach of EU legislation will expand even further in the coming years. Turkey, for example, has just enacted legislation to raise its copyright term for newly-created works to life plus seventy years. It is unlikely that Turkey would have done so were it not for the need to meet the standards of EU protection of intellectual property rights as part of the obligations it took on in concluding a Customs Union agreement with the EU. The countries of east-central Europe are also moving in the direction of harmonizing their legislation with EU standards as they move toward eventual membership in the Community. Given the preponderant balance in the U.S. favor in US-EU trade in copyrighted works, an additional 20 years of copyright protection on both sides of the Atlantic would add more to the revenue flows headed from the EU to the,,U.S. than it would to the monies we would be required to pay out to Europe. While the Administration has not undertaken the complex process of quantifying the precise extent of these benefits, the Motion Picture Association estimates that term extension would result in a modest increase of revenues from international sources of. less than $1 million per year by 2000, and $3 million per year by 2010, rising more dramatically to $160-200 million by 2020. One of our two major music collecting societies estimates additional international revenues of $14 million per year if U.S. right holders are in a position to take advantage of a further 20 years protection in Europe. In view of the international benefits to U.S. rights holders as a result of copyright term extension as proposed by HR 989, the Office of the United States Trade Representative supports the Mr. GOODLATTE. Thank you, Ambassador. STATEMENT OF BRUCE A. LEHMAN, ASSISTANT SECRETARY Mr. LEHMAN. Thank you very much, Mr. Goodlatte. In the interest of efficiency and since I know that everyone has a lot of other things to do today-I will attempt to be extremely brief, particularly in view of the fact that this is not really a complicated subject. I would like to begin by apologizing for the Administration getting its testimony to the subcommittee so late. However, it seems as if we were all on the same wave length anyway. In fact, if Government works were copyrighted, the administration's opening statement might be an infringement of the chairman's opening statement. [Laughter.] So it's quite clear that he understands what the issues are, and I think that the other members of the committee do too. I think you will find unanimity among the three witnesses that the principal reason for making this change is that it will enable us to harmonize with the European Union, our largest single market for copyrighted works outside the United States. In fact, in some cases it might even be larger than the United States. The Register of Copyrights, Ms. Peters, was correct when she suggested that this legislation would have an immediate impact, a very near-term impact, on works between 1920 and 1940. If we just think a little bit about that period of time, that was a period in which America's copyright industries really came into global dominance. There is a great deal of material that will have great commercial value on an international scale. I think it is fair to say that, with the passage of this legislation, there will be considerable revenue flowing into the United States because of the capacity to continue to exploit these works. Now that does have an impact on creativity in the United States because much commercial creation-in fact, almost all commercial creation-is funded by commercial enterprises. This day and age of the information superhighway, and so on, it requires considerable financial resources to get product out to the public, particularly on the global scale. The extension of the copyright term will provide commercial copyright-based industries with the capacity to do that. In the course of considering this legislation within the administration, we considered a number of very specific cases. We had some experience with this because we restored copyright protection to some works that had fallen into the public domain as a part of a NAFTA implementing legislation. There is some evidence, that the restoration of copyright protection under the NAFTA legislation actually encouraged industry to make available to the public in new editions, and much finer editions, works which otherwise would have remained moldering in the library. So on balance, we agree that there is a great deal of merit in this legislation. I'd just like to say a word about the concern that works will not go into the public domain. Obviously, that's always a concern, but there's very little evidence that as a practical matter that will work there's very little evidence, for example, that the consumer pays a great deal less for published works, which are in the public domain, versus published works which are copyrighted. If you go to a bookstore, the prices tend to be comparable. So in our view, there is relatively little down side to this legislation and it will definitely provide additional revenue for one of America's fastest growing industries. I'd just like to make one final point. It isn't in our written testimony, but I would like to comment on the Register's concern about section 303 and the term extension works that were unpublished prior to 1978. I'd just like to remind the committee that prior to 1978 unpublished works enjoyed common law copyright protection and virtually have perpetual protection and never would have gone into the public domain. So the additional period does not strike me personally as being an extensive additional period of time. Therefore, I can say that the administration, without reservation, supports the Chairman's bill in its entirety. [The prepared statement of Mr. Lehman follows:] PREPARED STATEMENT OF BRUCE A. LEHMAN, ASSISTANT SECRETARY OF COMMERCE AND COMMISSIONER OF PATENTS AND TRADEMARKS Mr. Chairman and Members of the Subcommittee: Thank you for this opportunity to appear before the Subcommittee to testify on H.R. 989, the Copyright Term Extension Act of 1995. The bill would extend the term of copyright protection in all copyrighted works that have not fallen into the public domain by twenty years in an effort to conform U.S. copyright law with the copyright laws of the European Union Member States. Since the first Federal copyright law in 1790, the term of copyright protection has steadily increased. In 1790, copyright protection was granted for an initial term of 14 years from the date of publication plus an additional 14-year renewal term if the author was still living when the original 14-year term expired. In 1831, the length of the original copyright term was increased to 28 years (with a 14-year renewal term). Then, in 1909, the length of the renewal term was increased to 28 years (for a total |