Mr. MOORHEAD. Professor Reichman. STATEMENT OF J.H. REICHMAN, PROFESSOR OF LAW, Mr. REICHMAN. Thank you, Mr. Chairman. Thank you for- Mr. REICHMAN. Reichman. Thank you. Thank you for the opportunity to appear again before your committee. Let me begin by emphasizing that with respect to duration, current U.S. copyright law complies with all the international minimum standards, both those in the Berne Convention and those that issued from the all important TRIPS Agreement, which has not been mentioned here today. So if we move to a term of life-plus70 years, that would exceed the mandated international standard. Now, I want to talk technically for a moment about the works made for hire problem because I agree with Bill Patry; it's much more complicated than appeared in this morning's testimony. There is no express minimum standard for works made for hire under the Berne Convention. But let me stress here, because I did not make this point strongly enough in my written statement, that article 12 of the TRIPS Agreement does establish a basic minimum standard of 50 years for copyrightable works that are treated as corporate creations in the domestic laws of member States. Article 12, would include both computer programs and original compilations. Now, then, the TRIPS Agreement goes on to establish a minimum 50-year term for producers of sound recordings, but only 20 years for television broadcasts. So, except for broadcasts, the trend clearly favors the minimum term of 50 years for most corporate productions, whether they are treated under copyright laws, as we do, or under neighboring rights law, related rights laws, that the Europeans use. So the United States already exceeds this minimum, the new, emerging standard of 50 years, by giving 75 years of protection to all works made for hire. Now what has the European directive done? First, it adopts a basic term of life-plus-70 years which Germany and France, to a lesser extent, had reached in a somewhat haphazard fashion. It does this to quickly integrate their national markets at lower transaction cost and with fewer trade restraints than would be the case if they were to respect acquired rights under a life-plus-70 formula in those countries while otherwise implementing a life-plus50 term everywhere else. Then, in effect, the European Union meets the minimum term of 50 years under TRIPS by giving it to all the related rights holders, including broadcast organizations, which it didn't need to do, film producers, sound recording producers, as well as the corporate creators of computer programs. More interesting, the directive has also established an ambiguous, catch-all category for works attributed to legal persons under the domestic copyright laws, and these works will obtain 70 years of protection. Now I really do not know how this provision will be applied. I hope the drafters had in mind works made for hire originating in the Netherlands, which is one. of the few European countries that has a true works-made-for-hire principle. If they did, then those works from the Netherlands would get 70 years, and under the MFN principle of TRIPS, that would help set a trend to harmonize toward our 75-year term, but I can't guarantee that is what will happen. Now, if we move unilaterally to 95 years for works made for hire, magnitude of the existing divergences will obviously increase. Even if we stay with 75 years for works made for hire, disharmony will prevail at the margins. Why? Well, on the one hand, the United States will give 75 years of protection to many productions that obtain only 50 in the European Union. On the other hand, the European Union may continue to give some works by recognizable, identifiable employee authors a life-plus-70 term over there, while we might treat those works as entitled to only 75 years of protection over here. Of course, this outcome depends on how courts actually apply this new 70-year term for legal persons. All this leads us to the rule of the shorter term, which is allowed by the Berne Convention and mandated by the EC directive. European countries must apply the rule of shorter term. Now, to the extent that some employee works obtain only 75 years in the United States, they might be cut back over there under the rule of the shorter term to 75 or 50 years, as the case may be. As I said, I hope these cases will diminish. I hope that more and more employee works originating on both sides will simply end up with 70 years, of protection over there, but I can't guarantee it. I can guarantee that U.S. corporate producers of computer programs, sound recordings, films, and television broadcasts should expect to be cut back to 50 years under the EC directive as a matter of course. The proper response to this is for the United States to adopt a version of the rule of the shorter term. This would enable the United States to apply reciprocity in these and other cases where U.S. law exceeded the minimum standard, but the law of the foreign creator's state gave less than we did. My written statement contains a word of caution in this regard. Some time in the future we may hear that the shorter-term rule, under the EC directive, conflicts with the MFN principle of the TRIPS Agreement. There are now at least two commentators who take this position. I do not necessarily share this view but it is open to some doubt in the long run. In the meanwhile, as long as Europe has such a rule and uses it, we should have one and use it too. All this suggests that we should encourage the Europeans to amplify their new-found interest in the copyrightable works of legal entities. We should press them, to give all legal persons at least 70 years, if not 75 years of protection, whether these productions happen to fall under copyrights or under their neighboring rights laws. Having said this, however I simply do not see how a 95-year term for U.S. corporate creations furthers the cause of harmonization, and I do agree with those critics who find that 95 years is excessive on the merits. A 95-year incentive is not needed to stimulate investment in the cultural industries, and its social costs for research and educational users alone would greatly exceed any benefits to society. In contrast, I do agree in principle with Bill Patry. I believe that a much stronger case can be made for prolonging the basic term PREPARED STATEMENT OF J.H. REICHMAN, PROFESSOR OF LAW, VANDERBILT UNIVERSITY Introduction The following remarks attempt to evaluate the pending proposal to extend the term of United States Copyright protection' in the light of this writer's larger concerns about the future evolution of intellectual property rights in an integrated world market.' My recent studies show that the conditions governing creativity and innovation at the end of the twentieth century differ significantly from those that gave rise to the Paris and Berne Conventions in the nineteenth century.' These changed conditions require legislative attention to the limits of the classical patent and copyright paradigms and to the need for new and more limited forms of protection dealing with See H.R. 989, 104th Congress, 1st session, Feb. 16, 1995 [hereinafter H.R. 989]. 2 See generally J.H. Reichman, Universal Minimum Standards of Intellectual Property Protection Under the TRIPS Component of the WTO Agreement, 29 INTERNATIONAL LAWYER 345 (1995) (hereinafter, Universal Minimum Standards); see also J.H. Reichman, Beyond the Historical Lines of Demarcation: Competition Law, Intellectual Property Rights, and International Trade After the GATT's Uruguay Round, 20 BROOKLYN J. INT'L L. 75 (1993) (hereinafter, Competition Law. Intellectual Property and Trade]. See Paris Convention for the Protection of Industrial Property, Mar. 20, 1883, as last revised at Stockholm, July 14, 1967, 21 U.S.T. 1583, 828 U.N.T.S. 305 [hereinafter Paris Convention]; Berne Convention for the Protection of Literary and Artistic Works, Sept. 9, 1886, as last revised at Paris, July 24, international minimum standards, then our own cultural and technical industries will become less competitive over time vis-a-vis firms in third countries who just stick to those lower minimum standards of the Berne Convention and the TRIPS Agreement. Thank you very much, and I'm happy to take your questions. [The prepared statement of Mr. Reichman follows:] PREPARED STATEMENT OF J.H. REICHMAN, PROFESSOR OF LAW, VANDERBILT UNIVERSITY Introduction The following remarks attempt to evaluate the pending proposal to extend the term of United States Copyright protection' in the light of this writer's larger concerns about the future evolution of intellectual property rights in an integrated world market. My recent studies show that the conditions governing creativity and innovation at the end of the twentieth century differ significantly from those that gave rise to the Paris and Berne Conventions in the nineteenth century.' These changed conditions require legislative attention to the limits of the classical patent and copyright paradigms and to the need for new and more limited forms of protection dealing with See H.R. 989, 104th Congress, 1st session, Feb. 16, 1995 [hereinafter H.R. 989]. 2 See generally J.H. Reichman, Universal Minimum Standards of Intellectual Property Protection Under the TRIPS Component of the WTO Agreement, 29 INTERNATIONAL LAWYER 345 (1995) (hereinafter, Universal Minimum Standards]; see also J.H. Reichman, Beyond the Historical Lines of Demarcation: Competition Law Intellectual Property Rights, and International Trade After the GATT's Uruguay Round, 20 BROOKLYN J. INT'L L. 75 (1993) (hereinafter, Competition Law, Intellectual Property and Trade]. 3 See Paris Convention for the Protection of Industrial Property, Mar. 20, 1883, as last revised at Stockholm, July 14, 1967, 21 U.S.T. 1583, 828 U.N.T.S. 305 [hereinafter Paris Convention]; Berne Convention for the Protection of Literary and Artistic Works, Sept. 9, 1886, as last revised at Paris, July 24, |