and perhaps that is part of the explanation, but we don't agree with what we think to be unfounded fears. Mr. KASTENMEIER. Thank you. We thank you for your contribution to this morning's long hearing, and we regret we have been interrupted a number of times, but, nonetheless, we appreciate the fact that you were both here and testified as you have. Mr. NOLAN. Thank you. Mr. DAM. Thank you very much, Mr. Chairman. Mr. KASTENMEIER. Now the Chair would like to call the second panel: first of all, Mr. David Ladd, who is counsel to the law firm of Wiley, Rein, and Fielding, and was an honored Register of Copyrights as well as one time, and he was the Commissioner of Patents way back when, 20 years ago. Mr. Ladd is appearing in behalf of PACT, which is the Coalition to Preserve the American Copyright Tradition. With Mr. Ladd, we would like to also greet and have him come forward as part of the panel Mr. John Mack Carter, who has been the editor in chief of Good Housekeeping magazine since 1975 and appears in behalf of the Magazine Publishers Association. First we will call on you, Mr. Ladd. TESTIMONY OF DAVID LADD, WILEY, REIN & FIELDING, WASHINGTON, DC, ON BEHALF OF THE COALITION TO PRESERVE THE AMERICAN COPYRIGHT TRADITION; AND JOHN MACK CARTER, EDITOR IN CHIEF, GOOD HOUSEKEEPING, ON BEHALF OF THE MAGAZINE PUBLISHERS ASSOCIATION Mr. LADD. Thank you very much, Mr. Chairman and other members of the committee. It is a pleasure to be before the committee again. I appear today, as you have said, Mr. Chairman, for CPACT, the Coalition to Preserve the American Copyright Tradition. The membership of the Coalition appears in the prepared statement. Let me at this point ask, as I am sure a preferred alternative to my reading a 45-page statement, that it be included in the record, and I will try to summarize the testimony in 5 minutes. Mr. KASTENMEIER. Without objection, we will indeed receive that statement and make it part of the record and commend you for the effort that has produced such a statement. Mr. LADD. Thank you, Mr. Chairman. The membership of the Coalition includes some of our largest book and magazine publishing companies and also major domestic media and programming enterprises. The Coalition is, as you know, opposed to the adherence to Berne. It takes that position because, in its view, the claimed advantages for adherence are outweighed by the disadvantages. I would like to step back and take a look at the overall advantage which the United States, according to the proponents of adherence, would earn by adherence to the Berne Convention. An assessment of the American interest in the development and enforcement of intellectual property rights internationally has recently been undertaken by the GAO, and the GAO has filed a comprehensive report. In that report the GAO reached the conclusion-and I am now quoting-"that attempts within WIPO to significantly strengthen general international standards in recent years have been unsuccessful due to developing country opposition." Now that language in the report was not casual. As a matter of fact, the World Intellectual Property Organization, in correspondence reproduced in the report, tried to persuade the General Accounting Office to change the language "limited progress" in recent years to "substantial progress," and the General Accounting Office declined to do that. But in any event, as a result of the study, the General Accounting Office also concluded that-I am now quoting again-"broadly effective gains in protecting intellectual property rights through WIPO do not appear to be attainable at this time.' So we have a conclusion by an arm of Congress to the effect that progress has not been significant and that the prospect of progress in the developing and extending of standards through WIPO is dim. It is also explained in the report that this is due to the polarization of the organization. The point has also been made that executives in our own Government have concluded that many Berne countries themselves do not have adequate protection for intellectual property rights; therefore, membership in Berne does not necessarily equate with high protection in practice; and, finally, that on the basis of these deficiencies in WIPO and deficiencies in the multilateral conventions, the UCC as well as Berne, the United States has undertaken the initiative to try to develop an intellectual property code for GATT. So, overall, on the advantage side, there are the conclusions of the General Accounting Office about the absence of gains which are in prospect for adherence to Berne. But there are disadvantages of course, and one of them, in our view, is that adherence to Berne, one way or the other, will ultimately work the moral right into our law. It will, we think, alter the traditional balance between authors and publishers, it will upset decades of settled practices, contract conventions, expectations, and risk allocations, and it will impose upon publishers a new and independent ground of liability, with the prospect of large judgments for reputational torts. It would clearly hobble and even make impossible editorial practices rooted in practical business needs. Now in this opening statement there is not time, and I wouldn't impose upon your time, to try to repeat in detail the examples of this kind which are given in the prepared statement, but I will in a sort of headline form tell you what some of these effects upon publishing practices would be. The introduction of the moral right would raise serious questions of author identification in collaborative and composite works, such as magazines, textbooks, and broadcasts. It would permit the second-guessing of split second editorial decisions which are unavoidable in time sensitive publications or productions, especially like the news magazines which are represented in the Coalition, and this is particularly troublesome in the case of news reporting where our domestic American publications excel. It would cloud the status of adaptations and revisions and the latitude of publishing houses and editors to make those adaptations and revisions. It would intrude on content judgments if creators were permitted to object to the context in which their work is placed as, for example, objecting to the use of a photograph or article in juxtaposition with others with which they do not agree. It would interfere with the editing of films for television, an issue that has already arisen in some litigation. It seems to us that the moral right under the Berne Convention, however and wherever defined, whether it is found in State statutory and decisional law or somewhere in section 43(a), will not be merely prospective in operation. Now I realize that your bill, Mr. Chairman, does try to bar retrospective operation, but the Berne Convention requires that it must-and I am now quoting-"apply to all works which, at the moment of its coming into force, have not yet fallen into the public domain in the country of origin through expiry of the term of protection." Such an unforeseen statutorily imposed obligation of the moral right, from any source, upon existing contracts for those works, would work all of the unfairness of ex post facto legislation. We do believe that the adherence to Berne will inevitably put the moral right fully into our law. Under the minimalist approach-and by that I mean the reliance upon the conclusion that the law now, in various sources, provides the equivalent of the moral right-adherence to Berne with no Federal statutory provision on moral rights must imply that there is the moral right or its equivalent somewhere in American law, that it lies, in large part, in State statutory and decisional law and that since courts have, by interpretation of common law principles or of State statutes, created the right, they are free and, indeed, encouraged to expand it. Under the alternate approach of your bill, Mr. Chairman, which specifically defines the right, there are serious questions on whether the exemptions of work-for-hire and the waivability provisions square with the Convention. Whether they do or do not square with the Convention, they lay the foundation for claims that they do not and demands for further legislation to do so. For example, there was a rather large article in a recent issue of Variety, September 4, about the controversy over the Berne Convention, and in that article one of the officials of the Writers Guild is quoted as characterizing the Berne implementation legislation as "the first step in some long-range change, and of course in testimony before the Senate some of the proponents of adherence to Berne have made clear that they regard this as the first step to be followed on later with efforts to define Federally the moral right. If I may refer to a comment that Mr. Dam made in his testimony, we quite agree that moral rights deserve independent and separate consideration, but our contention is that that should be done now, before we have accepted the obligations of the Berne Convention, whatever they are, and our choices are constrained by membership in Berne. I think that the British experience bears upon this, because the British are now considering the implementation of the moral right by statute. Up until now, because they had been members of the 1948 text, not the 1971 text, they have been of the opinion that the provisions of their common law and other nonstrict moral rights statutes satisfy their obligation to Berne. But they are now begin ning to consider adhering to the 1971 text, which is the text to which we would have to adhere, and they have concluded that in order to fulfill their obligations under the 1971 text, they must now go to a statutory form. But the point that I am getting to here is, that bill, which has been privately circulated by the Government for comment, is several pages long and in very elaborate detail provides exactly how the moral right will apply, and it is our view that that kind of careful, thorough examination and attention to detail should take place here now. The U.K. is now acting under the constraint of its Berne membership, so its choice is: Will we continue to rely upon sources in common law and other nonstrict moral rights law, or must we have the kind of elaborate law that is now being considered? The United States is not constrained yet by that choice. Our point is that these issues should be considered now. In this connection, we are very grateful that you did include these provisions in the bill because it indeed has given rise to this kind of discussion which we think is necessary for the Congress. Finally, we do not believe that adherence to Berne is necessary to exert or demonstrate U.S. leadership to copyright. The statement that the members of the Coalition who are opposed to Berne adherence are not concerned about piracy is pure balderdash. As a matter of fact, a number of the members of our Coalition have been involved with the Government in bilateral negotiations with foreign countries in an effort to improve their law. That is not the reason at all. As a matter of fact, we say in the statement we applaud the efforts of the Congress and of the Government generally to improve intellectual property standards internationally. But, in any event, the United States has exercised leadership, in our view, by its bilateral negotiations, where, by the way, progress has not been achieved by appeal to high principle, whether in Berne or anywhere else, it has been achieved by the Government's using the tools that Congress has given the Government in connection with the GSP legislation, the Caribbean Basin Initiative, and so forth, to limit access to American markets if our trading partners do not adequately protect our intellectual property. That has to be the reason for the gain. But by those activities and in the introduction of intellectual property into the GATT agenda and, by the way, by its own domestic law, the United States has demonstrated adequate leadership-as a matter of fact, outstanding leadership, and membership in Berne is not essential for that purpose. I will be glad to take your questions, Mr. Chairman. [The statement of Mr. Ladd follows:] Statement of David Ladd on behalf of The Coalition To Preserve the American Copyright Tradition Conde Nast Publications Inc. Forbes Inc. McGraw-Hill, Inc. Omni Publications International, Ltd. The Reader's Digest Association, Inc. Triangle Publications, Inc. Before The Subcommittee on Courts, Civil Liberties, and the Administration of Justice Committee on the Judiciary U.S. House of Representatives September 16, 1987 |