Senator DECONCINI. Thank you, Mr. Clemente.

I will yield to the Senator from Alabama if he has any opening statement he cares to make.

OPENING STATEMENT OF HON. HOWELL HEFLIN, A U.S.

SENATOR FROM THE STATE OF ALABAMA

Senator HEFLIN. Well, Mr. Chairman, I would like to commend you for holding these hearings. Over the past several years there has been renewed interest in protecting intellectual property rights both at home and abroad.

We are here today to discuss the adherence to the Berne Convention, which has heretofore been impossible because of the many differences between our copyright law and that imposed by Berne, and an unwillingness on our part to eliminate those differences to conform to the requirements of Berne.

We appear to be at a point where many of the affected parties are willing to eliminate those differences. They have joined forces and reached a consensus on many of the issues that traditionally have been a stumbling block in adhering to Berne. There remains, however, one major area of disagreement, moral rights. Both sides of the issue present persuasive arguments. In weighing these competing arguments, I think it is important to keep in mind the dual purpose of copyright legislation: to promote public access to creative works and to protect the rights of the creators of these works. I believe these goals are of equal importance.

Any change in the current system should be approached with great caution. Hence, in listening to the testimony today I will be looking for answers to the following questions:

Does membership in the Uniform Copyright Convention adequately protect U.S. copyright interests in foreign nations?

If not, would adherence to the Berne Convention provide the necessary protection?

If so, what are the costs of joining Berne, and do they outweigh. the benefits?

Finally, is the inclusion of a moral rights provision one of the necessary costs?

I look forward to the testimony of our distinguished and accomplished witnesses today. Thank you, Mr. Chairman.

Senator DECONCINI. Thank you, Senator Heflin.

Mr. Brown.

STATEMENT OF DAVID BROWN ON BEHALF OF THE MOTION PICTURE ASSOCIATION OF AMERICA, INC.

Mr. BROWN. Mr. Chairman, distinguished Senators, my name is David Brown. I am very pleased and grateful to be here as part of this Coalition for Adherence to Berne.

I am a motion picture producer, one of those who, according to the morning news, is a corporate defacer and might paint a moustache on the Mona Lisa. [Laughter.]

Among my credits-

Senator DECONCINI. I'm sorry, Mr. Brown. A corporate what?

Mr. BROWN. I am referring, with all respect, Senator, to a remark on the morning news programs describing some of us in my particular profession as corporate defacers.

My motion picture credits, along with those of my partner, Richard D. Zanuck, include producing "The Sting," "Jaws," "Cocoon," "The Verdict," "MacArthur," Steven Spielberg's "Sugarland Express," "The Eiger Sanction," and "Target," and many other films less well known and less successful. My partner and I are producers and formerly heads of major motion picture companies, and have been involved in every aspect of filmmaking. We are creative partners in the filmmaking process and not merely financiers. Nobody who knows us would suggest that we are enemies of the creative process or the creative community.

I appear today on behalf of my own company, as well as the Motion Picture Association of America and the Alliance of Motion Picture and Television Producers. Here are the points that we feel are crucial, and wish to emphasize, with respect to the need for adherence to the Berne Convention.

First and foremost, adherence will be an important means of combating the ever-increasing piracy of motion pictures overseas. Piracy, the unauthorized and uncompensated duplication of American films and television shows, has so escalated in recent years that it has become an ever-present danger not only to the artistic community and the private sector but also to the national interest in terms of our balance of payments.

Piracy is so rampant that in some countries it is difficult to find a legitimate copy of a prerecorded video cassette of an American film. I have here three illegal copies of my own films-"Cocoon," "Jaws," and "The Sting." The arrogance of these pirates is that they even have warnings here prohibiting anyone from copying this. [Laughter.]

We need every weapon we can muster in the struggle against film and video piracy around the world. Berne would be an important weapon in our arsenal, and there is really no time to lose.

The second point is that our adherence is in the best interests of both the American public and the U.S. motion picture and TV industry. In an era of enormous trade deficits, I need hardly mention that the U.S. film industry and television industry stands out as an invaluable trade asset. Our industry contributes $1,200,000,000 annually in surplus balance of trade, so there is in our minds a clear and substantial public interest in preserving that trade asset.

By the way, American films are not gold mines by any means. The Motion Picture Association has just released statistics that the cost of producing a feature film in this country is now over $20 million, up 113 percent since 1980. You can see the creative community has not suffered. We do not welcome those increases. We also spend an average of about $9 million for advertising and distributing each film. We need the foreign market to sustain a prosperous American film industry. Historically, foreign revenues have accounted for from one-third to one-half of world revenues and one crucially needed to support these enormous production costs.

Third, congressional action to secure U.S. adherence, it seems to us, would be entirely consistent with recent trade initiatives by the

Federal Government to help protect U.S. intellectual property abroad.

And, fourth, U.S. adherence to Berne does not in our view require adoption of a Federal moral rights law. It has been asserted by some that U.S. adherence to Berne is dependent upon the adoption by Congress of Federal moral rights legislation. That assertion, we submit respectfully, is simply not true.

The Berne Convention does not require that each member nation to have a specific moral rights law. The convention leaves it up to each signatory nation to decide how to comply with the convention's general, nonspecific terms. Some countries have specific moral rights laws; others do not.

That is not just our opinion; it is the opinion of an overwhelming number of those who have looked at this question, and I won't burden the subcommittee with all the names because you know them all. They are all experts, and the record will show who they

are.

The creative motion picture community is not helpless in any way. As we speak, the writers of Hollywood are in the process of either striking or not striking on a matter which would involve creative rights. They have high-priced lawyers, experienced labor negotiators. They are not supine.

I would like to point out something else, with all respect. Motion pictures may be art, and many of them are works of art that have enduring value, but a motion picture is not as a rule the work of one or two persons. It is not the same as a Monet. It is not the same as a symphony by Strauss.

It represents the fusion of many talents: the writer of the story on which the movie is based, the performance of the actors-Imagine "Mr. Smith Comes to Washington" without Jimmy Stewart. Isn't he part of the total package? Also germane to the artistic whole of a film and the music, the special effects, the editors, and the vision of the producer, who may well have had the basic idea of the film in the first place. My point is that producers and some of these producing companies are part of the creative process and have created a good environment for creative work.

I believe that we should move with all due speed on implementing adherence to Berne, and put all other issues to one side to be addressed separately. I and my colleagues have very specific ideas on those issues when the appropriate forum and time comes. Thank you very much.

[The prepared statement of Mr. Brown follows:]

STATEMENT OF DAVID BROWN

ON BEHALF OF

THE MOTION PICTURE ASSOCIATION OF AMERICA, INC.

THE ALLIANCE OF MOTION PICTURE AND TELEVISION PRODUCERS

AND

THE ZANUCK/BROWN CO.

March 3, 1988

Summary of Testimony of David Brown

The Motion Picture Association of America, the Alliance of Motion Picture and Television Producers, and the Zanuck/Brown Co. support U.S adherence to the Berne Copyright Convention. We do so because adherence will provide much-needed help in our efforts to combat the foreign piracy of U.S. films and TV shows that robs our industry of about 1/2 billion dollars a year in revenues.

We believe U.S. adherence to Berne will help our anti-piracy efforts because:

U.S. films and TV shows will have direct copyright protection in those countries that are members of Berne, but that do not have copyright relations with the U.S.

it will eliminate the cumbersome, and not always successful "backdoor" procedure by which U.S. copyright owners currently seek Berne protection by publishing their works simultaneously in the U.S. and in a Berne member country.

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it will strengthen U.S. arguments for stronger copyright laws in foreign countries.

it will enhance the U.S. position in pressing for Berne-type standards in the current round of GATT negotiations.

al.

Our support for U.S. adherence to Berne is not unconditionAbove all, the Berne implementing legislation must not contain a federal moral rights provision. The implementing legislation also must make clear that:

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Berne is neither self-executing nor directly

enforceable in the U.S.;

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current U.S. law satisfies Berne requirements in the "moral rights" area, and that adherence to Berne neither contracts nor expands rights granted under our domestic laws in this area; and

existing law and the implementing legislation meet our obligations under Berne and no further legislation is needed.

Mr. Chairman, my name is David Brown. I am a partner with Richard Zanuck in the Zanuck/Brown Co.

I appear here today on behalf of my own company, as well aş the members of the Motion Picture Association of America (MPAA) and the Alliance of Motion Picture and Television Producers (AMPTP). I welcome the opportunity to share with the Subcommittee our views on whether the United States should adhere to the Berne Copyright Convention and, if so, how the implementing legislation should address the so-called "moral rights" issue.

In sum, we believe that U.S. adherence to Berne will add an important weapon to our arsenal as we combat the ever-increasing piracy of our products overseas. Today piracy in foreign markets deprives the American film and TV industry of about half a billion dollars annually in revenues.

In our view, Berne will

help us in our efforts to stem this tide and, by doing so, will protect our industry's ability to contribute $1.2 billion annually in surplus balance of trade.

I must point out that our support for U.S. adherence is not unconditional. As I discuss later in greater detail, it is dependent upon the implementing legislation addressing the "moral rights" issue in an appropriate fashion.

In particular, the implementing legislation must not contain a federal "moral rights" provision. Instead, it must reflect the overwhelming weight of scholarly opinion that existing laws in this country satisfy the "moral rights" requirements of Berne and that there is no need whatsoever for the U.S. to enact a federal "moral rights" law in order to qualify for Berne.

Mr. Chairman, a personal note.

I am an experienced producer of motion pictures. I've spent much of my professional life in the motion picture business, in the trenches, first at Twentieth Century Fox and more recently at my own production company.

Among the films my partner, Richard Zanuck, and I have produced are: The Sting, Jaws, Cocoon, The Verdict, The Sugarland Express, The Eiger Sanction, MacArthur, and Target.

In addition, Mr. Zanuck and I served as President and Executive Vice President respectively of Twentieth Century Fox Film Corporation and in similar executive posts at Warner Bros. supervising all aspects of production on a worldwide basis for these companies. I am also an author of books and therefore a copyright owner.

1/ The members of MPAA are: The Walt Disney Company; The De Laurentiis Entertainment Group, Inc.; MGM/UA Communications Co.; Orion Pictures Corporation; Paramount Pictures Corporation; Twentieth Century Fox Film Corporation; Universal City Studios Inc.; Warner Bros. Inc.; and Columbia Pictures Entertainment.

2/ The AMPTP represents a variety of producers of TV programs and motion pictures, such as: Aaron Spelling Productions; The Burbank Studios; Columbia Pictures Entertainment; Embassy Television, Inc.; Four Star International; Inc. Hanna-Barbera Productions; Lorimar-Telepictures; MGM/UA Communications Co.; MTM Enterprises; Orion Television; Inc. Paramount Pictures Corp.; Ray Stark Productions; Stephen J. Cannell Productions; Sunrise Productions, Inc; Twentieth Century Fox Film Corp.; Universal City Studios, Inc.; Viacom Productions, Inc.; Walt Disney Pictures Inc.; Warner Bros. Inc.; and Witt/Thomas/Harris Productions.