copyright relations would then be set back to a level not seen since the end of World War II, when the U.S. began to come out of its isolationist shell and recognize the substantial stake in foreign markets for its copyrighted works and the need to exercise leadership in the international copyright community. Can the Risks Perceived in U.S. Adherence to Berne be Avoided? Appropriate legislation can minimize the potential risks some now perceive in implementing Berne Standards in the U.S. All proposals for implementing legislation explicitly state that Berne is not self-executing. Therefore, anyone seeking the benefit of U.S. obligations under Berne can make a claim only under the provisions of U.S. domestic lav. Few changes are required in our copyright laws to permit U.S. adherence to the Berne Convention. The jukebox provisions are being worked out. The concerns of users have been addressed. Moral rights are adequately addressed in current law. Uncertainty would thus be minimized and current business practices would not be upset. Adherence will not require any changes in the provision of our copyright law that benefit schools, libraries and other public sector copyright users. U.S. adherence to Berne will in no way effect a change in the present state of U.S. law on moral rights. Rights equivalent to the minimum required by Berne already exist in the U.S. through a combination of statutory and common law doctrines. While the "moral right" had its genesis in the civil law tradition, the term itself does not even appear in the Convention and the practices of Berne countries vary widely. This Berne obligation is entirely consistent with the U.S. common law and statutory approach to copyright protection. Is the Congress Now Considering Implementing Legislation? Yes, the Subcommittee on Courts, Civil Liberties and the Administration of Justice of the House Judiciary Committee has just completed hearings on H.R. 1623 introduced by the chairman, Mr. Kastenmeier (D-WI) on March 16, 1987 and on H.R. 2962 introduced by Mr. Moorhead (R-CA) on July 15, 1987 as the Administration's bill. Senate hearings commence on February 18 before the Subcommittee on Patents, Copyrights and Trademarks chaired by Senator DeConcini (D-AZ) on S. 1301 introduced by Senator Leahy (D-VT) on May 29, 1987 and on S. 1971 introduced by Senators Hatch and Thurmond on December 18, 1987 as the Administration's bill. Adherence to the Berne Convention has received the strong support of the Administration. What Principles Should Be Embodied in Berne Adherence Legislation? Implementing legislation and, where appropriate, the legislative history should be guided by the following principles: Congress should determine those changes in current U.S. law minimally necessary to adhere to Berne and should confirm in implementing legislation that only those, and no other, changes are required. The Berne Convention is not self-executing. Except for those minimal changes necessary to ensure compatibility, adherence should not in any way affect the present state of U.S. law. To accomplish these objectives implementing legislation should provide that: No provision of Berne is directly enforceable in any U.S. Current U.S. lav is compatible with Berne in the "moral this area rights under current U.S. lav are neither BMG Music (Formerly RCA-Ariola, Intl.) California Council for International Trade Computer and Business Equipment Manufacturers Association Consumers for a Sound Economy Digital Equipment Corporation Elsevier, Science Publishing Co., Inc. Gulf & Western (Simon & Schuster Paramount Pictures) Hewlett-Packard Company Hasbro Toy Company Hudson Hill Press IBM Corporation Information Industries Association Intellectual Property Committee Intellectual Property Owners John Wiley & Sons, Inc. Lotus Software Motion Picture Association of America National Association of Manufacturers Texas Instruments Incorporated Training Media Distributors Association Senator DECONCINI. Thank you. I will at this moment yield to my ranking member of the committee, Senator Hatch from Utah. OPENING STATEMENT OF HON. ORRIN G. HATCH, A U.S. SENATOR FROM THE STATE OF UTAH Senator HATCH. Well, thank you, Senator DeConcini. I appreciate being here and I appreciate your diligence in holding this particular hearing, and welcome all witnesses to the table. It is certainly nice to see you again, Ken, and nice to have you here. Mr. Chairman, at the end of last year on behalf of the administration I introduced S. 1971, the Berne Convention Implementation Act of 1987, which would place the United States in the position of being able to join that distinguished and venerable convention. It is no secret that the primary obstacle that stands between this subcommittee and enactment of this kind of legislation is the controversy of the application of a body of law called "moral rights." In an effort to promote discussion and cooperation toward the goal of ratifying Berne, I placed in the Congressional Record just yesterday a proposal that may help resolve some doubts that current copyright relationships will not be altered by ratification of the convention. Now I do not pretend that this is a finished product, but I hope it will promote the discussion that may produce a bill, especially a bill that can be adopted without reservations in the Senate. Now as I have said before, I look forward to working with you, Mr. Chairman, Senator Leahy, and all members of the subcommittee in the Senate to enhance international copyright protections without disrupting current copyright relationships. I think we all realize this is an important issue. There are a lot of people involved. There are very hotly contested aspects of this issue, and we want to do what is right, worldwide but certainly for our country. There is no question something needs to be done, in my mind, and I think that we have grabbed the bull by the horns and we are going to see that something is done. I hope that this hearing will give us the opinions and the feelings of everybody concerned so that we can move ahead with dispatch and do what really needs to be done. I want to thank you again, Mr. Chairman, for your leadership in this area. We appreciate it, and we appreciate all the witnesses who are willing to appear. Senator DECONCINI. I thank my friend. Mr. Clemente. STATEMENT OF C.L. CLEMENTE, VICE PRESIDENT AND GENERAL COUNSEL, PFIZER INC. Mr. CLEMENTE. Thank you, Mr. Chairman, for being allowed to testify on behalf of adherence to the Berne Convention. I should begin my testimony by admitting to you that I am not a copyright expert. Furthermore, as you may know, Pfizer is primarily a health care company and principally in the business of pharmaceuticals and hospital products. The prime area of intellectual property of concern to Pfizer and the health care industry generally is not that of copyright; in fact, it is the area of patents. So you might ask the question: Why then-since I am not a copyright expert and since in the day-to-day operations of my company, and in fact my industry, copyright is not important-why am I here? The short answer is that we at Pfizer firmly believe that adherence to the Berne Convention would go a long way toward our goal of improving intellectual property rights worldwide on an overall basis, and I would like to give you just a bit of the reasoning as to how we came to that conclusion. As I mentioned to you, Pfizer is a health care company and it is a true multinational company. We have plants in 65 countries, operations in 140. Half of our 40,000 employees are overseas. It is also very heavily involved in research and development. This year we will spend some $300 million on research in the health care field, and the figure for the health care or just the pharmaceutical industry is in the billions of dollars. This money is spent to invent new pharmaceuticals and other health care products and to bring them to market. It often takes $125 million and 10 to 12 years to bring a product to market, but like the computer software industry, and in fact the movie industry, and to a certain extent the book industry, virtually all the effort and energy goes into the invention and development of the product. Once the product is discovered, the book written or the software created, the cost of reproduction is minimal, so that we suffer from piracy overseas just as the copyright industry does, in that the cost of production is low. If there are no laws to protect our property overseas, then pirates can drive us from the marketplace, so to that extent we have a very common interest with the copyright industries that are appearing before you today. But more than that, we have found, in seeking an active role in the attempt to enforce and increase protection for intellectual property overseas, that we are often met with objections from our trading partners, both the private and the public sectors, that the United States is not a major player in the international arena of intellectual property; that although it calls for high standards in the areas of patents, trademarks and copyright, it itself is not a member of the premier convention for copyrights. I have had this personal experience myself many times over. I am chairman of the U.S. Council for International Business, Committee on Intellectual Property Rights. That committee is involved. with the International Chamber of Commerce and with WIPO and other international bodies that have a major concern for intellectual property. Í find time and again, in discussing greater protection for patents, that other areas of intellectual property are brought up. Previously it was the manufacturing clause. Currently it is the Berne Convention. In many negotiations with developing countries, when we ask them to apply higher standards than they currently have, again they refer to the fact that the United States often doesn't join international conventions, and the Berne Convention is a leading example of that. So that overall we have concluded-and this includes not only myself but the top management of Pfizer, which is very much in volved in the fight to get greater protection for intellectual property, both within the GATT and through other multilateral and bilateral agreements-that intellectual property is very much interrelated in the minds of others with whom we deal; that when we speak patents, copyrights and trademarks are often brought up to us. So that we have found, first, that it is not possible to draw clean distinctions in the minds of those with whom we deal, between the various arenas of intellectual property. Second, we have also found that the only time we have made real progress is when the various industries interested in the different fields of intellectual property stand together and support each other in the protection of their rights. We had this experience, as Mr. Dam pointed out, in our negotiations with the Government of Korea. That government attempted, at some point during the negotiations, to split off the pharmaceutical industry and the book publishing industry from the negotiations, and it was only when industry stood together as a whole that we were able to assist the U.S. Government in achieving an overall, effective agreement. So I hope this has given you some of the background as to why, although the pharmaceutical industry in general and even the broad-based chemical industry is not affected on a day-to-day basis by the Berne Convention, we believe very strongly that adherence to Berne will help our efforts for a comprehensive improvement of intellectual property rights on the bilateral front and on the multilateral front (including the GATT) and will also help U.S. copyright holders to obtain greater protection. Finally, not to be forgotten is the greater role we will receive in the WIPO, which administers the Berne Convention. Thank you. [The prepared statement of Mr. Clemente follows:] |