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ed Times to Authors and Inventors the exclusive Right to their Writing and Discoveries." 25

Sound copyright legislation is necessarily subject to other consideration in addition to the fact that a writing be created and that exclusive rights be protected only for a limited term. Congress must weight the public costs and benefits derived from protecting a particular interest. "The constitutional purpose of copyright is to facilitate the flow of ideas in the interest of learning." 26

The Constitution does not establish copyrights, but simply provides that Congress has the power to grant such rights if and as it thinks best. As this Committee observed during the 1909 revision of the copyright law, "[n]ot primarily for the benefit of the author, but primarily for the benefit of the public, such rights are given." 27 This statement still rings true today. Recently, the Supreme Court confirmed its validity by stating that the monopoly privileges that Congress may confer on creators of intellectual property "are neither unlimited nor primarily designed to provide a special private benefit. Rather, the limited grant is a means by which an important public purpose may be achieved." 28 Stated otherwise, the primary objective of our copyright laws is not to reward the author, but rather to secure for the public the benefits from the creations of authors.

The framers of the Constitution assigned to Congress, the most politically representative of the three branches of the federal government, the role of establishing intellectual property laws in exchange for public access to creations. In this context, the founding fathers contemplated a political balancing of interests between the public interest and proprietary rights. Congress struck that balance when it established the first patent and copyright laws. As this country has developed and as new technologies have burst upon the scene, Congress has adjusted this nation's intellectual property laws to incorporate new subject matter and to redefine the balance between public and proprietary interests. The Berne Convention Implementation Act of 1988 is a continuation of that process.

Today, we live in an age of rapid technological change, growing internationalization of various aspects of law, and increasing importance of intellectual property in world trade. The congressional role may be more complicated, but its objectives remain essentially unchanged. Congress must engage in the delicate assessment of equities between the public interest and proprietary rights.

The Berne Convention Implementation Act of 1988 is rooted in the proposition that choices are not impossible. The balancing of interests is possible. Both sides-public and private interests-will benefit.

25 U.S. CONST art I. §8, ci 8.

26 Statement of L. Ray Paterson, Professor, University of Georgia School of Law, House Hearings, supra note 9, June 17, 1987, see also statement of August W. Steinhilber for the Educators' Ad Hoc Committee on Copyright Laws, id. February 10, 1988.

27 H.R. REP. No 2222, 60th Cong, 2d Sess. 7 (1909). Similar language occurs in the Senate Report. See S. REP No. 1108, 60th Cong., 2d Sess. 7 (1909).

28 Sony Corp. v Universal City Studios, 464 U.S. 417, 429 (1984).

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IV. SECTIONAL ANALYSIS

SECTION 1. SHORT TITLE

Section 1 of the bill sets forth the short title: the "Berne Convention Implementation Act of 1988."

SECTION 2. REFERENCES TO TITLE 17, UNITED STATES CODE

Section 2 provides, for drafting clarity, that whenever in the proposed legislation an amendment is expressed in terms of an amendment to or repeal of a section or other provision, the reference should be considered to be made to a section or other provision of title 17, United States Code.

SECTION 3. DECLARATIONS

Section 3 sets forth three congressional declarations. Subsection (1) describes the Berne Convention, and declares that the Convention is not self-executing under the Constitution and laws of the United States. According to subsection (2), it is only through appropriate domestic law that the United States will carry out its obligations under the Berne Convention. The Convention is not otherwise enforceable. Subsection (3) states that the amendments made by this implementing legislation, together with the laws in effect on the date the implementing legislation is enacted, are sufficient to satisfy the obligations of the United States in adhering to the Berne Convention. No other rights or interests shall be recognized or created for the purpose of satisfying these obligations.

SECTION 4. CONSTRUCTION OF THE BERNE CONVENTION

Section 4 gives guidance to the courts about how to construe U.S. adherence to the Berne Convention.

Subsection (a) describes the relationship between the Berne Convention's provisions and our domestic law. It states in paragraph (1) that the provisions of the Convention shall be given effect under title 17 of the United States Code, as amended, by this implementing legislation, and any other relevant provision of Federal or State law, including the common law. This provision must be read in conjunction with the other provisions of the law that are specified. Paragraph (2) states that the provisions of the Berne Convention are not enforceable in any action brought pursuant to the provisions of the Convention itself.

Subsection (b) states that United States adherence to the Berne Convention, and the satisfaction of United States obligations thereto, does not expand or reduce certain rights of an author of a work. Those rights are set forth in Article 6bis of the Berne Convention, and are commonly known as the rights to "paternity" and "integrity." In other words, the state of current law is sufficient to comply with Article 6bis and this implementing legislation will have no effect, one way or the other, on current law.

SECTION 5. DEFINITIONS

Section 5 of the bill modifies chapter 1 of title 17, United States Code, in two ways.

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First, the definition of "pictorial, graphic, and sculptural works" is changed by adding a reference to "architectural plans" in the list of protectible subject matter. Since the protection of architectural works is required by the Berne Convention, this provision merely buttresses the proposition that the United States already complies with Berne standards. Stated otherwise, under current law rightsholders of two-dimensional architectural plans or blueprints enjoy copyright protection in such works as "pictorial" works. Section 5 therefore certifies that such protection exists.

Second, section 101 of the Copyright Act is amended by inserting two new definitions: the "Berne Convention" and a "Berne Convention Work." The Berne Convention is defined as the Convention for the Protection of Literary and Artistic Works, signed at Berne, Switzerland, on September 9, 1886, and all acts, protocols, and revisions thereto, up to and including the revision done at Paris, France, in 1971. A work is a "Berne Convention work" in the following circumstances: (1) in the case of an unpublished work, one or more of the authors is a national of a state adhering to the Berne Convention, or in the case of a published work, one or more of the authors is a national of a state adhering to the Berne Convention on the date of first publication; (2) the work was first published in a state adhering to the Berne Convention, or was simultaneously published in a state adhering to the Berne Convention and in a foreign nation that does not adhere to the Berne Convention; (3) in the case of an audiovisual work if an author is a legal entity, that author has its headquarters in a state which adheres to the Berne Convention, or if an author is an individual, that author is domiciled, or has a habitual residence in a state adhering to the Berne Convention; and (4) in the case of a pictorial, graphic, or scuptural work embodied in a building or other structure if such work is incorporated in a building or other structure located in a state adhering to the Berne Convention.

SECTION 6. NATIONAL ORIGIN

Section 6 of the bill relates to the national origin of Berne Convention works. It amends section 104 of title 17 in two ways: protection for foreign works is explicitly extended to "Berne Convention works" and the proscription against self-execution is codified. This letter codification is fundamental to the entire question of implementing legislation and of adherence to the Convention. It should be absolutely clear that the provisions of the Berne Convention do not create a right or interest in a work eligible for protection under title 17 of the United States Code. Section 6, subsection (c), also provides that any rights or interests in a work eligible for protection under title 17, or under other Federal or State statutes or the common law, may not be claimed and shall not be expanded or reduced, by virtue of, or in reliance upon, the Berne Convention's provisions or the United States adherence thereto.

SECTION 7. PREEMPTION WITH RESPECT TO OTHER LAWS

Section 7 adds a new subsection (e) to section 301 of title 17, United States Code, relating to Federal preemption with respect to other laws. The new subsection provides that the scope of Federal

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preemption is not affected by the adherence of the United States to the Berne Convention or the satisfaction of the obligations of the United States thereunder.

SECTION 8. SCOPE OF EXCLUSIVE RIGHTS IN NONDRAMATIC MUSICAL

WORKS

Section 8 of the bill proposes changes to the current jukebox compulsory license by creating a new licensing system based on negotiations, with the compulsory license used as a fall-back should negotiations fail.

A new section 116A makes the present coin-operated phonorecord (jukebox) compulsory license system-that seems clearly incompatible with the Berne Convention-subordinate to negotiated licenses where such licenses come into force. The new provisions would authorize such licenses as they come into force and would formalize a negotiating process that could totally supplant the compulsory license. If, after a year, negotiations fail to provide consensual licenses for virtually all music, or if negotiations are terminated at some future date, then a compulsory license that is substantially the same as that provided in current section 116 is available as a fall-back to ensure that jukebox music will always be available to the public. The Copyright Royalty Tribunal would retain jurisdiction over rate-making and distribution functions only to the extent that negotiations fail or consensual licenses expire or are terminated. In that circumstance, and after the filing of a petition, the Tribunal would meet within a year after the failure of negotiations.

The Berne Convention does not allow expressly for compulsory licensing of non-broadcast public performance of music, music as is done presently in the jukebox business. The outright elimination of the compulsory license would, of course, be a solution. But, the variations of laws and regulations that exist in the United States and many of the Berne Union's member states warrant an intermediate position to be taken in the matter. Thus, section 8 encourages voluntary negotiations but permits government intervention if the negotiations fail-a result which may be fairly analogous to various forms of government intervention in Berne countries.

In 1985 jukebox operators and the performing rights societies entered into an arrangement whereby compliance with the compulsory license provisions can lead to rebates on statutory royalties. Section 8 is rooted in this approach towards close, voluntary cooperation.

Specifically, subsection (c) authorizes copyright owners of nondramatic musical works and operators of coin-operated phonorecord players to negotiate and agree upon the terms and rates of royalty payments for performances of such works and the proportionate division of fees paid among various copyright owners, and to designate common agents to negotiate, agree to, pay, or receive such royalty payments. The purpose of this provision is to authorize the American Society of Composers, Authors and Publishers (ASCAP), Broadcast Music, Inc. (BMI) and SESAC, Inc.-the three performing rights organizations named in current section 116 of the Copyright Act-to negotiate jointly with the Amusement and

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Music Operators of America (AMOA), the terms and rates of licenses for performances of copyrighted musical works in any, some or all of their repertories by jukeboxes.

The joint activity among owners of copyrights and operators of coin-operated phonorecord players and their organizations authorized by section 116A would generally be procompetitive since the market involving jukeboxes is dispersed among many small participants for whom negotiation of individual licensing agreements is neither feasible nor economic. It would be costly and inefficient for copyright holders to attempt to negotiate and enforce individual agreements when the revenues produced by a single jukebox are so small. Although subsection (c) authorizes certain joint conduct necessary to achieve mutually agreeable terms and rates of licenses for jukebox performances of copyrighted musical works, and, where voluntary agreements are not achieved, provides for use of a compulsory licensing mechanism based on existing law (17 U.S.C. 116), it is not an authorization for joint conduct extending beyond those statutory terms. Restraints that are ancillary to the authorized joint conduct would, for example, not be accorded any special treatment under this subsection. Existing law would continue to apply to such restraints.

Absent any anticompetitive ancillary restraints, collectively negotiated licensing agreements between copyright owners and jukebox operators preserve the interests of the listening public and will provide an efficient and pro-competitive means to achieve the ends of the copyright laws and the Berne Convention.

SECTION 9. NOTICE OF COPYRIGHT

Section 9 of the bill amends chapter 4 of title 17 in several areas. The intent of all these changes is to make the law with respect to the use of the copyright notice, the registration system, and the system for building the collections of the Library of Congress compatible with Berne while simultaneously doing no more to the present law than is absolutely necessary. The amendments to sections 401 and 402 make use of the copyright notice voluntary-a work will no longer fall into the public domain at any time because it is published without notice. At the same time, if a copyright owner elects to use a notice, its form is specified in the law.

A requirement of notice of copyright on copies of published works has been a feature of United States copyright law, in one form or another, for almost two hundred years. Many user groups, particularly those that are noncommercial, have come to rely upon the information it provides. Certain commercial users have supported the copyright notice as a means of introducing works into the public domain. There is unanimity as to the necessity of eliminating the copyright notice in order to comply with Berne. Section 9 assumes that at least on a transitional basis, the informational utility of the notice as a means of conveniently distinguishing the protected from the unprotected is sufficiently great so as to warrant encouraging its use. It is entirely possible that elimination of the notice formality may not in the end curtail its use. Old habits die hard; it remains useful under the Universal Copyright Conven

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