STATEMENT OF SECRETARY OF COMMERCE MALCOLM BALDRIGE BEFORE THE SUBCOMMITTEE ON COURTS, CIVIL LIBERTIES AND THE COMMITTEE ON THE JUDICIARY UNITED STATES HOUSE OF REPRESENTATIVES ON U.S. ADHERENCE TO THE BERNE CONVENTION JULY 23, 1987 This Administration has increasingly devoted its attention to copyright issues in response to the growing importance of trade in copyrighted works. The International Trade Commission estimated that in 1982 the copyright industries earned a trade surplus of over $1.2 billion. We believe that improved protection of intellectual property will preserve these export earnings. The International Intellectual Property Alliance has estimated that in 1984 the copyright industries lost $1.3 billion to piracy in only ten selected countries. Inadequate copyright laws and ineffective enforcement are a major cause of these losses. The Administration is working to improve the international protection of copyrights. We are also working in the GATT to develop a method to enforce compliance with high-level standards of intellectual property protection. As part of this effort, the United States should join the Berne Convention to assure the highest available level of international protection for U.S. authors and copyright holders. United States adherence to the Berne Convention will require minimal changes in U.S. law. The expiration of the manufacturing clause removed one of the remaining obstacles to compatibility between our copyright law and Berne, and only a few further changes are needed. A large number of copyright experts believe that the concern over the so-called moral rights issue is ill founded. Our law presently provides an adequate level of protection for an author's right to demand to be named as the author on his work and his right to object to uses of his works that may discredit his honor or reputation. It meets the minimum levels of the relevant provisions of the Convention. No additional changes are needed. Our bill proposes a Congressional finding to that effect. 78-367 0 - 88 - 5 STATEMENT OF SECRETARY OF COMMERCE MALCOLM BALDRIGE BEFORE THE SUBCOMMITTEE ON COURTS, CIVIL LIBERTIES AND THE ADMINISTRATION OF JUSTICE COMMITTEE ON THE JUDICIARY UNITED STATES HOUSE OF REPRESENTATIVES ON U.S. ADHERENCE TO THE BERNE CONVENTION JULY 23, 1987 Mr. Chairman and Members of the Subcommittee: I am here today to talk about an increasingly important issue: assuring that there is adequate and effective protection for U.S. intellectual property throughout the world. The Department of Commerce has worked closely with the other Agencies represented here at the table today and the Library of Congress' Copyright Office to improve levels of intellectual property protection worldwide. We've done this to eradicate piracy and counterfeiting of U.S. products. And we've had some amazing successes, but often only after a lot of hard work. Traditionally, the Commerce Department focused its primary intellectual property concerns on patents and trademarks, perhaps because the administration of those laws is the responsibility of the Department of Commerce while the copyright laws are administered by the Library of Congress. In this Administration, however, we have increasingly devoted our attention to copyright issues. This is a natural and appropriate response to the growing importance of works protected by copyrights to the United States' domestic and international trade. In a 1984 study, the Copyright Office estimated that in 1982 the copyright and information-related industries contributed over $153 billion to the U.S. economy and employed 2.2% of the civilian labor force. Also, in 1984 the International Trade Commission estimated that in 1982 the copyright industries earned a trade surplus of over $1.2 billion. All in all, an outstanding performance, but one that might even be better. As I noted -2 earlier, the Administration wants to improve the protection of intellectual property. We believe that this will preserve or even improve the export earnings of such successful competitors in the world market. However, because of factors that I will discuss later, this already difficult task is made even harder. In 1985, the International Intellectual Property Alliance estimated that in 1984 the copyright industries lost $1.3 billion to piracy in only ten selected countries. When I speak about improving the export earnings of successful competitors, I'm not talking about protectionist measures to keep foreign products out of our markets, I'm talking about stopping these staggering losses due to piracy. Inadequate intellectual property laws and ineffective enforcement where laws do exist are the fountainhead of this problem. In response to this problem, the Administration has undertaken several efforts to improve the international protection of copyrights. As Ambassador Yeutter will tell you, we are working in the new round of GATT negotiations to define and to develop a method to enforce compliance with high-level standards of intellectual property protection. To succeed in that work, we need to put ourselves in the best possible posture. But, presently our posture is not as good as it should be because we do not adhere to the Berne Convention for the Protection of Literary and Artistic Works. There is absolutely no reason for us not to join Berne at least no reason that takes into account the long-term interests of the United States, our creative community and U.S. copyright holders. -3 Berne adherence requires only a few changes in U.S. law, and will not disturb the careful balance of public and private interests in our law. The most important reason for joining Berne is that it will assure the highest available level of international protection for U.S. authors and copyright holders. The Berne Union has 76 members: nearly all of the developed countries, a number of developing nations, and several Eastern Bloc nations. The United States and the Soviet Union are conspicuously absent from this list. Some argue that the benefits of adhering to Berne are speculative and remote. If this were true, why would U.S. publishers undertake the substantial expense (one firm's estimate is $10 million per year) to obtain rights under Berne through simultaneous publication in a Berne country? Our copyright owners traditionally have obtained Berne protection through simultaneous publication in the United States and in a Berne country, often Canada. Some argue that we don't need to adhere to Berne because we can always get Berne-level protection through the "back door" in those countries that belong only to Berne. They argue further that we can get Berne-level protection through national treatment in those countries which adhere to both the UCC and Berne. These arguments ignore several facts. First, only large U.S. copyright interests can afford the substantial expense of a program of regular simultaneous publication in a Berne country. This is too expensive and difficult or even impossible for many |