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Mr. MORRISON. It will mitigate it significantly though, right? Mr. LADD. We would rather have it and have it effective and valid under Berne than not, if we are going to have the moral right, but it does not solve the problem.

Mr. CARTER. Mr. Morrison.

Mr. MORRISON. Yes.

Mr. CARTER. Let me just comment on this, because it is a key question. When we talk about waivers-and I thought this was a legal question and one on alienable/inalienable waivers and all the other terminology we are getting in here-all I know is that today and tomorrow, we have 36 hours to close the December issue of Good Housekeeping magazine—that is, getting the entire thing set up; the presses are ready, standing by. In that, I have some 60 editorial pieces that have been developed freelance, I have over 200 photographs that have been bought from different sources. Of all these transactions, only four have been established under contract, under written contract. Everything else has been an oral agreement, which is the way our industry performs. Sometimes the contracts come along later, but in the urgency to get things done and the understanding we have with each other, with the suppliers and the publishers, we are going to press that way.

Now if we have waivers and if, as Mr. Ladd says, waivers are suspect, I can well foresee that if that is a requirement, to have these waivers in some permanent form or to have that clearly understood and read out in each instance, I see enormous confusion and question as to whether those waivers really were bought at the time of the other transaction.

Mr. MORRISON. If you are making your contracts on an oral basis essentially, you are taking certain risks of litigation that go with the lack of written documents, presumably based of your determination that those risks are today outweighed by the benefits of oral agreements. You believe that you may not be able to deal with these questions in the same way in the future?

Mr. CARTER. Yes.

Mr. MORRISON. Those risks of litigation are out there already, I guess is what I am going to say, and there are all kinds of questions of rights and waivers and things that could come into any particular relationship with a particular author even now because you have decided to be less than specific at the time of your transaction. I suppose that one additional concern is that current disputes don't lead to injunction against publication, and that is a major point.

Mr. CARTER. Yes, that is a major point.

Mr. MORRISON. And I certainly share that concern.

Let me just ask another question. To what extent does your conclusion about the risk of the moral rights uncertainty-which I think is what we ought to call it-and what that means for the business at your end-reflect lack of confidence in the extent copyright holders would benefit as a result of adherence to Berne?

If we were to be of a significantly different view that there is a lot more to be gained down the road for intellectual property rights of American copyright holders in Berne, would that effect your conclusion about the risks on moral rights?

Mr. LADD. The concern of the Coalition is the introduction of the moral right.

Mr. MORRISON. No price would be high enough to overcome that concern?

Mr. LADD. No. The point that we make is not the political point, it is simply that the advantages which are claimed for it are not worth what we think would be this impact upon the business operations.

Mr. MORRISON. They are not worth it to you.

Mr. LADD. Yes.

Mr. MORRISON. But we have got a lot of other people here who are in slightly different aspects of the intellectual property business who are saying these are worth a lot. So one of you has got to be wrong, or you are just saying your interest in this area is small, their interest in this area is large; they see the risk on the moral rights side to be small, and you see it to be large; that may be just defining the difference between the businesses that you are in, and I guess I am asking you if you are saying that no amount of benefit on the plus side is enough to take any risk on the moral rights side. The two groups sound like they are both saying there is no risk here on moral rights, so why are we even pausing to ask this question, because we get some benefit? We can argue about how big that benefit is. You are kind of taking the other view that sounds a little bit like there isn't anything out there in Berne, so why are we even bothering to put our toe in the water with respect to moral rights?

Mr. LADD. Right. I can't answer the question, because I'm sure it would not surprise you that we have not sat in the Coalition and said, is there any gain that we could get from adherence to Berne which would overcome your anxieties about the moral right? I don't know the answer to that question.

Mr. CARTER. I accept that there are benefits to Berne, but those benefits would in no way equal the penalities that application of moral rights would inflict on the American magazine industry, and the Magazine Publishers Association feels that way. As a matter of fact, when the MPA Legal Affairs Committee met to make a recommendation as to whether to oppose or support this, there was a unanimous result, a unanimous vote by the 11 members, all counsel, of the Legal Affairs Committee, to oppose, to recommend the MPA opposition to the Berne Convention.

Mr. MORRISON. Thank you, Mr. Chairman.

Mr. KASTENMEIER. On the latter point, the gentleman from Connecticut makes a point and makes it well that it would appear that we are looking at how different industries regard the impact of Berne quite differently, even though the differences do not, at least to the casual observer, seem very great-that is to say whether newspapers or certain types of publications would be slightly different than news magazines or certain other types of publications in terms of this fear of the possible implication of moral rights and the others who feel that that is an unreal fear, unjustified fear, that there are benefits to be gained which, for various reasons, outweigh that. It may in the final analysis come down to a judgment as to who is right.

Mr. CARTER. But, Mr. Chairman, may I suggest one thing, and that is that whether the moral rights turn out to be inalienable or alienable, this provision, this is not a detail, this is something with which we cannot, I suggest, proceed, or should not proceed, until we really understand the effect that that is going to have and whether that effect is a part of support of the Berne Convention. The group that supported the Berne Convention as well as those of us who opposed it, they too recognize the need to do that.

Mr. KASTENMEIER. Well, apparently the understanding differs, although we have not mentioned and I suppose I have to take note of the fact that there is yet another group of persons who has expectations with respect to moral rights and will testify at the next hearing, who differ from everyone here, at least in terms of what they would like to see in terms of the outcome of the impact of adherence to Berne. So there is, in a sense, a third view about this, and we will hear further from them.

Mr. CARTER. Yes.

Mr. KASTENMEIER. In any event, we thank you both for your contribution to this very perplexing question.

Mr. CARTER. Thank you, sir.

Mr. LADD. Thank you, Mr. Chairman.

Mr. KASTENMEIER. This concludes today's hearings. Our next hearing is on September 30 on this question. Until that time, the subcommittee stands adjourned.

[Whereupon, at 1:30 p.m., the subcommittee was adjourned.]

BERNE CONVENTION IMPLEMENTATION ACT OF

1987

WEDNESDAY, SEPTEMBER 30, 1987

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON COURTS, CIVIL LIBERTIES

AND THE ADMINISTRATION OF JUSTICE,

COMMITTEE ON THE JUDICIARY,

Washington, DC.

The subcommittee met, pursuant to call, at 10 a.m., in Room 2226, Rayburn House Office Building, Hon. Robert W. Kastenmeier (chairman of the subcommittee) presiding.

Present: Representatives Kastenmeier, Kastenmeier, Synar, Schroeder, Berman, Cardin, Moorhead, Lungren, DeWine, and Coble.

Staff present: Michael J. Remington, chief counsel; David W. Beier, counsel; Virginia E. Sloan, counsel; Thomas E. Mooney, associate counsel; Joseph V. Wolfe, associate counsel; and Audrey K. Marcus, clerk.

Mr. KASTENMEIER. The committee will come to order.

Mr. MOORHEAD. Mr. Chairman.

Mr. KASTENMEIER. The gentleman from California.

Mr. MOORHEAD. I ask unanimous consent that the subcommittee permit the meeting to be covered in whole or in part by television broadcast, radio broadcast and/or still photography pursuant to rule 5.

Mr. KASTENMEIER. Without objection.

This is the second day of the committee's hearing on the subject of moral rights with respect to the adherence to the Berne Convention.

On September 15th we heard from witnesses representing the motion picture industry and IBM, both of whom testified that adherence to Berne would be consistent with this country's leadership on intellectual property and trade issues, and that the current law on moral nights issues is sufficient to enable us to adhere.

We also heard from representatives of magazine and other publishers who testified that adherence is unnecessary, in fact, harmful to the interest of the United States and industries affected by it.

It was principally their opposition to the Berne moral rights provision, whether or not we deem current law sufficient for adherence, that led them to oppose adherence.

Today we will hear from quite another position with respect to this controversy. We will hear first from a panel of artists who are (405)

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