Under Secretary of Commerce for Intellectual Property
and
Director of the United States Patent and Trademark office

April 25, 2002

Thank you for joining us today to participate in this important conference. I welcome this opportunity to talk about international and domestic developments in copyright law.

The United States Patent and Trademark Office and the U.S. Copyright Office enjoy a close working relationship on legislative and international copyright matters. I know we'll continue that relationship as we face new challenges in the future of copyright protection.

This is an exciting time for copyright law. In 1903, Mark Twain said "Only one thing is impossible for God: to find any sense in any copyright law on the planet." A century later, the task is even tougher - but not hopeless. The development of technology and the expansion of global trade continue to present new challenges and opportunities that even Mark Twain could not have imagined.

Over the next two days, this conference will discuss many of the major issues confronting copyright policy makers today. I have been asked to outline some of these issues in order to provide the predacate for this conference.

[WCT/WPPT]

On the international level, one major copyright development has been the adoption of two new treaties: the WIPO Copyright Treaty and the WIPO Performances and Phonograms Treaty. These treaties update and improve protection for the rights of authors and performers within the digital environment. These agreements will provide a legal framework to facilitate further development of electronic commerce. The U.S. is a signatory to both treaties, and Congress already has amended our laws to enable us to implement the treaties.

I anticipate the WIPO Internet Treaties will be a big success. They have come into force this year after having passed the significant hurdle of ratification by 30 countries from all areas of the world, including in Africa and Latin America.

That said, it is too early to pass final judgment. The WIPO Copyright Treaty only came into force on March 6 and the WIPO Performances and Phonograms treaty comes into force on May 20. The final judgment will be made when we see how these Treaties will be implemented in domestic legislation and enforced in national courts.

Although the trends for effective copyright protection are positive, significant challenges remain. A key focus of this year's Special 301 review, under the chairmanship of the Office of the U.S. Trade Representative (USTR) has been the growth of piracy of optical media (such as music CDs, video CDs, CD?ROMs, and DVDs). The growing tide of piracy both in traditional form - tapes, CDs and other hard copies - as well as in new modes of distribution - the Internet - are costing the content industries billions of dollars every year.

To realize the potential of e-commerce for the distribution of all sorts of information products, from entertainment to education, from business software to databases for scientific research, providers must be confident that their products are safe from piracy. This development will enrich all of the participants: content providers, hardware and telecommunications providers and Internet users.

Providing this security requires both technological and legal means to enable copyright owners to protect their works. It also means that these same technologies and laws need to recognize that fair use means that some uses that might otherwise be infringing will be permitted.

To respond to these concerns and to adapt the copyright law to the digital environment, the Administration, the Copyright Office, and the Congress worked hard to enact the Digital Millennium Copyright Act (DMCA).

The DMCA carefully balances the interests of all stakeholders to ensure that content owners would enjoy the protection they need to put their works on the Internet and to ensure that appropriate fair use is maintained for consumers, scientists and educators.

Audiovisual Treaty

Even with the entry into force of the WIPO Internet treaties, more still remains to be done to protect copyrighted works. A case in point is improving international protection for audiovisual performances' rights, which is one of the unresolved issues from the 1996 WIPO Diplomatic Conference that produced the WIPO Internet Treaties.

The USPTO has been working for several years with the U.S. motion picture studios, the performers' unions, and other interested parties to lay the groundwork for an international agreement in this area.

The WIPO Diplomatic Conference on the Protection of Audiovisual Performances in December 2000 made significant progress. Nineteen of twenty substantive articles were adopted to meet the needs of performers and film producers in a way that will ensure that both of these parties will benefit from the efficient exploitation of motion pictures in the marketplace.

The one sticking point where an agreement could not be reached was Article 12-dealing with the question of transfer of rights between performers and producers. Although agreement was achieved on language regarding the transfer of rights by contract, there was no international consensus on language that would have transferred rights as required under the law of the country where the contract was formed.

Hopefully, on-going work in WIPO's Standing Committee on Copyright and Related Rights, and continued consultations by the U.S. government and other countries, will lead to the eventual resolution of Article 12. The issue will be placed on the agenda for the September 2002 meeting of the WIPO General Assemblies, and resolving this matter remains a priority for the United States.

[Broadcasters Treaty/Webcasting Issues]

In addition to the AV Treaty, WIPO is also considering a possible new treaty updating the rights of broadcasters internationally. The current proposals that have been circulated in WIPO have dealt with only the rights of traditional broadcasting organizations. However, the concerns of webcasters and others who distribute programming via the Internet and other types of communication media have been raised. One recent proposal provides a definition of "broadcaster" that would appear to include webcasters and at least some other Internet transmissions within the scope of the possible new broadcasters treaty.

The National Association of Broadcasters has written the Secretary of Commerce to request that the U.S. submit a proposal to WIPO on the matter. We have also received input from several sources supporting the importance of dealing effectively with signal piracy, but also highlighting concerns with some elements of the proposals being discussed in WIPO. Concerns have also been raised that granting additional rights to broadcasters could conflict with or even undermine rights provided to copyright and neighboring rights owners in the underlying subject matter of the broadcasts. Determining how to deal with these issues in order to develop a sustainable proposal is a difficult task that is being studied by the USPTO and the Copyright Office.

Back in the United States, policy makers have been working to develop royalty rates for sound recordings streamed over the Web. The Copyright Office's CARP panel recently recommended royalty rates to be paid for each song streamed. The CARP recommendation sets separate rates for Internet-only Webcasters and for terrestrial radio stations that also stream music online. The Librarian of Congress has until May 21 to make a final decision on the proposal. We understand that there has been significant controversy over both the royalty rate and the record keeping requirements recommended by the panel. This conference will explore these issues further in tomorrow's Broadcasting and Webcasting Issues panel.

Folklore Issues

One other issue that the World Intellectual Property Organization is exploring is protection for traditional knowledge and folklore. Many of the goals of indigenous and local communities in "protecting" their traditional knowledge stem from a concern for self-determination, health, justice, cultural heritage, and land issues. These are serious interests that must be examined fully within the appropriate national and international contexts. However, these are not issues with which the USPTO, WIPO or other intellectual property offices have competence.

It would be in-advisable to consider the creation of such a system before individual countries have, in conjunction with the communities within their borders, established domestic regimes for folklore and traditional knowledge protection and have gained experience in the application of that protection and its effect on the communities involved.

We were pleased to see that WIPO has just issued its Final Report on National Experiences with the Legal Protection of Expressions of Folklore, particularly as it highlights the many different ways countries have sought to address their domestic concerns. At the USPTO, we are proud of our new Database of Official Insignias of Native American Tribes. Tomorrow, this conference will further explore how the U.S. and other countries are looking at this challenging issue.

[Copyright Term Extension: Eldred v. Ashcroft]

On the domestic scene, there have been several important court cases interpreting the Copyright Act. The most significant case is Eldred v. Ashcroft. The U.S. Supreme Court has granted certiorari in this case to review a lower court holding that the 1998 Sonny Bono Copyright Term Extension Act is constitutional.

The lower court concluded that the preamble to the Constitution's copyright enabling clause "is not a substantive limit on Congress' legislative power."

It would be very unfortunate for the Supreme Court to rule that Congress does not have the power to extend the term of copyright protection. Congress has done so several times in the history of the Copyright Act, often in response to international trends or treaties.

The 1998 extension was designed to catch up to the term of copyright recently adopted throughout the European Union and by other countries. Under the Berne Convention, countries with a life-plus-70 term do not have to recognize the rights of foreign authors whose works have expired in their own countries. In other words, for American creators of books, music, movies and computer programs to take advantage of the additional 20 years of copyright in other countries, the United States had to extend its own term to life plus 70.

If the Supreme Court were to hold that Congress exceeded its powers under the Constitution's intellectual property clause, the decision would have widespread implications for all areas of IP law. The USPTO and Copyright Office are watching this case closely and will participate in drafting the U.S. Government's brief.

* * *

On Capitol Hill, Congress has been looking for legislative solutions to copyright-related problems. Senate Commerce Committee Chairman Hollings and Senator Stevens have introduced legislation that would require computer and electronics manufacturers to include copyright-protection technologies in their products.

Congressmen Chris Cannon and Rick Boucher also have introduced copyright legislation designed to spur the distribution of Web-based music service sales, extending the existing copyright exemption for music stores to include online stores, clarification of the rules governing incidental copies in a way to encourage Internet music distribution, and to require competing digital-music services cross-license their songs.

In addition, the staffs of the Commerce and Judiciary Committees have been working for the past year to try to develop database protection legislation that represents a compromise between the views of database users and database producers. Since the 1991 U.S. Supreme Court decision in Feist Publications, holding that databases such as the white pages of telephone books were not copyrightable because of a lack of originality, there has been a question as to the extent of protection for certain databases and other compilations of information. Many questions have been raised during the drafting process. For example, should database protection be a sui generis type of intellectual property or should databases be protected on the basis of current misappropriation law? How broadly should Congress define the scope of protection? Would all uses, both commercial and private, be infringing? All of these issues as well as many others promise to insure a heated debate.

There are proposals before the Senate and House that would require States to waive their Sovereign Immunity in intellectual property infringement suits in order to seek damages in enforcing their own intellectual property rights.

There is a bill before the Senate that would modify the application of the antitrust laws to permit collective development and implementation of a standard contract form for playwrights for the licensing of their plays.

* * *

The reason why copyright issues are so prominent on the Hill and in our courts may be the importance of the copyright industries to the U.S. economy. In 2001, the copyright industries accounted for more than five percent of the U.S. Gross Domestic Product, growing at twice the rate of the remainder of the U.S. economy. Internationally, the U.S. copyright industries foreign sales and exports led all major industry sectors. Over half of all U.S. exports depend on some form of intellectual property protection.

The development of sound and balanced copyright policy is one of my highest priorities as Under Secretary of Commerce for Intellectual Property. As we navigate these bumpy but fascinating shoals, perhaps together we can find the sense in copyright law that so perplexed the otherwise unperplexable Mark Twain.

KEY: =online business system =fees =forms=help =laws/regulations =definition (glossary)

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