Statement on Introduced Bills and Joint Resolutions

STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS -- (Senate - January 25, 2005)

Mr. CORNYN. Mr. President, in the fall of 2003, I introduced S. 1932, the Artists' Rights and Theft Prevention Act of 2003, along with my friend from California, Senator FEINSTEIN. As introduced, the ART Act was a modest but necessary first step to combat the rampant piracy plaguing the motion picture, recording and general content industries. The Bill focuses on the most egregious form of copyright piracy plaguing the entertainment industry today-the piracy of film, movies, and other copyrighted materials before copyright owners have had the opportunity to market fully their products.

Now, as part of a comprehensive package, "the Family Entertainment and Copyright Act of 2005," it is even more significant. This package contains a number of targeted, important reforms that help strengthen our intellectual property laws. I rise to express my strong support for the bill and ask my colleagues to move it expeditiously.

Intellectual property laws and the American businesses that rely on them deserve our strongest support. Our Nation was founded on a number of important ideas. One central one was that the value created by the work and sweat of a person should be recognized as that person's property and should be protected. Protecting the creativity and capital that American innovators invest to make our lives richer is the right thing to do. Failure to do so not only would diminish the quality of our individual lives, but our country would suffer too. Intellectual property-related industries are a central driver of our Nation's economy and a staple of our international trade.

The copyright-based industries alone accounted for more than 5 percent of the U.S. GDP or $535,100,000,000 in 2001 and almost 6 percent of U.S. employment, and led all major industry sectors in foreign sales and exports in 2001, the last year for which we have figures.

As the Justice Department recently has pointed out:

Ideas and the people who generate them serve as critical resources both in our daily lives and in the stability and growth of America's economy. The creation of intellectual property-from designs for new products to artistic creations-unleashes our Nation's potential, brings ideas from concept to commerce, and drives future economic and productivity gains. In the increasingly knowledge-driven, information age economy, intellectual property is the new coin of the realm. ..... [Report of the DOJ Task Force on Intellectual Property, p. 7.]

As the DOJ IP Task Force Report notes, America's economy relies more and more on ideas we create, not things we make. We need to protect our Nation's innovative and creative works with strong laws and enforcement of those laws because doing so is vital to our national economic security.

Having noted and quoted the DOJ Report, I want to pause to thank the Justice Department and outgoing Attorney General John Ashcroft for taking these issues seriously and for taking significant steps to address them. The formation of the Intellectual Property Task Force spotlighted these issues at the Justice Department and the work of the Task Force, headed by David Israelite did a superb job in developing comprehensive and serious steps better protecting our intellectual property interests. The DOJ engaged in serious domestic and international investigations and prosecutions against digital thieves who have misused promising digital technology like the Internet to further their attacks on American businesses. General Ashcroft and the Justice Department, who deserve our gratitude for so many reasons, certainly deserve it for their efforts on this area.

Having provided that foundation, let me discuss briefly some of the important provisions contained in this legislative package.

We have purposefully compiled a package of legislation that strikes a balance between innovation and copyright protection. One needn't be sacrificed to encourage the other-rather they go hand-in-hand.

First, I would mention the Cornyn-Feinstein "Artist's Rights and Theft Prevention Act" or the ART Act. Notably, it contains a provision making it a felony to record a movie in a theater. One of the principal ways that movie piracy happens is by thieves sitting in a movie theater, or bribing a projectionist to help them, and recording movies with small camcorders. These camcorded copies can then make their way around the world on the internet and usually land on the streets of cities around the world in pirated copies sold on the street, often the day the movie opens in the U.S. or even before the movie opens in many countries.

All it takes is a single or a small handful of camcorded copies distributed worldwide to have a devastating effect on a movie's profitability. Movies are generally an investment of tens or hundreds of millions of dollars that rely on box office and home video and other subsequent sales to recoup this investment. A camcorded copy released early in any of these cycles can undermine the economics of this business, and especially if they hit the streets or the internet while the movie is still in theaters. This is theft, and it is theft that supports organized crime groups, and perhaps, even terrorism. It deserves to be stopped by the specter of a federal felony.

Its second key provision focuses on so-called "pre-released" works. Because serious harm can be done to both the reputation of and market for creative products if they are pirated before they actually come to market, we have included reforms in the ART Act and this package that make it easier for the Justice Department to prosecute those who steal and distribute copies of copyrighted works on the internet before they are released to the public by their owners or authorized distributors. We make the prosecutor's job easier by allowing certain presumptions with regard to the harm caused, including the dollar amount and number of copies, necessary to allow the prosecutor to bring a felony action where the works in question are being prepared for commercial release but have not been released to the public legitimately. This is fair because no one can legitimately believe that they are within their rights copying and distributing works that are not yet available in the marketplace. Again this is a common sense concept, which deserves the support of the Congress.

Also, I would mention the Family Movie Act-another important component of this package. This provision allows the use of certain, specified technology to skip or mute content that may be objectionable to certain viewers when watching a movie at home, so long as no fixed copy of the edited work is made.

Very few would argue that many of the movies produced today contain significant amounts of gratuitous sex, violence, foul language or other potentially objectionable content. A number of innovative companies have stepped forward to solve this problem by providing filters that tag such scenes and allows consumers to tailor their viewing experience.

This legislation is designed to solve an on-going controversy surrounding the use of such technology. Specifically, there is litigation pending over the issue of whether providing edited versions of movies to consumers creates a "derivative work" that violates the rights of those who created or own the copyrights and trademarks for the original movies. The existence of this controversy arguably is hampering the development of the technology that families may find helpful in protecting children from potentially objectionable content.

Let me make clear that this bill is not designed to deal with ad-skipping by consumers in the home. I know that there has been some misinformation about this by groups who apparently oppose copyright protections generally, but this bill has nothing to do with anything other than using a certain kind of technology to modify the viewing experience of a movie to skip over objectionable content.

Finally, the two remaining provisions-though relatively small-are not insignificant. The Film Preservation Act, legislation that I recognize is particularly important to Senator Leahy, and I thank him for his efforts in promoting it, will reauthorize a Library of Congress Program dedicated to saving rare and significant films. Additionally, we make a small but necessary change to the Sonny Bono Copyright Term Extension Act. Correction of this error will allow libraries to create copies of certain copyrighted works, such as films and musical compositions that are in the last 20 years of their copyright term, are no longer commercially exploited, and are not available at a reasonable price.

Before I relinquish my time, I do want to thank a number of people who have worked tirelessly on behalf of this bill. Allow me to thank David Jones and Tom Sydnor of the staff of Chairman ORRIN HATCH, who is not only our previous Judiciary Committee Chairman, but a leader on copyright and intellectual property issues; Susan Davies and Dan Fine of Senator LEAHY's staff, who also has long been a leader on intellectual property issues; and finally, David Hantman of Senator FEINSTEIN's staff, a Senator with whom I am happy to have teamed to introduce the ART Act in the last Congress.

Having begun with the staff, who rarely get mentioned as much as they deserve for the great work they do, let me also thank the Senators they work for: Senators Hatch, Leahy, and Feinstein for their co-sponsorship, as well as the Majority Leader, who has taken a personal interest in this legislation and worked to make it happen.

Mr. CORNYN. Mr. President, would the Senator yield for a quick question?

Mr. HATCH. I would be happy to yield for a question from the distinguished Senator from Texas.

Mr. CORNYN. As the chairman knows, he and I and our other cosponsors have worked throughout last Congress on the provisions of the Family Entertainment and Copyright Act of 2005 that we have introduced today. With respect to the Family Movie Act portion of the bill, I just wanted to raise the point that there had been some concern over the potential effect of the FMA on future cases involving "ad skipping" technologies and ask if you would have any objection to including in the record the relevant portion of the floor discussion on that issue from last Congress?

Mr. HATCH. I thank my friend, the Senator from Texas, for that reminder. I would certainly have no objection to entering our previous colloquy into the RECORD again and ask unanimous consent that it appear after our remarks.

Mr. HATCH. Mr. President, Section 102 of the ART Act establishes a new provision of Title 18 entitled, "Unauthorized Recording of Motion Pictures in a Motion Picture Exhibition Facility." I ask Senator CORNYN, what is the purpose of this provision?

Mr. CORNYN. Section 102 addresses a serious piracy issue facing the movie business: the use of camcorders in a motion picture theater. Sad to say, there are people who go to the movie theater, generally during pre-opening "screenings" or during the first weekend of theatrical release, and using sophisticated digital equipment, record the movie. They're not trying to save $8.00 so they can see the movie again. Instead, they sell the camcorded version to a local production factory or to an overseas producer, where it is converted into DVDs or similar products and sold on the street for a few dollars per copy. This misuse of camcorders is a significant factor in the estimated $3.5 billion per year of losses the movie industry suffers because of hard goods piracy. Even worse, these camcorded versions are posted on the Internet through "P2P" networks such as KaZaA, Grokster and Morpheus-and made available for millions to download. The goal of our bill is to provide a potent weapon in the arsenal of prosecutors to stem the piracy of commercially valuable motion pictures at its source.

Mr. HATCH. I have heard it said that this bill could be used against a salesperson or a customer at stores such as Best Buy or Circuit City if he or she were to point a video camera at a television screen showing a movie. Is this cause for concern?

Mr. CORNYN. Absolutely not. The offense is only applicable to transmitting or copying a movie in a motion picture exhibition facility, which has to be a movie theater or similar venue "that is being used primarily for the exhibition of a copyrighted motion picture." In the example of Best Buy-the store is being used primarily to sell electronic equipment, not to exhibit motion pictures. For the same reason, the statute would not cover a university student who records a short segment of a film being shown in film class, as the venue is being used primarily as a classroom, and not as a movie theater.

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