Washington, D.C., April 23, 2014
(Please check against delivery)
Thank you very much Maria.
Ladies and Gentlemen,
A very good afternoon to you all.
It is really an honor and a great privilege to be present and to have this opportunity to speak to you on World Intellectual Property Day, here in the Coolidge Auditorium of the Library of Congress. I would like to thank Maria Pallante, the Register of Copyright and to thank also all of the staff in the Copyright Office, for giving me this opportunity and for the wonderful show that you have put on. World Intellectual Property Day provides us with an opportunity not just to focus on the increasingly important economic role of intellectual property, but also to pay attention to the economic, social and cultural activities that are enabled by intellectual property. It is these, I think, that create the closest connection for people with the importance of intellectual property.
As you know, this year, ‘Movies’ is the theme or the cultural and economic activity that we have chosen to focus on, movies, which we think are a global passion. Movies are – and I agree entirely with what Maria has said in quoting Carl Jung –a way for us to experience the full gamut of emotions, whether joy, sadness, laughter, happiness or love. All of the emotions are experienced by watching movies. This is why movies have been a passion for everyone from their first appearance.
It is really a privilege, of course, to be in the country that hosts the largest, the most vibrant, the most innovative, the most profitable, and the best known movie industry in the world. Maria Pallante has quoted some of the figures of the economic contribution of that industry. I have looked at the website of the Motion Pictures Association of America. They mention, amongst other things, that the industry contributes 41 billion dollars to over 300,000 businesses throughout the country and that it supports, directly or indirectly, 1.9 million workers. It is an extraordinary contribution.
Movies really are collections of IP. This is perhaps not a very satisfactory perspective for the artistic contribution to movies, but they are really collections of IP. The movies are a very good example of the way in which IP and intangibles are increasingly central to all economic activities in the contemporary economy – all economic, and I would add, social and cultural activities.
Maria Pallante also mentioned some of the contributions of copyright; there is the author or script writer; the composer of music; the performers of the music; the actors; and a whole range of other artistic creators involved in the production of a movie and for whom copyright is essential. But you also have, increasingly, innovation. Enhanced performance has brought us more sophisticated productions, so that technology and patents are also extremely important to the contemporary movie industry. Product placements have always been a part of movies - actually from the very first days. Product placements are increasingly important and they rely on trademarks. Then there is the merchandising of characters and the merchandising of titles. So movies are an example “par excellence” of a collection of IP and how IP can support a cultural and social activity that brings enormous joy to everyone around the world.
These collections of IP that constitute movies face an environment of enormous change. There are two features of that environment, in particular, to which I would point: the migration of all content to digital formats or the digital revolution, and the globalization not only of commerce, but also of fashions, trends, and cultural and entertainment consumption. These are enormous challenges. They are producing, on the one hand, a great opportunity and, on the other hand, a great threat or challenge. The great opportunity, of course, lies in the democratization of knowledge and culture that the digital environment has produced; the great threat is that it renders creative works much more vulnerable, in particular, it has produced an extraordinary disjunction between the cost of production and the cost of reproduction of creative works.
The cost of production in human and financial terms of a movie may be several hundred people working for a period of up to 18 months, with an investment of several hundred million dollars. The result of all of that cost of production can be reproduced in a few seconds at near zero marginal costs and made available on the Internet, the most powerful distributional mechanism that we have ever known. So this is, I think, the great opportunity and the great challenge that we experience at the moment and it is particularly dramatic for movies. With other forms of creative content, there are often other ways to monetize the content – there is for example, the possibility of live performance for many performers – but for movies, there is really only one way of monetizing them.
I believe that there are reasons for being more positive now about this digital revolution: digital sales are rising throughout the world and we have many new legal business models for distributing content that are available. These developments are giving us hope. However, we are losing some value in the process because digital sales are not rising by as much as analog sales are falling. So, some value is escaping in the process. We need to pay attention to this question, I think, because it is ultimately about the way in which we finance cultural production. Copyright is the model for financing cultural production.
Part – and I would emphasize only part – of the answer to the challenge lies in the development of the global legal framework for which WIPO, the World Intellectual Property Organization, is responsible and has been responsible since the Berne Convention on Literary and Artistic Works was concluded in 1886. That Convention was concluded in a period of fairly intense globalization with much greater increases of trade and the movement of persons and goods in the last part of the 19th century. That intensification of interaction and mobility led authors like Victor Hugo to militate for some form of international protection for creative works, which were circulating across borders with greater ease. The result was the Berne Convention.
The current wave of globalization that we are experiencing, as well as technological change, emphasize the need for us to have a rules-based system for global economic behavior and competition that is technologically adapted. Let me, since we are in the Jefferson Building, quote Thomas Jefferson in this regard. I think he saw it clearly as, if I may say he saw so many things clearly. In a passage from one of his letters that is reproduced on the fourth panel of the Jefferson Memorial, he said “I am not an advocate for frequent changes in laws and constitutions, but laws and institutions must go hand in hand with the progress of the human mind. As that becomes more developed, more enlightened, as new discoveries are made, new truths discovered and manners and opinions change, with the change of circumstances, institutions must advance also to keep pace with the times.”
The task of adapting the international legal framework is a very difficult one. To adapt it “with the change of circumstances”, as Jefferson said, is particularly difficult, because of the asymmetries of wealth, of information and of knowledge around the world. Nevertheless, as Maria Pallante has mentioned, the member states of WIPO were able to conclude two new treaties in the copyright area in the last two years.
One of those, the Beijing Treaty, had – we hope - an enormous impact on the movie industry around the world. It remedied an injustice – the exclusion from the international legal framework of actors, or audiovisual performances more correctly. The Beijing Treaty brought audiovisual performances into the international legal framework and this was an extremely important step. The Marrakesh Treaty was also a very important step because it facilitates the cross border exchange of published works in formats that are accessible to visually impaired persons.
I would like to acknowledge here the extraordinary leadership and the constructive engagement of the United States of America in respect of those two treaties. The United States was not just constructively engaged, but it was a leader in forming cross-regional alliances, cross-regional groupings, and creating the shared understanding that led to the consensus that enabled us to conclude the two new treaties. I hope that we can count on that engagement and leadership from the United States of America in the agenda of the future in the slow process of adapting the global legal framework in accordance with the change of circumstances.
The most immediate tasks for us are a proposed design law treaty and, beyond that, a treaty which will bring the rights of broadcasting organizations into the digital environment, an environment which all of the other aspects of the copyright system have entered over the course of the last twenty years.
It has been a great pleasure and a privilege for me to have been able to participate in this ceremony today to mark the social, cultural, and economic importance of movies; the great joy that they bring to us all around the world; and the very important role that intellectual property plays in ensuring that we have a global production of movies which rewards all of the creators who are involved in that production.
Thank you very much.