Golan Case May Put US In Violation Of International Copyright Treaties

A United States federal court recently gave some bad news to the US government and many foreign copyright owners – including the estates of Sergei Rachmaninoff, Dmitry Shostakovich, Sergei Prokofiev, and Igor Stravinsky. The court struck down a US statute which had restored copyright protection to the works of these foreign authors.

The Federal District Court in Colorado held, in Golan v. Holder [pdf], that the copyright restoration violated the First Amendment of the US Constitution, which protects the free speech rights of individuals and businesses. It was a landmark ruling – the first time any US court had found that a provision of US copyright law ran afoul of the First Amendment.

Golan, however, may put the US in a rather awkward situation. By limiting copyright restoration, the ruling might prevent the US from fulfilling its obligations under the Berne Convention and the World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).

“If the decision is upheld on appeal, the US could potentially be in violation of these treaties,” said Tyler Ochoa, who teaches international IP law at Santa Clara Law School in California.

The problem arose from some unusual formalities that used to be part of US copyright law. For instance, during most of the 20th century, a work received copyright protection in the US only if it was registered in a timely fashion with the US Copyright Office and displayed a proper copyright notice. Registration provided protection for 28 years, but if the registration was properly renewed, the work was protected for an additional 28 years.

Works created overseas often failed to satisfy these formalities for obtaining – or renewing – US copyright protection. As a result, a significant number of works had copyright protection in their country of origin, but not in the US.

In 1989, when the United States adhered to the Berne Convention, the country was supposed to restore copyright protection to many of these foreign works. Article 18 of Berne mandates that when a country joins the treaty, the nation must give copyright protection to foreign works from other signatory countries, provided that those works have not, at the time, fallen into the public domain in the works’ countries of origin.

Berne, however, has no enforcement mechanism, and the US failed to comply with Article 18.

That changed in 1994, when international negotiations created the World Trade Organization and the TRIPS Agreement. TRIPS requires all signatories to meet specific minimum standards for IP protection – including the protections set out in Berne. Violations of TRIPS can subject a nation to the dispute resolution procedures of the WTO, which can result in hefty trade sanctions against an offending country.

“The difference between TRIPS and Berne is that TRIPS has teeth,” says Christopher Sprigman, a professor at the University of Virginia School of Law. “TRIPS has an enforcement mechanism that can assess penalties.”

Not wanting to fall afoul of TRIPS, the US passed a law in December 1994 that restored copyright to foreign works. Unfortunately that statute, §514 of the Uruguay Round Agreements Act (codified at 17 USC §104A), runs afoul of the First Amendment to the US Constitution, according to the May 3 federal district court ruling in Golan v. Holder.

The US Supreme Court has greatly limited First Amendment challenges to US copyright law. Eldred v. Ashcroft, allows such challenges only if Congress alters “the traditional contours of copyright protection.”

Congress did precisely that when it passed §514, the 10th Federal Circuit Court of Appeals held in Golan v. Gonzales [pdf]. Restoring copyrights to works in the public domain violates “the bedrock principle of copyright law that works in the public domain remain there,” the court stated in its 2007 decision. The appellate court then sent the case back to the district court to determine whether §514 violated the First Amendment.

It did, according to the district court ruling in Golan v. Holder. (In this case, the name of the defendant changes whenever the US gets a new head of its Justice Department.)

The district court found that although the US had an important interest in complying with Berne and TRIPS, §514 went substantially beyond what was necessary to comply with those treaties. Specifically, when §514 restored copyrights in some foreign works, the statute created a limited safe harbour for entities that were using these works at the time copyright was restored. The statute allows these reliance parties to continue reproducing and selling any restored-copyright work for one year after the copyright holder files a notice of intent to enforce the restored copyright. If a reliance party made a derivative work based on the copyrighted work, the party can continue exploiting the derivative work after the copyright holder files a notice of intent – but the reliance party must pay a “reasonable royalty.”

The court found that the Berne Convention (and thus, TRIPS) allows member states to provide far more expansive protections for reliance parties. “Congress could have complied with the Berne Convention … by permanently ‘excepting parties, such as plaintiffs, who have relied upon works in the public domain,’” the court stated. By restricting reliance parties more than Berne requires, the government violated the First Amendment. Section 514, the court stated “suppresses the right of reliance parties to use works they exploited while the works were in the public domain.”

The district court’s ruling is controversial. The US government and some copyright experts insist that Berne does not allow permanent exemptions for reliance parties. Others experts claim it does.

“Nothing in Berne says or suggests [accommodations for reliance parties] can only be temporary,” said Anthony Falzone, who teaches copyright law at Stanford and who represents Golan in this case. He adds, “Other Berne signatories, such as the UK, have permanent accommodations that have not been challenged under the WTO dispute resolution mechanism.”

The district court is unlikely to have the last word in this matter. Observers widely expect the US government to appeal. And if the 10th Circuit Court of Appeals upholds the ruling – as many believe it will – the US could face international repercussions.

“If it is upheld on appeal, another country could ask the WTO to rule we are not complying with our treaty obligations,” Ochoa said. “If the panel found we were not complying with … the Berne Convention, it could authorise the complaining country to impose trade sanctions against the US.”