Free Trade Area of the Americas - FTAA

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September 18, 2003

Original: English





Name(s): Sean Bersell, VSDA Vice President for Government Affairs (English)
John T. Mitchell, Interaction Law, legal counsel (English/Spanish)
Organization(s): Video Software Dealers Association
Country: USA

Free Trade Area of the Americas and Access to Movies

Comments of Video Software Dealers Association
June 2003



Technology is neutral. It is the uses made of technology, not technology itself, which merit scrutiny. Just as national laws and international treaties rightly focus attention on whether legal systems need to be updated in response to the use of technology as a tool for reducing the effective reach of copyrights, in the same manner they must focus attention on whether legal systems need to be updated in reaction to the use of technology as a tool for enlarging the effective reach of copyrights.

The use of technology to infringe copyrights and the use of technology to circumvent the limits of the lawful copyright monopoly should be condemned equally. Both types of abuses threaten to upset the careful balance of rights in copyright that is intended for the public benefit.

The November 1, 2002, Draft Free Trade Area of the Americas (FTAA) includes proposals which, if adopted, would have a substantial negative impact upon millions of consumers. Those most harshly affected would be those who can least afford the higher consumer prices that would be certain to follow. Legal provisions existing for nearly a century would be abandoned to conform to the FTAA obligations. And, despite the success of the current United States legal architecture in stimulating an explosion in the availability of low cost motion picture and video game entertainment to the vast majority of the United States population, the FTAA would obligate the United States Congress to reverse itself and confer upon the motion picture studios the very “rental right” it rejected following the United States Supreme Court’s ruling in the Betamax case.

If adopted, the impact of these proposals would extend to all of the Americas. The United States home video market was developed, over the strong objection of the motion picture industry, which preferred a sales-only model rather than rental, by independent competitive businesses lawfully acting against the will of the copyright holders. When rental succeeded in generating huge revenues for the motion picture studios, they, in effect, “exported” the home video rental model to other countries, including the rest of the Americas.

The importance of allowing retail competition to operate free of perpetual restraint by copyright owners and retaining the unquestioned benefit to consumers of the balance of rights under the law cannot be overstated. Control over resale, lending and gifts could be taken from consumers if some of the current proposals in the Draft FTAA are adopted. If the negotiators acquiesce to these proposals, the effect will be (1) privatization of rights that now belong to the public, (2) an increase the cost of obtaining access to copyrighted works, and (3) forcing millions of people in the Americas who are now on the margins of the economy to lose the modest access they currently have to home entertainment. As explained below, their source of free or low cost access to used copies is directly threatened by FTAA proposals to change the balance of rights that have favored consumers and authors alike.

A number of provisions threaten to erode the current availability of low-cost movie and video game rentals available to the public. First, the Rental Right proposed in Article 6 is directly contrary to United States law and would require the United States Congress to create a new power to control or prohibit rental of copies of audiovisual works and place it in the hands of copyright owners. Second is the proposed expansion of copyright powers by the use of private agreements. Third is the enabling of overuse of technological measures to expand the reach of copyrights. Fourth is the extension of rights in fleeting “temporary” copies such that uses, the rights to which are currently reserved to the public, such as private performances, may come under the control of the copyright owner.

It is in the public interest that any exclusive rights conferred under copyright law be maintained for the sole purpose of encouraging the creation and wide dissemination of new works. In like manner, it is against the public interest for copyrights to be used to profit by limiting access to only those consumers capable of paying a premium for new copies. Since the inception of copyright laws, the freedom to re-sell, lend, give away or (in some cases) rent legally made copies, without the consent of the copyright owner has served to ensure that all consumers have access to these works, regardless whether the copyright owner has any financial incentive to make them available to those who are on the margins of the economy. Millions in the Americas depend upon the markets for used copies, the benevolence of those who will give away used copies, barter systems where used copies will be loaned or traded in exchange for others, and public library systems where many people can share access to a single copy. Some of the proposals in the November 1, 2002 Draft FTAA place all of this access at risk. We urge the negotiators of the FTAA to keep these public interests in mind, and to resist private efforts to enlarge the control that the major copyright holding companies may exercise over lawful uses that benefit the public.

Millions of people depend upon the market for used cars, used shoes, used clothing, and other secondary or tertiary transactions which offer no new remuneration for the manufacturer. Books, CDs, DVDs, and copies made legally by digital reproduction should be no different. If the citizens of the Americas are to have maximum access to the expressive works our collective creative abilities can offer, private interests must remain legally, technologically and contractually incapable of preventing lawful access to these works by those least able to pay the full price of an original copy.

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Established in 1981, the Video Software Dealers Association (VSDA) is the not-for-profit international trade association for the $20 billion home entertainment industry. VSDA represents more than 1,500 companies throughout the United States, Canada, and a dozen other countries. Its members operate more than 12,500 retail outlets in the U.S. that sell and/or rent DVDs, VHS cassettes, and console video games. Membership comprises the full spectrum of video retailers (from single-store operators to large chains), video distributors, the home video divisions of major and independent motion picture studios, and other related businesses that constitute and support the home video entertainment industry.

For further information concerning the VSDA Statement, please contact:

Sean Bersell (primary contact) (English)
VSDA Vice President for Government Affairs
or John T. Mitchell (English or Spanish)
VSDA legal counsel
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