INTELLECTUAL PROPERTY:

WHY IT MUST BE GUARDED

AND PRESERVED

IN THE LONG TERM BEST INTEREST

OF THIS NATION AND ALL WHO LIVE IN IT.

An important message presented to

The House Judiciary Committee's

Subcommittee on Intellectual Property

By

Jack Valenti

Chairman & Chief Executive Officer

Motion Picture Association of America

On

Thursday, June 15, 2000

Washington, D.C.

To the honorable members of this Committee, let me tell you about the freshly formed Copyright Assembly. It enlists into its membership the vast array of American enterprises involved in sports (professional football, basketball, baseball, hockey, NASCAR, NCAA), music, song-writing, advertising, software, broadcasters, both networks and stations, cable, movies, publishing, television programs, home video. These are the enterprises which are America's most wanted exports, in addition to being the favorites of the viewing, reading and listening public.

Why form a Copyright Assembly? Because we are deeply concerned about the future of creative works in a digital world where theft is easy, protection hard to come by, and too many people are seemingly unaware that stealing is wrong. All these valuable creative assets, protected by copyright, the roots of which are in the Constitution, are indispensable to both the culture and the economy of the United States.

Why this concern? All the members of The Copyright Assembly and are actively embracing new Internet opportunities for consumers and are developing new, inventive business models to deliver our creative works to homes, businesses, schools, universities. Many of us are licensing our creative material to Internet companies. Millions of dollars are now being invested by our members to develop this new economy, which along with Gutenberg's movable type and the invention of television, ranks as one of the great seminal entrants into the human society. We are all eager to be part of this revolutionary technological magic. But we worry lest what we have created at great cost of energy and investment becomes the victim of overt and covert theft of copyrighted material.

Why is there a problem? As legitimate businesses emerge on the Internet, thieves find the Internet a haven. There is no other word except "thief" to apply to those who take and use what does not belong to them. To put it bluntly, they steal copyrighted works. These burglars come in all sizes, ingenuity and motivation. Which is why at this moment we confront thievery by those who (1) profess to defend technological advancement but treat Copyright with a brazen disregard for laws and rules which guide and govern the daily labors of Americans (2) simply grin and say "Hey, if it's up there, it's okay to take it down for free. Why not?"

Moreover, it is a fact of life that no one rides the Internet to enjoy the routers, the packets, the chips or the entrails of a computer. Not at all. They are on the Internet to receive that which they want and need. Today, most of those who are Online want information, facts, data, email, etc. But tomorrow they all will want entertainment which through the expansive hospitality of Broadband reception will be dispatched to millions of homes all over this land and around the world, with pure fidelity to sight, sound and color. It is the creative ingenuity of what is called "Content" that people want above all else. It is Content's copyright shield that must be guarded and preserved. This is the responsibility of Congress and the courts.

Why should the Congress care? The Congress should hugely care because these creative works do not spring from a void. The source bed of this creativity lies within the imagination, artistry and ingenuity of a community of artists, craftsmen, athletes and others who provision Americans with most of what they read, hear and watch. It is the summation of massive infusion of risk capital that must be recouped else risk becomes too large, capital too cautious, and creative works dry up.

We should remind all who read this testimony that the members of The Copyright Assembly comprise the greatest trade prize available to any country on this planet. Intellectual property comprises 6.5% (as of 1997) of the nation's Gross Domestic Product ($530 Billion). It gathers in some $67 Billion annually in international revenues -- more than automobiles and auto parts, more than aircraft, more than agriculture! It produces new jobs at three times the annual rate of the economy as a whole. Moreover America's intellectual property revenue curve is rising all over the world. No wonder it is an engine of real growth for this nation.

Why this overture to the Congress? We want the Congress to understand clearly the economic and cultural worth of those enlisted in The Copyright Assembly. It's a value that cannot be cloned. It is a massive asset that must be guarded and preserved. As the Congress considers public policy issues which connect to the new technologies and the delivery of creative works to American consumers, we urge the Members to put intellectual property concerns at the top of their priorities.

The simple fact is this: Creative works must be able to be dispatched from the Internet to homes all over America in a safe, secure environment. If those creative works can't live on the Internet without thieves seizing them, it is a huge loss for this country. Or to put it starkly, if we cannot protect what we invest in, create and own, then we don't own anything.