Loyola of Los Angeles Entertainment Law Review Volume 16 Number 1 Article 1 6-1-1995 U.S. Copyright Law After GATT: Why a New Chapter Eleven Means Bankruptcy fo Bootleggers Jerry D. Brown Follow this and additional works at: https://digitalcommons.lmu.edu/elr Part of the Law Commons Recommended Citation Jerry D. Brown, U.S. Copyright Law After GATT: Why a New Chapter Eleven Means Bankruptcy fo Bootleggers, 16 Loy. L.A. Ent. L. Rev. 1 (1995). Available at: https://digitalcommons.lmu.edu/elr/vol16/iss1/1 This Article is brought to you for free and open access by the Law Reviews at Digital Commons @ Loyola Marymount University and Loyola Law School. It has been accepted for inclusion in Loyola of Los Angeles Entertainment Law Review by an authorized administrator of Digital Commons@Loyola Marymount University and Loyola Law School. For more information, please contact [email protected]. ARTICLES U.S. COPYRIGHT LAW AFTER GATT: WHY A NEW CHAPTER ELEVEN MEANS BANKRUPTCY FOR BOOTLEGGERS Jerry D. Brown* "I am a bootlegger; bootleggin' ain't no good no more." -Blind Teddy Darby' I. INTRODUCTION On December 8, 1994, President Clinton signed into law House Bill 5110, the GATT (General Agreement on Tariffs and Trade) Implementation Act of 1994 . By passing the GATT Implementation Act before the end of 1994, the United States joined 123 countries in forming the World Trade Organization ("WTO"). The WTO is a multilateral trade organization established by GATT 1994, wherein member countries consent to minimum standards of rights, protection and trade regulation. Complying with these standards required the United States to amend existing law in several areas concerning trade and commerce, including areas that regulate intellectual property rights.' * B.A., University of Oklahoma, 1992; J.D., Oklahoma City University School of Law, 1995. The author wishes to thank his wife, Angela Marie Poe-Brown, for three years of enduring patience, love, and stability, for he could not have finished his education without her. Thanks go also to John C. Kluge, for offering advice and suggestions on previous drafts from a disinterested point of view. Finally, the author would especially thank Associate Dean Jay Conison, Oklahoma City University School of Law, for his thoughts, advice, and insight in drafting this paper. 1.As British police hauled away a young bootlegger's entire inventory of Compact Discs ("CDs") in Colchester, the young bootlegger played this old blues song on his sound system. Record Haul by Music "Police," THE OBSERVER (London), Dec. 12, 1993, at 13. 2. General Agreement on Tariffs and Trade Act of 1994, Pub. L. No. 103-465, 108 Stat. 4809 (1994). 3. Though the textual result of the Uruguay negotiations is entitled The FinalAct Embodying the Results of the Uruguay Round of Multilateral Trade Negotiations, the treaty itself has come to be known simply as "GATT 1994." Similarly, the intellectual property sections of GATT 1994, the Trade-Related Aspects of Intellectual Property,Including Trade in Counterfeit Goods, 2 LOYOLA OF LOS ANGELES ENTERTAINMENT LAW JOURNAL [Vol. 16 This Article addresses the subsequent addition of Chapter 11 to Title 17 of the United States Code.4 This chapter, and its criminal counterpart in Title 18, establish liability for the unauthorized recording of live performances, a popular and increasing form of "bootlegging." In short, Chapter 11 requires that one making a recording of a live performance obtain the consent of the performer.' One who makes a recording of a live performance without the performer's consent is liable to the performer, and is also subject to the remedies or penalties set forth in existing copyright law.6 Current federal copyright law already prohibits some types of bootlegging, such as counterfeiting and pirating.7 In many respects, these laws control domestic bootlegging successfully. Before the new amendments, however, and for reasons addressed in this Article, Congress left to the states the task of regulating the unauthorized recording of live performances, what this Article refers to these recordings as "classic" bootlegging. Congress' failure to regulate classic bootlegging left enough room in federal law for people around the world to profit from this special form of infringement. In addition, many foreign countries considered state regulation of classic bootlegging an inadequate form of protection for their artists in the United States. Consequently, these countries did not provide American artists the same protection they provided their own citizens. Because the required provisions were buried deep within the language of GATT, and because federal copyright law already prohibits most forms of bootlegging, the recent amendments received little fanfare from the press or legal commentators. However, there are a few in the music industry who foresee the new amendments as having a great impact on domestic and international copyright protection. For these people, the new amendments is commonly abbreviated as "TRIPs." The TRIPs provisions of GATT 1994, delineated by articles and subsections, are located in Annex I-C of the Agreement Establishingthe World Trade Organization. Unless indicated otherwise, citations to the TRIPs portion of GATT 1994 will be given as GATT 1994, citing to the pertinent article. 4. See generally 17 U.S.C. §§ 101-114 (1994). 5. General Agreement on Tariffs and Trade Act of 1994, Pub. L. No. 103-465, 108 Stat. 4809 (1994). 6. Id. The remedies for copyright infringement are set forth in 17 U.S.C. §§ 501-510 (1994). 7. See infra part IV.A. 1995] COPYRIGHT LAW AFTER GA TT "close a gaping loophole"8 of protection in existing law, one that allowed classic bootleggers to profit without violating federal law. The addition of these amendments presents many interesting issues. Of these issues, this Article will address three: (1) Where, and to what extent, was federal law inadequate in controlling bootlegging? (2) Second, what will the new amendments bring to existing law? (3) Finally, how effective will the new amendments be, in conjunction with GATT 1994 standards, in controlling bootlegging in the United States and abroad? Part II, the section that follows, will familiarize the reader with bootlegging terms and the recording industry in general. Part III of this Article will analyze the toll that bootleggers have taken on the recording industry to date. Parts IV and V will summarize the current federal and state methods of controlling bootlegging. Part VI will outline the new GATT and federal provisions, and will trace their legislative history. Finally, Part VII will examine those areas in existing law where the new amendments will have the most effect. II. BOOTLEGGING AND THE RECORDING INDUSTRY: THE PLAYERS A. Classes of Bootlegging Bootlegging is the unlawful sale or manufacturing of some product,9 including phonorecords.'0 The word "bootlegging" originates from acts of piracy and theft: an "allusion to concealing objects in the leg of a high 8. GA 77 and Intellectual Property: Hearings on H.R. 4894 and S. 2368 Before the Senate Judiciary Comm. on Patents, Copyrights and Trademarks and the House Subcomm. of the Judiciary on Intellectual Property and Judicial Administration, 103d Cong., 2d Sess. (1994) (statement of Jason Berman, Chairman and Chief Executive Officer, Recording Industry Ass'n of America). As will be discussed in parts IV, V, and VI, existing federal copyright law does not prohibit some types of bootlegging, so long as the bootleggers conform to the compulsory licensing provisions of 17 U.S.C. § 115 (1994). 9. Judges and authors have defined "bootlegging" in a number of ways. Even the Supreme Court has defined bootlegging: "A bootleg phonorecord is one which contains an unauthorized copy of a commercially unreleased performance." Dowling v. United States, 473 U.S. 207, 209 n.2 (1985). 10. "Phonorecords" is a term of art in copyright law, which not only includes records, but also any "material objects in which sounds . are fixed by any method now known or later developed ...." 17 U.S.C. § 101 (1994). 4 LOYOLA OF LOS ANGELES ENTERTAINMENT LA W JOURNAL [Vol. 16 boot."" As with many unauthorized acts, there exist different classes of bootlegging, each with its own distinct legal consequences. The dis- tinctions among these classes lie either in the source material being bootlegged or the packaging of the product.'2 This Article will identify three classes of bootlegging: counterfeiting, pirating, and classic bootleg- 13 ging. Counterfeitingis the unauthorized duplication or sale of a pre-existing copyrighted work, where the duplicate has been manufactured to look and sound like the authorized copy. One may compare counterfeit phonorecords with counterfeit money; both purport to be authentic when in truth they are not. 14 Similar to counterfeiting, piratingis the unauthorized duplication or sale of a copyrighted work that was not released to the public. Included in the category of pirated recordings are outtakes,15 studio rehearsal tapes, "B-sides," and demonstration or audition tapes. 6 Classic bootlegging is the third type of bootlegging. Bootlegging in the classic sense is the unauthorized copy of a live performance of a copyrighted work. Usually, one becomes a classic bootlegger by recording a live performance in person or through a public broadcast. 7 This Article identifies classic bootlegging as such because the unauthorized recording of a live performance is the original and most notorious type of bootleg- ging. !1.WEBSTER'S NEW WORLD DICTIONARY 168 (College ed. 1968). 12. Were one referring only to the source material being copied, one could divide bootlegging into two categories, instead of three: unauthorized recordings of pre-released works, and unauthorized recordings of unreleased works. 13. At least two sources have used the three-category method. See Douglas Wong, Cantopop Piracy Poses Threat to Music Industry, STRAITS TIMES, Dec. 11, 1993, at 44. See also Daniel Roth, The Battle Never Ends for the Tape-PiratePolice: Music Knock-Offs are Big Business, CORP.