[Ecommerce] Jack Valenti: MPAA/MPA wants mass-market license terms to be strickly enforced in Hague Convention on Jurisdiction

[James Love]

-------- Original Message --------
Subject: Jack Valenti: MPAA/MPA wants mass-market license terms to be 
strickly enforced in Hague Convention on Jurisdiction
Date: Sat, 12 Jul 2003 11:30:54 -0400
From: James Love <james.love@cptech.org>
To: random-bits@lists.essential.org


http://www.cptech.org/ecom/jurisdiction/JV%20Kovar%20letter.pdf

*  "First, we strongly disagree with the suggestions of some that seek
to carve out from the reach of the Convention certain classes of
business-to business (B2B) transactions, whether based on the character
of the contracting entity (e.g., libraries or educational institutions),
the amount of the transaction, the nature of the negotiations (e.g.,
so-called "non-negotiated contracts") or the substance of the underlying
transaction (e.g., mass-market licenses)."


			Jack Valenti
			Chairman and Chief Executive Officer
			Motion Picture Association
			1600 Eye Street
			Washington, DC 20006
			TELEPHONE: 202/293-1966
			TELECOP1ER: 202/452-9823
			Internet: jvalenti@mpaa.org



June 26, 2003

Mr. Jeffrey Kovar
Assistant Legal Advisor for Private International Law
United States Department of State
2430 E Street, NW
Suite 203, South Building
Washington, D.C. 20037-2851

Dear Mr. Kovar,

I write on behalf of the Motion Picture Association of America (MPAA)
and its international counterpart, the Motion Picture Association (MPA).
We serve as the voice and advocate of the American motion picture, home
video and television industries, domestically through the MPAA and
internationally through the MPA. The members include: The Walt Disney
Company; Sony Pictures Entertainment Inc.; Metro-Goldwyn-Mayer Inc.;
Paramount Pictures Corporation; Twentieth Century Fox Film Corp.;
Universal City Studios LLLP; and Warner Bros.

We very much appreciate all your efforts on this matter over the last
decade, and especially your efforts to inform and be informed by
interested non-governmental parties. As companies that do business in
every corner of the globe, we have a profound and abiding interest in
promoting certainty in contracts. A global convention that assures
businesses that the choice of court provisions they contract for will be
honored and enforced in every country, absent extraordinary
circumstances, would certainly promote the growth of commerce and trade.
We believe that the Preliminary Result of the Work of the Informal
Working Group on the Judgments Project (Working Group Draft) is a solid
start toward that laudable goal, and a useful focus for the Hague
Conference. We support the U.S. Government's efforts to continue
discussions with other nations on this draft, and improve the final product.

We understand that, at the moment, you are not seeking detailed
comments, but instead more general views on the Working Group Draft
draft. Reserving such detailed comments for a more appropriate time, we
offer the following broad observations.

First, we strongly disagree with the suggestions of some that seek to
carve out from the reach of the Convention certain classes of
business-to business (B2B) transactions, whether based on the character
of the contracting entity (e.g., libraries or educational institutions),
the amount of the transaction, the nature of the negotiations (e.g.,
so-called "non-negotiated contracts") or the substance of the underlying
transaction (e.g., mass-market licenses). Any attempt to exempt whole
classes of parties or transactions from a convention designed to honor
the choice of court agreements to which the parties had agreed could
only promote chaos, not certainty. Moreover, it would force courts
around the world to engage in complex fact finding even to reach the
preliminary question of whether a particular party or transaction is
encompassed within the scope of the treaty, For example, the court would
need a full-fledged evidentiary hearing to determine whether a
particular non-profit organization constituted a "library" or whether
the choice of court provision was the product of an adequate negotiation
between the parties.

Going down this road would be an exercise in futility, for no useful
Convention could ever emerge from it. Rather than straining to serve
groups that hope to maximize their future ability to avoid their
contractual obligations, the Government should work to preserve the
broad reach of the Working Group Draft, which encompasses the vast bulk
of B2B choice-of-court provisions.

For the same reasons, we would strongly oppose any move to provide
special status to Internet Service Providers (ISPs), a proposal also
raised at the recent meeting. We have not heard sufficient justification
to warrant treating ISPs any differently under the Convention than
banks, widget makers or movie studios when they enter into business
agreements. Indeed, acceding to pleas for special treatment based on
ill-defined concerns can only lead to other industries around the world
asking for their own special provisions, defeating the sound objective
of providing all organizations with the same clear and reliable rules on
choice of court provisions.

We do share the concern, voiced by others at the recent meeting, that
the "escape hatches" in the document may be too broad or engender a
nonuniform approach to the same issue, as they allow a court to
frustrate the parties' agreement as to choice of court where it finds
that the agreement is "null and void (Articles 4,5, and 7(a)) or where
"recognition or enforcement would be manifestly incompatible with the
public policy of the State addressed" (Article 7(e)). We fully recognize
that the courts in this nation and others must have some room to refuse
to honor choice of court agreements in extraordinary circumstances, but
are concerned that the Working Group Draft specifies no standard for
what will render a particular provision "null and void" or "incompatible
with the public policy."

Without such a standard, there is a risk of inconsistent approaches as
to when a "choice of forum" clause is "null and void" between those
countries that have detailed and expansive "mandatory laws" (or
doctrines of "ordre publique") and those countries which instead believe
more strongly in freedom of contract and generally entrust such matters
to the agreement and discretion of the contracting parties. As the
Working Group Draft moves forward, we urge you to promote the goal of
certainty by making plain that these exceptions should be applied only
in rare circumstances.

We would also use this opportunity to raise two more specific but
important concerns. One relates to Article 15t which permits a State to
declare upon ratification of the Convention that its courts may refuse
to determine disputes if there is no connection between that State and
the parties or the dispute. Our member companies. like many
international corporations, produce and distribute their works on a
worldwide basis, with different elements of the work coming from
different countries. In such circumstances the various parties involved
in the production of the work (and local subsidiaries may have been
formed for various aspects of the work) may have intentionally chosen a
court at the outset of the transaction. In a B2B transaction, the choice
of the forum should not be so easily second-guessed. We urge you to
consider working toward removing or modifying that section.

Our final concern relates to Article 1.3 (k) and 1.4. We understand the
distinctions the Working Group Draft seeks to draw between litigation to
determine whether a particular patent or trademark is valid or invalid
on one hand, and issues of their validity raised in a contract dispute
between two parties on the other. The recent discussions by the group,
however, suggests that the term "incidental question" in 1.4 is a source
of confusion and requires some further explication. That explication may
help clarify whether to consider extending the scope of 1.3(k) to
copyrights.

Once again, Mr. Kovar, we applaud you and your colleagues for the hard
work and excellent progress you have made. We look forward to continuing
to work closely with you, and hope that together we can achieve a
successful outcome.


Sincerely,


Jack Valenti




-- 
James Love, Director, Consumer Project on Technology
http://www.cptech.org, mailto:james.love@cptech.org
tel. +1.202.387.8030, mobile +1.202.361.3040