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Based on the completed requirements analysis, in Fiscal Year 2002 we will begin systems

analysis, design and development work. A multiple-award contract will be developed to

rebuild and integrate our information systems to meet our new requirements. We plan to have this contract awarded by July 2002.

In Fiscal Year 2002, we will use the reprogrammed IT funds ($620,000) for IT contract

management and CORDS user support to provide hands-on technical advisory assistance to

our current CORDS users.

I very much appreciate your consideration of this modified request for next fiscal year. This shift in funding strategy is critical to our being able to fully meet our statutory obligations and fully serve the American people in the future.

2. Business Process Reengineering: Initial Implementation

The second initiative involves our initial steps to carry out our Business Processing Reengineering Implementation Plan. The plan will be implemented in phases beginning in fiscal 2002. The Copyright Office No-Year account will fund the three-year implementation, except for furniture and furnishings.

In fiscal 2000, the Copyright Office began the BPR project by awarding a contract to Price WaterhouseCoopers, LLP to conduct a study of its business processes. At the same time, the Office appointed a senior Project Manager, who is an expert in Copyright Office procedures, to oversee the contract and lead the Office BPR team. The project focuses on six major business processes: registration of claims, recordation of documents, requests for information, acquisition of deposits, maintenance of our public

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• Improve operations and service that will achieve better processing times and create timely public

records;

• Enhance operational efficiency through the use of new or alternative technologies;

Contain the costs of registration, recordation and other services;

Strengthen security within the Copyright Office; and

Use staff and space more efficiently.

In fiscal 2001, the Project Manager is leading a team of twelve Copyright Office staff and several Price WaterhouseCoopers contractor staff to document the current environment, plan new processes, and develop an implementation plan. The Office plans to complete the study with a final implementation plan to be completed by the end of this month.

We are requesting authority to spend $380,000 from our No-Year account for human resource actions (e.g., re-writing position descriptions, performing job analyses) as well as staff training to retool the workforce. Contractors will be hired to perform space design, re-write position descriptions, and some funds will be used for purchasing automation equipment and software.

The Copyright Office Mission

The Copyright Office administers the copyright law and is the primary source of copyright expertise in the Federal Government. It provides expert assistance to Congress on intellectual property matters and advises Congress on anticipated changes in U.S. copyright law. It analyzes and assists in the drafting of copyright legislation and legislative reports, conducts and provides studies for Congress and offers advice to

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Agreement. The Office works with the State Department, the U.S. Trade Representative's Office, and the Patent and Trademark Office in providing technical expertise in negotiations for international intellectual property agreements; provides technical assistance to other countries in developing their own copyright laws; and through its International Copyright Institute and other international work, promotes worldwide understanding and cooperation in providing protection for intellectual property.

The Copyright Office is also an office of central public record, a place where claims to copyright are registered and where documents relating to copyright may be recorded. The Copyright Office furnishes information about the provisions of the copyright law and the procedures for registration, explains the operations and practices of the Copyright Office, and makes available the public records of the Office. The Office also administers various compulsory licensing provisions of the law, which includes collecting and distributing royalties. Additionally, the Copyright Office and the Library of Congress administer the Copyright Arbitration Royalty Panels (CARP), which meet for limited times for the purpose of setting terms of certain licenses, adjusting rates and distributing royalties.

Given its role as administrator of the copyright law, creator of a central public record of copyright ownership, technical adviser to Congress and government agencies, and a source of copyright information to the public, the Copyright Office has a direct and vital role in the development and resolution of intellectual property policy, legislation and information.

Copyright Industries - A Growing Force in The U.S. Economy

Copyright is the segment of intellectual property law that protects the creative output of millions of composers, lyricists, painters, sculptors, photographers, authors, computer programs, graphic and performing

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artists, dramatists, motion picture producers and compilers. U.S. copyright industries accounted for about 5% of U.S. Gross Domestic Product (GDP), or over $450 billion in added economic value in 1999. In the last twenty years, the core copyright industries' share of GDP grew more than twice as fast as the rest of the economy. Should this trend continue as expected, the economic impact of the copyright industries will become an even more significant part of the American economy, emphasizing the need for strong copyright protection, and bringing to the fore increasingly challenging issues with which the copyright system must

deal.

Copyright Policy Challenges: Technological Change and the Digital Environment

Throughout the second half of the 20th century, the copyright law has had to adjust to a vast array of technological changes. The challenges to copyright posed by the convergence of today's computer and communications technologies are more serious and far-reaching than those posed by the technological developments of the past. The current technologies have the potential to impact every right in the copyright

bundle.

The increasing use and distribution of digital information raise significant issues regarding access to and security of copyrighted works. For works available in electronic form, there is often no limit to the number of people who can access a work simultaneously through the Internet and alter or modify them with ease. The Constitution provides for intellectual property protection with the goal of promoting public access to knowledge and innovation. The information infrastructure of the World Wide Web and other computer networks requires careful maintenance of the public good and private interest balance that has guided U.S.

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Fiscal 2000 Accomplishments, Fiscal 2001 Focus and Fiscal 2002 Plans

Policy Responsibilities Under the Digital Millennium Copyright Act

A major focus of the Copyright Office's legislative efforts during fiscal 2000 and in fiscal 2001 continued to be the completion of tasks entrusted to us by Congress in the Digital Millennium Copyright Act (DMCA), P. L. 105-304. The DMCA placed several policy-related responsibilities on the Office, including specific studies and rulemakings.

The DMCA made a number of amendments to Titie 17, including the addition of Chapter 12 of the copyright statute, which address technological protection and management systems for copyrighted works. Section 1201(a)(1) makes it unlawful to circumvent a technological measure that effectively controls access to a copyrighted work. However, the prohibition against circumvention does not apply to users of a copyrighted work which is in a particular class of works, if those users are, or are likely to be in the succeeding 3-year period, adversely affected by the prohibition in their ability to make noninfringing uses of that particular class of works.

The determination of what classes of works, if any, are subject to this exception is made by the Librarian of Congress on the recommendation of the Register of Copyrights, who conducts a rulemaking proceeding to identify any such classes of works. The initial rulemaking was begun in 1999. After consultation with the Assistant Secretary of Commerce for Communications and Information, the Register made her recommendation to the Librarian of Congress. He accepted the recommendation and published two classes of works subject to the exemption on October 27, 2000. Rulemaking proceedings are to be