Time Inc., Life's publisher, in most cases no longer wants all rights in all photos shot on assignment. It no longer in most cases wants work made for hire relationships. There are several reasons. In the first place, the sheer expense of storing negatives and color transparencies does not warrant that sort of relationship. Believe it or not, the expense of storing color negatives makes it uneconomical for the publisher to retain all those negatives. In the second place, there is not that much market for the use of photos taken on assignment but not actually published. In the third place, photographers who are retained to go on assignment are in many cases photographers to whom the publisher voluntarily returned rights. Indeed, the famous picture of President Roosevelt with the cigarette holder and that marvelous grin on his face was a picture taken by a staff photographer of Life magazine. After he retired, that picture and all his other pictures were given back to him. Now, that is not what I heard this morning. What I heard this morning was that publishers take poor, defenseless people and exploit them. That is not the way it really works. Senator MATHIAS. Let me ask Secretary Hoopes about the encyclopedia and textbook industry. Are not there instances there where an author's work is clearly identifiable, clearly separable from the rest of the work? In the Britannica the authors are very often assigned their contributions, as I recall. Is it necessary there to require the creative artist of the illustrations or the writers of the articles to sell on a work made for hire basis? Mr. HOOPES. I would think, Senator, that the answer to the question varies with the particular circumstance. I would be surprised if the makers of encyclopedias used the work for hire form of contract for all of their contributions. Mr. John Robling, who is the vice president of Encyclopaedia Britannica, is here. Perhaps he can respond more specifically with regard to that company. Senator MATHIAS. And about encyclopedias generally. Mr. ROBLING. I think that what Mr. Hoopes has said is pretty accurate. I do not want to get too specific, but I have been through this rather recently because we have just published a new edition, the 15th edition, of Britannica. That involved 10 or 12 years of expenses totaling $32 million, ending up with 43 million words. Now, when we had 5,000 contributors, authors, worldwide, and we might invite a biophysicist from Oxford to do a particular piece, then we would invite someone in the humanities in Tokyo to do a piece, those were all acquired on a basis of a contribution that could be used and reused again, as we go back to press for a new copyright every year. And that is basically the process that we follow. Many of these are scholars, of course. They come from academia. They are not exactly best-selling authors, but they are experts in their field. Senator MATHIAS. How about textbooks? Mr. HOOPES. Again, I think the situation with textbooks varies. In the case of college texts, it is more frequently the case that there are identifiable single or groups authors. In the case of elementary textbooks-and here we are usually talking not of individual texts but of whole programs, for example, multiple volumes on the social sciences, or mathematics for the fifth grade. In such cases, it is the usual practice to use the work for hire format. The work is far more integrated and is much less the product of an individual author. Senator MATHIAS. What would you say to Ms. Brickman about her experience today, where she sold an illustration for a rather modest sum of $75 and then finds it on the dust jacket in a much more prominent position than had been anticipated? Mr. PERLE. I think I would say to her what was said to the man who asked, "How do I get to Carnegie Hall?" And the answer was "practice." I would say Senator MATHIAS. Let's have no demonstrations at this hearing. Mr. PERLE. I would say that Ms. Brickman was retained, she got work. She did not have to accept that work. She chose to accept that work. One of the great fallacies about work made for hire is, and as it has been talked about this morning, that there is some sort of magic by which poof, it's material specially commissioned to be work made for hire and that's the end of the contractual negotiation. The contractual negotiation also involves how much you are going to pay, in what installments, and under what circumstances. What controls does each party exercise? Work made for hire is merely a statement of a legal consequence, not of an economic relationship. So, Ms. Brickman, as her reputation increases, as she gets better known by virtue of being published, will be in a better position to bargain for more money and to bargain for greater rights. Senator MATHIAS. You would tell her to take that dust jacket then on her next bargaining session and use that as evidence of the fact that she has a marketable talent? Mr. PERLE. If I were representing Ms. Brickman—and I am sure that some lawyer will be or has been or some agent was or is representing Ms. Brickman-I would say to the publisher: fine, pay us the $2,000; but, if any of the illustrations Ms. Brickman executes is used as a dust jacket, we desire and insist upon that additional payment which is normal and customary for commissioned dust jackets. It is a question of how the negotiation works out all the terms and conditions of the contract; agreement that work product is to be work made for hire is merely one of those terms. Senator MATHIAS. You described the practice at Time-Life. You are interested, by and large, in the one-shot publication. Mr. PERLE. In the magazines, yes. Senator MATHIAS. In the magazines. Mr. PERLE. By and large, not always. Senator MATHIAS. I understand. But by and large, your normal practice is to pay for the use in one issue of a magazine. That being the case--and I suspect that is representative of the magazine industry-why would a publisher want to acquire more than that one publication right? Why do publishers acquire more? Mr. PERLE. There is one instance given in my prepared testimony, which I think reads better than I could tell it now, in the special case where a publisher is creating a story that would not otherwise exist, and at great cost and expense to the publisher. Let me give you a specific example. At the time of the coronation of Queen Elizabeth, Life magazine sent a host of people over to Westminster Abbey, who did things with cameras that had never been done before. Remote control cameras in the ceiling and all sorts of lighting effects. Life sent a battery of photographers and writers, some of whom were on staff, some of whom were not on staff, to cover that historic event. The cost of that coverage ran into the hundreds of thousands of dollars. At that time, those people who were not staff photographers and writers were on a work-made-for-hire basis because, with Life's investment of hundreds of thousands of dollars, which at that time was an enormous amount of money, Life knew and planned that there would be reuse factors. The publisher knew it would want to use the pictures and words again, although at the time not sure in what context such reuse would occur. The people that were sent to do that job, to execute something that the publisher was creating-a photo story of the coronationnever would have gone were it not for the publisher. They would not have been in Westminster Abbey. They would not have had the equipment. They would not even have had the film. They were more than happy to go on that assignment and go on a work-madefor-hire basis. Nor were they unhappy at the arrangement. Freelancers worked on the same copyright basis as staff members and the publisher paid the free lancers their market price at that time for the assignment. Senator MATHIAS. That is, as you say, a rather unique situation. Tell us, any one of you, is it not also the case that, unless there is some vigorous opposition by the author or the artist, that the publisher, by acquiring all the rights, sets up the possibility of a windfall somewhere down the road? Mr. HOOPES. Theoretically you are correct, Senator. But I come back to this point: Categorizing a work as a "work made for hire" does not automatically determine the question of compensation, either of amount or of kind. First the work has to be agreed between the parties as a "work made for hire." Second, in accordance with section 201 there may be an allocation of the various rights as between the parties by further express agreement. So, the terms of a "work for hire" agreement are ultimately resolved by the relative bargaining powers of the two parties. Senator MATHIAS. Of course, then I think you revert to probably the incentive for the introduction of this bill, that the bargaining powers of the two parties are so unequal. Mr. HOOPES. In some cases they are unequal. But as Mr. Perle has suggested, this is not always the case. It is certainly not the case, for example, where distinguished scholars are asked to provide a major contribution to a new encyclopedia. Senator MATHIAS. No, or somebody in the position of John Kenneth Galbraith, who is, I expect, well able to protect his flank in a negotiation of that kind. But it is the nurturing of new talent and new creativity that I think we also have an interest in. Mr. PERLE. Senator, may I comment on new talent. New, unknown talent is not often retained by magazine publishers. As I said before, magazines tend to use established authors who are known in their respective fields. The unestablished author who executes material other than pursuant to a commission or assign ment works in his or her garret and submits material, unsolicited, over the transom, in person or through an agent. Such material by its very nature, because it is already in existence and not executed pursuant to a commission with the written understanding that it will be deemed to be work made for hire, if not capable of being work made for hire under the present statute. So the statute needs no revision to take care of that situation. The new and unknown artist, photographer, or writer wants his work to be published. His principal motivation is to be published, to get exposure to develop a reputation and to demonstrate his art to the public. He also wants to be paid. He is not unlike an unknown actor who is delighted to have the opportunity to act even though not paid as much as a star. It is publication and exposure which develops reputation and reputation in turn increases bargaining power. I submit the work-made-for-hire question is not really relevant in the determination of whether or not an unknown author is to be published in a magazine. Incidentally, may I correct one omission? I am accompanied here today by Barry Agdern, who is chairman of the Copyright Subcommittee of MPA's Legal Affairs Committee, and Alfred H. Wassestrom who is one of the grand men in the copyright field and the former chairman of MPA's Legal Affairs Committee. Senator MATHIAS. We are delighted to have all of you here. Thank you very much for being here. Thank you for your testimo ny. Without objection, the prepared statements will be inserted into the record. [Material referred to follows:] STATEMENT OF E. GABRIEL PERLE, ESQ. MAGAZINE PUBLISHERS ASSOCIATION Time, My name is E. Gabriel Perle. I am submitting this statement on behalf of the Magazine Publishers Association. The Magazine Publishers Association is an organization representing the interests of nearly 200 publishing firms which publish consumer oriented periodicals. Better Homes and Gardens, Reader's Digest, and Good Housekeeping are among the more widely circulated magazines, but hundreds of other periodicals appealing to a wide variety of interests and avocations are MPA members. Atlantic, Harper's, Foreign Affairs, Bon Appetit, Essence, Fly Fisherman, Scientific American, Colonial Homes and The New Yorker are among MPA's nearly 800 member magazines. Circulation of member magazines now exceeds 290 million copies per issue. The I am accompanied today by Barry Agdern, Chairman of the Copyright Subcommittee of MPA's Legal Affairs Committee, who is in charge of copyright matters for the Office of the General Counsel of The Hearst Corporation. Also present with me is Alfred H. Wasserstrom, one of the grand men of the copyright field, who had served for many years as Chairman of MPA's Legal Affairs Committee and its predecessor Copyright Committee. Time I am at present Corporate Vice President Law of Time Incorporated with surveillance over all legal matters of Time Inc. and its subsidiaries, including copyright matters. Inc. is the publisher of Time, Life, Fortune, Sports Illustrated, People, Money and Discover magazines. Its book publishing activities include Time-Life Books, Little, Brown and Company and Book-of-the-Month Club. Its video operations include Home Box Office, the country's largest pay television programming |