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that such sequel and remake rights were to be owned by the producer.

Four, many people create a motion picture, including writers, the director, cameraman, producer, actors, creators of special effects, and many, many other people. A motion picture is undoubtedly the most complex form of a derivative work developed and formed by many creative talents to transform the written word and music and art into a motion picture at the sole cost and risk of the producer. Why should sequel rights revert to one of the contributors to the production of a motion picture if that person is willing, as and to the extent now permitted by the act, to grant such rights to the producer upon such compensation as may be agreed upon?

Five, as a study of the legislative history of the act will amply demonstrate, all of the foregoing and other problems had been studied by this committee, and the work-made-for-hire provisions of the act were reported out by this committee in November 1975 as "a carefully balanced compromise," and that a change would be "of dubious value to employers and employees alike which might also reopen a number of other issues,” and as stated by the Register of Copyrights: "The definition now in section 101 represents a carefully worked out compromise aimed at balancing legitimate interests on both sides.”

Most of the legal relationships between artists and producers, employees and employers, in the motion picture industry are governed by short-term collective bargaining agreements, usually improved by the employee with each new agreement, as in 1981 for actors, writers, and directors, with residual payments for use of subsidiary and ancillary rights.

In the absence of any demonstrated need for a change with respect to the motion picture industry, I respectfully suggest that the words “as a part of a motion picture or other audiovisual work” be deleted from the amendment and retained in the act.

In the motion picture industry many, indeed an increasing number, of the talented people who participate in the collective creation of a motion picture are engaged at their request as inde pendent contractors whose services are specially ordered or commissioned, not employed for use as part of a motion picture.

Partially in response to the distinguished Mr. Elmer Bernstein, I would point out that in contracts with composers there are standard provisions that for the use of the music we are to pay additional royalties including that composers receive shares of performance royalties directly through his or her performance rights society.

Tax considerations apply to commissioned works. As I am not a tax specialist, I will only allude to advice passed on to me that, in order to generate additional retirement and pension, health, and welfare benefits, in addition to those available through union and guild plans, composers and others prefer to provide their services through corporations of which they are direct employees. Such employer corporations then lend the services of their employees to a motion picture producer to create a work specially ordered or commissioned as part of a motion picture.

As stated by this committee with reference to the termination of transfer provisions in section 203 of the act, including the clause that excludes works made for hire from its operation, "Section 203 reflects a practical compromise that will further the objectives of the copyright law while recognizing the problems and the legitimate needs of all interests involved.”

In conclusion, may I emphasize that the act was the result of a legislative process which began with the famous Copyright Office studies of 1955 and culminated 22 years later in the Copyright Act of 1976.

There has been no testimony of any alleged abuses in the motion picture industry.

It is my judgment that any perceived problems are more appropriately the subject of contract negotiations between the parties within the structure of the present act and collective bargaining agreements, where applicable, and do not indicate a legislative problem.

I hope that this statement at least demonstrates that the words "as a part of a motion picture or other audiovisual work" should be retained in present section 101 for a definition of a work specially ordered or commissioned which may qualify as a work made for hire if the parties so agree in writing. Thank you, Senator.

Senator MATHIAS. Thank you, Mr. Colby. Without objection, your prepared statement will be inserted into the record at this point.

[Material referred to follows:]

Memorandum Statement

of

Richard Colby

Senior Distribution & Marketing Counsel

of Twentieth Century-Fox Film Corporation

My name is Richard Colby. I am a member of the California and New York Bars, Senior Distribution & Marketing Counsel of

Twentieth Century-Fox Film Corporation, and formerly Chairman of the Copyright Committee of the Motion Picture Association of

America, Inc.

Although I am not speaking on behalf of the American Bar Association or any of its Sections or Committees, I presently

serve as Chairman of the Subcommittee on Works Made for Hire of

Committee 307 of the ABA's Section of Patent, Trademark and Copy

right Law.

I attach to this statement, a list of my published writings, including at item 8. my previous testimony at 1963 Hearings at

the Copyright Office, reported at pages 268 and 278-281 of Copy

right Law Revision Part 3, a print of the Committee on the

Judiciary of the House of Representatives.

I am authorized to say that the member companies of the Motion Picture Association of America agree in principle with my

Statement, but time has not been sufficient for their respective

counsel to review my Statement in any detail.

To that extent, I

have the honor to appear by invitation of the Committee on the

Judiciary of the United States Senate, in my individual capacity

[blocks in formation]

The following is a copy of the definition in $101. of the

Copyright Act of 1976 ("the Act") of a "work made for hire," in

which brackets are used to indicate the deletions proposed in S.

2044 ("the Amendment"):

A "work made for hire" is-

(1) a work prepared by an employee within the scope of his or her employment; or

(2) a work specially ordered or commissioned for use (as a contribution to a collective work, as a part of a motion picture or other audiovisual work,) as a translation, as a supplementary work, as a compilation, (as an instructional text,) as a test, as answer material for a test, or as an atlas, if the parties expressly agree in a written instrument signed by them that the work shall be considered & work made for hire. For the purpose of the foregoing sentence, a "supplementary worki is a work prepared for publication as a secondary adjunct to a work by another author for the purpose of introducing, concluding, illustrating, explaining, revising, commenting upon, or assisting in the use of the other work, such as forewords, afterwords, pictorial illustrations, maps, charts, tables, editorial notes, musical arrangements, answer material for tests, bibliographies, appendixes, and indexes. (and an "instructional text" is a literary, pictorial, or graphic work prepared for publication and with the purpose of use in systematic instructional activities.]

SUMMARY

The proposed Amendment would directly diminish the value of

our contracts, and would restrict our ability to recoup the capi

tal investment we have at risk, in the following respects:

1. By removing commissioned works from the category of works made for hire, the Amendment would permit the artist to

terminate, pursuant to $203. and $304.(c) of the Act, the sequel and remake rights granted to the producer.

2. The motion picture producer would no longer be deemed the "author" of all parts of the motion picture, raising questions under foreign laws and treaties as to the nationality of the motion picture, making it much more difficult to enforce and protect our rights in foreign countries.

3.

The potential revenue from sequels and remakes would, in time, be lost, even if the parties had agreed upon payments and

13-698 O - 83 - 6

that such sequel and remake rights were to be owned by the pro

ducer.

4. Many people create a motion picture, including writers, the director, cameraman, producer, actors, creators of special

effects, and many, many other people. Why should sequel rights

revert to one of the contributors to the production of a motion

picture, if that person is willing, as, and to the extent, now

permitted by the Act, to grant such rights to the producer upon

such compensation as may be agreed upon, and why should the

motion picture producer not have the right to produce and distribute sequels if, in fact, only part of the motion picture resulted from the contribution of that person to the motion pic

ture.

5.

As a study of the legislative history of the Act will

amply demonstrate, all of the foregoing, and other problems, had been studied by this Committee, and the work made for hire provi

sions of the Act were reported out by this Committee in November

1975, as "a carefully balanced compromise" (S.R. 94-473 ("S.R.") at 104), that a change would be "of dubious value to employers and employees alike (which) might also reopen a number of other

issues" (S.R. at 105), and as stated by the Register of

Copyrights (CLR Part 6 at 66] :

The definition now in section 101 represents a carefully worked out compromise aimed at balancing legitimate interests on both sides.

Most of the legal relationships between artists and pro

ducers, employees and employers, in the motion picture industry are governed by short-term collective bargaining agreements (usually improved by the employee with each new agreement, as in 1981 for actors, writers and directors), and standard form contracts resulting from such agreements.

In view of the almost unanimous support that the Act had

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