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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 Copyright 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 Copyright 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 as a copyright lawyer.

S. 2044

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 a work made for hire. For the purpose of the foregoing sentence, a "supplementary work" 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 capital 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

[blocks in formation]

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 provisions 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 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), and standard form contracts resulting from such agreements.

In view of the almost unanimous support that the Act had

from all interested parties, including the Register of Copyrights, when it became Law, and 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.

As I expect that others will present all sides, especially the public interest, with respect to other authors, publishers and producers, including the changes the Amendment would work upon contributions to collective works, such as encyclopedias, will focus my remarks on the impact of the Amendment upon the motion picture industry.

I

Before I do so directly, it may be appropriate first to analyze the Amendment in relation to several other sections of the Act with respect to what was referred to by this Committee in 1975 as a change

of dubious value to employers and employees alike (which) might also reopen a number of other issues. [S.R. at 105.]

THE AMENDMENT

The Amendment would delete three of nine categories of works. which, even though works specially ordered or commissioned, would not qualify for treatment as a "work made for hire," even if the parties were willing so to agree in a written instrument signed by each of them. Among the three works to be excluded are works specially ordered or commissioned for use as part of a motion picture or other audiovisual work.

The consequences of this proposed change would affect, for example:

1. Whether the party who commissions the work is to be considered the author under $201. (b) of the Act, consistent with the

fact that the parties can now allocate the rights arising under the Act, even if the work is deemed to be a work made for hire.

2. The nationality of the work, its qualification for protection under the Act, and under foreign laws and treaties. $104. (b) of the Act.

3. Whether the carefully crafted Termination of Transfers and Licenses provisions of $203. and $304.(c) will apply to the work, since each of these Sections, for reasons to be reviewed below, excludes works made for hire from their operation.

4. Duration of the copyright term under $302. and $304. of

the Act.

As stated by this Committee:

The right of termination would not apply to "works made for hire," which is one of the principal reasons the definition of that term assumed importance in the development of the bill. [S.R. at 108.]

Indeed, that:

Section 201. (b) of the bill adopts one of the basic principles of the present law: that in the case of works made for hire the employer is considered the author of the work, and is regarded as the initial owner of copyright unless there has been an agreement otherwise. (Emphasis added.) [S.R. at 104.]

As noted by Abraham L. Kaminstein, late Register of Copyrights, in summing up, following the 1965 Hearings before the Committee on the Judiciary of the House of Representatives (really the end of the debate on these topics prior to enactment. of the Act in 1976):

Most amazing to those of us closely involved in the development of the bill is what has happened with respect to the so-called "reversion" or termination-of-transfers provision now found in section 203. This, which was once by all odds the most explosively controversial provision in the bill, appears to have largely receded as an issue in general revision.

The one remaining issue on ownership of copyright that should be mentioned here is raised by the proposal advanced on behalf of screen writers and composers which would change

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