Mr. BILLER. No; it is acceptable. But, we would support any alternative language if it were to achieve the same objective.

Mr. KASTEN MEIER. The gentleman from New York, Mr. Pattison. Mr. PATTISON. I have no questions.

Mr. KASTEN MEIER. I have just one. You devoted quite a bit of your statement to the manufacturing clause. Really, 8 to 10 years ago we tried to limit the effect of it on the theory that eventually it might well be phased out consistent with national policy.

I am not sanguine about how it presently appears in H.R. 2223. I rather agree with the thrust of your statement and wonder it if might be useful for our purposes internationally to place a further restriction on that section which would limit the effect of, actually limit the effect of the manufacturing clause to a term certain, for example, 6 years from date or some other such specific period of time whereinafter it would no longer have any force or effect? Would that not be helpful to the State Department with respect to its dealings with Great Britain and other countries?

Mr. BILLER. Yes, sir, I think it would. We fully realize that there could be a difficulty posed for some American manufacturers if protection like this, which has existed in legislation for many years, were suddenly terminated.

If the Congress should decide that in order to achieve a desirable transition that some sort of phaseout period is necessary, we would support such a position.

Mr. KASTEN MEIER. I thank you, Mr. Biller and your colleagues this morning.

Mr. DANIELSON. May I ask an additional question?

Mr. KASTEN MEIER. Certainly.

Mr. DANIELSON. Concerning section 104 (c) I have been puzzling here. Maybe you can give me a short cut. Does a foreign state have standing in the U.S. courts to bring the kind of an action contemplated, on the communities referred to in 104 (c)?

Mr. BILLER. At the present time?

Mr. DANIELSON. Yes.

Mr. BILLER. Yes, sir.

Mr. DANIELSON. In another sub of this committee-Mr. Railsback was on it, I believe we have been considering the advisability or the lack thereof permitting foreign states to bring action in the United States and you feel it does have that?

Mr. BILLER. I don't know, I just wanted to try and clarify it for you. Mr. KASTEN MEIER. We appreciate your appearance here this morning and that of your colleagues. Thank you.

[Witness excused.]

Mr. KASTEN MEIER. The Chair would like to call upon Deputy Assistant Attorney General Irwin Goldbloom of the Civil Division of the Department of Justice. Would you please identify your colleagues for the committee.

Mr. GOLDBLOOM. On my left is John Murphy and on his left is Miles Ryan. On my right is Michael Werth. All of these gentlemen are from the Justice Department.

Mr. KASTEN MEIER. I notice that you have a 36-page statement which you may deliver in its entirety or if you care to, you may summarize. Mr. GOLDBLOOM. Thank you.

TESTIMONY OF IRWIN GOLDBLOOM, DEPUTY ASSISTANT AttorNEY GENERAL, CIVIL DIVISION, DEPARTMENT OF JUSTICE

Mr. GOLDBLOOM. Mr. Chairman, I am pleased to respond to the committee's invitation to present the views of the Department of Justice on H.R. 2223, a bill for the general revision of the copyright law, title 17 of the United States Code, and for other purposes.

We are in sympathy with the general purpose of title I of the bill, to provide a thorough revision and updating of the copyright law, title 17, United States Code. However, as set out below, we recommend certain modifications in the proposed revision. We oppose title II of the bill which creates a new type of intellectual property, a hybrid between a copyright and a design patent.

H.R. 2223 and its companion bill, S. 22, are nearly identical with S. 1361 as passed by the Senate in the 93d Congress on September 9, 1974. There are, however, technical and perfecting amendments and changes required by the enactment of Public Law 93-573, providing for interim copyright extension and increased penalties for tape piracy.

A section-by-section analysis of S. 1361 is part of Senate Report No. 93-983, 93d Congress, at pages 102 to 228. Further details as to the history of this copyright revision bill appear in the same report at pages 101 to 103. The summary below is specifically directed to features of the Bill of particular concern to this Department.

Section 107 relates to the "fair use" doctrine. This is fully discussed in Senate Report No. 93-983, pages 115 to 120. The scope of fair use in copying is illustrated to include reproduction by a teacher or a student of a small part of work to illustrate a lesson (S. Report 93-983, p. 115).

This example, therefore, does not include reproduction of the entire work to illustrate a lesson. In determining whether the use made of a work in a particular case is a fair use, a court is to consider as factors the purpose and character of the use, the nature of the copyrighted work, the amount and substantiality of the portion used in relation to the copyrighted work as a whole, and the effect of the use upon the potential market for or value of the copyrighted work.

As to the reproduction of entire works for classroom use, the doctrine of fair use would be applied “strictly" (S. Report, 93–983, p. 117). Sections 108, 110, and 111 cover exemption from liability for copyright infringement in the fields of library and archive reproduction (section 108), the exemption of certain performances and displays, such as in classrooms in face-to-face teaching activities of a nonprofit educational institution (section 110) and the retransmission of a primary transmission simultaneously with the primary transmission or nonsimultaneously with the primary transmission if by a "cable system" outside defined geographic areas ("secondary transmissions" of section 111).

Section 302 establishes a new term for the duration of copyright. Generally, this is for a term consisting of the life of the author and 50 years after his death. In the case of joint works, the period of 50 years commences upon the death of the last surviving author. For anonymous works, pseudonymous works, and works made for hire, the copyright period is for a term of 75 years from the year of its

first publication, or a term of 100 years from the year of its creation, whichever expires first.

Where one or more authors are identified for an anonymous or pseudonymous work before the end of the copyright term, the longer period of copyright terminating 50 years after the death of the author then applies.

Section 405 deals with the effect of the omission of the copyright notice. Section 411 covers infringement actions in certain situations. Section 506 contains special provisions applying to persons who infringe willfully and for purposes of commercial advantage. With respect to copyright in a sound recording, for the first such offense, a person is fined not more than $25,000 or imprisoned not more than 1 year, or both.

For any subsequent offense, a person is fined not more than $50,000 or imprisoned not more than 2 years, or both. Section 507 provides a 3-year statute of limitations for both criminal proceedings pursuant to provisions of the bill after the cause of action arose, under the provisions of Section 116 and 506 and for civil actions after the claim accrued.

Section 601 affords preferential protection to publishers and printers of the United States and Canada Report 93-983, pp. 195-200.

Sections 801-809 are concerned with the Register's duties to collect royalties and make determinations concerning the adjustment of copyright royalty rates for certain uses where compulsory licenses are provided by the bill.

They also relate to his duties to determine in certain circumstances the distribution of these royalties deposited with the Register of Copyrights. Section 803 provides for selection of membership of the tribunal to make necessary determinations with respect to royalty matters, to be on the basis of a list of names furnished by the American Arbitration Association to the Register of Copyrights. Section 804 provides for procedures to be followed by the tribunal in making its determinations. Subsection (e) of section 804 directs that the tribunal shall render a final decision in each proceeding within 1 year from the certification of the panel, certified by the Register of Copyrights on the basis of the names furnished by the American Arbitration Association. This subsection further provides that the Senate Committee on the Judiciary and the House of Representatives Committee on the Judiciary, upon showing of good cause, may waive this requirement of the rendering of a final decision within 1 year from the certification of the panel in a particular proceeding.

The judicial review for tribunal final determinations, provided in section 809 (concerning the distribution of royalty fees), is limited. A court may vacate, modify or correct such a determination if it was procured by corruption, fraud or undue means, where a member of the panel was guilty of misconduct by which the rights of any party were prejudiced.

Provisions for the protection of ornamental designs of useful articles appear in title II of the bill. Section 201 provides that authors or proprietors of an original ornamental design of a useful article may secure a period of protection, except for certain subject areas set out in section 202, for a period provided in section 205. Section 201 con

tains definitions of the terms "useful article", "design of a useful article", "ornamental" and "original" as needed for purposes of the particular protection provided by this title. Section 204 provides that protection commences on the date when the design is first made public, either by being exhibited, publicly distributed, or offered for sale or sold to the public. Section 205 provides that the term of protection extends for 5 years, subject to being renewed for an additional 5 years prior to the expiration of the initial term. Section 206 provides for certain design notices to be applied to the products protected, and section 207 limits recovery for infringement if the design notice requirement

of section 206 have been omitted.

However, actual notice of design protection to a particular person can take the place of the design notice requirement of section 206. Section 209 of title II provides for loss of protection if registration of the design is not made within 6 months after the date on which the design was first made public, who may make application for renewal registration of a design protected under the bill, how and under what conditions and with what supporting papers a design protected under the bill can be renewed.

Section 212 of title II deals with the examination of the design application and provides for cancellation of registrations on application of a person who believes he is or will be damaged by a registration under this title. Grounds for cancellation are that the design is not subject to protection under the provisions of the title.

Section 220 of title II provides remedies for infringement of a design protected under this title. It provides for a civil action to have judicial review of a final refusal of the Administrator to register the design as for infringement if commenced within a time period specified by the Administrator of the title, but not less than 60 days after the decision, and permits simultaneous remedy for infringement by the same action if the court adjudges the design subject to protection under this title. This would appear to mean that the infringer would have to be joined as a party defendant with the Administrator of this title. The requirements for such an action are that the design proprietor has filed and prosecuted to final refusal an application for registration of the design, a copy of the complaint in the action is delivered to the Administrator within 10 days after commencement of the action, and the defendant has committed acts which would constitute infringement of the design.

Section 221 of title II gives courts jurisdiction of actions under this title and authority to grant injunctions to prevent infringement, including temporary restraining orders and preliminary injunctions.

Section 222 of title II relates to recovery of infringement, setting maximum amounts of recovery per infringing copy by way of compensation and provides for the delivery for destruction or other disposition of any infringing articles.

Section 223 of title II provides for cancellation of a registration of a design by a court and certification by the court of such order to the Administrator.

Section 227 of title II provides that copyright protection under title I, when utilized in an original ornamental design of a useful article, may still be a design work eligible for protection under the provisions of this title.

The issuance of a design patent for an ornamental design for an article of manufacture under the patent laws, title 35 United States Code, terminates any protection of the design under this title.

Section 229 of title II provides that nothing in this title annuls or limits common law or other rights or remedies available to a person with respect to a design which has not been made public as provided in this title or any trademark right or right to be protected against unfair competition.

Section 232 of title II amends various other statutes. Of particular importance to the Department. is the revision proposed for title 28, United States Code, § 1498 (a) to provide that whenever a registered design or invention is used or manufactured by or for the United States without license of the owner thereof, the owner's remedy shall be by action against the United States in the Court of Claims for recovery of reasonable and entire compensation. Use or manufacture of a registered design or invention by a contractor, subcontractor or any person, firm or corporation for the Government and with the authorization or consent of the Government is to be construed as use or manufacture by or for the United States.

Use or manufacture by or for the United States of any article owned, leased, used by or in the possession of the United States prior to, in the case of an invention, July 1, 1918, and for registered designs, prior to July 1, 1978, is not to be the basis of an award under this section. Government employees have the right to sue the Government under this section except when in the position to order, influence or induce use of the registered design or invention by the Government.

Further excluded as a basis for claim under this section are claims by a registrant or patentee or assignee thereof when the design or invention was related to the official functions of the employee, in cases in which such functions included research and development, or in making of which Government time, materials or facilities were used.

Section 233 provides that title II of the bill shall take effect 1 year after enactment of this act.

Section 234 precludes a retroactive effect for the provisions of the design protection of the bill.

Section 106 states generally the basic rights of copyright owners. Following sections of the same chapter set forth limitations and exceptions to those rights. The public interest in the promotion of education and scholarly pursuits calls for a careful consideration of such circumstances as may impede the dissemination of knowledge. In this regard, section 107 of the bill, dealing with "fair use" of copyrighted information, leaves unclear the extent to which librarians can reproduce works for use in libraries.

It would seem in the public interest to work an accommodation between the copyright and such reproduction. But, as a doctrine applied on a case-by-case basis, "fair use" renders it uncertain whether, without infringement, librarians or library patrons can make copies of library materials for the patrons' use. Because of the advantages of the economical and speedy means of reproduction now available in libraries, it would be socially desirable not to discourage use thereof by uncertainty over the extent of the "fair use" doctrine.

Thus, we strongly believe that a definition in the bill of the doctrine as applied to such reproduction in libraries is definitely needed.