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Moreover, the omission of notice will not invalidate the copyright in a work if registration for the work is made within 5 years after the publication without notice and a reasonable effort is made to add notice to all copies or phonorecords distributed to the public in the l'nited States after the omission is discovered.

Is under the present law, innocent infringers who are misled by the omission of notice would not be liable in actual or statutory damages for infringement. But under H.R. 2223, they might have to surrender profits gained through the infringement and be subject to injunction or payment of a reasonable license fee for continuing their activity (section 405. (b)). These provisions would delete from 17 U.S.C. $21 the provision that no permanent injunction shall be had unless the proprietor of the copyright shall reimburse the innocent infringer his reasonable outlay innocently incurred if the court, in its discretion, shall so direct.

A copyright should be protected from invalidation only when the failure to provide notice was the result of an accident or mistake or in violation of the copyright owner's written requirement that, as a condition of authorization of public distribution, the copies or phonorecords bear the prescribed notice, and distribution of only a -mall number of such items has been made to the public. To permit, as proposed in section 405, a copyright owner to issue an entire publication of his work without notice and vet enforce the copyright tends to negate the purpose of notice. Although innocent infringers would incur no liability, they would still have to establish their innocence even where the omission was deliberate in many cases. We suggest that the section specifically be limited to the etiect of omission of the copyright notice by accident or mistake.

We also believe it advisable that the words “particular copy or copies," contained in the present statute, be used instead of the broader and more general words "a relatively small number," found in section 411.7, to designate the limits within which notice may be omitted without loss of copyright. And we think the discretion in the court to order reimbursement to the innocent infringer should be retained.

Subject to specified exceptions, section 601 provides that the importation into or public distribution in the United States of more than 2.100 copies of a work consisting preponderantly of nondramatic literary material in English by an American or resident alien author and protected under the Copyright Code is prohibited, unless the por. tions consisting of such material have been manufactured in the United States or Canada.

This section would reenact in modified form a previous, highly protectionist nontariff trade barrier (17 U.S.C. $$ 16, 197). We do not beliere that there is either a necessity or desirability for such a provision which creates an absolute bar to certain books published abroad.

Section 601 is entirely related to questions of copyright. It does not protect authors at all. On the contrary, section 601 decreases the value of copyrights by preventing an American author from granting worldwide publication rights to an English publisher who offers more favorable compensation than an American publisher. Whatever the merits of the original "infant industry" justificaton for the mannfurturing clanse, the restriction is clearlv innecessary and inappropriate today in light of the strength and success of our industry and in

light of our Nation's commitment to eliminate nontariff barriers to international trade and insure vigorous competition.

For these reasons, section 601 should be stricken from the bill, and the manufacturing clause should be eliminated from our copyright law.

With respect to the Department's antipiracy program in the sound recording field, we note the following as areas where amendments are desirable:

Section 506 should be amended to provide for forfeiture of infringing articles in criminal cases resulting in convictions, and a new section should be added to provide for summary and judicial forfeitures in criminal cases.

At present, the Government has no clear-cut authority to destroy infringing articles which have been seized or otherwise obtained in the investigation or prosecution of a tape piracy case or, for that matter, any criminal copyright infringement case. This lack of specific authority has resulted in critical storage problems for many FBI and U.S. marshals' offices throughout the country and poses the embarrassing possibility that the Government may be ordered to return known infringing articles to a convicted defendant.

With proper amendments, H.R. 2223 could eliminate this most serious problem. We strongly urge the following revisions:

1. There should be added to section 506 a new subsection which should be designated as:

(b) When any person is convicted of any violation of subsection (a), the court in its judgment of conviction shall, in addition to the penalty therein prescribed, order the forfeiture and destruction or other disposition of all infringing copies or phonorecords and all implements, devices, equipment or other articles of whatever kind used or intended to be used in the manufacture, use, or sale of such infringing copies or phonorecords.

Present subsections (b), (c), and (d) need to be redesignated as subsections (c), (d), and (e), respectively.

A conforming amendment should be made to title 18, United States Code, section 2318, so that it reads as follows:

2318.
(a) (present section 2318)

(b) When any person is convicted of any violation of subsection (a), the court in its judgment of conviction shall, in addition to the penalty therein prescribed, order the forfeiture and destruction or other disposition of all counterfeit labels and all articles to which counterfeit labels have been affixed or which were intended to have had such labels affixed.

(c) Except to the extent they are inconsistent with the provisions of this title, all provisions of section (new forfeiture section decribed below), title 17, United States Code, are applicable to violations of subsection (a).

2. A new section should be added reading as follows:

(a) All copies or phonorecords manufactured, reproduced, distributed, sold, or otherwise used, intended for use, or possessed with intent to use in violation of section 306(a), and all plates, molds, mat. rices, masters, tapes, film negatives, or other articles by means of which such copies or phonorecords may Le reproduced, and all electronic, me. chanical, or other devices for manufacturing, reproducing, assembling,

using, transporting, distributing, or selling such copies or phonorecords may be seized and forfeited to the United States.

(b) All provisions of law relating to (1) the seizure, summary and judicial forfeiture, and condemnation of vessels, vehicles, merchandise, and baggage for violations of the customs laws contained in title 19, U nited States Code, (2) the disposition of such vessels, vehicles, merchandise, and baggage or the proceeds from the sale thereof, (3) the remission or mitigation of such forfeiture, (4) the compromise of claims, and (5) the award of compensation to informers in respect of such forfeitures, shall apply to seizures and forfeitures incurred, or alleged to have been incurred, under the provisions of this section, insofar as applicable and not inconsistent with the provisions of this section; except that such duties as are imposed upon the collector of customs or any other person with respect to the seizure and forfeiture of vessels, vehicles, merchandise, and baggage under the provisions of the customs laws contained in title 19 of the United States Code shall be performed with respect to seizure and forfeiture of all articles described in subsection (a) by such officers, agents, or other persons as may be authorized or designated for that purpose by the Attorney General.

Proposed section 114 should be amended to provide for the copyright owner of a sound recording to have the right to make derivative works or it should be amended to clarify that persons other than the copyright owner do not have such a right absent consent of the copyright owner, notwithstanding the fact that the sound recording copyright owner would have no such right.

Section 114 limits the specific rights of a sound recording copyright owner to those granted to copyright owners by parts (1) and (3) of section 106. That is, sound recording copyright owners have the right:

(1) To reproduce the copyrighted work in copies or phonorecords; (3) To distribute copies, et cetera.

The right to prepare derivative works based on the copyrighted work (part (2) of section 106) is withheld from a sound recording copyright owner despite section 103 which states that such works are copyrightable and despite the fact that sound recording copyright owners are entitled to make and copyright derivative works under present law, 17 U.S.C. 87. There is a real possibility that an unauthorized duplicator who made a “derivative” work by slightly altering the original copyrighted sound recording would claim that he did so legally since the copyright owner is given no exclusive right to make derivative works.

This potential legal problem could be eliminated by including part (2) of section 106 in the list in section 114 of exclusive rights granted to a sound recording copyright owner-an action which would grant to sound recording copyright owners no more rights than they presently possess.

Section 506 should be amended accordingly to include part (2) of section 106.

A third area for concern is proposed section 301 (pages 32-33), subparagraph (b), which states:

Nothing in this title annuls or limits any rights or remedies under the common law or statutes of any State with respect to:

57–786—76-pt. 1— 10

and

(3) Activities violating rights that are not equivalent to any of the exclusive rights within the general scope of copyright * * * including breaches of contract, breaches of trust, invasion of privacy, defamation, and deceptive trade practices * * *

We believe this language could be read as abrogating the antipiracy laws now existing in 29 States relating to pre-February 15, 1972, sound recordings on the grounds that these statutes proscribe activities violating rights "equivalent to * * * the exclusive rights within the general scope of copyright * * *."

Certainly such a result cannot have been intended for it would likely affect the immediate resurgence of piracy of pre-February 15, 1972, sound recordings. (Note: In any event, there would be no effect on sound recordings produced after February 15, 1972, since it would appear that the States cannot constitutionally enforce their antipiracy laws against the unauthorized duplication of these later recordings.]

We therefore urge that section 301(b) be amended to include a new subsection (4) as follows:

(4) Sound recordings fixed prior to February 15, 1972.

Proposed section 506(a) should be amended to correct the disparity of sanctions between second-time infringers of sound recording and motion picture copyrights and second-time infringers of other copyrights.

As written, section 506(a) provides for a maximum $10,000 fine and 3 years imprisonment for second-time infringers of all copyrights but sound recording and motion picture copyrights. Infringers of these latter two categories are subject, upon conviction of a second offense, to a maximum fine of $50,000 and 2 years imprisonment. We suggest that these latter infringements are sufficiently serious to warrant at least the same maximum imprisonment for second offenders as is aj) plicable to second-time infringers of other copyrights, as well as the larger fine. The term of imprisonment prescribed should therefore be at least 3 years.

We support the substitution of “for purposes of commercial advantage or private financial cain” for the present requirement in 17 U.S.C. 104 that, to be criminal, infringements must be done "for profit.” The provision in present section 104 for aiders and abettors has been removed, but these individuals will be liable to prosecution under 18 U.S.C.2.

From the standpoint of making deterrents meaningful beyond the financial deterrent and provide a penalty for those who can "take"! financial losses as a cost of business, it is recommended that a maximum 1-year term of imprisonment be included in the sanctions under proposed sections 116(d) and 506(b), (c), and (d), all of which are provisions the Department supports.

We also note that section 115, subparagraph (a) (1), states explicitly and with clarity what four courts of appeals have ruled is the scope of compulsory licensing under present law, namely, that absent authorization by the owner of a composition copyright, the duplication of a sound recording embodying a copyrighted musical composition is an infringement of the composition copyright even though the duplicator tenders royalty payments and otherwise attempts to comply with present compulsory licensing provisions. This is contained in the final sentence of subparagraph (a) (1), which reads:

I person may not obtain a compulsory license for use of the (nondramatic musical) work in the duplication of a sound recording made by another.

"Since this prohibition is not limited to copyrighted sound recordings, the ethiet is to prevent the operation of the compulsory license mechanism for making copies of any sound recordings embodving copyrighted musical compositions. The Department wholeheartedly supports this provision.

Section 804 deals with procedures before the tribunal which determine adjustment of copyright royalties and their distribution under specified sections of the bill. We object to the provision in subsection (e) of this section that the Senate Committee on the Judiciary and the Ilouse of Representatives (ommittee on the Judiciary may waive a requirement that a final decision in each proceeding be rendered by the tribunal within 1 year from the certification of the panel by the Register of ('opyrights.

The constitutional division of duties among the three principal branches of the Government places in the Congress the legislative responsibilities. However, once a law has been enacted, it is for the executive branch to carry out the intents and purposes of the law as directed by the Congress. In our view, legislation, once enacted, should not be modified or waived by actions of a committee of the Congress. It is suggested that if waiver of the 1-vear requirement is desirable under particular circumstances, these circumstances be generally outlined in the bill and that the tribunal be given authority upon good cause shown to extend the period of time for rendering decisions.

Of particular concern to this Department is the new form of copyright protection provided by title II of the bill.

This new form of protection is a hybrid between design patents, 33 U.S.C. 171-173, issued for a period of up to 14 years by the Patent Orice for new, original and ornamental designs of articles of manufacture and the copyright laws which provide for registration and is-uance of certificates of copyrights for the writings of authors. The new protection that is provided under the bill is not presently available under the copyright laws and can only be obtained through a de. sign patent after an examination procedure which determines whether the ornamental design meets the criteria of patentability, including unobviousness in view of the prior art, as provided by 35 C.S.C. 102, 103,

While the protection period as proposed for the new type of ornamental design protection is only a maximum of 10 vears as compared with the maximum of 14 years available for a design patent, it is granted without the need of meeting the novelty and unobviousness requirements of the patent statute.

A threshold consideration before finding that the needs are such that this new type of protection should be available is whether the benefits to the public of such protection out weigh the burders. We 1mlieve that insufficient need has been shown to date to justify removing from the public domain and possible vise by others of the rights and Jxnefits proposed under the present bill for such ornamental desims. We believe that design patents, as are granted today, are os far as the public should go to grant exclusive rights for ornamental designs of useful articles in the absence of an adequate showing that the new

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