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promotion of the progress of science and useful arts requires a doubling of the puble 56-year copyright period. Our alternative proposal would accommodate such valid concerns as may exist regarding the present law and, at the same time, carry out constitutional goals.

Section 106 deals with the effect of omission of the copyright notice. Under the present Act, omission of notice on published copies of a work ordinarily places the work in the public domain (17 U.S.C. & 21). However, if such notice is acci. dentally omitted from a particular copy or copies, copyright is not lost; but inharent infringers who are misled by the accidental omission are not liable for infringement. Under Section 405 of the Bill, omission of notice from "a relatively small number" of copies or phonorecords publicly distributed will not invalidate the copyright whether or not such omission was accidental. Moreover, the omission of notice will not invalidate the copyright in a work if registration for the work is made within five 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 United States after the omission is discovered. As 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. 223, 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.O. $ 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 potice was the result of an accident or mistake or in violation of the copy. right 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 small 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 yet enforce the copyright tends to negate the purpose of Ootice. Although innocent infringers would incur no liability, they would still ha re to establish their innocence even where the omission was deliberate in many cases, We suggest that the Section specifically be limited to the effect 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 in-tead of the broader and more general words "a relatively small number," found in Section 405, 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 2,000 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 portions 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, 107). We do o't believe 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 unrelated to questions of copyright. It does not protect antbors 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 fublisher. Whaterer the merits of the original "infant industry" justification for tbe manufacturing clause, the restriction is clearly unnecessary 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 ensure vigorous competition.

For these reasons, Section 601 should be stricken from the Bill, and the "manufurturing clause" should be eliminated from our copyright law.

With respect to the Department's anti-piracy program in the sound recording feld, 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 F.B.I. and U.S. Marshals' offices throughout the couatry 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 manufac

ture, 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: Section 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 aduition 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 described 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 506(a), and all plates, molds, matrices, masters, tapris, film negatives, or other articles by means, of which such copies or phonorecords may be reproduced, and all electronic, mechanical, or other devices for manufacturing, reproducing, assembling, using, transporting, distribut. ing, 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 judi. cial forfeiture, and condemnation of vessels, vehicles, merchandise, and bag. gige for violations of the custon's laws contained in Title 19, Cnited 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 provi. sions 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 awner 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 hare the right:

(1) to reproduce the copyrighted work in copies or phonorecords; and

(3) to distribute copies, etc. The right to prepare derivative works based on the copyrighted work (part 2 of sertion 106 ) is withheld from a sound recording copyright owner despite Secthan 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. $ 7. There is a real possibility that an unanthorized duplicator who made a "derivative" work by slightly altering the original ropvrighted 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 ine in the list in Section 114 of exclusive rights granted to a sound recording

pyright owner-an action which would grant to sound recordiing copyright owners no more rights than they presently possess. Section 506 should be

nd accordingiy to include part (2) of Section 106.

A third area for concern is proposed Section 301 (pages 32-33), subpa ragraph (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:


(3) activities violating rights that are not equivalent to any of the exclusive rights within the general scope of copyright... including breaches of con:rict, lireaches of trust, invasion of privacy, defamation, and decep

tive tra le practices..... We believe this linguage could be read as abrogating the anti-piracy lawg ne pristins in states relating to pre-February 15, 1972, sound recordings on the grounds that these statutes proscrihe activities violating rights "quivalent to ... the exclusive rights within the general scope of copyright. ..." Certainly N10h a result cannot have been intended for it would likely effort the immediate fi*tirgence of piracy of pre-February 15, 1972 sound recordings. (Note: in any erunt, there would be no effect on sound recordings produced after February 15, 1972. since it would appear that the states cannot constitutionally enforce their anti-piract laws against the unauthorized duplication of these later recordins.) TV therefore urge that Section 301 (b) be amended to include a new subseciion (4) as follows:

(4) Sound recordings fixed prior to February 15, 1972. Proproud Section 506(a) should he amended to correct the disparity of sine tions between second-time infringers of sound recording and motion picture copyrichts and cond-time infringers of other copyrights. As written, Section 506 ( a ) provides for a maximum $10,000 fine and three years imprisonment for secondtime infringers of all copyrights but sound recording and motion picture coyri hts. Infringers of these latter two categories are subject, upon conviction of a **ond offense, to a maximum fine of $50,000) and two years imprisonment. We surgent that these latter infringements are sufficiently serions to warrant at least the same maximum imprisonment for second offenders as is applicable to second-time infringers of other copyrights, as well as the larger fine. The term or imprisonnent prescribed should therefore be at leist three years.

We support the substitution of “for purposes of commercial advantage or prirate financial guin" for the present requirement in 17 U.S.C. $ 104 that. to be crivainal, infringements must be done "for profit". The provision in present Sertion 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 berond the financial de terrent and provide a penalty for those who can "take" financial losses as a cost of mininess, it is recommended that a maximum one-year terin of imprisonnent be in luded in the sanctions under proposed Sections 116(d) and 506 (b), (c), and (1), 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 copy

1 Jondora Muelo Publishing 00. V. Melody Recordings, Inc., 606 F 20 393 (CA. 3. Topinber 27. 1974): Fame Publishing Co., Inc. V. Alabama Custom Tape. nr.307 . 24 CAT CA 5. January 31. 1975): Duchess Music Corp. v. stern 458 F 20 130.5 (CA9),

fiorni denied, sub nom. Rosner v. Ducher Music Corp., 109 C.S. 947: and Ederard B. Wrok. Juric Corp. V. Colorado Magnetics, I no.. 497 E 20 289 (CA. 10). certiorari denied. Iub nom. Colorado Maometics, Inc. v. Eduard Marke Music Corp.. 419 C.S. 1120.

righted 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 anal sentence of subpargraph (a) (1), which reads :

A person may not obtain a compulsory license for use of the (nondramatic

nusical] work in the duplication of a sound recording made by another. Since this prohibition is not limited to copyrighted sound recordings, the effect is to prevent the operation of the compulsory license mechanism for making copies of any sound recordings embodying copyrighted musical compositions. The Department wholeheartedly supports this provision.

Section 804 deals with procedures before the tribunal which determines adjustment of copyright royalties and their distribution under specified sectious of the Bill. We object to the provision in subsection (e) of this section that the Senate Committee on the Judiciary and the House of Representatives Committee on the Judiciary inay waive a requirement that a final decision in each proceeding be rendered by the tribunal within one year from the certification of the panel by the Register of Copyrights. 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 one-year 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 proter. tion provided by Title II of the Bill. This new form of protection is a hybrid between design patents (35 U.S.C. $ 171-173) issued for a period of up to 11 years by the Patent Office for new, original and ornamental designs of articles of manufacture and the copyright laws which provide for registration and issoance of certificates of copyrights for the writings of authors. The new protection that is provided under the Bill is not presently available under the copyrizat laws and can only be obtained through a design 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 ('.S.C. 102, 103. While the protection period as proposed for the new type of ornamental design protection is only a maximum of ten years as com ared with the inaximum 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 outweigh the burdens. We believe that insufficient need has been shown to date to justify removing from the public domain and l ille use by others of the rights and benefits proposed under the present Bill for such ornamental designs. We believe that design patents, as are granted today, are as 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 protection will provide substantial benefits to the general public which outweigh removing such designs from free public use. While it has been said that the examination procedure in the Patent Office results in serious delays in the issuance of a design patent so as to be a significant problem and damaging to "inventors" of orna. mental designs of useful articles, the desirable free use of designs which do not rise to patentable invention of ornamental designs of useful articles are believed to be paramount. If the contribution made to the public by the creation of an ornamental design of a useful article is insufficient to rise to patentable novelty, the design should not be protected by law. The Department of Justice has consistently opposed legislation of this character,

To omit federal statutory protection for the form of a useful object is not to deny the originator of that for any remedy whatsoever. If he can prove that competitors are passing off their goods as the originator's by copying the prod. uct's design, he may bring an unfair competition action against such copyists. C'rescent Tool Co. v. Kilborn & Bishop Co., 247 Fed. 299 (C.A. 2 1917). See, also, Sears, Roebuck & Co. v. Stiffel Co., 376 U.S. 225 (1964), and Compco Corp. v. Day-Brite Lighting, Inc., 376 U.S. 234 (1964).

Quite apart from our opposition to the merits of Title II, we also oppose enactment of the design protection provisions of this Bill which would provide a new class of actions against the United States since the Bill proposes to ameud Section 1498 (a) to add the new type of design copyrights to the remedies avail. alıle to inventors against the United States who have been issued United States 19tents when they are used by the United States without authorization of the owner. For example, by amending Section 1498( a) in this way, the Congress will be creating a completely new problem area fraught with difficulties for government procurement Government contractors who "reverse engineer" alleged trade secrets in bidding competitively for government contracts would now be faced with the necessity of designing around the "packaging looks" of a product citered by a design copyright which may not rise to the stature of patentable borelty under the patent laws. Thus, the "non-utilitarian looks" of a vehicle which may not be protectable as a design patent would be given copyright-type protection under the Bill. We, therefore, strongly oppose the new type of protection proposed by Title II of the Bill

Section 1498 (a) is also amended to provide for the first time for suits against the United States for unauthorized use of inventions, whether patented or uopatented. Thus, it would appear to permit a suit based on a trade secret containing an unpatented invention. This, also, we strongly oppose as inconsistent with limiting claims against the United States in 28 U.S.C. 1498 to those recognized by the patent and copyright laws. No adequate showing has been made that this type of protection, on balance, is in the public interest.

The provision in Section 220 whereby simultaneous suit can be filed against the Administrator who carries out the provisions of Title II (8230) and an alleged infringer of the design in that it subjects an alleged infringer to suit in the same action even though the threshold question whether a certificate can issne under the provisions of the law has not been decided as between the Admininfrator and the applicant for registration is believed undesirable. While it is not likely that the issuance of certificates of registration will he frequently refused if certain basic requisites of applications are met, nevertheless, if a situation should a rise of a refusal of issuance of a certificate of registration by an Administrator; this should require a separate and distinctive action to secure issuance thereof, especially since governmental functions should not Dormally be mixed with the proprietary enforcement functions of courts in adjudicating private rights and remedies.

Certain technical corrections appear indicated in Title II as follows: P. 66, lines 22 and 23 appear reversed. P. 73, line 22, "Section 311" should read-"Section 211". P. 73, line 26, "mortgage" should read-"mortgagee". Mr. KASTENMEIER. We would next like to call Mr. Rene D. Tegtmeyer, an Assistant Commissioner for Patents, representing the U.S. Depart. ment of Commerce. Would you please identify your colleagues.

Mr. TEGTMEYER. Thank you, Mr. Chairman. With me today are David Allen and Rosemary Bowie, both of whom are from the Commerce Department and in particular from Patents.

Mr. KASTEN MEIER. I notice you have a prepared statement. You may proceed.

[The prepared statement of Mr. Tegtmeyer follows:]



Mr. CHAIRMAN: I appreciate this opportunity to appear before your subcommittee to express the views of the Department of Commerce and its support for H.R. 2223 with certain modifications which I shall explain.

ILR. 2223 is the result of 20 years of extensive effort by the Copyright Office of the Library of Congress and the Congress to revise the copyright law. I understand that the testimony of the Register of Copyrights included a discus. sion of the background concerning this effort and an outline of the principal provisions of the bill. I will not attempt to be repetitive in this respect.

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