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HR 2003 is divided into two titles; Title I, General Revision of the Coprriel.t Law and Title II. Protection of Original Ornamental Designs. As the DepartInent views each title from a slightly different perspective, I would like to evin ment on them separately this morning.

The Department of Commerce would like to highlight three grecific are, in our comments on Title I:

1. The lack of protection in t*.S. government works.
2. Premption of state law with restart to unfair competition, and
3. The inclusion of Canada in the manufacturing requirement.

PROTECTION OF GOVERNMENT WORKS

First, proposed section 105, in prohibiting copyright protection for gorere ment works, prestes a special problem for the lepartment of Commerce. I mean Title 1.5, United States (ode, (hapter 23, the Secretary is required to exabitsla and maintain a clearinghouse for ille colletiou and dinimination of the last technical and engineering infurinition. This is done through the Departu* • National Technical Information Service, ulleri VTIS.

As a matter of policy. Chapter 3 require that each of the services and futere tions provided be self-sustanuis au 12-114;uidating. as nuch as ide, ( []* sistent with its objectilex. Tie Chapter specially state** its pin tono font* general public wall not be the cost of publications and other services wll a are for the vial 114 and knefit of private

and individuals With the incre Un of regralolay. the dillult of the ting the rolli rah ment to disininute thnical iniuriin on a bus that pars its oWA W b inerned, it is cheaper for a purchaser to buy one copy of an evenile tel. logical publication and photocopy it ratlier than to buy the nun er of *** that are arually need. The lak of op right protection for most part m:de available by NTIS makes this practive legal. II.krerif STIS rewolp the (int of preparing and kädling its publications, the divinita of this material (annot be inaintained on å sell-ountaining aud sili loytulan

An example of the potential harm which could arise from this lask of pr *** right can be mn in t'ie publication "Direyfury of ('uinbuterizul Ina Fesil Related Software Availalle from Feleral algengta 197!". Tij di tapping! . premind in rejon to the larze nuier of Inquests received fun this ini tid. tion. It was prepared at NTIS expense. Tlie approximately $154),14%) rust of

ving Feltritt asincies to gathered the information and publisi: in the dirett 1119 not rimburs from a propriation. In order to rerup SIIN PY**** price of $10 fmr copy was for this 1:5414 ke diretury. Anyone came to make and will computing photople ould do so for a fraction of this !! Thus it is necessary for NTIN to risk substantial moness to produce such

Vinauthoriz44 photocopying is p lally wrink in connection with for un Sale** out of the right market (1 tonery of STIS, Neren are formiga pi,* *.* which enpate in such copsing practice. It has also CA N TIN to be limite In pricing its periodicals die to the much lower cent of duplication done by rwale marketers and potential customers of governdent works which are not copy rigl.tel.

For th* psonewe beliere that morrisht protertion chonla bo pros!! Wort distributed under (?!!pter 13. Title 13 of pipe tritud Siates (wwe, Niki 18 to that prorided under moei, (hapter . Title 15, for standard refero-fr*** data prepared by the Impartirent of (rumere under the posis one of tot Chanter, or in the alternative that the Conkre recunder the stattat ruirement that the mrvice and functions provided under Chapter 3 be

Puustaining and self-liquidating.

PITYPor

Rewund. we agree with the preruption of State contrarht lawa parstart in vien 3011n), nr.d with the principle embled in that ction that there sh"):d be a winke, fern! «f-*** for urisht, Florenpr. the lanpınca of sub-161

od ***p1l right in the nature of pyright" italir added) will not be ***4 to prvyt mrt of the Rinia Ini Onnir m

on vih are rw me!!*4! In ***tute or tablishid by Federal and State (*urt del in applying the famon law.

Martin 301 ) (3) is intended to exempt State nnfair competition In w fruits the perinpure effect of ton 3014). Among the rights and nnd tool r ru are timp arixink frotn the violation of rikts not equivalent to any

nie nights within the general set of copyright. These "not uivalent nria are said to include "breaches of contrat, bruches of trust, invasol

ary, defumitin, sud derejotive trude practiv such as palago and fall tnw.talinta "* "I be prubiem we have is that the listing is inrutuplete and the LatL are linisted than thant which would describe the premt SON

d state unfnir competition lat. A. a lion, we prou " A tore caprehensive and includre listing of unfai

'itan torts in action (b) 13). 'I be pureed a nendment: dobi Artrities violaung rights that are not cuivalent to any of the excludre

w ithin the rural wife of copyright as sf*cited by mersion 10*, including

!n of auntruet, bredbe of trust, invalon of privacy, deraruntien, an 1. Tilve trade practi* mach as M ing off and furpristatan] acte 1. together forms of unduet which caust or are larly to connecnun ,

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, this pro al rondment would more arrurately state te et '91.!A.r (in titan tortw b are now rekuinied by the stales, so that: tort ,belle will not *11n.ling

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Title II would provide protection only against copying by others and would not give an exclusive right in the design itself. The term of protection would be for five years, renewable for one additional five-year term.

Infringement would include making, importing, selling or distributing for sale an article having a design copied from a protected design, importantly bullesef. an innocent seiler or distributor would be an infringer only if he failed to reveal bis source and then reordered the article after having received a personal written notice of the design protection. This is a greatly reduced level of liability uben compared with that contained in Title I where a seller or distributor is liable as an infringer for the sale of a single unauthorized copyrighted work.

Design patent protection would continue to be available but a design patent and design protection under this title could not be maintained roncurreutix. Ain), copyright protection for designs would be continued, except that if copyright pro tection and a design registration were obtained, the copyright protection would not extend to utilization of the design in the useful article protected by the design registration.

Today, original ornamental designs for useful articles may be eligible for (v. eral protection under the patent laws or in some instances, under the pright law. In recent years, however, it has been generally agreed that the deixa patent laws do not provide adequate protection against deniin pirary. Because of the relatively short-lived popularity of many designs, a patent in some cases cannot be serured quickly enough to provide any useful protection.

The expose in obtaining & design patent today results primarily from the fact that the Patent and Trademark Office must examine an application to det". mine whether it is new, original, and ornamental". At the present time it tame almost two years to obtain a design patent. Until the patent is gruntal the designer or manufacturer markets the desigur at his own peril, subject to it being freely copied. The alternative of withholding the design from the tharket until the patent issues is impractical in many industries where styles change rapidly and may even he seamnal.

Since the Supreme (ourt decision in Mazer v. Stein in 1954, the Copyright (154 has accepted an increasing variety of registrations for designs embodied in u? articles so long as they meet the criteria of being artistic. Howerer. there are still many t of designs for which roisright protection is unavailable, for instance, furniture and appliances Moreover, the term of protection in the propond copyright law, life of the author plus difty years, is much too long for industrial designs which have a relatively short commerrin! life.

To eremplify the problems that exist under current practice we gote complaints froin domestic manufacturers that their designs have been pied in «er? ' foreign areas particularly in the far east. The imitations are then imprinted into and sold in the nited States where thy often enjoy a considerable price advantage over the artire prone in the l'nited State. We beliere that the II Alls the need for more effective protection for design oriciuntos from thistle of unfair uimtttoo let it provides quick, inexpensive and short terib

The partinent of (ommere favore this legislation. However, we panid !he to highlight m e of our sritie recommendations which will bring title II ne the bill more in line with other intellectual property protection both patiotaily and internationally and will generally improve the protection affan.

Section 1(a) proides that protection for a desin shall begin on the date when the design is firt made pullie. ID u guett 4*tions it is made car that the desi must be thade public before an application for protection and be file. This profision will put S. *dents at a disadvantake if they doer to obtain pritetion of their design in foreint on ries, many of t he fut example Japan, refuse protertion for a design which has been nade polulle brir to the falls of an appitution for registration.

In order to prevent the prible loss of protectiun in foreign e ntrie, it slea'd not be required that the design be made public prior tongistration. Insted, pro trn fin

h u d tilt on the date that the agistration is publiski in the taitei sunt*** a. prasided for instion 2121a) of the bill. Protection which

kins when the restration is publishe would provide more to the pulse and wond not finalize the then deiring to protect his des outside of the Unted Nunto T?.* Won! I also make Title II (01 tent with Title I which was eliminated the serlor p iration frydirenent for copy richt protection.

wwtfic statutory innguage to effect this change will be subtnitted to the Cotxrat a later date.

Section 209 appears to limit an application to a single design. This limitation afvars to be unnecessary. An application containing ten or twenty designs would be no more difficult to process than an application containing one design be a use no search of prior designs is necessary. A multiple design application would save the applicant paperwork, thus, save him tiine and money. It would also save the Administrator processing time over an equal number of single applications. This might result in a lower fee per design. As long as a separate fre is paid for each design contained in the application there would be no loss of rivenue and both the applicant and the Administrator would benefit. We have therefore recommended that multiple design applications be permitted under this title.

Title II requires that the application be accompanied by a statement setting forth facts about the design, and that such statement must be under oath. Similar reuirements in Title 35. United States Code, covering patent and trademark practices permit such required statements to be subinitted with a written declara. tion in accordance with 18 C.S.C. 1001 making a false staternent punishable by a fine or imprisonment and jeopardizing the validity of the document. We believe that such a provision should be applicable to the application for design registration. Therefore, such declaration should be permitted in lieu of an oath.

The present fee provisions of section 215 of this title are unacceptable to the Dejartment of Commerce. In our opinion, the design registration system should be completely self-supporting because the benefits of the design registration System only accrue to the individual recipient of the registration. This, the publie should not be expected to bear any portion of the expense of a design registration system.

in a study done in 1964, the $15 fee for the design registration under a bill similar to the present one, was found to be inadequate to provide 100% cost rernvery. The $15 application fee would be even more inadequate today.

Rather than propose different fee levels for each of the functions specified in sextion 215(a), the Department of Commerce proposes that section 215 be amended in its entirety to give the Administrator the discretion to establish charges sufficient to recover 100% of the cost of operation of the design registration system. A similar approach is ('urrently being considered by Congress in various bills to revise the patent laws.

TESTIMONY OF RENE D. TEGTMEYER, ASSISTANT COMMISSIONER

FOR PATENTS, DEPARTMENT OF COMMERCE

Vr. TEGTMEYER. Mr. Chairman, I appreciate this opportunity to appear before your subcommittee to express the views of the Department of Commerce and its support for HI.R. 2223 with certain modificatione which I shall explain.

II.R. 2223 is the result of 20 years of extensive effort by the Copyright Office of the Library of Congress and the Congress itself to revise the copyright law. I understand that the testimony of the Register of ('opyrights included a discussion of the background concerning this effort and an outline of the principal provisions of the bill. I will attempt not to be repetitive in this respect.

H.R. 2223 is divided into two titles: Title I, General Revision of the Copyright Law; and Title II, Protection of Original Ornamental Designs. As the Department views each title from a slightly different perspective, I would like to comment on them separately.

The Department of Commerce would like to highlight three specific areas in our comments on title I:

1. The lack of protection in U.S. Government works and the effect on one function of the Department of Commerce,

2. Preemption of State law with respect to unfair competition, and

3. The inclusion of an exemption for Canada in the manufacturing requirements.

First, proposed section 105, in prohibiting copyright protection for Government works, creates a special problem for the Department of Commerce. Under title 15, United States Code, chapter 23, the Secretary is required to establish and maintain a clearinghouse for the collection and dissemination of scientific, technical, and engineering information. This is done through the Department's National Technical Information Service, called NTIS.

As a matter of policy, chapter 23 in section 1153 requires that each of the services and functions provided be self-sustaining and selfliquidating, as much as possible, consistent with its objectives. The chapter specifically states its policy that the general public shall not bear the cost of publications and other services which are for the special use and benefit of private groups and individuals.

With the increased use of reprography, the difficulty of meeting the requirement to disseminate technical information on a basis that pays its own way has also increased. It is cheaper for a purchaser to buy one copy of an expensive technological publication and photocopy it rather than to buy the number of copies that are actually needed. The lack of copyright protection for most periodicals made available by NTIS makes this practice legal. If NTIS cannot recoup the cost of preparing and handling its publications, the dissemination of this material cannot be maintained on a self-sustaining and self-liquidating basis.

An example of the potential harm which could arise from this lack of copyright can be seen in the publication, "Directory of Computerized Data Files and Related Software Available from Federal Agencies-1974."

This document was prepared in response to the large number of requests received for this information. It was prepared at NTIS expense. The approximately $150,000 cost of surveying Federal agencies to gather the information and publishing the directory was not reimbursed from appropriations. In order to recoup NTIS expenses, a price of $60 per copy was set for this 150-page directory. Anyone choosing to make and sell competing photocopies could do so for a fraction of this price. Thus, it was necessary for NTTS to risk substantial moneys to produce such a product in the absence of copyright protection.

Unauthorized photocopying is especially serious in connection with foreign sales; out of the eight largest customers of NTIS, seven are foreign entities which engage in such copying practices. It has also caused NTIS to be limited in pricing periodicals due to the much lower cost of duplication done by resale marketers and potential customers of Gerernment works which are not copyrighted.

For these reasons, we believe that copyright protection should be provided for works distributed under chapter 2: title 15, similar to that provided under $ 290(e), chapter 7(a), title 15, for standard reference data prepared by the Department of Commerce under the provisions of that chapter, or in the alternative that the Congress reconsider the statutory requirement that the services and functions provided under chapter 23 by NTIS be self-sustaining and selfliquidating.

Turning to the question of preemption, we agree with the preemption of State copyright laws pursuant to section 301(a), and with

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