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In other words, in one you have a situation in which the copyrigo material is being used to make a buck; and in the other. giving that kind of purposeful use. That is precisely why the tar is distinguishes--the tax law and the Congress. The ('ongres certain benefits available to nonprofit institutions of eduation : it does not make available to profit making institutions.

Mr. Parrison. Are we not talking about the dissemination of infur mation, and how it is disseminated; we do not really care, do we!

Mr. ROSENFIELD. Yes, we do.

We are saying for the purpose of this special exemption, jist Congress has said we are going to support nonprofit higher et s tion or lower educational institutions and nonprofit making of te are saying that the (Congress, in its wisdom, ought to make the e rules for the nonprofit, noncommercial utilization of this copri: material and let the commercial one go on its own.

Ilhat we are trying to point out in a sense is that the ad l.com pronto mittee refuse membership to profit making schools that are esimin schools for this very reason. It is not that we are thinking of it as an afterthought. This was a fundamental distinction bwtuen the profit and the nonprofit in the character of the use involved.

As a matter of fact, Jr. Congressman, 107 itself speaks of the purpose and character of the use. The purpose of the use in a proto making institution is to make a buek. sure you make a buck by disseminating education to the students. The purpose is to make a buck.

Mr. P'ATTISON. Maybe. I can form a number of corporations, notfor-profit corporations, with a small group of people involved, a noto for-protit corporation, and charge tuition, and not make a profit at all, because we just adjust our salary dependent upon what we madr. There is no profit at all. It comes out to zero at the end of the year

You can do the same thing with a for-profit corporation.

You are not going to tell me if a for-profit corporation in urs 3 les in the time that they incur the loss, you are not gone to let the la of the hook.

I think the distinction is based upon the use, not upot trip at of the institution. That is all.

Vr. RENFIFLD. We thought we were a king for less than 3 trip pushina usto.

Mr. Ki TT NYIR. We thank the representing educators lumtis morning, and educational 114's, and the copyright bill. We thank you for your sery helpful testimony.

The Chair would now like to call those who repriment publishers Bella Linden, Paul Zurhowski. Ernest Farmer, Irwin. Katr, and Efni Momto come forward.

Th (hair would like to experigets that it is so late in the morning in reaching you. There has ben, evidently, a very profound interest in the subject from the questioning of those who prezided

Nonetheles pour testimony is equally raluable to us and soug!! afer.lonlu regrut that it is late. Perhaps hervafter we can make other arianta

V Linden?
[The prepared statement of Ms. Pella Linden follows:)

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STATIMENT O BILAL. LINDEY, ATTORNEY, NEW YORK, N.Y. "!" ("arman, I am Bella L. Linden, partner in the law firm of Lindon and 1*.'. Vit Jurk City. I was counsel for many years for the American Texto Von !" ?? ?i brts Institute (until its merger with the American Book Publishers ! ... into the awwwiation known as Associntion of American Publishers), a 70 Bart of t'ie l'anel of Eufwrts appointed by the Reginter of Copyrights to Flip mult of the Copyright Law, and a member of the Committee on Daid Ter hinscal Information (COSATI) of the Federal (ounett for ipard Terbest and Chairman of the (OSATI sul, panel on riches of

!" roles aterized information systems. My firm represents llarcourt *** you Juranonted. Inc. and laciniilan, Inc. two of the five larget American

* !*q' publishers. However, I appwar here today not on behalf of Macmillian * !Ir 17 alese, ivor solely on tull of educational publishers. Rather, I am Drop it Illi'rreus of our sein of education authoripande pubbinhing. /'14 the sum total of the combined creative efforts and investments

"SET!!. and publishers of this country's educational materials. Ta' merit ls v****tfully submitted in opparition to the proposal for a Bw.paleorational exptnption to the rights of authors and publishers established 1. IR 1 Elzni year ago, in your f'ninmitter's analysis of the dtrine of fair que de psy!", e in the Resinion Bill and, in particular, its application to

till and classroom use, your committee oncluded that "a seni fr exemp1.--, * certain reprimturtions of copyrighted works for educational and +1 1.*Irapu frim pay night control is not justified" (11R Hep o. 43. p T!' !! Bet #ork's bearing the Register of (ops rights stated that your report "" ! pues, not the basic legislative esplanation of the content of the Bill, and

r!! from which) the reports surreding it in both Houses have all been **** Tring the Intervening Front, the only relevant fact to have pand your le the further proliferation of derties for unauthorizei. ine passe fragte dopiration, tar and transmission of eripriklted works

Yr wef 1. rw!vre still delating the traient for the so-called "educational 111

A1,"n nf priti rue, the dispute # based on pronomie Interesti. Authore. toitu, ali galia, Ilmarians, all trtant live on a budget I will certainly P: nje hit sing wilah may be ruirt from of charge initums no burden drigo herifert, so it is not toenlly unnatural Pop *** of copsrim malarial

*** Wiraud for dupliation privileges Textbook budgets are extremely low, *' re national average, to between two and three peent of a

spl hoepelse Photones por inte purefpottenue and mother sougosimetro con stairs are TpHmong Here are not part of a maloolis textbook budget, but cotne l* logot a loss of tumtrella of "'ppo" T!, the natur.I and la table fredd:1." to see toortorum in mod plementare traierial is the prepur and impie

Begre 1* laudable borte pret, f* the inelatenre of wine that authors atid

''] out the paid for #ih ne of their work

* &uut the protein paugran the n1109,99 ani pohleler of ontsnal t **** ': I and with the pupitre 18 of full and poput ritmes tievood T!" , naltre 11 luftetar tv96-2}fost triranumir, 17.8! ("qon the map is a Tint d fefetip between area to subtenery! +999?!' ?!! he wonderurtedly wrt, an unpaid lor d'!1*. 'DO!

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consulting. The authors of educational works are not highly publicized per21. ties who write best sellers and appear on television talk shows. Jangan ticing teachers. Few become ricb as a result of their writings. To the ri!!! it is possible to describe a typical textbook author, be or she is a meminta faculty of a highly regarded college or university, enjoys an excellent n'a', & in his or her field, but is little known outside of it and counts on copyrigher)!!" in pay for braces for the children's teeth, a second car for the famiiy of a dia or stills year abroad or some similar expense. More often than not, rusait,45 : educational works are vplit between several authors.

by and large, it is the publisher who discerns educational needs, sens.. and selects the author (or, more commonly, group of authors) to create the proba! and materials to satisfy the requirements of schools and universities and 4 and supervive the planning, design and creation of the works. The pillon venture generally encompasses continuing review and evaluation by 1.!*" teachers and curriculum specialists, supervisors and consultants and tired in throughout the country. The role of the American educational publisite: and coordinate various functions of writing, artistic desian and terkini di ..." in applied research, packaging, consulting and training as well as manuais marketing and distribution.

Exluational materials today are commonly produced in sets or pruger **** tegrating various forms and media such as texts, teachers' manuuls of a illumirijus, slides, sound recordings, curus, charts, puzzles, instruct.stai duplicating mesters, transparencies, testing materials and the like; wida:-). themeprogram» frequently represent the entire range of literary auelementi di ng titius, non fiction, prose, poeiry, music and drama. It is not at all latott..... for an educational publisher to insest more than one million d mais il development costs alone for the creation of a program which will take fer!? trn years to reach the market and another three to five years to un arredor and even begiu to pay off the instruent. In the case of oue ejay ! junior high school stence program with which I am familiar, a total ok 1. . **: seara eland between the time the program was coneived and the first trien Herr putished. The program virtually revolutionized the format aud (vt.''! ! pieturatary paliwo science books. The efforts and investments of authors a..da (ational pubii-bers do not stop upin publication, as subsequent editions in tinnn'ly resined in light of feed-back froin the field and changes in puolrics techuques

Cutwonly, major portions of the expenses of educational publishing att attributable to payments made to other publishers and authors for the use and Intraration of portion of prior works in new programs. In the case of obe terrari etuitary reading program, permissions feey paid by the pubusker elimejad $10*3.06w and, it is estimated, coluprised more than 30,000 perminwels grdure! The administrative "burden" of clearing the permissions did not impair lie derelaiment of the program.

We cannot emphasize often enough that many of the products of educational publishinik, muli as treutints, texts, worktunarak, teris, liie card, uu?!" *** , encyclopedies and other reference workin, are designed for use in precemeal fashion rather than ever-to-over reading. To purait unauthorized fiestis dupileation of copyrighted works for the purpures of teaching, educate and rarth is a request, in tallosed England, to prmit the evalvial munity to eliguse in on demand reprinting, on a daily basis, of the man buvoties of copyrighted educational, scientine and technical works with these to one and to crcumvent payment to authors and publishers wibre etme Lil Párt fer pujch work in that same rduational cotan.unty.

in maliy trofe*t* «2tubad putut-Botinesiste apart from other bus nau The au??** aidd pubieders of the works are in a very real and rew..al ***?7*** Read in parte putee Fir muduration will to prope, etwa: l

stop allodd piller 113!3e+ ank.r pato und fertitels misle a broad ra ** af umrini aid we':r!r me. To avis...je to rip this file is tuxlass mits, that y lle est lindeysately retiunerated rip the dust to that he diet.

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ltorf'retual work product are the system of economic incentive to writers 1-ded by copyright and the free-enterpring publishing system which en. P ; 9***4 tuliiple outlets fur distribution. Thus, authors are encouraged to their thoughts, and the views of an author which may be antithetical In tal publisher for de considered by him to be unpublishable for economie, 10 tire or other reasons) may still receive exposure through publication by as ther.

If apped to the free storage (input) of copyrighted materials in computer. statim sistems the propeampi eri mption would be in complete deri 4, n of the Judgment of both Hots** of Congre as expressed in the fr**. passage of a law establishing a National Commission on New Tech.

<a te of Copyrighted Work, One of the stated purposes of that 146. 11..5x 0 ls to study compile data on, and make recommendations to Congress Pink "ibe su production and use of copyrighted works of authorl.ip ... in mjetetlen mith automatic systems capable of storing, processing, retriesing, and transferring information

P"{wtents of the eduratdımal exemption have repeatedly emphasized their re! "authal' purfume and its relation to the public welfare. Of course educa. ! is in the public interest but under our sistem this Interest is served Ho a porate and commercial enterprise which ruires a profit to survive. The B.!" to this country's educational system, educ.for, mbolers, and schol

of**** will be enaterial under the epoxton of copyright which will preult m:, the prime piemption This was fully recognized by your Committee ****len, after considering arguments for a periflc eduen linal extn.p

11811:bryr.d fair use. It state 1: **!! fullest piwible use of the tultitude of technical devlope now available to profungol ng should be enouraged But, bearing in mind that the basic con. yo'l hal pirine of granting copyright protection in the advancement of learn. .24 !! eittir.itter al pronks that the puppiat destrution of ineratives tr 2.!butihip presenta a serious danger" (11R Rep. No. 3, at p. 31)

TESTIMONY OF BELLA L LINDEN. REPRESENTING EDUCATIONAL

PUBLISHERS

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« LANDY. Thank you, Mr. (hairman.

al not read my statement at a!), but submit it for the record, !'eren bwythai merything that I am saying in my statement,

Idara y eersthing that the evertor have waid this morning rpitse all love navi! g for the past 10 years, at lru-t. Let's, in order to stane, all I would like to do is point

;*«,1 Bilvitise or six sctunlly it als up to seven- statements !!! mo, id pareminarly lile toilmas to your attention.

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s'! Who starter. 10 years that plotesoping p in a very limp 5. Tini pia !") ti-aid that coping

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No one here has ever spoken to the Congress that they a insist that the Xerox equipment or ta pe equipment should be 3* to the nonprofit institutions gratis. What they have all insiste is that the intellectual material, without which the techno dissemination hardware would be relatively useless, should be gratis.

Again, I say with great sadness, we see awe and respect for tars'. property, and we see less than respect for intellectual creativity, w..: in my view, may I suggest--and I am sure it is shared by all is the cultural and most valued part of the heritage.

I would also like to point out that what you are doing is not ria'.' ing a Williams & Wilkins case of past transgressions where the is limited to one publisher and certain specitic issues. You are in: asked to legislate exemptions with respect to all future crea!. 1: You are being asked to suggest a system of modifying the en... and packaging of intellectunl information for the educationale research community. You are being asked-there will be po vi clysmic disappearance of future creativity overnight. If you do that these educational exemptions, what you will have created is the ual but inexorable erosion of the competitive entrepreneurial pruni tion of intellectual material for the education and research munity of this country at the very least.

One or two of you noted very aptly that the educational materia I will hand out some that consist of 150 items in a children's ring: program of all kinds of nonfiction, small portions included. 1.: is the entire market for the educational prolucers and the his of material. I will not dwell on that point,

I would merely like to add that yes, as the educators have sa ! this morning, it is a question of budget. What they have refrigny ! to is the intellectual property builget, which is 2 or 3 percent, at 1. mot, of the entire school budget. They are not talking abwite trachers' salaries or carpeting or Xerox equipment. All they are la ing about in the minunule proportion of the budget that give! : intellectual property.

With respect to the problems of fair use, may I sugat, .. all du rep***t intended. fair unf, as I sat and listened to time difficulties of detining fair u-e, it occurred to me--and I ma: 1 stingrapent to this cominittee or to anyone in this room-ifer * Lord had promulgated the statement, love thy neighbor liure! committee at the time of Genesis, you would still have people line detining what love is seeking guidelines with respect to wh.hr bors are intended to come under the stricture to love thy ne : and there would be a rising claror for eremption of certain la borhoorts from the sidenent of the good Lund laut itu." the puble internet to empt tone.ghborhoods.

vivl sugaut in all riou-lem, there is no precise languager !! statnio of any kind that he per lwen promulgated that is 1:1;i to different interpretations. That is why, thank the Lord, there a

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