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copyright infringement where a person borrows a computer storage element (disc machine) containing a program from a friend and transfers the program to another host machine without permission of the copyright owner.

A new Section is proposed : 811—; Scope of exclusive rights: Microform Compositions.

NEW Section 11– Scope of exclusive rights: Microform Compositions.

(a) Limitations on Exclusive Rights. The exclusive rights of the owner of a copyright in a microform composition are limited to the rights specified in clauses (1), (3) and (5) of section 106. The exclusive rights of the owner of copyright in a microform composition to reproduce and display it are limited to the rights to duplicate the microform composition in the form of the microfiche, microfilm, opaques or other microforms that directly or indirectly recapture the actual images in the composition, and to display these actual images. These rights do not extend to the making or duplication of another microform composition that is a fixation of other images, or to the display of other images even though such images derive from the same or similar subject matter to those included in the copyrighted microform composition.

"(b) Right of copy distinct; the exclusive right to copy or to display cops. righted literary or dramatic work, and the right to copy or display a copyrightd microform composition are separate and independent rights under this title.**

Explanatory language:

This section is modeled after the language of the tape piracy statute and calls for a recognition of two separate rights.

The intent of this amendment is to create what has been a format copyright in the work of a creator of a microform composition. There are variations in tlie nature of the contribution different creators will bring to the creation of a mier). form composition. A simple reproduction of a pre-existing document might not qualify for copyright as a microform composition. The collection, selection, organization, editing and creating of a large set of materials represents a major contribution of the nature copyright protection was intended. This amendment would provide such protection. It should be noted, however, that the protection provided is limited to the specific composition created and does not preclude any. one else, with independent effort and creativity from microfilming those same materials and, perhaps, qualifying for a separate copyright for his efforts.

By way of a technical amendment to $ 301. Pre-emption with respect to other laws, the following amendment is proposed :

*$ 301. Pre-emption with respect to other laws.

“(a) On and after January 1, 1977, all legal or equitable rights that are equiralent to any of the exclusive rights within the general scope of copyright as speci. fied by section 106 in works of authorship that are fixed in a tangible medium of expression and come within the subject matter of copyright as specified by sen. tions 102 and 103, whether created before or after that date and whether puhlished or unpublished, are governed exclusively by this title. Thereafter, no person is entitled to any such right or equivalent right in any such work under the common law or statutes of any State.

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

"(1) subject matter that does not come within the subject matter of copyright as specified by Sections 102 and 103, including works of authorship not fired in any tangible medium of expression; or

"(2) any cause of action arising from undertakings commenced before January 1, 1977; or

"(3) activities violating legal or equitable rights that are not equivalent to any of the exclusive rights within the general scope of copyright as specified by section 106, including rights against misappropriation not equivalent to any of such exclusive rights, breaches of contract, breaches of trust, trespass, conversion, invasion of privacy, defamation, and deceptive trade practices such as passing off and false representation.

"(c) Nothing in this title annuls or limits any rights or remedies under any other Federal Statute.

"(d) Compliance with the deposit requirements of this title shall not be de structive of any such "not equivalent" rights."

An amendment to Section 407. Deposit copies of phonorecords for Library of Congress is offered as follows:

"(b) The required copies or phonorecords shall be deposited in the Copyright Office for the purpose of reference within the Library of Congress. The Register

of Copyrights shall, when requested by the depositor and upon payment of the fee prescribed by section 708, issue a receipt for the deposit."

Subsection (b) is amended to limit the use that might be made by the Library of Congress of deposited works. Items such as data bases, computer programs and merufuri compositions are costly and the use thereof for purposes other than reference within the Library of Congress would substantially impact the opportunities for authors to recover their costs, particularly considering the limited quantities in which they are marketed.

An amendment to Section 408. Copyright Registration in General is offered as follows:

Add a new section (f):

* 1f) In the case of microform compositions deposit copies are required only where the retail price of the composition is $1,000 or less. In cases where microform compositions are created in editions, deposit copies are required only when the total number of copies in a particular edition exceeds 200 in number."

The creation of a microfilm composition often is an expensive process and results in very small unit sales. Many microform compositions sell only 20 or 30 copies and a total sale of 50 is usually considered quite a successful work. TO require the creator of a microforın composition to deposit two copies out of perhaps a total of 20, represents a disproportionate burden. The manufacture of each copy, in addition, is a costly effort. The purpose of this amendment is to lituit the impact of the deposit requirement on the overall objective of the copyright system: to obtain the widest possible dissemination of information useful to science and the useful arts.

An amendment to 704, Retention and Disposition of articles of deposit in Copyright Office is proposed as follows:

**121) 'pon their deposit in the Copyright Office under sections 407 and 408, all copies, phonorecords, and identifying material, including those deposited in connection with claims that have been refused registration, are in the custody of the United States Government."

Subsection (a) would be amended to specify that deposit copies are in the custody of, rather than the property of, the United States Government, Title wouid thus be left in the author and the Library of Congress' rights of utilization and disposition limited to that of a bailee. Again the intention, in the light of vastly expanded library networking concepts, is to limit the use that may be made of expensive deposit copies by others than the Library of Congress. A replication and redistribution effort by the Library of Congress could severely allert the rights of authors otherwise granted in this legislation.

We be'ieve these amendments deserve consideration in this revision cycle. They represent the results of day-to-clay experience of authors, information companies, and users seeking to work out within existing copyright concepts workable rela. tions for the dissemination of information through these technologies. We recog. nize the great pressure on the Committee to act on this legislation, particularly in view of the immense effort you have already devoted to it. These are no soall inatters, however, the present and future methods for sharing the works of authors with world-wide audiences are to be found in this complex mix of constitutional, economic and social issues.

Whether you are able to take the time to understand these new technology issues now and to act on those which deserve immeriiate attention or are constrained to defer to the National ('ommission on New Technological l'spe of Copyrighted Works on all of them, it should be clear that the constitutional rights of authors will not be protected by exemptions that essentially free large computer systems to have free access to all works of authorship.

One of the major features of the computer age is the fact that state after state hos created large university-based computer facilities and have given these facilities extensive authority to serve not only educational users, students, but industry. libraries of all kinds and government, state and federal, as well.

The result of granting such facilities an exemption to input into computers copyrighted works of authorship withont infringing the copyright would be the criation of a whole new information distribution system in the l’nited States. The Nt stem would not be based on author's rights as the present system is based. Rather it would be based on state bureaucratic decisions. Only those anthors which the state-owned networks chose to respect would be granted anything approaching the rights of authors enjoyer in inkprint publications. The works of authors could be freely installed in computers without the authors' approval or pren knowledge. The authors ideas could be used, re-documented and even distorted as to source, meaning and context. One area served by one system would have access to that systems version of the facts and another area would have access to another state-subsidized version. How would we as a nation sort out the truth without equal access to the same unabridged works of authorship. If the author's control over his work product through copyright is denied him by exemptions which free his works to be input, piecemeal or in total, accurately or inaccurately, it is difficult to see how the nation can stimulate and reward authors for writing the insightful and critical commentaries essential to the functioning or a democracy.

An exemption of input from copyright infringement would have other effects as well:

By implication such an amendment to the present legislation acknowledges that to input copyrighted materials into a computer is an infringement under present law. A need for such a change in the law has not been proved.

The small printouts resulting from most computer searches would by their size alone be argued to constitute "fair use" of the information. Having inserted in the computer the Encyclopaedia Britannica, brief extracts would be printed out. Notwithstanding the fact that this is the only way to use encyclopedic information, many would seek to treat it as fair use. Since there is no provision for any payment system in the proposal, this apparently is the intended result.

If entire works are free to be input, such materials as the Reader's Guide to Periodical Literature could be keypunched and installed in a computer system. Such publications are used simply to find a specific article citation. Without specific provision for controlling uses, the protection offered by copyright would De minimal. Little would be published in the open literature and authors would attempt to protect themselves by limiting by contract what uses could be made of their works.

The stress on exemptions would have the effect of eliminating publishing media which did not have exemptions because the basis for creation and invest. ment in dissemination efforts, a minimal proprietary position, would be elimi. nated. The result would be reduced creation and distribution of works of anthorship. The elimination of risk capital and the reliance on state capital would seri. ously retard development in many areas of science and the useful arts.

The proliferation of non-profit uses, particularly in information, today are legend. Government funding of research in information systems work, for example, is essentially limited to grants to non-profit organizations. This has led to the development of a whole generation of organizations performing this te search on a non-profit basis. Sepa rate non-profit groups have grown up to do similar research in education. We raise these questions not to challenge the purposes of these groups, but to suggest that the amendment is unduly broad as drafted and would serve, if enacted, to stimulate even further the development of subsidybased information dissemination activities.

Finally, we believe there are several basic legislative drafting objections to the exemption proposal :

The amendment conflicts with the purpose of Section 117 to maintain the status quo in the law vis-à-vis copyright at input. If the committee is to consider seriously this exemption, similar serious consideration must be given to the author's-rights-based amendments offered above. It should be clear from a brief reading of the amendments we have suggested that this is an exceedingly com. plex area and that it cannot be dealt with simplistically.

The amendment, if coupled with the library photocopying exemption, appears to destroy the economic base of publishing. What the education exemption would allow to be input without infringing copyright, the library exemption would permit the copying of. The result would be the elimination of meaningful copyright protection for authors.

The amendment would preempt much of the work of the National Commis. sion on New Technological Uses of Copyrighted Works. By granting such an ex. emption, the amendment would not only prejudge a large segment of the Commission's responsibilities, but it would also create a situation where there would be no experience for the Commission to draw on in evaluating how authors and nisers can resolve problems and develop workable relations within an economic framework.

In summary, the information industry position on H.R. 2223 is that, subject to some technical amendments, the bill should be enacted in its present form and that the library and education exemptions should be rejected. In the event that serious consideration is given to any such amendments, of a nature to deprive authors of significant rights in the new information technologies, we respectfully

request that the recommendations of our committee be given full and equal con. sideration including the calling of witnesses with first-hand experience in the dar-to-day resolution of the problems encountered. While many of these issues

bould be referred to the National Commission, some questions could be resolved how on the basis of existing knowledge, expertise and understanding. We, accordingly. urge the Committee to hold hearings with regard to developments in the new technology a rea. It is in this area of the law that the copyright concept will pre most challenged in the months and years immediately ahead. An effective opyright law, "that will anticipate the 21st Century" will need to deal with these issues.

We thank you for your courtesy in providing us this opportunity to share our views with you and we wish you the best of good fortune in this and all other areas requiring your legislative skills.

STATEMENT OF PAUL G. ZURKOWSKI, PRESIDENT, INFORMATION INDUSTRY

ASSOCIATION Mr. Chairman and Members of the Committee. My name is Paul G. Zurkowski, President of the Information Industry Association. I have prepared a formal statement which I will not read but which I ask be submitted for the record.

The information Industry Association is composed of more than 70 commercial firms. Some create data bases and computer programs. Others specialize in marketing access to such machine readable information sources. Others are microform publishers, traditional book and journal publishers, consultants, information-on-demand companies, suppliers of services to libraries, indexing and abstracting companies, information systems designers, information facilities managers, and others engage in the creation and marketing of information products, services and systems, world-wide.

Many of these companies have a decade or more of experience in disseminating works of authorship through the use of all varieties of advanced information tehnologies, alone and in combination with traditional ink-print technologies. Our Proprietary Rights Committee spent the past two years matching this practical experience with the provisions of the revision bill. You will find in the statement the results of that effort. We think that before your committee makes or the National Commission on New Technological Uses of Copyrighted Works recoinmends, any changes in H.R. 2223 affecting the use of works of authorship in these new technologies these recommendations and the experience of this industry should be considered. People in the industry dealing with the opportunities for wider dissemination of information offered by the new technologies are ready and willing to assist you in these matters in any way they can.

The objective of copyright is to encourage the author to permit the wide dis. semination of his ideas in return for an exclusive right in the form in which they are expressed. This is the objective of the information industry as well-to obtain the widest possible dissemination of information, fully utilizing all available information technologies while protecting the rights of authors.

We appear to add our support for enactment of H.R. 2223 and to register our Oprition to the amendments proposed to sections 107 and 108.

We feel most strongly that a single-copy photocopying exemption combined with an exemption permitting the input of copyrighted works of authorship into a momputerized information system would eliminate meaningful copyright for anthors. Copyrighted works of authorship which the education exemption would permit to be input without infringing copyright could be copied on a single-copy basis under the library exemption. Stripped of these copyright protections, allthors could publish little in the open literature without being subjected to such Perpt uses. Authors, in turn, would seek to protect their works, as the Register fears and the Justice Department recommended, by limiting by contract what Use could be made of their works. The end result for both libraries and educators would he less access rather than the free access they initially expect would result fron their amendments.

Further objections to the proposals include:

1. No need for such an exemption has been proved. An industry is emerging to provide the widest possible dissemination while respecting the constitutional mandate to protect author's rights.

2. Small printouts from data banks of encyclopedic information would be argued to constitute "fair use", notwithstanding that this is precisely the use intended. These kinds of resources would be denied to research, education and

libraries on an open copyrighted basis and would have to be provided under contractual arrangements.

3. By exempting certain activities, and thereby exempting them from posts others have to pay, these exempt activities would tend to replace privat-l5 funded publishing and information activities. The elimination of private tins capital from the creation and information distribution functions would seriously retard development in many areas of science and the useful arts.

Finally, the proposal to exempt input conflicts with the provisions of serta 117 to maintain the status quo in the law vis a vis questions of copyrighted works and computers. This is an exceedingly complex area involving not only author's rights, but also major social policy questions with far-reaching economic impli. cations. Section 117 was originally included in the bill in recognition that neither this Committee nor the Senate Judiciary Committee bas explored these issues adequately. The National Commission on New Technological Uses of Copyrighted Works was established to do that investigation for the Congress

If these exemptions are written into the law the study expected of the Commission would be seriously prejudiced. By granting exemptions at the expense of author's rights and the economic interests of publishers and informarjan companies, the arena within which all parties now are developing workable relations would be destroyed. The Commission would be deprived of the nere sary experience in the marketplace on which to base meaningful recommenda. tions for future copyright legislation.

CONCLUSION While our committee of people who work with these technologies dar in and day out were able after lengthy meetings and detailed discussions to agree on some basic definitions and on an approach to the technologies based on author's rights, there also emerged unanimity that these were just the beginning in understanding the whole complex of dynamic technical, esoteric, legal, social and economic relationships which ultimately will form the base for our emerging information society.

It promises to be an exciting and long journey. We recognize as an industry that the serious attention you are giving these matters represents for our soxiety that first step by which any journey must begin.

TESTIMONY OF PAUL G. ZURKOWSKI, PRESIDENT, INFORMATION

INDUSTRY ASSOCIATION Mr. ZURKOWSKI. I have submitted two statements. I will read part of the four-page summary statement.

My name is Paul Zurkowski; I am president of the Information Industry Association. Donald Johnston, counsel, Xerox education group and member of our Proprietary Rights Committee is with me. The association is composed of more than 70 commercial firms, all of which are involved in one way or the other in applying the modern ininformation technologies to the dissemination of information.

Many of these companies have a decade or more of experience in disseminating works of authorship through the use of all varieties of advanced information technologies, alone and in combination with traditional ink-print technologies.

Our proprietary rights committee spent the past 2 years matching this practical experience with the provisions of the revision bill. You will find in the statement the results of that effort. We think that before your committee makes, or the National Commission on New Technolngical Uses of Copyrighted Works recommends, any changes in H.R. 2223 affecting the use of works of authorship in these new technologies, these recommendations and the experience of this industry should he considered.

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