Mr. KASTEN MEIER. Yes. Actually this brought my attention to section 109 (a) which says, "Notwithstanding the provisions of section 106(5), the owner of a particular copy or phonorecord lawfully made under this title," the copy being a copy of a book or anything else, I gather, "or any person authorized by him is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord," meaning such person is entitled to resale without royalty. So the bill, in fact, comes down in opposition to your suggestion. Your suggestion would be to remove that?

Mr. CAMERON. Yes.

Mr. RAILSBACK. But I mean, even in the absence of that, it is my belief that you become a proprietor, just like you buy a book, you become the owner of it, or you buy a painting, you buy a piece of patented machinery, you buy a design, you can either give it away, you can sell it, you are the owner of it, and that is what you are paying for. Except if the owner wants to attach a condition to his contract of sale; in other words, what you are talking about is contract, you offer me a book, I buy your book, and unless there is a condition, unless you attach a condition, I can do with it anything I want to do. And that is just

the law of contracts.

Mr. CAMERON. That is correct, Mr. Railsback. But I am suggesting that in this case it should be changed in order to provide for fairness to the authors of the copyrighted material.

Mr. RAILSBACK. I think that you would have to change it in so many other areas, to be fair about it-well, let me just pursue something else. How do you feel about having a central intermediary as far as to obtain price quotes on published works? In other words, one of the problems that editors have, I think, or students, is that they have a work, they perhaps should pay for reproducing it, I think, I agree, and what I am saying is I agree with you that there are instances where they should be paying, but I imagine in some cases it is very difficult to get price quotes. What do you think about having some kind of a central intermediary or central office to get hold of the author to, you know, get a price?

Mr. CAMERON. In general, Mr. Railsback, I am against multiplying the bureaucracy. I would not like to see that.

Mr. RAILSBACK. How would you deal with the problem of relative inaccessibility then? In other words, where it is difficult to get hold of somebody?

Mr. CAMERON. I do not think that is a problem, and as I

Mr. RAILSBACK. Well, you know why it is not a problem? Because they do not do it now. They just go ahead and reproduce it. In other words, the law is not in force.

Mr. CAMERON. Well, as I pointed out in my statement, I am not concerned with the isolated, casual exchanges of isolated copies of books, but I am concerned about the commercial resale of hundreds of copies of textbooks.

I would like to bring to your attention and that of the entire committee that in Great Britain and several other European countries there are now proposals, which will almost certainly be enacted into law, to pay authors royalties on library use; that is to say, libraries will keep records of how many times a book is checked out, and authors will be paid royalties according to that. And I think that is also, although I

have not gone that far in my recommendations to the committee, it certainly is in the same direction as my proposal for royalties on resales.

Mr. RAILSBACK. That is all I have. Thank you.

Mr. DANIELSON. I have one observation I must make or I will have indigestion all day, Mr. Chairman. I want you to understand one thing, Professor, that under the Constitution the only purpose of copyright is to promote the progress of science and useful arts. That is all. There is nothing else. But for that, you would have nothing on copyright.

Now, the disease which makes second-rate nations of some of the countries of Europe need not be adopted to affect our own structure, and while I am here, it is not going to be. I recommend, sir, with all respect to your intellectual achievements, that you join the real world. This proposal of yours has no chance whatever of success.

Mr. CAMERON, Mr. Danielson, you tend to confirm my opinion of the majority of Congressmen. Thank you.

Mr. DANIELSON. That is very well. I am delighted.

Mr. KASTEN MEIER. Thank you, Professor Cameron.
[The prepared statement of Rondo Cameron follows:]

STATEMENT OF PROFESSOR RONDO CAMERON

Mr. Chairman, Members of the Committee, Members of the Staff: I appreciate this opportunity to present my views, those of an ordinary citizen, on this important legislation. It frequently happens in the legislative process that the voices of ordinary citizens are drowned by the clamor of special interests. I am glad to see that such does not appear to be the case with the bill now under consideration.

Although I qualify myself as an ordinary citizen, my interest in the outcome of this legislation is far from negligible. Moreover, as a teacher, a research scholar, and an author, I am representative of the many thousands indeed, millionsof others who pursue those honorable professions. For us teachers, scholars, authors-the printed word is at the very heart of our professional lives and of our livelihood. Books, magazines, and scholarly journals are the tools of our trade Both as producers and users of copyrighted material we are vitally interested in the protection of the intellectual property of authors and in its accessibility for fair use by teachers, students, and scholars.

Mr. Chairman, let me note, for the record, that I am the author, co-author, or editor of eight books that have appeared in more than twenty different editions; of more than 100 articles, contributions to symposia, columns, and reviews; and that various of my writings have been translated into virtually all major languages including Japanese, Korean, and Arabic. I am also the editor of the Journal of Economic History, a scholarly publication with an international circulation. Finally, as president of the Economic History Association, I am the official representative of its thousand-odd individual members, and speak unofficially on behalf of many other similar scholar-teachers,

Mr. Chairman, in view of my background and interests, I will confine my remarks to those portions of the bill concerned with literary works, as defined in the bill, and more particularly to Sections 106–108. In general, Mr. Chairman, I find the bill to be excellent (at least those portions with which I am most familiar), a great improvement over the present chaotic state of copyright law. I wish to commend your committee and its staff, its predecessors in previous Congresses, and their counterparts in the Senate, for striving to bring order out of chaos. I wish for the bill speedy if now belated passage.

In spite of my general commendation and my wishes for speedy passage, I do have two points of criticism. It seems to me that there are two flaws in the bill which, however, can be remedied with minimal changes in the text of the bill. The first concerns the unnecessarily vague language in Sections 107 and 10%. The second concerns an omission from the bill of serious concern to authors of textbooks. I will take them up in that order.

(1) One of the most widespread abuses of the rights of authors at the present time results from the technological progress that has made possible cheap, rapid

57-786 - 86 pt. 1 - 31

reproduction of published works by photocopying and similar processes. As a researcher and teacher, I have found these devices most useful and convenient; but as an author I have suffered from the unwarranted and unfair (and unremunerated) copying of my books and articles. It is one thing to photocopy a few isolated pages in preference to laboriously copying by hand or typewriter a series of passages needed for later reference; it is quite another to photocopy entire chapters, articles, and even books for sale or other forms of distribution. Although Sections 107 and 108 take a step in the right direction by identifying and attempting to cope with this abuse, they are not in my opinion sufficiently specific and precise. I believe the bill should set specific limits on the amount and number of copies that can be made of a copyrighted publication, beyond which the user or duplicator should pay a royalty to the author and publisher. I will be glad to indicate what I think those limits should be if the committee wishes. As the analysis of the Senate bill 1361 of the 93rd Congress states succinctly (Calendar No. 946, p. 118):

"Isolated instances of minor infringements, when multiplied many times, become in the aggregate a major inroad on copyright that must be prevented." In my opinion the best way to prevent it is not to forbid it legally, which would only result in surreptitious infringements, but to require the beneficiaries to pay a royalty to the owner of the copyright.

(2) There is no provision at all in the bill for the payment of royalties on the resale of published books and similar works. I am not concerned here with the market for old, rare, and out-of-print books, many of which are no longer under copyright in any case, or with the casual, informal markets that exist, for example, among college students for the resale of textbooks among friends and classmates. What is of concern, however, is the numerous large, organized markets for the coommercial resale of used or "second hand" books, especially textbooks. The existence of these markets constitute a serious threat, in the language of Section 107, to "the potential market for or value of the copyrighted work." As above, I do not suggest that such commercial resale should be prohibited, merely that the wholesalers or retailers should be required to pay a royalty to the owner of the copyright. Musical composers, artists, moviemakers and such receive royalties on commercial "performances and displays" of their works; it is only fair that authors should receive royalties for the commercial resale of theirs.

Subject to these two qualifications, Mr. Chairman, which I hope the commitee will remedy in its final mark-up of the bill, I again congratulate you on your fine work in revising the copyright law. Thank you for your attention. Mr. KASTENMEIER. The Chair would now like to call on Mr. Donald D. Merry, president of Sicom Electronics Corp. Mr. Merry, you are welcome.

TESTIMONY OF DONALD D. MERRY, PRESIDENT, SICOM

ELECTRONICS CORP.

Mr. MERRY. Thank you, Mr. Chairman. I realize that you are running short of time, so I will try to accelerate.

Gentlemen, please accept my sincere appreciation for this opportunity to speak to you today on H.R. 2223 and copyright matters in general.

My presentation will take approximately 14 minutes and has been arranged to minimize the confusion from discussing specific subjects lifted out of context.

Congressional scheme in copyrights: It has always been a characteristic of our social and governmental attitude to find the concept of a monopoly reprehensible. In the building of this Republic, Congress has acted, in accordance with the Constitution, to develop a body of laws which have as a primary goal the benefit of society at large. Sometimes, to accomplish that goal, it was and is necessary for Congress to embrace rather than oppose the concept of a monopoly. So it is in matters of

patents and copyrights which are, in themselves, monopolies. Congress has, and I think rightly so, "dangled a carrot," called a copyright, in front of those creative individuals among us to stimulate them into producing, through their unique talents, works which will benefit society at large. The "carrot" or monopoly or copyright is only granted for a limited time and with the understanding that upon termination of the monopoly all rights inure to the public domain.

Ralph Waldo Emerson wrote, "The man who grasps principles can successfully select his own methods. The man who tries methods, ignoring principles, is sure to have trouble."

In the matter of copyrights, the underlying principle is the benefit of society at large. The method is to reward the creator. It follows that, in any legislation centering on copyrights, the primary interests of society are at least as important as the methods and secondary benefactors involved.

The music industry has prospered and grown dynamically since 1920. There is an accompanying chart to show that. This has only been possible because of a sound underlying body of laws. Title 17 has served society well since 1909.

As we meet during these sessions to consider changing and revising the present copyright statutes, we should be cautioned by Emerson's wisdom and not "get the methods ahead of the principle" or we are sure to have trouble. There has been, during the past 10 years, a great deal of emotion and activity at the Federal and State legislative level and also in the Federal and State courts related to control efforts in the copyright area. Indeed, most of these efforts resulted in various authorities, both Federal and State, imposing some form of control over matters of a copyright nature when the authority to do such was vested only in Congress. We all know the familiar saying about "too many cooks spoiling the soup."

In line with that, there is presently sweeping across our country a trend that will, if allowed to mature, reverse the primary and secondary goals of the intent of our present congressional copyright scheme, leaving the interests of society neglected. My purpose here today is to provide what hopefully will be constructive comments to assure society is not neglected and we continue to enjoy sound growth in our industry based on fair, equitable laws.

Comments on H.R. 2223: Addressing ourselves now to specific points in H.R. 2223, I offer the following comments.

Under section 115, at page 21, line 21: "A person may not obtain a compulsory license for use of the work in the duplication of a sound recording made by another." I suggest you add "without the approval of the owner of the master sound recording." Many of the sound recording masters in use today are licensed out to businesses who manufacture and distribute under the compulsory license provisions. Present wording of section 115 could be construed so as to render legally useless large libraries of music properly assembled for this purpose.

Presently, section 115 effectively requires the use of musicians to qualify for a compulsory license and ignores the fact that there are businesses which specialize in recording--studios--and there are businesses which manufacture and distribute. Of course, there are also the major music companies who are wealthy enough to do both.

Section 115, as it stands, would eliminate that segment of the music industry-small business-which cannot justify or afford an expensive recording studio. It preempts the present pooling of such cost by small business and would result in lost royalties to the copyright holder. It favors big business.

Section 115, paragraph (a), clause (2), should be reviewed carefully to assure it does not stifle creativity. Many innovations, such as the electronic moog, might be cramped by the wording of this clause. Under section 115, paragraph (c), clause (1) at line 21: It is suggested that, due to problems frequently experienced today, a more specific location for the identification of a copyright holder be set forth. "The registration or other public records of the Copyright Office” is, I contend, too vague to be workable as experience has proved. This is an excellent time to solve this age-old problem by simply nailing down a specific location where anybody can obtain this information. readily. By location, I mean a specific file in the Library of Congress. Under section 115, paragraph (c), clause (3) at line 35: The requirement for a CPA to certify with a detailed statement of account, the monthly royalty reports, each month, is unworkable in practice and is a severe and unnecessary burden on small businesses. It will not hurt big business. Annual certified statements following monthly statements, attested to by company officers, should be adequate.

Under section 115, some provisions should be provided to clarify situations which arise when the copyright holder refuses to acknowledge the rights of a compulsory license applicant. Experience has shown that this is not an isolated problem. The statutes are generally written with the protection of the copyright holder in mind; however, where we have a compulsory contract between two parties by statute, we must be sure to offer consideration to both.

Under section 301, more detail should be set forth defining the legal status of property rights which are vested in the public. Such property, presently in the public domain, is being denied the public use through various interpretations of the many courts across our great land. The confusion exists at all court levels, both Federal and State and even manifests itself in a five-to-four Supreme Court decision. While section 301 is supposed to preempt those laws in the nature of copyrights, such intent is circumvented by simply calling it another name; that is, unfair competition. In one case a court ruled that a plaintiff had no statutory property right and the plaintiff had no common law property right but the plaintiff did have a "quasi property right" in a musical sound recording. How in the world can a businessman foresee a court creating a whole new thing not provided by statute? Much of the public's time and money can be spared by eliminating expensive litigation in our courts through clarifying de

finition now.

Under section 302, an objection must be made to the copyright term of life plus 50 years. First of all, this has been proposed more as an attempt to standardize with what is the custom in certain European countries and the wording of the Geneva Convention. In Europe, they don't feel as we do about monopolies and cartels. Our Government, the people, feel differently and I see no reason to offer more stimulus to the creative individuals in our society than is required to keep society enriched with a free flow of ideas and useful arts. Certainly no