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Mr. CAMEROX. I do not follow your reasoning on that, Mr. Pattison.

Mr. PATTison. Well, a scientific journal, for instance, which has a very limited subscription, any kind of copying at all of that-

Nr. CAMERON. Precisely.
Mr. PATTISON. Almost exceeds fair use.
Mr. CAMERON. That is why I say that there should be specific limits.

Mr. Parrison. Well, it seems to me from the standpoint of the librarian and the other part of it, which is the teacher's part, that if the teacher wants to take an article out of Time magazine and make 10 copies for his class of one particular page of Time magazine, that probably also would be fair use, even though it would not be fair use in the technical journal. And we have to look at both sides of that picture. We have the teacher's side, as you quite well expressed.

Mr. CAMEROX. Yes.

Jr. Pattison. And the other side, which is the author's side. The author in the case of Time magazine probably would be perfectly willing to admit that 10 copies of 1 page would be fair use, whereas the author of the scientific journal may well not.

Mr. CAMERON. But

Jr. Pattison. So if we put an artificial limitation on the number of copies

Mr. CAMEROX. As the bill is now written, there is no protection except through tedious and extensive judicial process for the author of the article in the scientific journal.

Mr. Pattison. On the other side, there is no protection for the teacher who wants to get that information out, and would presumably get quick permission from certain kinds of authors and journals who are delighted to have you copy all you want. But the practical matter of getting permissionMr. CAMERON. Telephone call.

Mr. PATTISON. Well, a telephone call from Dubuque, Iowa, to Time magazine for a sixth grade teacher who wants to do something tomorrow is kind of ridiculous. I mean, it just does not work out, and the teacher ends up having to subject himself to that terrible penalty that we have added to the bill if he does not make a telephone call, and even if he did make the telephone call he is not even sure who he is talking to.

Mr. CAMERON. What he does now is what he would continue to do, I hope, after the bill is passed, which is to go ahead and make the copies.

Mr. Pattison. But the problem--that is the problem, I think, designing a bill that we know is going to be violated, and I am not sure that that is the right way to legislate. I have no further questions,

Mr KASTENMEIER. The gentleman from Illinois, Mr. Railsback.

Mr. RAILSBACK. Professor, in respect to resale, I am inclined to think that under the law, the general law of contracts, unless the seller puts some kind of a restriction or a reservation on the sale, that that person, that business can do with that property whatever any owner wants to do with it. It is like you buy a piece of art work or a painting, or a patented machine, you buy it without any restriction, and you can sell it, you can give it away, you can do whatever you want to do. That is frankly my initial impression.

Mr. KASTENMEIER. Would the gentleman yield?
Mr. RAISLACK. Yes.

Mr. KASTENMEIER. 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. RAILsBick. 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 ('onstitution 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 a fleet 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.

Mír. DANIELSON. That is very well. I am delighted.
Mr. KASTEN MEIER. Thank you, Professor Cameron.
(The prepared statement of Rondo (ameron follows:]

STATEMENT OF PROFESSOR Rondo (AMERON

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 18 - 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 in. terested in the protection of the intellectual property of authors and in its accessibility for fair use by teachers, students, and scholars.

Jr. 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 writing 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 Economie 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 10S In general, Mr. Chairman, I Ond the bill to be preellent (at least those portions with which I am most fa. miliar), a great improvement over the present chaotic state of copyright law. I wish to commend your committee and its stall its predecessors in previous ('ongresses, and their counterparts in the Senate, for striving to bring order out of chaos. I wish for the bill speeciy if now belated passage.

In spite of mv general commendation and my wishes for speedy Dassage. 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 108 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

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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 unre munerated) 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 copy right 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 soxiety 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 ('ongress. 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 II. R. 22:23: Addressing ourselves now to specific points in H.R. 22:23, 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.

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