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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 benetit 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 oxiety 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 i7 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 etforts 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 "t00 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. 2223 : Addressing ourselves now to specific points in HR: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.

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 acknowl. edge 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 hy 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 definition 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

one can say the present incentive of 28 years plus 28 years has resulted in lack of growth. Why then increase the cost to society? It is absolutely not necessary. Remember, the primary goal of the copyright laws is to benefit society. This philosophy also extends to the idea of extending present copyrights beyond their legal limit. How can that possibly give a just return to society for granting a monopolycopyright?

Additionally, now that sound recordings are entitled to copyright protection, a problem arises where the creator is granted a copyright for life plus 50 years. Most sound recordings are created by a corporation whose life-specified in the articles of incorporation--is perpetuty. So we have perpetuity plus 50 years which is forever and that contlicts with the Constitution which requires that such monopolies be "for limited times."

Regarding section 705, some consideration should be given to providing additional data to the public by the Library of Congress. If, in fact, the primary purpose of the copyright scheme is to benefit the public then an effort should be made to make it easy for the public to avail themselves of that which is theirs. To accomplish this is relatively simple. In addition to the aforementioned file reflecting the copyright holder, the date and renewal date of the copyright should be shown. A separate file containing works on which the copyrights have expired should be provided so it may be used by the society which paid for it with a limited monopoly.

('oncluding remarks: The preceding comments have been offered to help bridge the gap between the businessplace and the legislative offices of you gentlemen. Throughout this presentation you undoubtedly noted that an emphasis was placed on society's welfare. I felt this was necessary. During the past 10 years, the hotly contested battles which have taken place in our court rooms on such subjects as cable TV', pirating sound recordings, and copying of literary works, and others have resulted in so much case law that is at odds with statutory law.

Federal judges disagreeing with other Federal judges. ('ompanies fighting tooth and nail in ugly displays of greed, power, and corruption. Not once in some 100-plus court cases reviewed by this person involving copyright matters did the interests of society emerge. Always it is some special interest faction attempting to cement a position of advantage over others. More often than not, those of us whose lives are involved with copyrights are easily caught up in the complex and emotional issues at hand and it is very difficult to keep one's head screwed on correctly--to view the issues from their proper perspective.

I suggest to you, gentlemen, that our own lifeblood, the society in which we live, has not received a proper share of her just earnings and consideration. Please contemplate this as you consider some of the suggestions which I have brought to you today.

Thank you. Mr. KASTEN VEIER. Thank you, Mr. Merry. I think you kept well within your allotted time of it minutes, and I do not think you took that much time.

I would like to yield to the gentleman from Illinois, Mr. Railsback. Mr. RAILSBACK. I have no questions, but I want to thank you for your testimony.

Mr. MERRY. Thank you, sir.
Mr. KASTENMEIER. The gentleman from California, Mr. Danielson.

Mr. DANIELSON. Same thing. I have no questions. I wish to thank you. In fact, I have nothing here that I can quarrel with.

Mr. MERRY. Thank you, sir.
Mr. KASTENMEIER. "The gentleman from New York, Mr. Pattison.

Mr. Patrison. I am interested in the fact that you do not specify what problems arise from section 115(a) as it relates to something like the moog.

Mr. Merry. No, I do not. My feeling in that particular section, sir, was that as several other of the persons ahead of me have testified, the technological advances have required a revision of this law. And there was a time prior to Public Law 92–140 when Congress did not see, for instance, that sound recordings were entitled to coypright. They were not creative in nature. They now see fit to award them copyrights. The same is true of arrangements that are now creative in nature that were not before. The electronic moog is the example that I use, but it is possible for someone to be creative in a sense today that they never recognized in years past. For instance, creative dancing is something that lately, and I suspect in the 1920's it probably would have been scandalous, but today it is recognized as an art form.

Mr. PATTISON. I am just curious how it would affect, how paragraph 115—I am not just maybe as familiar with that as you are. How would that impact on something like the moog?

Mr. MERRY. The moog is a musical instrument that electronically creates musical sounds and simulates other instruments.

Mr. Pattison. Every band has a moog these days.

Mr. MERRY. You indicated in here that an arrangement shall not change the basic melody and fundamental character of the work and shall not be subject to a protection as a derivative work under this without the consent of the copyright owner, and then I think when an author, and I will use a musical work as an example, when the author gets a copyright, which is generally identified in sheet music form, it is possible for another creative artist like Burt Bacharach or someone to come along and redo that work and change the fundamental character of not necessarily the-well, let's take some of the more contemporary presentations, and the one that comes to mind is Jesus Christ Superstar. That is an interpretation that involves many adaptations to the original work, and so do others.

Mr. PATTISON. About which there has been brought out a lot of litigation on that particular one.

Mr. Merry. Right. Yes. There probably has been.

Mr. Pattison. There is a performing group and the authors have differed by exactly what you are pointing out.

Mr. MERRY. Yes.

Mr. Pattison. They have said that the performance was a separate thing.

Mr. MERRY. I see. The effort here, of course, is to protect the property owner.

Mr. PATTISON. No, it is both.

Mr. Merry. I think that if we accepted the concept of compilation copyrights and derivative works, then we have to not restrain the people who would derive another work through a compilation and deny him a chance to express himself in his medium. I think it is something that has to be looked into. I think it might be something that just has not been viewed from all the vantage points that it should.

Mr. Parrison, Uh huh.

Mr. Murry. It is not anything that I cannot personally live with. I am just looking at it from the benefit of creative people in the society at large.

Mr. Parrison. Well, I thank you for your comments, and they are extremely helpful.

Mr. KASTEN MEIER. I would only, in conclusion, want to say that when you were talking about a corporation, and you suggest that this would provide for a copyright for life plus 50, or for perpetuity plus 50, that is not the case. That would be a work for hire, and the term is a term of 75 years from the date of first publication. It is a fixed term. It does not endure during the life of a corporation.

Mr. MERRY. All right, Mr. Chairman, I understand what you are saying, but I offer this explanation. You have to differentiate het ween the components of the musical work, and there are basically five of them. There is the music, the words, the arrangement, the plastic dise, being the record itself, and then the artist's rendition, say Johnny Cashi singing it. Now, in the case of the music, and the song, and the arrangement, that is granted a copyright for life plus 50 years, but not if this is, let us say, Columbia Records who comes along and utilizing that copyright inder contract creates a sound recording, and they get a copyright on that sound recording, the corporation itself has created the sound recording, and they are entitled to copyright for life plus 50 years.

Mr. KASTEN METER. They would be entitled insofar as they created it as a corporate interest and held a copyright.

Mr. MERRY. Yes.

Mr. KASTENMEIER. They would be entitled to 75 years after publication?

Mr. MERRY. Only 75 years? Okay. That was not clear to me. Thank you.

Mr. KASTEN MEIER. But nonetheless, your points, otherwise, I think, are well made, and we appreciate your contribution this morning.

Mr. MERRY. Thank you very much.
[The prepared statement of Donald I). Merry follows:]

STATEMENT OF DONALD D. JERRY, PRESIDENT, SICOM ELECTRONICS (CORP. 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 SCHIFME IN COPYRIGHTS It has always been a characteristic of our social and governmental attitude to find the concrpt 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 l'ongress to embrace rather than oppose the concept of a monopoly. So it is in matters of patents and copy. rights 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

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