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effort of reproducing copyrighted printed material. For the more distant future, however, the larger problems will be posed by the application of computers and micro images and their technological decendents to the process of information storage, retrieval and dissemination. While all of their potential uses obviously cannot now be foreseen, the high speed digital computer already has important implications for authors and publishers and for public policy toward copyright.

The present state of technology suggests that the computer will affect conventional publishing in two distinct ways: 1) the initial version of some types of information that are now reduced to writing, copyrighted and published will very likely be computerized, thus bypassing conventional publishing altogether; and 2) the contents of published works will be stored in computers and, once stored, serve as a substitute for additional printed copies. Examples of the former are the innumerable pieces of scientific analysis now going initially into computers and computer networks which formerly were published in journals and as scientific tracts. An example of the latter is the eastern universities medical school network of computers and telephone lines reported in the New York Times on March 5, 1965. The network, when completed, will merge the information resources of the participating medical schools. It is anticipated that, as technology matures, it will become increasingly practical for networks such as this to purchase a single tape rather than copies of books for deposit in each local library or information center. The contents of "books" stored on computer tape can then be obtained by any member of the network in the form of printed copy, film, visual display on closed circuit television, or some other output.

The reduction of literary and scientific creations to computer tape for dissemination by networks carries with it the risk of dulling the incentive copyright now affords author and publisher. Under the conventional system of publishing the author and publisher are rewarded in accordance with the actual number of copies sold, and there is no problem in accounting for the copies. But as computer systems take over the function of "satellite" publishers, accounting for the number of copies becomes much more complex. Unless a system is created for the purpose there will be no accounting control even for the printed copy output of books, and it will be even more difficult to account for intangible copy "printouts” over closed-circuit television, as microfilm, and in other visual forms. This possibility of leakage may reduce the incentive of authors to create and of publishers to publish.

While the computer "revolution" may reduce some of the incentives to create intellectual property, it may also provide something in the way of a new incentive that, at least in part, offsets the reduction. If computerized forms of the contents of books will be substituted for conventional copies now purchased, then the decreased demand for the latter will in part be offset by an increase in demand for tapes or other forms of computerized copies. In a market economy, it can generally be assumed that the substitution of one form of good or service for another occurs because the price of the good being substituted has undergone a relative price decline. Accordingly, the computer may make it economically feasible to publish certain intellectual creations that might otherwise have gone unpublished. It follows, of course, that the resulting increases in effective demand for such output will be translated into incentives for author and publisher only if some means are provided for remunerating both, irrespective of whether copies are marketed as conventional printed volumes, computer tape, or tangible or visual display copies obtained from computer tape.

A likely development related to the above is that computer manufacturers themselves will increase their demand for intellectual property.

The demand for computers will increase as the volume and variety of services the computer can satisfactorily perform increases. In the past, success in the computer manufacturing industry has depended largely upon the computer manufacturer's ability to provide the requisite servicing, including programming.

This raises the very important question of how computer manufacturers, some of whom have already acquired publishing houses, will obtain the intellectual property they program. Will they enter into agreement with authors who retain copyright, or will they employ authors as they now employ programming and systems specialists so that the author's creations are considered work made for hire? Were the latter to materialize, it would pose an important issue of concentration of control over the creation, storage and dissemination of knowledge and information. Under the present systen of copyright, control is dispersed over tens of thousands authors and about nine hundred publishing houses. Almost the entire output of high-speed digital computers is in the hands of about eight companies.



In summary, the essential thrust of my analysis is that the technological revolution in information storage and dissemination is apparently upon us. It brings with it both great opportunity and great challenge. The spectacular advances in copying machines have made it possible to reproduce excellent copy almost instantly and at a cost per page of a few cents-or in sufficient volume, of a fraction of a cent. The benefits of this to society, especially to the process of instruction in schools and colleges, are enormous.

The new advances in the technology of reprography establish strong economic incentives to infringe the copyright or to argue for its modification to permit freer use of copyrighted material. The surveys cited in this analysis indicate that the incentives to infringe and circumvent the copyright are already at work in the schools and colleges and will very likely become stronger as new technological advances occur.

Before summing up the economic forces that bear on this issue a word probably should be said on the moral and legal question. Reduced to its simplest terms the question is whether any individual's property right should become less secure or less viable simply because the property has become more desirable and more readily accessible to others. By analogy, if my neighbor constructs a pathway to his rose garden, thereby easing my access to it, does this bestow on me any newborn legal or moral right to take his roses? In a private property society the answer is clearly "No."

The question cannot be answered so simply in terms of economic welfare, but there are economic solutions to the problem. Under the new technology the incentive to use selections from textbooks, reference works, and other instructional material has greatly increased because the cost of reproducing them for classroom distribution has been substantially reduced. This implies that the demand for parts of books has increased, possibly but not certainly at the expense of demand for additional copies of the entire book. If this is in fact the economic issue posed by the new technology in reprography, there is little reason to suppose that the market mechanism cannot resolve this supply-demand problem. Suppliers of books-authors and publishers-must design some method whereby parts of books or, more practicably, the rights to reproduce parts of the books, may be sold. Unless they do this, either present methods of selling books and the copyright will frustrate the new technology, or the incentive to circumvent the copyright will lead to unlawful reproduction or legal reproduction through copyright revision. Not only is neither of these solutions socially desirable but, in addition, neither is likely to produce an optimum allocation of our resources to the production of knowledge or optimum patterns of use of such knowledge. In brief, the copyright to a book should not obstruct extraction of the maximum use of a book, but neither should the increased incentives to use books in ways different from past patterns lead to emasculation of the property right. The condict of seller and buyer can be resolved here, as can most other buyer-seller conflicts, through the pricing system.

The economic issues posed by the electronic computer are more complex and less definable; the observable trends have been too short in duration and the technological possibilities too much a matter for speculation to point with certainty to what the future might bring. But two developments appear reasonably certain: there will be an increasing demand for "publishing” the contents of such intellectual creations as books in the form of computer tape, and for this reason the contents will increasingly be "read” from visual-image substitutes for the present printed page. It is possible also that copies printed out from computer tape will be substituted for both visual-image computer output and conventional published copies.

While these problems are, as has already been indicated, more complex than those posed by the new means of reprography, they are not fundamentally different. Nor do they appear to require radical solutions. The new technology in information storage and retrieval, as in the case of all other innovations in history, requires market and institutional adjustments. As the demand for "books" in the form of tape increases, publishers, at least at present, are in the best position to fulfill it and should do so. Otherwise, effective use of the new technology will be hampered. But there appears to be no fundamental difference between the social necessity of protecting intellectual property rights in film and tape and that of protecting such rights in visible and tangible printed books. Similarly, there is no fundamental distinction to be drawn between reproducing copyrighted material on a Xerox machine and reproducing it from tape or film as visual images or printed copy. If one violates our laws of private property and dulls the incentive to create, so does the other. There is, therefore, a need to clear up any uncertainties that may still exist about whether intellectual property created, stored, and retrieved in one form is on legal parity with that created, stored, and retrieved in other forms. If the copyright is economically justifiable for one, it surely should be justifiable for the other. In any case, the form the property takes should have relatively little bearing on the copyright principle.

There would still remain complex problems, however, even if these uncertainties were clarified. When publishers sell books in the form of tape to computer centers, the computer center becomes in effect a "satellite" publisher, capable of producing copies in a variety of ways. There then arises the problem of counting copies—the customary basis for determining the revenues of author and initial publisher. It has been suggested that a solution to this problem may be to charge a lump-sum fee at time of storage and to develop accounting control systems that reveal the volume of use and printout. Payments may then be made to publisher and author on a per "copy" basis. Similarly, as technological developments make it increasingly practicable to print out copies of books from tape, the computer may become analogous to copying machines, except that it may be more capable of reproducing whole volumes. Again, it would seem that the market might provide clues to the socially optimum solution to this problem. The basic guidelines to policy that envisage the optimum solution are the same as those invoked in the case of copying technology: while it is apparent that the copyright should not obstruct the economical use of the new technology, it is equally apparent that the new technology should not be made the means of riding roughshod over the rights of authors and publishers in the intellectual property they create and prepare for use by the public.

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PUBLISHERS COUNCIL, INC. Mr. MANGES. Mr. Chairman, other members of the committee, and counsel, my name is Horacé Manges. I am a member of the law firm of Weil, Gotshal & Manges, 60 East 42d Street, New York City, Attorneys for American Book' Publishers Council, Inc., of 1 Park Avenue, New York City.

The council is the national trade association of general book publishers. Its 191 members include nearly all publishers of general books, most church and other religious book publishing firms, all major university presses, nearly all scientific and technical book publishers, the major paperbound book publishers and almost all publishers of children's books.

It is estimated that the members of the Council publish and distribute at least 90 percent of all general books published in the United States. The publishing of elementary, secondary and college textbooks, reference books, educational tests and maps is separately represented by the American Textbook Publishers Institute, which is also presenting testimony, as you have heard. And these two organizations are, as you have heard, presenting certain testimony jointly.

The copyright revision bill is one of great importance to large segments of the population. Copyright provides the only means by which the contributions of the creative minds which are so vital to our culture can be safeguarded. Without appropriate copyright protection authorship will obviously be discouraged. Likewise, copyright provides the fundamental legal basis for a number of major industries: the publishing of books, magazines, newspapers, and music; the production of phonograph records and motion pictures; radio and television broadcasting; the performance of music, both classical and popular, and the production and distribution of the entire range of


educational materials. Without appropriate protection of copyright these industries just could not operate as they do.

This bill, as you know, is actually a revision of the bill introduced in July 1964. It has been given most careful and exhaustive attention by our dedicated Register of Copyrights and his able staff, and by the conscientious House Judiciary Committee and its proficient counsel. It involves many policy compromises by the interested parties.

We believe that any examination of the full House committee record of the revision bill in the last congressional session would demonstrate the general reasonableness of the positions which the council has taken—and these positions have been taken by the institute as well. Specifically, we should like to refer to the positions taken on two subjects.

Reversion: First, we refer to the matter of reversion. The compromise on this subject caused the following significant statement by the Register of Copyrights in his testimony before the House subcommittee on September 2, 1965:

Most amazing to those of us closely involved in the development of the bill is what has happened with respect to the so-called "reversion” or termination-oftransfers provision now found in section 203. This, which was once by all odds the most explosively controversial provision in the bill, appears to have largely receded as an issue in general revision. (P. 1866.)

We shall briefly state what happened on this subject. From the outset we opposed the inclusion of any provision in the new law which would allow authors or their survivors a right to revert or recapture a copyright grant in curtailment of the duration of an authorpublisher contract previously mutually agreed upon.

Although still adhering to that view, the council and the institute, together with certain other organizations, withdrew their opposition on this subject in a compromise arrangement with the Authors League. That arrangement, in substance, was effectuated in the bill.

The result is that, pursuant to the bill, under certain circumstances, the duration of a copyright grant to a publisher may be considerably shortened as compared with the length of a similar grant under the present law. For now, if an author contracts to license his copyright to his publisher for the entire term of copyright and any renewal term, the publisher is certain to obtain a term of at least 28 years and will obtain a term of 56 years if the author should survive the first 28 years of the term, because in that event upon his death his estate would be obligated for the balance of 56 years by virtue of his contract. Under the bill however, the author or certain survivors have the right to terminate the grant after 35 years, after publication, or 40 years after creation of the grant, whichever is sooner, irrespective of the date of the author's death. This compromise was praised in the House committee report, which states at page 119:

The constructive spirit manifested by those who have contributed to this compromise reflects credit on all those responsible.

In substance, that compromise was, as I have stated, effectuated in the bill. Of course, if it should be attacked, we would desire to refer to our prior stand on this point, as reflected in the record before the House committee.

Secondly, we refer to our position on the manufacturing clause. This is a unique provision of American law. So far as we know, no other

country makes an author's right to the use of his work depend upon the circumstances of the manufacture of copies of that work. This is obviously a tariff problem, not a copyright one. In fact, in the earlier report of the Register of Copyrights, he specifically recommended outright repeal of the manufacturing clause. The bill before you does not delete this clause but embodies a compromise which modifies it. We still believe in the merits of outright repeal but in the interest of trying to get a revision bill enacted, we are willing to forgo our efforts for repeal; this is on the condition that the book manufacturers and the printing unions refrain from attempting to modify section 601 of the bill, which we have reason to believe they will be willing to do.

We come now to our position at this stage of the bill: First, as to the products of the technological revolution, the council agrees that the fullest possible use of the multitude of technical devices now available to mechanized educational and informational systems should be encouraged. But as the House committee report indicates on page 60, bearing in mind that the basic constitutional purpose of granting copyright protection is the advancement of learning, the potential destruction of incentives to authorship presents a serious danger.

The explosive increase of these technical devices makes the enforcement of copyrights much more difficult even with the most protective provisions expressed in the law. The present bill attains à delicate balance of the rights of owners and users. We ask that this balance be preserved. We cannot too strongly urge, Mr. Chairman, that technological innovation be not permitted by your committee to lessen stimulation to creation and publication. We especially urge that your committee resist pressure for legislation to meet possible future requirements which cannot yet be either observed or defined.

Recognizing the need for revision of the obsolete 1909 law and accepting the House committee statement that his bill "represents an effort to reconcile conflicting interests as fairly and constructively as possible”—House committee report page 32—the council supports the major substantive provisions of the bill even though certain of its provisions are of substantial disadvantage to book publishers.

If, however, there are to be any major policy changes affecting book publishers, we would certainly wish to reevaluate the desirability of the entire bill in the light of their effect. We have heard reports that changes will be sought. Until specific proposals are submitted and we have had an opportunity to study them, we are not in a position to deal with them.

Accordingly, we earnestly request, Mr. Chairman, that at some later date we be permitted to present answering testimony with respect to any policy changes sought which may affect the interests of book publishers.

Senator McCLELLAN. May the chairman interrupt at that point to state that you may keep in touch with the counsel of the committee and if, after further testimony is heard by the committee, you desire to refute any of it or to rebut it, you may submit your request and the committee will consider either hearing you or granting you the privilege of submitting a statement.

Mr. MANGES. I appreciate that very much, Mr. Chairman.

You have heard, and will hear further, the suggestion that a panel of experts be appointed to study the problem of computer uses of

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