copyrighted material and to report its findings and recommendations to the Congress within a specified period of time; also, that the meetings of the interested groups which are being held under the auspices of the Copyright Office should continue. The council endorses these suggestions but urges that passage of the bill be not delayed meanwhile. You have heard reference to them by Mr. Karp. You will hear further references.

We should like permission to file with this statement a list of seven changes-none of major policy-which the council urges, along with the American Textbook Publishers Institute. As to these seven, the Authors League has stated its approval of the first six, and its objection to the seventh.

We are grateful to you, Mr. Chairman, for having permitted us to be here today.

Senator MCCLELLAN. Mr. Manges, as I understand it, these are amendments you would propose to the bill.

Mr. MANGES. That is right, Mr. Chairman.

Senator MCCLELLAN. They may be printed in the record as a part of your remarks.

Mr. MANGES. Thank you very much. (The document referred to follows:)

S. 597 CHANGES REQUESTED BY AMERICAN BOOK PUBLISHERS COUNCIL, INC. AND THE AMERICAN TEXTBOOK PUBLISHERS INSTITUTE

Section 101, p. 6, lines 5–6: After "motion picture" delete comma and add "or other audiovisual work,".

(This addition, in our opinion, was intended to be included, consistent with the language of other sections.)

Section 101, p. 6, line 7: After "as a test," add "as answer material for tests,". (We believe that this addition is logical and appropriate.)

Section 107, p. 8, line 34: Change period to semicolon. The following word "In" would thus become "in."

(The purpose of this change is to deter the likelihood of quotation of the first sentence of Section 107 out of context.)

Section 110(1). p. 10, line 3: Immediately before the semicolon, insert "or unless, in the case of a display, the same image is simultaneously transmitted onto more than one receiving apparatus;"

(This change, in our view, is essential in order to obviate the danger that display apparatus in the classroom, which will be available separately to each student, will displace the use of copyrighted text material without payment to authors and publishers.)

Section 110(4), p. 10, line 31: After "public," insert "after written notice to the copyright owner served by the person responsible for the performance at least twenty days before the date of such performance, setting forth the date, hour and place of such performance and a list of the copyrighted works to be performed,". (While the copyright owner is given the right to serve a notice of objection to certain types of performance, there is no provision for informing him that such performance will take place.)

Section 112(b), p. 16, line 25: Insert "(5) a notice of the making of such copies or phonorecords is served on the copyright owner within thirty days after the making thereof.".

(We believe that any enforcement would be extremely difficult in the absence of some such provision as here requested.)

Section 304(F), p. 34, line 3: Add "if a grant confers rights under a copyright covering the term of such copyright and any renewal term and does not provide otherwise, such grant shall be deemed to include any extended term created by this title and by P.L. 87-668 and P.L. 89-142."

(We believe that the rights here involved should not depend upon whether the draftsmen of copyright grants affected by this section remembered to include the term "extension".)

Senator MCCLELLAN. Are there any questions before we proceed further?

Senator BURDICK. These amendments in no way disturb the copyright you referred to?

Mr. MANGES. They do not.

Senator FONG. Could you give us the distinction between publishers and book manufacturers?

Mr. MANGES. Book publishers ordinarily contract with independent printers and binders for the actual processes of physically manufacturing books. They do not have their own printing and binding plants. The book manufacturers are independent entrepreneurs who do the printing and binding of the manuscripts at the request of the book publishers.

Senator FONG. There is a difference of opinion on the manufactured books coming in

Mr. MANGES. Yes, the book manufacturers do the printing and binding. It is the physical process. The publishers do the editorial work of getting the manuscript out, and distributing and promoting the finished work.

Senator MCCLELLAN. Any other questions?

(No response.)

Senator McCLELLAN. I doubt if we could conclude with another of the witnesses before the time I wanted to recess, so we shall recess now until 2 o'clock, and I shall request the other two witnesses, and others who were scheduled to testify today, to be back at that time. Thank you.

(Whereupon, at 12:05 p.m., the above hearing was recessed, to reconvene at 2 p.m., the same day.)

AFTERNOON SESSION

Senator BURDICK (presiding). Come to order, please.

The next witness will be Mr. Deighton, chairman of the board of the Macmillan Co.

STATEMENT OF LEE C. DEIGHTON, CHAIRMAN OF THE BOARD OF THE MACMILLAN CO.-Resumed

Mr. DEIGHTON. Mr. Chairman, in some 40 years of publishing, I have discovered the hardest thing for an author to do is to reduce his manuscript to publishable size.

Senator BURDICK. Do you wish your full statement to be made a part of the record?

Mr. DEIGHTON. I would like to present the entire statement.
Senator BURDICK. Without objection, it is so ordered.

Do you intend to summarize it?

Mr. DEIGHTON. I intend to summarize it.

I am Lee Deighton, chairman of the Macmillan Co. I appear on behalf of the American Textbook Publishers Institute, a trade association of 125 firms engaged in publishing reference books, maps, tests, textbooks, and other materials of instruction. These firms account for 95 percent of the sales of such materials to the schools and colleges of the country.

79-397-67-pt. 1-6

It is highly competitive industry in which no single firm commands more than 10 percent of the market. We believe that this is as it should be in a political democracy and a free enterprise economy.

We live in a very close relationship of interdependence with the schools and colleges we supply. They are the only market for our products. We could not survive without them. More than this, the teachers in the schools and colleges are the authors of our products. At the same time, the schools of the Nation rely heavily upon the instructional materials we produce.

Because instructional materials are so important in training the minds of our young people, the publishers of these materials have a very great responsibility to society. We believe that this responsibility can be best discharged by private, commercial publishers whose independence of action is guaranteed by the society they serve.

The most important guarantee in our society is the copyright law, which is the legal foundation of our business. Incidentally, in every advanced nation of the free world, instructional materials are provided by private, commercial publishers.

The current study of copyright which began 12 years ago was not started at the behest of book publishers. Nor have book publishers come forth strongly at any time to request a new law.

Nonetheless, we have followed the discussions closely and have participated in them eagerly. The bill before you is the result of many compromises arrived at through many hours of conference and efforts in good faith to develop a law fair to all parties of interest. Book publishers still believe that section 601, the manufacturing clause, is essentially a tariff provision that has no place in a copyright law. Yet, as written, it is a compromise that most publishers are willing to try. In the same way, we have reached an accommodation with users on fair use.

We respectfully request now that you examine the bill and any amendments that may be suggested to make sure that copyright does not become a hollow shell through grant of further exemptions.

We have observed a central thread running through the dialog of the past 3 years. It is quite simply a demand for free use of copyrighted material through the grant of special exemptions. It is our position equally with authors, composers, artists, and other creative talents that the product of a man's mind and imagination is property just as much as the product of his hands or machines.

Every exemption granted is an abridgement of the creator's rights to enjoy the fruits of his labor. As citizens, we are concerned lest the granting of exemptions proceed so far as to hinder the flow of created materials.

Among the exemptions that have been sought in this copyright dialog are these:

(1) the making of copies without permission or payment for use in educational institutions.

(2) the making of copies without permission or payment for instructional purposes in governmental agencies and institutions.

(3) performance and display of copyrighted material without permission or payment in educational television.

(4) input, manipulation, and display of copyrighted material in computers without permission or payment.

It is our position that the bill before you, S. 597, meets these demands in a manner fair to all parties, and in a manner that will not impede the use of new technology.

Appearing at this early point in the proceedings of your committee, we are uncertain whether the parties of interest are still at odds concerning the uses of copyrighted material in this technology. Book publishers have been anxious throughout the copyright study period because the drafting of a new copyright law has run simultaneously with a technological revolution in the means of duplicating and displaying copyrighted material.

Only the outlines of this revolution have so far emerged. We are well aware of the advances in photocopying, but the development of computer networks, library networks, facsimile transmission computerassisted-instruction, and earth satellites is in the planning and experimental stage. It is the position of book publishers that no law written at this time can deal fairly and justly with specific devices and specific situations arising from the communications revolution. Neither the devices nor their effects upon copyright can be wholly foreseen.

The hazards of legislation made too explicit with respect to technology are noted at page 53 of the committee report to accompany H.R. 4347:

Although it was touched on rather lightly at the hearings, the problem of computer uses of copyrighted material has attracted increasing attention and controversy in recent months. Recognizing the profound impact that information storage and retrieval devices seem destined to have on authorship, communications, and human life itself, the Committee is also aware of the dangers of legislation prematurely in this area of exploding technology.

In the context of Section 106, the Committee believes that, instead of trying to deal explicitly with computer uses, the statute should be general in terms and broad enough to allow for adjustment to future changes in patterns of reproduction and other uses of authors' works.

It is precisely because the bill before you is in fact "general in terms and broad enough to allow for future changes" that book publishers can lend it their support. We would view with alarm any amendment which would permit the further encroachment by devices, machines, or processes-to use the language of the bill before you-"now known or later to be developed.'

The use of copyrighted material without permission and without payment in transmission by television or computer as previously proposed constitutes a serious threat to authors and publishers.

The threat is precisely that technology of transmission and display will make one copy of a book do where hundreds or thousands have been used and purchased before.

The threat I am describing is not immediate but lies in an unknown future.

Nothing so dramatically forecasts the future as the possibility of earth satellite systems of broadcast. Earth-satellite transmission will permit simultaneous viewing throughout the country. New recording devices now available will permit viewers to record and store the transmitted program for use on classroom television sets over and over again. Suppose now a closed-circuit program transmitted via satellite to educational institutions. Suppose that on this program the pages of a copyrighted work are displayed for reading and that in thousands of these institutions recording devices

fix the program on film. In these circumstances, who would buy the

books?

At this moment, no such network exists in educational institutions. Computer transmission is a future, not a present, threat to authors and publishers.

With this background, we may now consider the force of the exemptions from copyright previously proposed for transmission by television or computer. Use of copyrighted material without permission or payment would permit display of this material for as long as desired, as many times as desired, to as many individuals simultaneously as may be placed before cathode ray tubes. It would cover all kinds of copyrighted material from "Winnie the Pooh" to mathematical treatises.

Unrestricted use in closed-circuit transmission would be damaging to all kinds of copyrighted material. To certain kinds, it might well prove fatal. Closed-circuit television is linked to educational institutions. Textbooks, workbooks, laboratory manuals, and standardized tests are produced for this market. They can be sold nowhere else. If unlimited use destroys the market for them, private commercial publishers will find it impossible to risk the capital required for new texts and instructional materials.

These materials are designed for sale in quantity in large markets. There are other publications of a scholarly or technical nature with total markets of only a few thousand copies. If these markets are reduced by as much as 10 percent, the books in question cannot be published.

Unrestricted use in this case, permitting one copy to serve where hundreds have served before, would quite literally dry up the sources of publication. To be quite specific, if an advanced scholarly or scientific work were encoded without permission or payment into a computer, and if this computer were part of a wide-ranging network, no scholar or scientist with access to the network would buy the book. No library associated with the network would buy the book. It would be difficult to find a publisher for another book of the same sort.

Under the present law, nonprofit television and radio are granted the right to use nondramatic literary material for performance only. This means that no copy may be made of the performance for future use. The bill before you continues this basic exemption from copyright, but authorizes the making of two copies for instructional television performance. The first copy may be held indefinitely for archival purposes; the second may be held and used without limit to the number of uses for no more than a year.

This provision represents a compromise on the part of book publishers. It is their majority view that a one-time performance on educational television cannot disturb the market for a work. It is their unanimous view that repeated performances without restriction would remove any reason for purchase of the work and thus damage its market.

We would regard any extension in the number of permitted recordings as a serious erosion of basic copyright.

It will be alleged that in opposing the extension of free use of copyrighted material in the new educational technology, beyond the uses provided in the bill, book publishers are trying to prevent the