growth and use of these marvelous devices. This is not the case. We are interested in the advancement of education or we would not be in book publishing. We believe that the new technology has great potential. We believe it will require new kinds of instructional materials, and we want to be in business to provide them.

We do not believe that the development of instructional television. or computer-assisted instruction requires the expropriation of our current product.

It will be asserted that free use of copyrighted material is essential for educational transmission because publishers are slow and reluctant to answer requests for use of their materials. No one will deny that some publishers have been slow and inefficient in handling permission requests. On the other hand, thousands of requests are handled promptly and reasonably each month. At the Macmillian Co. alone, we receive 8,000 requests a year, and we are in a current study of the feasibility of handling these requests via computer.

You may wonder why responses are not immediate and automatic. There are several interesting and important reasons why not. The basic principle is that publishers stand in a fiduciary relationship to their authors. They cannot approve quotations out of context or quotations which are in effect an abridgement or caricature of the author's work.

Two examples will illustrate the problem. We recently received at the Macmillan Co. a three-page letter requesting permission to use some 30 disconnected sentences and paragraphs ranging over 279 pages of an author's work. It was necessary to go to the pages of the work to discover what the effect of this kind of skip-quotation would be. It was clear, upon inspection, that the effect would have been gross distortion and the request was declined.

As a second example, we are often asked for permission to quote portions of a poem. If the request is for alternate stanzas or for a passage from which lines are omitted, we cannot in good faith grant the permission, for the result would be a distortion of the poem. If we granted permission, we would be in violation of our obligation to protect the integrity of the author's work.

Clearly, then, we cannot grant all requests for all uses of an author's work. The handling of permission requests cannot be automatic since it requires the exercise of judgment. On the other hand, once user needs are made clear, it is possible that certain of them can be handled in bulk.

Now, may I interpose a sentence or two.

Granting the right to free use of copyrighted material without permission or payment would be granting the right to abridge, to distort, to caricature, to quote out of context. With free use of copyrighted material, there is no possibility of policing legitimate use of an author's work. There is no guarantee of the integrity of that work.

I think it is your experience, Mr. Chairman, as it is mine, that truth never quite catches up to falsehood.

There is no question that applying for permission to use copyrighted material is an inconvenience. So is the paying of taxes. So is the respect for parking ordinances, and for legally posted "No Trespassing" signs.

It is undeniably an inconvenience to respect copyright to the extent of applying for permission to use material that someone else has

created. To overcome this inconvenience, two suggestions have been advanced by users. The first is to permit free use of copyrighted material so that no permission need be sought. The second is to set up a clearinghouse to which users can apply and from which permissions can be secured quickly.

Book publishers are quite willing to undertake feasibility studies for methods of handling copyright commissions.

This offer to study the means of clearing copyright permissions is genuine. On Monday of this week, book publishers were in conference with the Office of Education on this very problem.

We are seeking a means to clear permissions for educational research information to be stored on microfilm and in computers for Project ERIC. The directors of this project do not yet know what kinds of copyrighted materials will be required.

They do not know whether they will want entire books, or passages, or abstracts. They have no idea how many uses will be made of material stored in computers. Neither do we, but both parties intend to work together within the framework of the present copyright law to find out. For we are persuaded that the orderly process of the marketplace is the proper means for solving our problems.

Mr. Chairman, may I express the appreciation of American Textbook Publishers Institute for the opportunity you have given us to state our position.

(The complete statement of Mr. Deighton follows:)

STATEMENT OF LEE C. DEIGHTON

Mr. Chairman, I am Lee Deighton, chairman of The Macmillan Company. 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% of the sales of such materials to the schools and colleges of the country.

It is a highly competitive industry in which no single firm commands more than 10 per cent 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.

This is in no sense a reflection upon the quality of the schools. It is in part an outcome of the extraordinary growth of enrollments and the difficulty of securing and holding enough good teachers to do the job. There is a turnover of one third of the teaching staff every year. Approximately 7 per cent of our teachers this year hold only temporary certificates. One third of the teaching staff has had less than three years of experience. They have a real and practical need for the materials of instruction that we provide.

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.

It is clear from the testimony of this morning that authors are the primary creators and proprietors whose work is encouraged and protected by copyright law. It is quite natural to wonder therefore what is the interest of publishers in copyright.

The scholars, teachers, and creative artists who write manuscripts do not have the means of turning them into printed books and of distributing them to the

nation's book buyers. They present their manuscripts to private publishers who do have these means. The author contracts with the publisher to publish and distribute his works, and assigns certain rights of copyright to the publisher in consideration of grants, royalties, and advance payments against future royalties. It is by this route that the publisher enters the copyright picture. He is required by contract to commit his capital to publication. He commits himself to expenditures on risk because for most books there is no certainty prior to publication that a book will sell. Since books are not usually purchased sight unseen, we must have a book in hand in order to sell it.

Professor Markham has clearly described the prepublication costs to which the publisher commits himself. Quite apart from fixed costs such as rent and taxes, he must pay the salaries of editors. He must buy and pay for photographs, maps, and artist's illustrations. He must pay for typesetting and the making of printing plates. For a single high school textbook, these prepublication costs may amount to $50,000.

For an elementary school textbook series, they are often as high as $750,000. For a new 20-volume encyclopedia which my company is publishing this year, they will be slightly more than $7,000,000. These are out-of-pocket costs before the first copy of a new book appears. If there were no copyright law to protect the publisher against piracy and misappropriation, he could not risk his capital in prepublication costs.

Now, suppose a situation in which there is no copyright protection. By means of quite simple technology, a pirate may photograph, print, bind the entire work and sell it at a cut-rate price because he does not have the prepublication costs of the original publisher. He has no editors. He buys no artwork. He pays nothing for typesetting. The interest of publishers in a strong copyright law becomes self-evident.

The function of the publisher is to create, package, and distribute. Our product is primarily the book, but we are not limited to this form. We can package and distribute our materials just as well on microfilm or on magnetic tape and will do so when a demand for these forms develops, provided they are protected by copyright. We can and do produce film, filmstrips, transparencies, and other audio-visual products, and because they are peculiarly vulnerable to misappropriation, they require the special protection which the bill before you provides. 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 resuit 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. Similarly, the provisions for free use of copyrighted material in educational television, for reversion of rights to authors, and many other particulars in the bill represent compromises between publishers and other parties of interest.

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 looked at copyright legislation not only as publishers but as citizens of a free economic society. We have observed a central thread running through the dialogue of the past three 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 examption 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.

Ainong the exemptions that have been sought in this copyright dialogue 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 photo-copying, but the development of computer networks, library networks, facsimile transmission, computer-assisted-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 disappearance of a market will make it impossible to publish books in quantity sufficient to return the required investment. We can adjust to the technology itself by new kinds of publications and new price structures. What we cannot adjust to is unpaid for use of these new materials. Unpaid use by depriving us of income would make it impossible for us to adjust.

The threat I am describing is not immediate but lies in an unknown future. The threat of use without payment in closed-circuit transmission is not immediate only because this transmission is ineffective. We may note in passing the comment in the 1967 Carnegie Report on Educational Television: "With minor exceptions, the total disappearance of instructional television would leave the educational system fundamentally unchanged." Or we may note the 1967 comment of Dr. Conant in a report of a study sponsored by the National Association of Secondary School Principals: "Only 10.9 per cent of the principals replying to the inquiry indicated that television was a major teaching device in one or more subjects in their schools."

We cannot suppose that these conditions will continue for long. The educators engaged in instructional television are a devoted and committed group. The foundations have recently offered millions of dollars of their own funds for program development and have proposed systems which would provide far greater funds to support noncommercial television. A recent Presidential message calls far additional support of educational television and exploring the use of earth satellites. 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?

I have been describing the future of closed-circuit television. The same kind of transmission is now technologically possible in computer network systems. It is contemplated that in these systems, a central computer will store copyrighted works, and that they will be transmitted by wire to hundreds of individual console screens upon demand. In a system of this kind, the only copy exists in the computer. It is merely displayed on the console screen to be read at leisure by the user. The computer in effect becomes the library.

At the moment, no such network exists in educational institutions. We are still in the experimental stage in a relatively few colleges and schools across the country. Like television transmission, 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. It should be noted that the bill before you for the first time in American copyright law extends copyright to include the right to display a work publicly. (Clause 6 of section 106) This is clear and explicit recognition that methods and devices for display currently available and in growing use have the potential of destroying the market for copyrighted works. In this connection, the Committee Report to accompany H.R. 4347 says at page 55: "With the growing use of projection equipment, closed and open circuit television and computers for displaying images of textual and graphic material to 'audiences' or 'readers' this right is certain to assume great importance to copyright owners........ The committee is aware that in the future, electronic images may take the place of printed copies in some situations, and has dealt with the problem by amendments in sections 109 and 110........"

This atatement presents the heart of the problem. We are faced with a loss of market when a machine can make one copy of a work do where hundreds have been used before.

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 stadardized 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 nstructional 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 per cent, 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 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. The right to make a copy of a transmission for re