fees. But the first part has been taken care of. Statutory damages have been doubled, and so they are fairly substantial. If you have an appealing case in the courts, you might well get a fairly substantial judgment.. Maybe the problem is that the cases aren't appealing enough, because maybe the training films are being used by relatively small businesses also, or by nonprofit organizations. There you have the dilemma that your bill will already, in effect, exempt nonprofit organizations—and we had suggested this-that if nonprofit organizations infringe the reproduction right, they will be exempted from the mandatory award of attorneys' fees. Of course, they could still be subject to attorneys' fees because the court would still have discretion to award attorneys' fees. But you do have that consideration. We certainly did feel in our analysis of this issue that it would be unfair to subject the nonprofit organizations to mandatory attorneys' fees. That's why we made that suggestion to you. Mr. BERMAN. Thank you very much, Mr. Chairman. You were very generous in allotting me this time. Mr. KASTENMEIER. The gentleman from North Carolina. Mr. Oman, it's good to have you and your staff here. You heard my comment earlier, Mr. Oman, concerning H.R. 3158; that is to say, if the movie studios would agree not to charge the nursing homes and not to require a license, and if a license were, in fact, required, that no charge would be imposed, do you share my enthusiasm for the voluntary course being pursued as opposed to congressional intervention? Mr. OMAN. Mr. Coble, I do favor the voluntary solution as the one that would solve the problem most rapidly and most satisfactorily, if, in fact, it was fair to both sides. I suspect that this hearing is part of the negotiating process and probably has served its purpose in moving the parties further alone the road toward agreement. I hope that that would end the matter in a way that was satisfactory to both sides. Mr. COBLE. I hope so, too. Let me ask you a question, Mr. Oman, going back to the first panel. I think in your statement you mention an emotional weight being in favor of the nursing home exemption. Senator Roth makes the point and said, to paraphrase him, that those living in nursing homes and hospitals should be allowed or be able to enjoy the same rights as those who live in private residences. The Senator suggested that the present law discriminates against the nursing home occupants. Do you concur with that? Mr. OMAN. It does. If you were to define a home that would include a nursing home, they are being treated unequally. They are not in these homes by choice; they are forced by circumstances to live away from family and friends. They do have our sympathies. That's why, as I say, it has that emotional appeal. Mr. COBLE. One more question, Mr. Chairman. Let's shift gears, Mr. Oman, and go to Mr. Berman's bill, H.R. 671. I am asking this primarily for illumination. I am not interrogating you, Mr. Oman; I'm asking to learn. The attorneys' fee bill identifies the prevailing party as the recipient and then lists certain exemptions. My question to you is, do you think we should provide mandatory award of attorneys' fees to prevailing defendants who I think, to use your words, may be individuals or small business operators with shallow or limited pockets? The reason I ask that, I believe the current pattern or trend in the Federal courts is, for the most part, to identify plaintiffs as recipients of attorneys' fees when they are so awarded. Mr. OMAN. My preference, Mr. Coble, would be to limit the right, except in egregious cases, to the plaintiffs. As I mention in my statement, we rely on private enforcement of the copyright laws to make the laws work. If there were a disincentive, an added disincentive for them to vindicate their rights by exposing themselves to lengthy lawsuits, they would be reluctant to bring those suits and that would defeat the congressional purpose. So we would favor limiting it to the prevailing plaintiffs generally. Mr. COBLE. Thank you, Mr. Oman. Thank you, Mr. Chairman. Mr. KASTENMEIER. The gentleman from Illinois. Mr. SANGMEISTER. Thank you, Mr. Chairman. Mr. Kuyper, who has not yet testified, has given us a statement that he's going to present, and because you're ahead of him, I would just read something that he has in his statement and ask for your comment on it. He states, in part, taking it out of context here, "Although it is for others to fully articulate this argument, may I suggest that the implications are immense for the motion picture industry, which depends upon the protection of intellectual property and copyrights worldwide as a basis for their revenue. I do not need to remind you of the status of American motion pictures as generators of foreign exchange. Also-"and this is what I draw your attention to "Also, this small exemption in our copyright law may very well be in violation of the Berne copyright agreements and certainly flies in the face of our national policy to protect intellectual property rights around the world." Do you agree with that, that it may be in violation of the Berne copyright agreement? Mr. OMAN. I suppose an argument could be made that it is in violation of all our obligations under the Berne Convention, but I think it would be a very strained argument. In fact, the Berne Convention doesn't get into this detailed regulation of copyright in individual countries. The narrow limitations which most countries have to accommodate the social and policy requirements are generally perfectly compatible with the public performance right under the Berne Convention. I have some information on the practice in other countries and I would be happy to share that with you. One specific example, Australia recently amended its copyright laws and it specifically provides that performances—and I should probably read you the statute-at premises where persons reside or sleep do not constitute an infringement of copyright in literary, dramatic or musical works. So that exemption is much broader than the one that's being sug good standing of the Berne Convention and no one has ever complained about it. Maybe the point that the people are raising relates to negotiating strategies internationally. If every country in the world were to adopt a provision like this, the people that would be bearing the brunt of it probably would be the Americans because the Americans produce most of the popular motion pictures all over the world. Maybe that's what they're suggesting, in terms of raising the issue of being at a negotiating disadvantage in trying to get fair treatment in other markets, but certainly, from our perspective and our obligations under the Berne Convention, this bill is not in violation of those obligations. Mr. SANGMEISTER. Thank you. Now, as to Congressman Berman's bill, whether or not you favor the attorney fees being awarded is, of course, one thing. But what I'm concerned about is he defines in his bill-what a business concern is. Basically, it's a business concern whose numbers of employees does not exceed 500 persons. Does that seem reasonable to you? Mr. OMAN. I suppose, in looking at the people we're intending to help, it seems reasonable. I'm not sure it fits in with the equal access to justice definitions, whether the number was pulled out of the air, but to me it seems like a reasonable number. Mr. SANGMEISTER. I would yield to the sponsor. Mr. BERMAN. The amendment comes from the Small Business Administration regulations on small business size. So, yes, they were pulled out of the air, but it was government air. [Laughter.] Mr. KASTENMEIER. If the gentleman will yield, I think it was similar to the equal access to justice legislation, which has a monetary cap, too, in addition to the 500 persons. Mr. BERMAN. It comes right out of the regulations of the Small Business Administration on small business size. Mr. SANGMEISTER. That's all I have, Mr. Chairman. Mr. KASTENMEIER. The gentleman from North Carolina. Mr. COBLE. Thank you, Mr. Chairman. I want to revisit my other question, Mr. Oman. You surprised me. You surprised the witness, as we say, with your other answer. I thought that you were going to probably include defendants in that. In the spirit of equity, let me just briefly visit with you about that. It seems to me there could be circumstances whereby a defendant could be equally aggrieved, equally out of pocket in time, money, expense and so on, and that's why I was anticipating you would probably say that defendants should enjoy the same beneficiary role as do plaintiffs. That's what surprised me. If you want to elaborate now or later, that would be OK. Mr. OMAN. Sure. I misunderstood, Mr. Coble. I thought you were saying whether or not the defendant should be given mandatory damages when they prevail. If defendants would get mandatory attorney's fees, we think that would have a chilling effect on the willingness of small copyright owners to bring suit. I do recognize that there are equities from time to time that mitigate in favor of the defendant getting attorneys' fees, and that's the beauty of the current system. By giving the judges this discre tion, they can impose the burden where it's justified, and for those defendants that have been sued for frivolous reasons or sued maliciously, the courts have it within their discretion under current law to give attorneys' fees. Mr. COBLE. Thank you, Mr. Oman. Thank you, Mr. Chairman. Mr. KASTENMEIER. Just one last comment or question, lest you be thought to be supporting the nursing home bill without qualification, I remember you said that your preference was that if it were to be extended, it would be extended to nonprofit nursing homes, as distinguished from profit-making institutions. Is that not correct? Mr. OMAN. I raised that, Mr. Chairman, as one of your options, if you decided not to go with a full-fledged extension across the board for all institutions that fell within the category- Mr. KASTENMEIER. On the theory that if a nursing home or health facility is in the profit-making business presumably they ought to pay for intellectual property materials as anyone else would. That there is a distinction to be made there, at least theoretically. Mr. OMAN. Well, I know the equities are an important part of your deliberations. If a health care facility is charging its residents $2,000 a week for the most lush environment to make their recovery in, there is a question of whether or not, even though it would be long term and would be the equivalent of a home, you wonder whether or not they can't afford to pay the creators for some of the benefits that are being provided by the VCR. It only goes to the equitable considerations. Mr. KASTENMEIER. Thank you very much for your help on both bills. Doubtless we will need to be in touch with you and your distinguished staff in the near future on these bills. It may well be that we will need other advice and counsel, as well as information. Thank you very much. Mr. OMAN. Thank you, Mr. Chairman. Mr. KASTENMEIER. The Chair apologizes for the late hour. Our next witnesses will be testifying on H.R. 671 as a panel. They are Robert Gehrke, executive director of the Training Media Association, John Evans, president of Industrial Training Systems Corp., and Peter Jaszi. Mr. Jaszi is a professor at the Washington College of Law at American University, and he testifies on behalf of the Educators' Ad Hoc Committee on Copyright. He is accompanied by a long time friend, Al Sumberg, associate general secretary of the American Association of University Professors. Having said all that, may I say that one of the witnesses—is it you, Mr. Evans, or you, Mr. Gehrke, that has an early appointment? Mr. GEHRKE. We've canceled that. Mr. KASTENMEIER. You've canceled that. I would ask you to speak first, and questions can be asked or if there are no questions for you, you can be execused if you still want to make a 12:45 plane. In any event, we're delighted to have all of you. Mr. Gehrke, STATEMENT OF ROBERT GEHRKE, EXECUTIVE DIRECTOR, Mr. GEHRKE. Thank you, Mr. Chairman, members of the subcommittee. My name is Robert Gehrke. I am executive director of the Training Media Association. We are a group of more than 60 companies that produce, market and distribute training and education materials, primarily on videotape. Joining me today is one of our members, Mr. John Evans, president of Industrial Training Systems Corp. We believe that passage of H.R. 671 would be one of the most important steps Congress could take this year to promote investment and innovation by America's small businesses and individuals who create copyrighted works. We are joined in support of H.R. 671 by the Coalition for Copyright Entrepreneurs, an ad hoc group of over a dozen organizations that represent a broad array of small business and individual creators, including authors, photographers, illustrators, film and documentary makers, graphic artists, engineers, newsletter and comic book publishers, and many others. With your permission, we wish to submit an updated list of supporters for the record. [The prepared statement of Messrs. Gehrke and Evans follows:] |