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We estimate that there are about 500 American companies involved in this business, located in virtually every state, with approximate total annual sales of about $700 million (1987) to commercial and government users; sales of films and tapes to our nation's schools, colleges and universities account for an additional $300 million in annual revenues.

Most of the companies in this industry are "small businesses" by any definition. A survey of TMA's membership in November 1989 revealed that the median TMA company has gross annual sales of about $1.6 million, and has 15 full-time employees. This would make the median TMA member about the same size as the average neighborhood McDonald's restaurant franchise.

Training media make a valuable contribution to most every sector of the American economy. Quality audiovisual training programs cost a great deal to produce. The market for our works is highly specialized and, therefore, necessarily limited. sale of a thousand copies of one of our tapes is considered highly successful.

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The combination of high production costs and limited markets means that an average training tape may cost $300 to $500 or more per copy Each copy that we sell or rent may, in turn, be used to train dozens, even thousands, of employees. Thus, even though copies of training tapes cost a lot, they can provide very costeffective education.

Unfortunately, our products are terribly susceptible to copyright infringement.

In 1987, TMA commissioned a study by Lakewood Research of Minneapolis, Minnesota, to help us better understand the attitudes and practices of corporate America with respect to our copyrighted works and the law. (A copy of this study appears as Attachment B to this statement.)

The study found that only three percent of all organizations surveyed had policies, practices and attitudes respectful of the rights of copyright owners in training media.

In practical terms, the study showed that corporate and government users are making thousands upon thousands of copies of training tapes without the permission of the copyright owners. These tapes may be for "archival" purposes, or to facilitate circulation of training tapes within large organizations, or for other reasons. By our calculations, these unauthorized copies translate into a loss of one-third of potential sales to unauthorized commercial copying.

We are combatting a pervasive attitude of disrespect for copyright. The job is gigantic, and our resources are limited.

Our Efforts to Deter and Combat Infringement

We are doing everything possible to attack the menace of copyright infringement within the limits of our resources.

TMA has one of the most aggressive public education and incentive programs in the copyright industry certainly in proportion to the size of our membership.

Our association and its members endeavor to educate users of our materials as to what uses may violate copyright laws and take other measures to protect our rights.

Here are just a few examples:

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Since 1979, TMA members have been providing their customers with copies of our brief brochure, "Imagine A world Without...", which explains why respect for copyright laws is essential to preserve the incentives for training media and other copyrighted works to be produced. We encourage our members to send a copy of this brochure with every tape shipment. To date, well over 200,000 copies have been circulated.

For the last several years, TMA has offered an award of up to $5000 to anyone for information leading to the discovery and prosecution of those who infringe our copyrights. This program has helped to uncover more than two dozen cases of infringement, resulting in numerous settlements. We publicize this program through bright yellow stickers which we urge all TMA members to attach to copies of their videocassettes.

We have recently prepared a "video leader" which we make available to all TMA members at cost. This is a brief announcement that our members can insert at the beginning of their videocassettes, advising viewers that unauthorized copying is illegal.

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We work with an association of retired FBI agents who will conduct investigations when one of our members has reason to believe infringements are occurring. These skilled investigators have also helped us to reach settlements with many infringers.

* TMA has collaborated with a law firm on the issuance of "cease-and-desist" letters. When one of our members obtains evidence of an infringement, they authorize a letter from the law

firm reciting the evidence and stating the dollar value loss they believe they have suffered. The letter asks the alleged infringer to return all illegal copies to the complainant along with a check for the dollar value of the loss and a signed statement affirming it will commit no infringements in the future. In return, the complaining distributor will provide an equivalent number of legitimate tapes to the alleged infringer. We have had some modest success with this approach.

* Many of our members encode anti-copying technologies on our videocassettes, though we have found available technologies to be of limited effectiveness. TMA's board continues its review and search for more effective technologies.

But all these efforts barely make a dent in infringement. That's why we believe the law must be strengthened to provide an additional deterrent particularly where the victim of the infringement is a "little guy" from whom the typical infringer may believe he has nothing to fear.

Small Copyright Owners Are Chilled in Enforcement

TMA has long been of the opinion that the effective enforcement of rights by small business and individual copyright owners is chilled by the costs and risks of litigation.

Copyright litigation is expensive. It requires access to specialized members of the bar. While our members get frequent clues or leads to infringements, investigation and bringing suit are very costly.

The actual dollar loss in any given case of infringement may seem relatively modest... say, $500 to $1,000 (though in many cases, infringers cost us tens of thousands of dollars). But to companies the size of ours, recurrent infringements of this magnitude can represent very significant losses.

Moreover, without any assurance that attorney's fees will be awarded (and, indeed, the law currently grants the courts great discretion and little guidance -- in making such awards), the copyright owner pursuing "smaller" infringements could easily see the value of any damage award swallowed up by attorney's fees... several times over.

In a recent survey, TMA asked its members about their ability to enforce their copyright interests. Nearly 50 percent of our members replied.

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Among the respondents:

82 percent said that within the past five years they have "filed or considered filing" a copyright infringement lawsuit. But only 21 percent actually filed such a lawsuit in the past five years.

46 percent said that within the past five years they had settled a copyright infringement claim at less than actual damages without filing a lawsuit because they feared they would be unable to recover their attorney's fees.

61 percent said that within the past five years they had decided against filing a copyright infringement lawsuit out of fear that they might not recover their legal expenses.

96 percent said that if they could be certain of receiving attorney's fees if they prevailed, this would make it more possible for them to take legal action to defend their copyrights.

68 percent feel that the certainty of paying attorney's fees would discourage would-be copyright infringers.

In 82 percent of all copyright infringement cases in which TMA members were involved, the infringing activity and therefore the legal action were out-of-state... with the additional cost impacts that this entails.

clearly, even in cases where compelling evidence exists, small copyright owners believe they cannot effectively enforce their rights. This has a devastating impact on the ability of entrepreneurial copyright owners to invest in and create new works, to the detriment of the American public.

Finally, Mr. Chairman, we note that while much of the infringement problem facing our industry involves illegal reproduction of our videocassettes and supporting print materials, we also face a broad range of other infringing activities, including plagiarism and unauthorized public performance. In those cases, too, our members face the same cost impediments to vindicating their rights.

H.R. 671 is Good Copyright Policy

Mr. Chairman, the training media industry is not alone in its concerns. We are joined in support of H.R. 671 by organizations representing tens of thousands of writers, artists, illustrators, photographers, film and video producers and

directors, small publishers, small distributors, and others who believe their ability to make a living and to contribute to this nation's creative outpouring is compromised by the current system.

Attorney's fees serve a vital role in the copyright scheme. As one court has observed:

The purpose of the Copyright Act is to encourage people to devote themselves to intellectual and artistic creation by granting authors the exclusive right to the fruits of their labors.... Thus a successful suit for copyright infringement involves more than just the vindication of private property rights, for if the Act were not enforced by private suits, the incentives Congress established to encourage authorship would have little effect... An award of attorney's fees helps to ensure that all litigants have equal access to the courts to vindicate their statutory rights. It also prevents copyright infringements from going unchallenged where the commercial value of the infringed work is small and there is no economic incentive to challenge an infringement through expensive litigation... Quinto v. Legal Times of Washington, Inc., 511 F. Supp. 579, 581 (D.D.C. 1981) (citations deleted).

As the court suggests, particularly for smaller plaintiffs, the award of attorney's fees is critical to ensure that the purposes of the Copyright Act are satisfied.'

Mr. Chairman, we respectfully submit that the measure before you today represents sound public policy and is entirely consistent with established principles of copyright.

The U.S. Copyright office, in its analysis of a predecessor bill to H.R. 671, agreed with the principles of the legislation. In a letter to Rep. Berman, the General Counsel of the Copyright office wrote (with particular reference to the training media industry):

Smaller firms, with smaller markets, confronting individual but cumulatively significant infringements, cannot rely on

Frankly, it is our hope that, in the long run, H.R. 671 will serve less to stimulate litigation than to generate respect for copyright law in the first instance... every copyright owner would prefer respect for his property to having to chase after infringers.

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