fees in copyright infringement cases. Is it your general view that the courts have been abusing this discretion?

Mr. EVANS. I would defer to Mr. Gehrke on that, but it is my view that the fees awarded have not been adequate. If anything, I think Mr. Gehrke might have more information on that.

Mr. GEHRKE. Well, I think the question here is-I think you're right in that statement. But even more concern here is the—Mr. KASTENMEIER. I was asking a question.

Mr. GEHRKE. I know. I would agree with Mr. Evans.

Mr. KASTENMEIER. In what percentage of infringement cases have courts not awarded individual and small business plaintiffs attorneys' fees? Do you have any

Mr. GEHRKE. I have no statistics on that, Mr. Chairman.

Mr. KASTENMEIER. The one case cited, I guess a Michigan case, there was a $150,000 award, then the attorneys' fees were $160,000 and only $30,000 was awarded. There's a question of whether that was a reasonable award or not. It may well be that the problem is the attorneys' fees are excessive. I'm not sure.

Do you think attorneys' fees should be mandatory whether or not the defendant acted in bad faith, Mr. Gehrke?

Mr. GEHRKE. The defendant acted in bad faith?

Mr. KASTENMEIER. Yes.

Mr. GEHRKE. I would say yes. An infringement is an infringement, and I can't imagine them wilfully making that decision without realizing they're doing it.

Could I make one comment on that?

Mr. KASTENMEIER. Of course.

Mr. GEHRKE. We seem to be drifting toward what is reasonable attorneys' fees and what's unreasonable, that type of thing. I think the question is even more basic than that. Maybe Mr. Berman hit on it earlier.

As an example, I had a call last week from a small company in San Francisco. It's a small husband and wife type of operation, maybe even smaller than our average. They had received what we call the posted syndrome. They got two tapes out to be previewed by a prospective buyer. They received one tape back, which wasn't theirs the people made a mistake evidently-kept the originals, and the copy they received had both of his originals recorded on it. He called and said I have them, I have them, what can I do next. I said, well, you've got make a decision. Do you want to file suit and file a complaint against them? He said well, how much is that gong to cost us? I said I have no idea, but in past experience, it's probably going to be $10,000, $15,000 to start with. He says you mean I have to spend that much just to-I know they've done something wrong. But they have to make that business decision every day.

What we're after is a deterrent, I think. The reason we support this is because it's a deterrent for that type of action.

Mr. KASTENMEIER. You heard the Register of Copyrights' testimony. Has doubling statutory damages in willful infringement cases been helpful to you, to your particular trade association?

Mr. GEHRKE. We have had no evidence that that has worked for us at all.

Mr. KASTENMEIER. You have no evidence. So as far as you're con

Mr. GEHRKE. I would hope you wouldn't repeal it.

Mr. KASTENMEIER. If one accepts the premise that there ought to be a change in the law with respect to the mandatory awarding of attorneys' fees, one has to ask the question of how broad is it? Is it as narrow as training films alone, or as broad as anybody in litigation? To make that distinction, not merely under copyright law but anything else, is a very difficult proposition. Who shall benefit by it? Training film producers alone?

Mr. GEHRKE. I could answer that by saying, in looking into this matter-and we have submitted those on the ad hoc committee that we talked about earlier-this is a very, very broad issue and it involves thousands and thousands of individual small copyright holders who may be newsletter-type people, they may-it is a very broad field. It's amazing how many other people have the same problem that we have raised with this particular issue.

Mr. KASTENMEIER. I think you can interest other people in the same proposition. But I don't find, on the part of the committee, that they have been very vocal about this. I think your association, for obvious reasons, has a particular problem. I think we understand that. Some of the other proprietary groups could identify with it, but I don't think, as a whole, they seem to have the problem that you have, because of what you're marketing. Even the major studios, if they have a problem, it is not precisely your problem in terms of films.

That's why I asked the question. It is difficult to know, as a precedent, how far one should go in adopting the English system, and giving up our system, because that's basically what appears to be involved.

In any event

Mr. EVANS. May I make a comment?

Mr. KASTENMEIER. Yes, sir, of course.

Mr. EVANS. You referred to the English system. We have recently introduced a product line in the United Kingdom which is identical to a product line in the United States. The demographic comparisons and the market comparisons would indicate that the United Kingdom should produce a certain revenue. In point of fact, the United Kingdom has outperformed the United States equivalent of that product manifold, and we conclude it is because in England, with the Anton Piller provisions of the law, and other provisions, where it's a very serious thing to infringe copyright, that people behave themselves more there.

We, as an organization, don't wish to promote litigation. We wish to have people behave properly in the first instance so that we don't have to do this.

Mr. KASTENMEIER. I appreciate that. As a matter of fact, we have known that differentially you have had a problem for some time. This came up in the first sale doctrine, you remember that. While we did extend it to audio records for a very special reason, there probably was a differential reason for considering you apart from the rest of the motion picture industry, which wanted it generally. I think collectively we felt you didn't as urgently require it as the record industry did.

I think that you probably did have a special problem, apart from the rest of the industry. I concede that you have a problem today.

Whether this is the right way to go or not, I don't know. But I do agree that those who produce the sort of films that you do, with limited markets, certainly suffer badly from the unauthorized reproduction of your works.

I have no further questions. Therefore, I would like to thank the witnesses, Mr. Gehrke, Mr. Evans, and Professor Jaszi, for their contributions today. We are very pleased to have you.

I apologize to our last panel for the late hour. Our final panel of witnesses on the nursing home VCR bill, H.R. 3158, are-first of all, I would like to greet a good friend and former staff member of this subcommittee, Mr. Timothy Boggs, vice president of Time Warner Inc. He is appearing on behalf of Warner Brothers, Inc., a major producer and distributor of motion picture films.

Next we would like to hear from Mr. Peter Kuyper, chairman of the Motion Picture Licensing Corp., one of the three independent services with the responsibility of licensing certain public performances of videocassettes.

Next we would then hear from Dr. Paul Willging, executive vice president of the American Health Care Association, which is the largest national nursing home association whose 10,000 facilities provide long-term care for nearly one million elderly and disabled Americans.

Finally, the subcommittee will receive the views of Mr. Michael F. Rodgers, senior vice president for policy and government affairs of the American Association of Homes for the Aging. AAHA is a national organization representing 3,500 not-for-profit facilities providing health care for 600,000 elderly individuals.

I would like to recognize you gentlemen in order of your introduction. First I would like to again greet Mr. Timothy Boggs. We're aware of your attempt, a very beneficial and constructive attempt, to try to move something forward on a cooperative basis. We are delighted to have you here. Welcome.

STATEMENT OF TIMOTHY A. BOGGS, VICE PRESIDENT, TIME

WARNER INC.

Mr. BOGGS. Thank you, Mr. Chairman. I will try to be brief, recognizing the hour of the day.

It is a pleasure to be in this room once again. If I could say, one of the last projects I worked on when I was staff to your subcommittee involved the rights of institutionalized persons. Mike Remington, Tom Mooney and I were happy to have staffed a bill that dealt with some of the problems in nursing homes, so it is a personal interest as well.

Mr. Chairman, I am Tom Boggs, vice president of Time Warner Inc. The subcommittee has asked for the views of one of our corporations, Warner Brothers, a major producer and distributor of motion pictures. We are happy to be here to talk with you about this bill.

We agree simply with the objectives of the bill and want to join in the efforts of the subcommittee members to make sure that elderly citizens who live in nursing homes enjoy films, our films hopefully, on videocassette as they would in their own private

does not in any way undermine America's commitment to copyright protection, both domestically and internationally. I was pleased to hear this morning that the sponsors of the bill share that same commitment as well, so we're relatively in synch, I believe. It's just a matter of getting there.

The protections and incentives provided by the U.S. copyright law are our lifeblood. America's copyright community owes a great deal of its success to the members of this subcommittee who have invested countless hours crafting a carefully balanced law that reflects the needs of many and diverse interests.

Warner Brothers has struggled to devise a program that would satisfy the goals of this bill without injuring our copyrights or setting a precedent that would have adverse consequences for copyright law around the world. I want to thank Mr. Cardin and Senator Roth for encouraging us to find a nonlegislative proposal to satisfy both of these objectives.

In response to their request, we prepared a letter to Congressman Cardin and Senator Roth, stating simply that Warner Brothers will not require a public performance license from any nursing home that provides long-term or permanent care. As a result, nursing homes targeted by this legislation are free to show their residents a copy of "Batman," "The Accidental Tourist," "The Color Purple," or any of the 1,200 Warner films that are now available on videocassette. They will be able to show all future Warner releases as well, including, before long, the Oscar-winning "Driving Miss Daisy." I have provided the subcommittee with a copy of that letter for the record.

I have with me a copy of the catalog of all of our films that are available on videocassette, if you or the staff would like to review what is available.

Mr. KASTENMEIER. Thank you. As a matter of fact, your statement and your letter, and any other submissions, will be accepted for the record, as well as the statements and submissions by all other members of the panel.

Mr. BOGGS. Thank you.

Further, in an effort to respond to members and staff, we are pleased to announce today that if any individual nursing home would prefer, we would be pleased to provide them with a written license for such performances without charge.

Warner is not the only major film producer and distributor to assure the nursing home community that it will not require a public performance license to show videocassettes in the resident's living room. Paramount, Columbia, Disney, Universal, Orion and Turner Home Entertainment, which owns a large number of classic films from the MGM library, have adopted similar policies. These commitments cover thousands and thousands of additional films, from old favorites to contemporary hits. I have with me as well the catalogs of these other corporations. It might be useful to look through them. I suspect there won't be a film that you're looking for that is not included in these catalogs.

Mr. KASTENMEIER. In that respect, I would just say this out of curiosity. Do the entire libraries of major studios find them reproduced in terms of videocassette form?

Mr. BOGGS. No. Usually, the entire library is not available in videocassette, in part because many films, as you know, shouldn't have been released in the first place, let alone being released on videocassette.

[Laughter.]

Mr. BOGGS. We find that you have to analyze each market and look at the television market and the cable market, and then the home video market, to see whether or not you think there will be a market for the film.

We do, of course, hope that each of our films earns the right to be released on videocassette, and we struggle to do that.

Mr. KASTENMEIER. Would it be fair to say that the lion's share of recent releases would be reproduced for VCR's?

Mr. BOGGS. Yes.

Mr. KASTENMEIER. But your libraries may go back into the thirties and forties and

Mr. BOGGS. Then we must be a little more selective.

The different film distributors may present different approaches. Some offer a royalty-free license agreement; others offer assurances that a license is not required for their titles. But despite these different approaches, the private sector has responded with a self-executing and self-enforcing policy that is voluntary and preserves the copyright owners' public performance right.

People have asked about films distributed by those who have not announced a royalty-free or license-free policy. I am glad to report that most of them are covered by similar commitments from companies responsible for the day-to-day licensing of films in these smaller ancillary markets.

As a result, I believe no nursing home should have any hesitation about showing a film on videocassette. In fact, Mr. Chairman, to assure the nursing home community, we are prepared to take out advertisements-we could talk with them and get their suggestions-but we would be prepared to take out advertisements in nursing home publications or in trade publications explaining the Warner Home Video policy and providing a telephone number that people could call for response to their questions. We, like they, want to make this transaction-free, free of hassles, or free of costs, and we anticipate it will be. We will work very hard to develop a plan to make sure that that happens as smoothly as possible.

Many Members of Congress have commended us for this position, and we thank them. Congress and this subcommittee have frequently asked us and other members of the private sector to attempt to work out problems on our own and we are happy to do so again in this case. I should note that several film companies took similar action several years ago for children receiving special medical treatment and in AIDS care facilities.

Some have asked why Warner does not throw its support behind the legislation and make our company policy a part of the law. Mr. Chairman, we simply cannot. Public performance is a simple but vital aspect of the copyright law, as you know better than anyone. It provides someone who invests his time and vision to produce a work of art with limited control over the public's use of that work. The incentives at the heart of our copyright system permit a film