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As President of Films Incorporated/Entertainment, I would like to contribute to the deliberations of the House Judiciary Subcommittee on Courts, Intellectual Property

and

the Administration of Justice concerning H.R. 3158.

Films Incorporated presently is the exclusive representative of the following distributors for the licensing of copyrighted films and videocassettes in the non-theatrical market, which includes nursing homes: MGM/UA; PARAMOUNT; COLUMBIA; 20TH CENTURY FOX; TRI STAR; NEW WORLD; NEW LINE CINEMA; MIRAMAX FILMS; CINEPLEX ODEON; and portions of the libraries of smaller distributors. We also are non exclusive representative of DISNEY/TOUCHSTONE in this market. We have made substantial investments up front and in minimum royalty guarantees to acquire rights to almost 10,000 titles -- from classics to the latest releases.

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Generally, we license film and video exhibitions for a fee which represents return on our substantial investment in the licensing rights, and a return on the investment of the creators and copyright holders of the titles. We share, however, the concerns of Mr. Cardin and Mr. Roth that the residents of nursing homes should not be unduly burdened in their recreational viewing of videos. Consequently, we are interested in a non-legislative arrangement that would satisfy the objectives of H.R. 3158 without undermining the exclusive right of the copyright holder to authorize a public exhibition of his work and our right to recover the investment we have made to secure our distribution rights.

Corporate (312) 878-7300

Entertainment:
(312) 878-2600. Ent. 42

Education:
(312) 878-2600, Ext. 13

we

For some time

now

have
not

been attempting to market performance licenses to nursing homes. In fact, Films Incorporated has never actively pursued licensing in this market. In the past,

Business and Government (312) 878-2600, Ext 44

have granted licenses free of charge to children's cancer ward and to AIDS hospices. We are willing to extend this practice to nursing homes and agree that we will not

Films Incorporated
5547 N Ravenswood Avenue

require public performance licenses for videocassette exhibitions, without charge to the residents, in common areas of nursing homes which provide long term substantial health care to elderly residents. We will confirm this commitment by telephone or in writing at the request of any nursing home. Alternatively, we will grant royalty-free licenses to nursing homes which desire formal documentation.

We believe our commitment represents a substantial opportunity to resolve the concerns underlying the pending legislation. Therefore, we propose that there is no need for Congressional action to amend the copyright laws in this regard.

We respectfully request that this letter be incorporated into the record of the Subcommittee's hearing on H.R. 3158 scheduled for April 5.

Very truly yours,

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Allen J. Green
President
FILMS INCORPORATED/ENTERTAINMENT

cc: Hon. William V. Roth, Jr.

Mr. KASTENMEIER. This concludes the hearing this morning. I thank all our witnesses for bearing with us. The committee stands adjourned.

(Whereupon, at 1:26 p.m., the subcommittee adjourned, to reconvene subject to the call of the Chair.]

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The Honorable Robert W. Kastenmeier
Chairman, Subcommittee on Courts Intellectual

Property and the Administration of Justice
2328 Rayburn House Office Building
Washington, D.C. 20515-4902

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I am writing to you in my capacity as a consultant to the Training Media Association and former Chairman of its Copyright Committee. I have been advised of the hearing held by the Subcommittee on Courts, Intellectual Property and the Administration of Justice of the House Judiciary Committee on April 5, 1990 in consideration of HR-671, introduced by Congressman Howard Berman.

I understand that you have raised certain concerns about this legislation, which would guarantee reasonable attorney's fees to small business and individual copyright owners who prevail in copyright infringement lawsuits.

I want to pass along to you a few thoughts on questions raised by Register of Copyrights, Ralph Oman, and yourself regarding the relevance of F.B.I. actions as well as the history of the discretionary role of granting attorney's fees established by the Federal courts.

In response to Mr. Oman's suggestion that we try for criminal prosecutions, I can only say that calling in the F.B.I. has been an absolutely futile task. The reason is that the infringements we are dealing with are small but numerous. In addition, pirated training videos are not generally re-sold but, rather, used internally. The cumulative

The Honorable Robert W. Kastenmeier
April 20, 1990
Page Two

effect on the training business is tremendous, representing a loss of 30% of total sales, yet it is rare that there are large individual cases.

The F.B.I. has told us on a number of occasions that they will not act unless $50,000. or more of pirated product is involved. This is generally not the case and even if the Justice Department did prosecute a case, I can assure you that it would be forgotten in a week by the marketplace.

We have had poor results in attempting to publicize lawsuits and settlements. It's just not news. Mr. Oman's kind offer to assist us with criminal prosecution is genuinely appreciated, and, of course, it would help, but the long-term impact is doubtful unless the policy is vigorously sustained. Moreover, I just don't see how even several major prosecutions will affect the attitudes of the numerous small infringers.

As to the question raised by yourself of whether or not reasonable attorney's fees have been denied to us, we are in the process of getting additional information on this subject and, with your permission, we will make it available for the record. Unfortunately, in the total history of the training media industry only a handful of copyright infringement cases have been decided by the courts. Virtually all cases have been settled, usually after exhausing negotiations. The attorneys we have consulted have felt that the certainty of reasonable attorney's fees would provide a substantial deterrent to copyright infringement as well as reasonable incentive to the small business or individual copyright owner to protect his rights.

I also want to add this based on my own personal experience with copyright infringement cases: When I have negotiated with powerful defendants to settle cases and to obtain my attorney's fees, I have been repeatedly reminded that attorney's fees are discretionary and I personally have not been successful in negotiating them. As a copyright owner, I don't feel that I can rely on what courts have done in a few rare instances in the past or what the Appellate courts have ruled. I simply know what the law clearly says, and that is the granting of attorney's

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