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ORION

PICTURES CORPORATION

March 30, 1990

FEDERAL EXPRESS

The Honorable Benjamin L. Cardin
Congress of the United States

United States House of Representatives
507 Cannon House Office Building
Washington, D.C. 20515

Dear Congressman Cardin:

The purpose of this letter is to comment briefly on S. 1557 and H.R. 3158 with respect to the home video exhibition of copyrighted motion pictures in the common areas of nursing homes and, further, to suggest that the objectives of those bills can be accomplished more fairly by non-legislative means.

At the outset, I wish to emphasize that Orion recognizes and is most sympathetic to the humanitarian intent of S.1557 and H.R. 3158. Nevertheless, we are disturbed that the proposed exemption to the Copyright Act, however well-intentioned, would encourage erosion of the public performance rights granted to copyright owners. The public performance doctrine, as it now exists, represents a careful balancing of the needs of many diverse interests; its preservation is crucially important to Orion and the many companies and individuals in the U.S. film industry. Legislative action which diminishes public performance protection, we believe, would be an unfortunate precedent with serious adverse consequences in the U.S. and abroad.

We suggest that voluntary measures would achieve the goals of S.1557 and H.R. 3158 without compromising the integrity of the public performance doctrine.

Accordingly, Orion is prepared to adopt and implement a policy whereby public performance licenses would not be required for home video exhibition of our motion pictures in the common areas of nursing homes and equivalent facilities providing permanent or long-term residential care for the aged, as long as the facility does not impose a direct charge to its residents for such

exhibition.

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THE HONORABLE BENJAMIN L. CARDIN

March 30, 1990
Page Two

We are willing to cooperate with your office in working towards a result beneficial to all interested parties. Please feel free to contact me if I can be of any assistance.

Very truly yours,

Juan Hote

John W. Hester

Vice President and

Counsel

MCA INC. 100 UNIVERSAL CITY PLAZA, UNIVERSAL CITY, CALIFORNIA 91608

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I am writing on behalf of MCA INC., a diversified entertainment company with subsidiaries engaged in the production and distribution of theatrical motion pictures. The purpose of this letter is to comment on S.1557 and H.R.3158, which address the viewing of video cassettes in nursing homes and other similar

institutions.

We have carefully reviewed the issues raised by the proposed legislation and believe that the desired objectives can be achieved by voluntary industry action, rather than by legislation. MCA does not intend to seek licenses from nursing homes for the public performances of its video cassettes if the performance occurs in a common area of a long-term health-related care facility for the elderly which provides temporary or permanent residence and which does not make any direct charge to residents for viewing. This limitation would apply to all those facilities that afford private quarters to each resident while providing food, recreation, medical care and other services through a common or shared area. However, it would not apply if the performance were further transmitted by closedcircuit television or by any other means.

Further, although this commitment makes a formal license agreement unnecessary, we are prepared, if any facility so requests, to enter into a royalty-free license with such facility in exchange for a promise by that facility to contribute at least $10.00 per year to the United Way

The Honorable Benjamin L. Cardin
U.S. HOUSE OF REPRESENTATIVES

Washington, D.C.

20515-2003

March 28, 1990

Page Two

for a fixed term, initially, to ensure that the conditions of the license are properly observed and not abused.

Underlying our proposal is the basic premise that voluntary industry regulation is better than a prolonged legislative battle that might dilute the public performance right of the Copyright Act. We would urge you, however, to recognize that if our voluntary actions produce additional demands to impose limitations upon our ability to license previously recognized non-theatrical markets for our product, we may be forced to re-examine our views.

Please do not hesitate to contact me if I can be of further assistance.

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I am writing on behalf of Warner Bros. Inc., a subsidiary of Time Warner Inc. and a producer and, through subsidiary companies, a distributor of motion pictures.

The business of Warner Bros. Inc., as well as the
businesses and livelihoods of many companies and
individuals involved in the production and distribution of
motion pictures rests on the protections provided by our
Copyright Law. The crucial importance of copyright
protection is what leads to Warner Bros. concerns about
S.1557 and H.R. 3158 dealing with the showing of motion
pictures via video cassettes in nursing homes. Our current
Copyright Law is the result of many years of effort by the
Congress and the private sector and stands today as a
carefully crafted law reflecting the needs of many and
diverse interests. While we do not believe it is wise or
necessary to amend the Copyright Law as provided in S.1557
or H.R.3158, we are prepared to join you in attempting to
meet the goal to which the legislative proposals are
directed.

We are prepared to join you in attempting to genuinely satisfy this goal without injuring the integrity of our copyrights or setting a precedent that could have serious adverse consequences for copyright law around the world. Warner Bros. hereby advises that for a period of 25 years it will not, as to any nursing home which provides long term or permanent residence, assert that the exhibition therein of motion pictures on video cassettes requires a license from Warner Bros. Inc. provided that the nursing home does not levy a direct charge for viewing the video and does not "further transmit" the performance to the

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