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Mr. Robert D. Hadl
March 29, 1990
Page 2

Therefore, I suggest that your letter be modified as follows: "Effective upon receipt of a contribution of ten dollars made in our name to (insert the charity of your choice) made by a nursing home or any duly authorized representative of a nursing home, we hereby grant royaltyfree licenses for a term of 25 years to each member of the covered class" on the terms and conditions expressed in S.1557 and H.R. 3158, identical bills introduced in the 101st Congress.

I am fully cognizant of the discussions that have taken place among various health care and motion picture industry interests. I applaud this attempt to reach a private solution. I understand that the tentative agreement reached would differ from the legislation in its definition of the covered class. I have no objection to such a change in coverage if it is acceptable to the motion picture industry. However, I implore you and others in the industry to consult with each other and make but one choice in defining the covered class so that the essential element of uniformity may be achieved.

If your letter were modified as suggested, it would achieve the basic objectives of the legislation. Licenses would be granted by virtue of the letter itself thereby giving the nursing homes an undisputed right to perform videos in common areas conditioned on certain terms for a period of 25 years. From a legal standpoint, this is critically different from a policy announcement not to seek licenses. Moreover, from a practical standpoint, by granting licenses in one letter, the need for a quarter of a million individual licensing transactions is obviated. By selecting the definition of the covered class that is either in the bill or in the tentative agreement, uniformity is achieved. Finally, by making the grant of the blanket license contingent on some legally effective consideration, your original offer becomes even more generous since it would be binding.

I hope these suggestions are helpful to you in achieving your desired non-legislative solution. In view of the hearing on this subject scheduled for April 5, 1990, the time frame for negotiations is limited. Therefore, I would appreciate a response by the close of business on Friday, March 30, 1990. My fax number is (202)224-2805 if you should like to respond in that fashion.

Mr. Robert D. Hadl
March 29, 1990
Page 3

Thank you for your interest in, and your prompt attention to, this matter.

Sincerely,

But al

Wireva v Roth,
U. S. Senate

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Mr. KASTENMEIER. Now we would like to hear from Congressman Ben Cardin.

STATEMENT OF HON. BENJAMIN L. CARDIN, A REPRESENTATIVE

IN CONGRESS FROM THE STATE OF MARYLAND Mr. CARDIN. Thank you, Mr. Chairman. I very much appreciate the opportunity to testify here today, and I thank you very much for scheduling these hearings.

I also appreciate your kind comments at the beginning of the hearing. I very much appreciate appearing back before a committee that I very much enjoyed serving on. I do miss this subcommittee, and I regret that our party rules do not permit me to continue to serve on the Judiciary Committee and the subcommittee that

you chair.

Many months ago I was approached by the health care trade associations that you will hear from today. I was told about a nursing home chain in my district that had received a letter from a business called the Motion Picture Licensing Corp. MPLC, as they are known, offered an umbrella licensing agreement to that chain of nursing homes that were located in my district.

For the record, I would like to submit my entire statement, along with certain exhibits, including the proposed umbrella licensing agreement that was submitted to the nursing home chain in my district.

Mr. KASTENMEIER. Without objection. Mr. CARDIN. The purpose of this licensing agreement was “to allow you to publicly perform, as that term is used in sections 101 and 106 of title 17, U.S.C., copyrighted prerecorded videocassettes and videodiscs which are otherwise by law for home use only.” The agreement goes on to fill in a license fee for a 1-year period, August 1, 1988 through July 31, 1989, of $16,975, not an insignificant fee.

When this matter was brought to my attention, like Senator Roth, I was surprised to learn that a nursing home was not a home for the purposes of showing videos. I believed that private showing of a video in a nursing home should be treated as it is in our private homes. However, it seemed to me that the easiest way to try to correct this situation was for the Congress to consider the bill I have filed and to pass that legislation.

Mr. Chairman and members of the subcommittee, during this hearing you will hear a lot about the meaning of "public performance." According to the House report that accompanied the Copyright Act of 1976, a public performance takes place "at a place open to the public or at any place where a substantial number of persons outside the normal circle of a family and its social acquaintances is gathered.” While a nursing home or similar facility may not be considered to be open to the public, friends, family and fellow patients would be in the audience. According to the Copyright Office, which delivered a memorandum to the subcommittee commenting on the proposed legislation, an amendment to the Copyright Act of 1976 would be required to exclude nursing homes and similar facilities from coverage under the public performance

provisions of the law. The Copyright Office has noted in their memo that they would be inclined to support H.R. 3158.

The purpose of H.R. 3158 is very specific and clearcut. We will all grow old eventually. Some of us will be healthy enough to remain in our homes throughout our lives. Some of us will be able to afford to hire home health care professionals that will come to our homes. Some of us will choose to move to a nursing home. Others of us will not have family or friends to care for us, so few options will exist.

A nursing home is not as hotel, and it is not a dormitory in which to live for a year. A nursing home is a home for the elderly who need special attention and care. It is an individual's home and residence in the fullest sense of the word. It is a different kind of home from an apartment, condominium, townhouse or detached hom in the sense that one will live among peers, not family members. This is not a reason to penalize the elderly and the ailing by denying them the right to view videos without paying the royalty.

I believe we are proposing a modest change in the copyright law. The motion picture industry has asserted to me that they do not collect a significant amount of money from copyright royalties in nursing homes. So the issue is not money. They have asserted that allowing nursing homes to be exempted from the public performance doctrine would set a precedent for other groups to ask for exemptions. I am sympathetic to their concerns and, along with Senator Roth, have been working to find a nonlegislative solution to this problem.

First let me emphasize the purpose for filing H.R. 3158. I believe, as a matter of public policy, hospitals, hospices, nursing homes, retirement homes or other such group homes that provide long-term health or health-related care and services to individuals on a regular basis, and serve as a temporary or permanent home for such individuals, should be allowed to show videos without paying a royalty fee.

As a result of negotiations that have taken place over the past 2 months between the health care community, the motion picture community, and congressional staff, I am pleased to tell the subcommittee today that there is substantial agreement on the purpose of H.R. 3158. Attached to this statement are seven letters from different motion picture companies, and although they differ in the approach taken to solve the problem, each letter agrees with the purpose for which H.R. 3158 was filed; namely, permitting videos to be shown in nursing homes without paying a royalty. We have come a long way. We're almost there.

However, as I see it, there are three essential elements any solution must have—and Senator Roth has mentioned those. First, the agreement should be binding. Nursing homes have been threatened before and fearful that they will be sued if they view videocassettes in their common areas. You may hear from the industry that they have presented to the nursing community a gift, that the company will voluntarily allow the copyrighted material to be shown. But, Mr. Chairman, the industry asserts that this is a public performance, so how can we, as legislators, justify nonenforcement of the Second, any nonlegislative solution should be uniform across the industry. It makes little practical sense to force activity directors to check each company's policy before renting a video. In addition, some letters are broader than others in their definition of the type of facility covered, while another leaves open the option of rescinding the policy should their "voluntary actions produce additional demands to impose limitations upon our ability to license previously recognized nontheatrical markets."

In my conversations with representatives from the motion picture industry, I am impressed by their willingness to work with Members of Congress to develop an industry standard of uniformity. I am hopeful that additional progress on this point can be made during this hearing.

I believe any solution must be virtually transaction free-and Senator Roth has commented on that. If each individual nursing home were to request a license of each individual picture house, hundreds of thousands of pieces of paper would be involved.

After having spent a great deal of time considering this issue, I believe the objectives of H.R. 3158 can be accomplished by any one of three options. One option is that the motion picture industry, through each of its representative companies, would issue a blanket license for nominal consideration to each facility that meets the definition and conditions set out in H.R. 3158. Senator Roth and I suggested that approach by letter dated March 29 of this year-I have made a copy of that letter available to this committee.

A second approach could be that the motion picture industry and the health care industry enter into a binding agreement concerning video viewing. I might point out that the parties were very close to entering into such an agreement during our negotiations.

A third option could be the enactment of H.R. 3158.
Mr. BERMAN. Excuse me, but could you repeat the second option?

Mr. CARDIN. The second option would be for the motion picture industry and the nursing homes, through the health care associations to enter into an agreement whereby they agree, in exchange for nominal consideration, that nursing homes would have the right to view, license and royalty-free, videos. That agreement would cover which nursing homes are involved and would be signed by all the relevant parties, and would be enforceable.

As I mentioned earlier, the motion picture industry has suggested a fourth option, a gift. This option could be acceptable if there was some way that the gift would be legally binding on the industry and afford nursing home operators the protection they deserve.

One personal observation I believe is in order. All parties involved have devoted an extraordinary effort to resolve this issue, and I would like to express my thanks.

The Motion Picture Association of America has spent a great deal of time and energy on this issue. They have faced the very difficult task of trying to get eight large companies to agree on a single issue. I can understand the difficulty and I personally appreciate the amount of time that has been spent in trying to bring about that agreement. The American Health Care Association, the American Association of Homes for the Aging, and the National Association of Activity Professionals have all worked hard, through

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