bases in individual systems. One such scheme would be a statutory provision for the compulsory licensing for use in all systems, of a data base licensed for use in any one system.

A.1.3.8.6 Full-Text Storage and Retrieval of Documents in Computerized Systems.

1.

2.

The questions as to input and output of copyrighted docu-
ments are substantially the same as those pertaining to
the input and output of copyrighted data bases. The dis-
cussion and conclusions in this study relating to data
bases are applicable generally to the computer storage and
retrieval of the full text of documents.

There has been considerable discussion as to whether the
input of copyrighted documents should be free, with a
license and payment to the copyright owner being required
for output, or whether a license should be required be-
fore input. The arguments advanced on both sides are
presented in this report. The authors of this report
are impressed most by the argument that, since a license
will admittedly be required for output, practical con-
siderations suggest that the terms of the license, in-
cluding the basis for assessing fees, should be settled
between the parties before the operator of the computer
system begins the process of using the material.

A.1.3.9 Unique Characteristics of Computerized STI Systems. It can be deduced from the analysis of copyright questions relating to the use of copyrighted works in computer systems that such uses present special characteristics not present in the traditional ways of using copyrighted material. The following special features of computer uses seem particularly significant:

1. Copyrighted works in their usual form of printed pages are usable in that form in other media, but must be converted to machine-readable form for use in computer systems.

2.

The availability to researchers and other users of the works placed in a computerized STI system will tend to displace the market that would otherwise exist for the sale of copies of the works to them.

3. Computerized STI systems, to realize their potential value for research, must seek to include comprehensively the whole body of works extant in any particular field of science or technology.

4.

Exclusive licensing of copyrighted works for use in one
STI system could have two undesirable results: (1) It
would prevent other systems from attaining comprehensive
coverage of the whole body of works in a particular
field, thus putting researchers to the inconvenience of
searching through several systems; and (2) It would tend
to foster the monopolization of STI system services to one
or two giant systems.

The first two of these special features would seem to indicate that the copyright law should recognize, as it now appears to do, that the conversion of copyrighted works into machine-readable form and their input and output in the operation of computerized STI systems require the consent of the copyright owner. The last two of these special features would seem to indicate that there may be a need to establish, at least in some situations, either voluntary "clearinghouse" systems for the blanket licensing, on a nonexclusive basis, of the use of copyrighted works in computer systems, or a statutory system of compulsory licensing for the use of such works in those systems.

A.1.3.10 Clearinghouses and Compulsory Licenses. The clearinghouses operated by the American Society of Composers, Authors, and Publishers (ASCAP) and by Broadcast Music, Inc. (BMI) for the blanket licensing of public performances of musical compositions, have frequently been cited as possible models that might be adaptable for the blanket licensing of reproduction rights in journal articles and other works. The operation of these two organizations and the factors that have contributed most importantly to their effectiveness are outlined in this report. Some of the major problems that would be faced in attempting to establish a clearinghouse for the reproduction of journal articles are mentioned and some approaches for meeting those problems are suggested in the report.

Provisions for a compulsory license for the recording of copyrighted musical compositions were enacted in the Copyright Act of 1909. That compulsory license was designed to prevent the establishment of a monopoly in making recordings of music under exclusive licenses that would otherwise have been granted. One of the practical consequences of these compulsory licensing provisions, incidentally, has been the voluntary establishment by music publishers of a centralized agency (the Harry Fox Office) for the issuing of negotiated licenses on standard terms for the music of most of the major publishers.

The Copyright Act of 1976 provides for compulsory licenses of a different character in three additional situations: for the performance of music in jukeboxes, for CATV retransmissions of broadcasts of copyrighted material, and for the use of certain works in noncommercial broadcasting. These three compulsory licensing systems are examples of blanket, nonexclusive licensing established by statute. The purpose of the compulsory license in these three instances is not to prevent a monopoly, but is to avoid the difficulties and high transaction costs that would be entailed if the user groups had to obtain licenses from and pay fees to the individual copyright owners.

If a voluntary clearinghouse satisfactory to both copyright owners and users can be organized, that would seem to be preferable over a statutory compulsory licensing scheme. Among other reasons mentioned for this preference, perhaps the most important is the greater flexibility of a voluntary arrangement and its easier accommodation, by negotiations between the groups concerned, to experience and changing circumstances.

A.2

ADAPTATION OF THE COPYRIGHT LAW TO NEW TECHNOLOGIES

A.2.1 IN GENERAL

Since the enactment of the first United States copyright statute by the First Congress in 1790, the copyright law has had to be added to, modified, revised, and interpreted to meet changing conditions brought about in large part by new technological developments. The statutes were completely rewritten in 1831, 1870, 1909, and just recently, in 1976. In the intervals between those comprehensive revisions, the statutes were amended in some particulars, and they were further adapted to changing conditions by judicial interpretation and, to some extent, by business practice.

Adaptation of the copyright law to changing conditions brought about by new technology has been especially necessary in the twentieth century, primarily for the obvious reason that the rate of technological development has accelerated rapidly. And, because of the long interval of more than 65 years from the 1909 revision, with the statute being amended during that period in only relatively minor respects, the courts have been called upon to take a large part in adapting the law, by interpretation, to meet the problems emanating from the new technologies.

An analysis of the more significant court decisions dealing with those problems, particularly as the decisions reveal the basic principles and philosophical approaches adopted by the courts in construing the copyright statues, may contribute to an understanding of how the copyright law has been shaped and reshaped to fit new conditions flowing from technological innovations, and may be useful in indicating approaches to the solution of similar problems that may be raised by the newer and emerging technologies of today and the foreseeable future.

In this section we shall seek to show how the copyright law has been adapted to resolve the questions raised by the new technologies of the twentieth century that were not dealt with specifically in the statutes because they were just beginning to emerge or were unknown when the statutes were enacted. Among these new technologies are:

motion pictures, silent and with accompanying sound;
sound recordings and sound reproducing mechanisms;
radio and television transmission and reception;
rapid, effecient copying machines;

cable television systems;

-- microfilm, videotapes, and computer programs.

We shall review principally the adaptations of the copyright law in court decisions, but some attention will also be given, in passing, to industry practice and to the regulations and practices of the Copyright Office. In addition, we shall summarize the adaptation to the several new technologies reflected in the copyright law revision enacted in 1976.

A.2.1.1 Philosophical Basis of Copyright. To understand how the copyright law has developed and has been adapted to meet new issues, it is important to keep in mind the fundamental philosophy underlying copyright. The basis of copyright is stated in broad terms in the clause of the United States Constitution empowering Congress

"To Promote the Progress of Science and useful Arts, by
securing for limited Times to Authors and Inventors the
exclusive Right to their respective Writings and Dis-
coveries."

We deduce from the Constitution that the end purpose of copyright is to "promote the progress of science and useful arts," that is, to stimulate the growth and spread of learning and culture for the benefit of society at large; and that, as a means toward achieving this end, authors are to be given exclusive rights in their works; thus, the creation and public dissemination of works of authorship are to be fostered by giving to authors the legal means to realize the economic value of their contributions to society.

The United States Supreme Court has expressed the underlying purpose of copyright as follows:

"The primary object in conferring the monopoly (of copyright) lie(s) in the general benefits derived by the public from the labors of authors. A copyright, like a patent, is 'at once the equivalent given by the public for benefits bestowed by the genius and meditations and skill of individuals, and the incentive to further efforts for the same important objects." (Fox Film Corporation v. Doyal, 286 U.S. 123, 1932)

"The economic philosophy behind the clause empowering Congress to grant patents and copyrights is the conviction that encouragement of individual effort by personal gain is the best way to advance public welfare through the talents of authors and inventors in 'Science and Useful Arts'. Sacrificial days devoted to such creative activities deserve rewards, commensurate with the services rendered."

(Mazer v. Stein, 347 U.S. 201, 219, 1954)