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Mr. HUTCHINSON. You haven't actually submitted anything to them?

Mrs. LINDEN. No.
Mr. HUTCHINSON. You do not have any reaction from them yet?

Mrs. LINDEN. That is true. I think that it is too soon for us to have a reaction. I think that the reaction more appropriately would come once they recognize that we don't intend to be the sole arbiters of how the sampling is done, what is paid for, how it is paid for, and so forth, and that we are lending financial and active support to the Council on Library Resources, to Dr. Heilprin and Dr. Meyerhoff, and Mr. Jerry Sophar, and all of the other gentlemen who are not in any way affiliated with book publishing, and who have recommended the Market Research Bureau to do the sampling study that would be necessary for a licensing system and who are actively engaged in supervising that licensing study.

The NEA will be asked to lend the help and services of their own research bureau, so that together we can negotiate and work out a system under which all can live and survive.

Mr. HUTCHINSON. Thank you.
I have no further questions.
Mr. KASTENMEIER. Thank you, Mrs. Linden.
The committee will stand in recess until 2:15 this afternoon.

(Whereupon, at 12:40 p.m. the committee was recessed, to be reconvened at 2:15 p.m. the same day.)

AFTER RECESS

(The subcommittee reconvened at 2:15 p.m., Hon. Robert W. Kastenmeier presiding.)

Mr. KASTENMEIER. The subcommittee will come to order.

This afternoon, having concluded this morning with Mrs. Linden, we will proceed in somewhat changed order to accommodate Mr. Richard Cardwell who will be the first witness, representing the National Newspaper Association.

May I announce that we will try to conclude fairly expeditiously this afternoon because we may be interrupted by more quorum calls and rollcalls. With this in mind, we will try to proceed as quickly as we can.

Mr. Cardwell.

STATEMENT OF RICHARD CARDWELL, ON BEHALF OF THE

NATIONAL NEWSPAPER ASSOCIATION

Mr. CARDWELL. Mr. Chairman, members of the subcommittee, my name is Richard W. Cardwell. I am a practicing attorney in Indianapolis, Ind., and serve as general counsel to the Hoosier State Press Association.

I appreciate the invitation to appear before you on the subject of copyright revision in behalf of the National Newspaper Association.

For the record I might state that the name of the association was changed approximately 2 weeks ago from National Editorial Association to the National Newspaper Association. Most of its membership of more than 6,600 newspapers is made up of weekly or semiweekly newspapers, but more than 850 are dailies. NNA members are located in all 50 States and all 435 congressional districts. Newspapers published by its members go into approximately 25 million homes regularly and are read by about 100 million Americans. Accompanying me is Mr. Theodore A. Serrill, executive vice president of the association.

Copyright revision is of great interest to newspaper publishers, both as creators and users of copyrighted material. I will divide my discussion today into those two contexts.

A. AS CREATORS OF COPYRIGHTED MATERIAL

Whereas newspapers have more often resorted to State remedies of unfair competition in the past when faced with unauthorized appropriation of their creative efforts, there is little question that the emphasis is shifting toward the necessity of Federal copyright protection. The 1964 U.S. Supreme Court decisions in Sears, Roebuck &

. Co. v. Stiffel Co. (376 U.S. 225) and Compco Corp. v. Day-Brite Lighting, Inc. (376 U.S. 234), probably have limited State remedies to the "passing off” concept. And the bill under consideration states unequivocally that its intent is to federally pre-empt State “unfair competition" equivalent to copyright, thereby abolishing the common law cause of action. (Sec. 301; see Supplementary Report of the Register of Copyrights on the General Revision of the U.S. Copyright Law: 1965 Revision Bill (May 1965), pp. 81–86.)

I might state first that it is somewhat difficult to determine the copyrightability of newspapers under the present bill. Whereas the present law plainly states at section 5(b) that "periodicals, including newspapers are subjects of copyright, we can only assume that they now fall within the category of "literary works" in section 102 (1) and somehow also within the term "collective work” in the definition seotion. (Sec. 101:"A 'collective work’ is a work, such as a periodical issue, anthology, or encyclopedia, in which a number of contributions, constituting separate and independent works in themselves, are assembled into a collective whole." See 1965 Supplementary Report of the Register of Copyrights, p. 104.)

Assuming, however, that they are still subject to copyright, we think it is of utmost importance that the deposit and registration requirements be as simple and elastic as possible. Copyrighting individual issues of newspapers is an onerous and time-consuming procedure. Very few newspaper publishers, particularly in smaller operations, have either the time or inclination to go through the rigamarole. Even when faced with the prospect of infringements, they may elect to suffer rather than go through the detailed requirements for protecting their rights, and, I might add, paying the $t registration fee per issue. (The fee would be $6 if the bill is passed in present form, sec. 708 (a) (1).)

For that reason, we are in favor of the administrative latitude contained in the bill wherein the Register of Copyrights may by regulation exempt any categories of material from the deposit requirements (sec. 406(c)) and may permit a single registration for a group of related works. (Sec. 407(c); see 1965 Supplementary Report of Register of Copyrights, pp. 119–120.)

There is only one clause in the entire bill in parentheses, and we would recommend that it be deleted. That is at section 403 (a) relating to "Notice of copyright: Contributions to collective works." The section provides:

SECTION 403. Notice of copyright: Contributions to collective works.

(a) A separate contribution to a collective work may bear its own notice of copyright, as provided by sections 401 and 402. However, a single notice applicable to the collective work as a whole is sufficient to satisfy the requirements of sections 401 and 402 with respect to the separate contributions it contains (not including advertisements inserted on behalf of persons other than the owner of copyright in the collective work), regardless of the ownership of copyright in the contributions and whether or not they have been previously published.

The alleged justification for that clause in parentheses is set out in the 1965 Supplementary Report of the Register of Copyrights. It says that

the general copyright notice *** would not cover the material placed in that issue by other persons as ordinary advertising. (See 1965 Supplementary Report of the Register of Copyrights, p. 104.)

That assumes a legal answer to a question that is not only unresolved, but one which is causing considerable controversy; that is, the ability and resolve of offset publications to photographically "lift” advertising layouts from other publications.

It has never been judicially decided that a newspaper has no property right or copyrightable interest in advertising layouts which it creates with its own skill, materials, and effort. Indeed, there is unresolved litigation on that very point today.

We feel it would be most unfortunate and legally indefensible at this time for a copyright law to blithely remove from possible general notice protection every published advertisement. If the clause were deleted, it would rightfully allow the question to be resolved by future judicial decision.

B. AS USERS OF COPYRIGHTED MATERIAL

Undoubtedly one of our greatest concerns is with the provision relating to copyright of U.S. Government works. (Sec. 105; see 1965 Supplementary Report of the Register of Copyrights, pp. 8-10.) Communicating information is not only the newspaper industry's stock in trade; its free flow is essential to our form of government. Whatever might clog that flow must be of concern to each of us, particularly if it affects in any detrimental way information emanating from governmental sources.

Although section 8 of the present copyright statute provides that "no copyright shall subsist *** in any publication of the United States Government, or any reprint, in whole or in part, thereof," it is a matter of common knowledge that this prohibition is honored more by its breach than its practice. (Schnapper, "Constraint by Copyright" (Public Affairs Press, 1960).) A number of governmental bodies "get around" it by permitting private persons who produce works under a Government contract or grant to secure copyright and then obtain a nonexclusive license to publish, or they arrange for the private publication of works produced under contracts or grants, or they take assignments of copyrights secured by private persons.

(Ch. XI, Report of the Register of Copyrights on Copyrights Law Revision, July 1961, pp. 129-133.)

The American Newspaper Publishers Association discussed this situation in a transmittal letter of May 10, 1965, to the subcommittee chairman, stating:

This Association takes the position that no person should be permitted to copyright any material where a substantial part thereof is created by Government employees, or with Government funds.

We concur with that position. In our opinion, limiting the copyright prohibition to a "work” of the U.S. Government “prepared by an officer or employee of the United States Government within the scope of his official duties or employment” is absolutely insufficient as a judicial or administrative standard in such an important area.

It does not touch, in our opinion, some main areas of abuse-copyrighted speeches by Government officials or employees or Government grants to private individuals.

We would prefer a prohibitory standard tied to the expenditure of public funds--which either pays the salaries of governmental officials or employees, or is used for a grant or contract, or is used for publication of the work.

Our comments on final matters will be more brief.

We generally agree that the doctrine of "fair use" as a limitation on exclusive rights is predominantly a question of law. Section 107's brief statement regarding it should suffice as an adequate legislative recognition of the principle.

We likewise agree with the "useful article” distribution or exhibition rights contained in section 111(a) (2). (See 1965 Supplementary Report of the Register of Copyrights, pp. 47-49.)

We feel the "innocent infringer” provision at section 404(b) is an admirable balance of interests, particularly with the liberalization of notice requirements in the bill.

However, we strongly urge that the clause in section 101 (b) of the present law relating to newspaper reproduction of a copyrighted photograph, which limits liability to a sum between $50 and $200, be retained in the present bill as an amendment to section 504(b).

Although section 504(c) (2) gives the court discretion to reduce statutory damages as low as $100 in cases of innocent infringement, the conceivable maximum for such infringement could be $10,000.

This allowable disparity in damages might easily place a newspaper in the position of being forced into a settlement completely out of proportion to the damage incurred—the very thing the existing limitation was designed to prevent. The American Newspaper Publishers Association's letter goes into this matter in considerable detail, so we will not repeat it here.

We have appreciated the opportunity to present these views today. We will, of course, be most happy to cooperate with the committee in any manner it desires in any future considerations.

Mr. KASTENMEIER. Thank you, Mr. Cardwell, for a very cogent and concise statement. The letter you refer to by the American Newspaper Publishers Association dated May 10, 1965, and signed by Stanford Smith, general manager, we have. At this point without objection the Chair would like to include this letter as part of the record.

Thank you.

(The document referred to follows:)

AMERICAN NEWSPAPER PUBLISHERS ASSOCLATION,

New York, N.Y., May 10, 1965. Hon. EDWIN E. WILLIS, Chairman, House Judiciary Subcommittee on Copyrights, Washington, D.C.

DEAR MR. CHAIRMAN: The American Newspaper Publishers Association submits its views in this letter for the record of hearings to be held by your subcommittee beginning May 12 on bill H.R. 4347 providing for general revision of the copyright law of 1909.

The ANPA is a trade association of daily newspapers with more than 930 members having more than 90 percent of the total U.S. daily newspaper circulation. Inasmuch as our members are both users and creators of copyrighted materials, their interests would be affected by certain provisions of H.R. 4347. That bill, and its companion measure now in the Senate Judiciary Committee, reflect changes made in response to comments and study of bills introduced in the 2d session of the 88th Congress. Our views deal with the provisions of the bill relative to copyright in works of the U.S. Government and damages recoverable in the case of the unauthorized reproduction of copyrighted photographs by a newspaper.

GOVERNMENT COPYRIGHT Section 105 of this bill continues the present law's general prohibition against securing copyright in any “work of the United States Government” which is defined in section 105 as a "work prepared by an officer or employee of the United States Government within the scope of his official duties or employment."

While we are gratified to note that this bill does not contain the provision set forth in a prior version which would have permitted copyright to be secured in a published work of the U.S. Government in appropriate cases as determined by heads of U.S. Government agencies, the present bill still leaves much to be desired because the phrase "within the scope of his official duties or employment" may not afford adequate protection for the general public. If that phraseology is narrowly interpreted, it could be limited to the relatively small number of persons employed by the Government whose job descriptions specify duties involving the preparation of such Government works. The fact of the matter is that a great number of Government officers and employees, including administrative assistants, research workers, lawyers, economists, and others on a professional level, devote substantial amounts of time and effort to the preparation of copyrightable material although such activities might not be held to be within the scope of their official duties or employment. Another concern is that the present bill establishes no standards whatever regarding the ownership of copyrighted material created in the course of performing contracts between private individuals or corporations and the U.S. Government.

This association takes the position that no person should be permitted to copyright any material where a substantial part thereof is created by Govern. ment employees or with Government funds. It is of vital importance that the laws of the United States insure that all such material is made available to the general public, without copyright restrictions, so as to encourage the widest possible dissemination of Government information, documents, other writings.

NEWSPAPER REPRODUCTION OF COPYRIGHTED PHOTOGRAPHS The damage provisions of bill, H.R. 4347, are also of special concern to newspapers. Section 101 of the present law provides that in the case of a newspaper reproduction of a copyrighted photograph, such damages shall not exceed the sum of $200 nor be less than the sum of $50. The bill deletes that special damage limitation provision of the present law and adds instead a so-called "innocent infringer” provision in section 504 (c) (2) which provides :

"* * * In a case where the infringer sustains the burden of proving that he was not aware and had no reason to believe that his acts constituted an infringement of copyright, the court in its discretion may reduce the award of statutory damages to a sum of not less than $100."

Bill H.R. 4347 would also change the present law in other respects. Under present law the court, in cases not involving special limitations, has the discretion to award statutory damages in lieu of actual damages and profits in an

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