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copyright owner could charge any sum he wishes for a license, or even deny the license altogether. This would put the background music manufacturer at the mercy of the copyright proprietors who could discriminate from one manufacturer to another and possibly drive one or another out of business, or prevent a potential manufacturer from entering it.

We can see no justification for this discriminatory language.

In order to prevent such discrimination, we propose that the second sentence of section 113 (a) (1) be eliminated or at least amended to read as follows:

A person may obtain a compulsory license only if his primary purpose in making the particular phonorecords is to distribute them to the public for private home use, or to provide background music in places other than private homes.

In the hearings before this subcommittee it was argued that the exception to compulsory licensing was necessary because tape recordings cannot be traced. But our tape recordings for background music can readily be traced. We should not be penalized because of abuses with respect to other tape recordings, and we object to a shotgun approach. We appreciate the opportunity of appearing before your committee and we wish to commend you all for the many hours of hearings you have conducted, and for the thorough study you are giving the copyright proposals.

Thank you.

Mr. ST. ONGE. Thank you very much, Mr. Dwan, for your very explicit statement on the two points that you discuss.

First of all, let's talk about fair use for a moment, which doesn't appear at all in the present statute. Is that right?

Mr. DWAN. It is not defined, sir.

Mr. ST. ONGE. But there are a number of court cases which have attempted to define it in particular instances?

Mr. DWAN. There are some; yes.

Mr. ST. ONGE. The language that you propose in your statement on page 2, adding a sentence to the proposed section 107, would allow someone using one of your machines to go to the library, take out a book and reproduce the entire book without fear of suit by the copyright owner. Am I right?

Mr. DWAN. I think I would like to ask Mr. Lauder to answer that question.

Mr. LAUDER. Yes, sir; this amendment would permit that, which we think the present law permits, too, as long as he uses it for his own use and does not publish it.

Mr. ST. ONGE. Would the same thing apply to a teacher?

Mr. LAUDER. Yes, sir.

Mr. ST. ONGE. He would reproduce a whole book?

Mr. LAUDER. For their own use and not for publication; yes, sir.

Mr. ST. ONGE. Would the teacher be allowed to use it in classroom work?

Mr. LAUDER. That is an open question, sir; whether that is a publication or not.

Mr. ST. ONGE. What would you say?

Mr. LAUDER. I would say it would be permissible. It is done today and nobody ever sues anybody for it, so everybody assumes it is all right, and I think under present law it would be held to be all right.

Mr. ST. ONGE. As I recall the testimony of some of the educators who have been before us, some of them have requested guidelines in the definition of fair use to be added to the present section 107, but I don't recall many who asked for the reproduction of a complete work. I think this is probably going as far as anyone has gone before in the testimony that we have heard.

Mr. Dwan, it would be your position, then, that the present law allows such a practice today?

Mr. DWAN. I wouldn't go so far as to say reproduction of a whole book.

Mr. HERZOG. I don't think that we in the copy business feel that it should be allowed to reproduce the whole book for the classroom, but economically, if we are talking about copying machines, it wouldn't be feasible to do so when you consider the cost of each page at approximately 5 cents. You could buy the book a lot cheaper than you could reproduce it.

So the limiting factor today, when you are talking about copying processes, is the economic factor, not whether or not they choose to do it. Mr. ST. ONGE. I think I would tend to agree with you today, but in 10 years from now I am sure 3-M will have a copying machine that will make reproduction economically feasible.

Wouldn't you agree with that statement?

Mr. HERZOG. I am sure the publishers will also have printing processes that will do that much cheaper, so I guess the ratio will still hold. Mr. ST. ONGE. Mr. Dwan, you make the point that the public is now using copying machines and the copyright owners have acquiesced in that practice because there have been no lawsuits involved, but isn't it true that extensive use of copying machines is something relatively new?

Mr. DWAN. Mr. Herzog can answer that one.

Mr. HERZOG. It is not that new. It is now in the neighborhood of extensive use, I guess, extending back about 15 years, certainly within the last 10 years the numbers measured in the hundreds of thousands. So a 10-year period would not, in my opinion, be considered very new. Mr. ST. ONGE. But there has been a tremendous increase in recent years in the production and sale of copying machines.

Mr. HERZOG. Yes.

Mr. ST. ONGE. Mr. Dwan, you refer to a number of cases on unfair use, but you don't cite them. Would it be too much to ask you to give us some citations, not now, but to submit them to the committee? Mr. DwAN. I will be glad to do that, Mr. Chairman. (Subsequently, Mr. Dwan submitted the following:)

Re copyright bill (H.R. 4347).

Mr. HERBERT FUCHS,

SHARP, SOLTER & HUTCHISON, Washington, D.C., September 3, 1965.

Counsel, Subcommittee No. 3, House Judiciary Committee,
Washington, D.C.

DEAR MR. FUCHS: In connection with my testimony on August 4, 1965, representing Minnesota Mining & Manufacturing Co., we undertook to provide the subcommittee with a list of cases on "fair use." Such a list is respectfully submitted herewith in the hope that it will be helpful to the subcommittee.

It is of considerable interest that in the fourth case listed the judgment was affirmed per curiam in the Supreme Court by an equally divided court. Columbia Broadcasting System v. Loew's, Inc., (1958) 356 U.S. 43, 2 L. Ed. 2d 583). In an

other per curiam decision, the Supreme Court considered the record unsatisfactory and vacated the judgment of the court of appeals, with direction to return the case to the district court. Public Affairs Associates v. Rickover ((1962) 369 U.S. 111, 7 L. Ed. 2d 604). The court of appeals had remanded the case to the district court for determination of the issue of "fair use," and a dissenting opinion in the Supreme Court would affirm that remand.

Very truly yours,

RALPH H. DWAN.

Berlin v. E. C. Publications, Inc. (329 F. 2d 541): Parody lyrics to 23 songs which were published in a magazine were held not to be an infringement of the copyrighted musical compositions.

Wihtol v. Crow (309 F. 2d 777): The making of a new arrangement of a copyrighted musical composition and performance of that new arrangement was held not to be a fair use.

Eisenschimb v. Fawcett Publications (246 F. 2d 598): Defendant's use of plaintiff's books in writing an article which was published in a magazine was found to be a fair use.

Loew's Inc. v. Columbia Broadcasting System (131 F. Supp. 165, affirmed); Benny v. Loew's Inc. (239 F. 2d 532, affirmed); Columbia Braodcasting System v. Loew's, Inc. (2 L. Ed. 2d 583): Held that defendant's television burlesque was not a fair use of plaintiff's motion picture.

Toksvig v. Bruce Pub. Co. (181 F. 2d 664): The use by defendant of plaintiff's book in the preparation of defendant's book was found to be an infringement and not a fair use.

Associated Music Publishers, Inc. v. Debs Memorial Radio Fund (46 F. Supp. 829, affirmed); Associated Music Publishers, Inc. v. Debs Memorial Fund (141 F.2d 852): The playing of phonograph records of part of a copyrighted musical composition by a radio station was held not to be a fair use of the composition. 20th Century-Fox Film Corp. v. Stonesifer (140 F. 2d 579): A motion picture was held not to be a fair use of a copyrighted play.

Mathews Conveyor Co. v. Palmer-Bee Co. (135 F. 2d 73): The use in defendant's catalog of two cuts from plaintiff's catalog was held to be so unsubstantial as not to be an infringement of copyright.

College Entrance Book Co., Inc. v. Amsco Book Co., Inc. (119 F. 2d 874): Defendant was found to have copied plaintiff's books in the publication of its own books, in order to avoid the trouble or expense of an independent work, and this was held to be an unfair use since both plaintiff's and defendant's books met exactly the same demand on the market.

Leon v. Pacific Telephone & Telegraph Co. (91 F. 2d 484): Defendant's use of plaintiff's telephone directory in preparation of another directory listing the same information in different order was found not to be a fair use of the copyrighted directory.

Sheldon v. Metro-Goldwyn Pictures Corp. (81 F. 2d 49): A motion picture was found to be too similar to a copyrighted play to constitute a fair use of it.

Shapiro, Bernstein & Co., Inc. v. P. F. Collier & Son Company (26 USPQ 40): The publication of 10 out of 18 lines of the words of a copyrighted song in a story in a weekly periodical was held not to go beyond the limits of fair use.

Holdredge v. Knight Publishing Corporation (214 F. Supp. 921): An article contained in defendant's magazine was found to be not a fair use of plaintiff's book.

Columbia Pictures Corp. v. National Broadcasting Co. (137 F. Supp. 348): A television show was held not to infringe the copyright on a movie, for the reason that "Some limited taking should be permitted under the doctrine of fair use, in the case of burlesque, to bring about this recalling or conjuring up of the original."

American Institute of Architects v. Fenichel (41 F. Supp. 146): Defendant made and used six copies of one form in a copyrighted book of forms and delivered them to the contractor with whom he was dealing. The delivery of copies was held to be a publication, but a fair use, since the defendant's use was not the kind of use intended to be forbidden by the statute.

Karll v. Curtis Pub. Co. (39 F. Supp. 836): The publication of words to a copyrighted song in an article contained in a magazine was held to be a fair use of the song.

Broadway Music Corporation v. F-R Pub. Corp. (31 F. Supp. 817): The printing of the chorus of a copyrighted song in a story contained in a weekly magazine did not go beyond the limits of fair use.

52-380-66-pt. 3—9

Henry Holt & Co., Inc. v. Liggett & Myers Tobacco Co. (23 F. Supp. 302): The use by defendant of quotations from plaintiff's book in its pamphlet published for a commercial purpose was not excusable as a fair use.

Hill v. Whalen & Martell, Inc. (220 Fed. 359): The defendant's burlesque of the plaintiff's copyrighted cartoon characters was held to injuriously affect the value of the copyright, so as to constitute an infringement.

Dun et al v. Lumbermen's Credit Ass'n. et al (144 Fed. 83): Defendant's use of plaintiff's book in preparation and publications of its own book was held to be a fair use.

Sampson & Murdock Co. v. Seaver-Radford Co. (140 Fed. 539): Defendant's use in the preparation of its city directory of the plaintiff's copyrighted city directory was found not to be a fair use.

Social Register Ass'n. v. Murphy (128 Fed. 116): Defendant's use of plaintiff's copyrighted publication in the preparation of its own similar publication was not a fair use.

Simms v. Stanton (75 Fed. 6): The defendant's books were found not to be an infringement of the books previously published and copyrighted by plaintiff, because defendant did not draw upon the plaintiff's copyrighted books to any substantial degree. Such use as was made was considered to be a fair use.

Mr. ST. ONGE. In the sentence that you propose adding to section 107, you say "to reproduce the copyrighted work for personal or private

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What distinction do you make between the personal and private? Mr. DWAN. Well, sir, by "personal use" I think we would mean in a business meeting, for instance.

Would that be what we had in mind?

Mr. HERZOG. We would define them just the opposite, I think. A personal use is where you make a copy for your own reading and own study. A private use would be where you would be using it in a meeting or sending it on to the next fellow, rather than making a call.

Mr. ST. ONGE. And finally, on this question of fair use, Mr. Dwan, in your last sentence on fair use, you say you submit that the public interest is better served by the present Copyright Act than it would be by the passage of H.R. 4347 without the amendment that you recommended.

Would you take the position that no bill at all would be better than H.R. 4347 with section 107 as it stands?

Mr. DWAN. That is our feeling; yes, sir.

Mr. ST. ONGE. I think it would be better to let other members question the witness at this point, if they wish to.

Do you wish to question him on fair use, Mr. Poff?

Mr. POFF. Thank you, Mr. Chairman.

Several previous witnesses have had occasion to refer to H.R. 11947, which was introduced on July 20, 1964. I believe you made reference to that bill, Mr. Dwan. While not giving a citation, specific reference

was made to section 6 of that bill.

In order that the questions we ask on this subject might have meaning, I believe it would be appropriate, Mr. Chairman, to insert that section at this point in the record. I ask unanimous consent that this be done.

Mr. ST. ONGE. Without objection, it is so ordered. (The section referred to follows:)

§ 6. Limitations on exclusive rights: fair use.

Notwithstanding the provisions of section 5, the fair use of a copyrighted work to the extent reasonably necessary or incidental to a legitimate purpose such as criticism, comment, news reporting, teaching, scholarship, or research is not an

infringement of copyright. In determining whether the use made of a work in any particular case is a fair use, the factors to be considered shall include: (1) the purpose and character of the use;

(2) the nature of the copyrighted work:

(3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and

(4) the effect of the use upon the potential market for or value of the copyrighted work.

Mr. POFF. When Mr. Cary testified originally, he made the following statement relative to fair use:

This doctrine has never been included in any of our copyright laws, and yet the courts have, on their own initiative, down through the years held that the exclusive rights of the author are not to be strictly constructed but, broadly speaking, are to be subject to a limitation that a reasonable portion of a copyrighted work may be reproduced without permission where necessary for a legitimate purpose which is not competitive with the copyright owner's market for his work.

That last clause, while not identical, is substantially synonymous with the fourth subparagraph of section 6 of H.R. 11947. This, I assume, is the subparagraph which would best serve your purposes in light of the answers that have been given to questions raised by the acting chairman. Is this correct?

Mr. DwAN. No, sir; we don't think that section 6 of 11947 quite covers our problem.

Mr. PoFF. I didn't intend to ask that. I simply ask, does this not touch the heart of your problem, and if you had to choose between these two approaches, would you not choose the approach of H.R. 11947 ?

Mr. DWAN. Provided it included some language along the lines I have suggested.

Mr. POFF. Are you saying that it will not give you the protection you need unless the specific language you suggested is used?

Mr. DWAN. That is our view; yes, sir.

Mr. POFF. You would not recommend any further itemization of the paragraph in explanation of guidelines for court interpretation of the term "fair use"?

Mr. DwAN. We would have no objection to further itemization, but we don't feel particularly qualified to suggest further language except in the field in which we are involved. We would have no objection to further elaboration by example.

Mr. PoFF. Isn't it a fact that case law in general today embodies the concept expressed by Mr. Cary in the paragraph I recited?

Mr. DwAN. I am sure Mr. Čary made a good effort to interpret the

cases.

Mr. LAUDER. The cases that there are, Mr. Poff, as Mr. Dwan pointed out in his statement, all involve publication by competitive organizations to the publisher or the copyright owner, and none of them involve private use, personal or private use, by a person who is not in the publishing business, and who is not publishing something. So the cases are more or less inapplicable to the average person who owns a copying machine.

Mr. POFF. Should a case be brought by a copyright owner against a person who owns one of your machines and uses it to reproduce something for his personal use, would not a court considering the fair use doctrine apply the test stated by Mr. Cary? Namely, is it or is it not

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