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Mr. TENZER. The Register of Copyrights is not supposed to perform a judicial function.

Mr. Dwan. I mean suggesting to the committee legislative proposals which would give the courts guidance.

Mr. TENZER. What troubled me, sir, is the use of the term "inconsistent” when you suggest that it is inconsistent to ask a court to make a decision on a problem which the head of an administrative agency has not been able to decide. Isn't that the function of the court?

Mr. Dwan. I think what we really meant was the head of the administrative agency making suggestions to the Congress to define the thing more fully.

Mr. TENZER. But you don't want to take away the right of the court to make a final determination in any case not covered by the statute or by the regulations of an administrative agency?

Mr. Dwan. As one lawyer to another, no, sir; I do not.

Mr. TENZER. I will reserve my other questions, Mr. Chairman, until we get to 113.

Mr. St. ONGE. We are running late, so I shall be very brief in my questions on the second section of your statement, Mr. Dwan.

As I understand your statement, the 3-M Co. has prepared some new equipment and is proposing to sell the equipment and magnetic tape music libraries with no leasing involved, and you feel that no license fee should be paid for the use of that equipment even though it is to be used for the playing of music in public places by the owner?

Mr. Dwan. Mr. Chairman, we propose that we pay the regular 2 cents or 3 cents.

Mr. Sr. ONGE. For the record ?
Mr. Dwan. The mechanical license.

Mr. Herzog. Actually, the problem is not related to the payment. Actually, our being able to police the payment on both the performance fees and the mechanical fees is not in question. We are not arguing that. We believe they have a right to that.

Mr. St. ONGE. But wouldn't the effect of the amendment proposed on page 8 of Mr. Dwan's statement be to exempt Muzak from paying the fee that it now has to pay?

Mr. HERZOG. No, not at all.

Mr. Dwan. We are perfectly willing to pay the regular fee. We just don't want to be excluded from the privilege of paying that fee.

Mr. ST. ONGE. Mr. Poff!
Mr. POFF. I will be brief, too, Mr. Chairman.

This is not precisely the point, but it may help to give us some insight into your reasoning:

How do you feel, if you have an attitude, about the so-called jukebox controversy?

Mr. Dwax. Mr. Poff, we would like to stay out of that one.
Mr. Poff. That is all I will ask, Mr. Chairman.
Mr. ST. ONGE. Mr. Tenzer?

Mr. TENZER. Mr. Dwan, on page 6 of your testimony, would you attempt to define for us the term which you use, “very small commercial establishments” on the last line of the first full paragraph?

Mr. Dwan. Mr. Herzog will answer that.

Mr. Herzog. Actually, because of the present use of background music, the lease fee and the payments of mechanical and performance


fees, the average lease per month fee, which is the only present means of obtaining background music, is relatively high.

We think that a unit in which we can incorporate this in a for-sale unit that a person can own, would broaden the use of music, so that in a sense we are increasing the fees that these societies get by doing this.

Mr. TENZER. I appreciate the statement, but I suggest that it is not responsive to the question. I am looking for a definition of what you consider to be a "very small commercial establishment."

Mr. HERZOG. A barber shop, a beauty shop, which historically have used radios for this application because of the cost of leased music.

Mr. TENZER. Have you considered, for example, the size of some beauty shops? Have you seen any with 100 seats and 100 operators? Is that a small shop?

Mr. HERZOG. No, that is a big shop.

Mr. TENZER. Where would you draw the line of demarcation? Would you define it by the number of persons permanently employed in the shop, the size of the business, the dollar volume of the business, or the square-foot area of the store or establishment ?

Mr. HERZOG. It could obviously be any of those. We are thinking primarily of the one-man grocery stores, the two-lady dress shops, the one-man barbershop, the one-doctor office.

Mr. TENZER. Since this is your statement and you use the term “very small commercial establishments," would you be satisfied if it were confined to a strictly "mama and papa” store type of business?

Mr. HERZOG. Confined ?
Mr. TENZER. Yes, confined.
Mr. TENZER. How far would you go?

Mr. Dwan. We have no objection to selling to a larger establishment. We were just pointing out here that the little people can take advantage of our facilities for the first time, but also the big ones, too.

Mr. TENZER. Then are you, in effect, suggesting that upon the payment of 2 cents royalty per record, you would permit the making of a magnetic tape from the record, which could be sold to "very small commercial establishments” which can reproduce and play the music over and over and over again without the payment of any fee to the creator of the music?

Mr. HERZOG. I don't think we are asking to change any of the rules as they currently apply, whether to Muzak or leased music or ourselves. The fees are exactly the same. I think our objection is to the discriminatory right to prevent someone from going into the thing rather than having the compulsory license mechanical fee apply. I don't think we are arguing with the rules of the payment. Our payment would be exactly the same as anyone else's.

Mr. TENZER. I am not suggesting anything about any competitive company. I am just trying to get the record clear for our use in our committee work and for an understanding by the Members of the House as to exactly what you are proposing.

You are suggesting on page 6 of your testimony that you will soon have a machine, a creative work just like the author of music, and you want to get paid for that machine, don't you?

Mr. HERZOG. Yes, sir.

Mr. TENZER. I want to know the process by which this music will get onto the tape and whether anyone is going to be paid for the music on that tape.

Mr. HERZOG. Yes.
Mr. TENZER. How?

Mr. HERZOG. By the mechanical and performance fees in which the standards are pretty well defined by the societies.

Mr. TENZER. In other words, for placing the recording from a record onto a tape you would pay a fee?

Mr. HERZOG. Yes.

Mr. TENZER. You would pay for the privilege of placing that music onto the tape and then sell the tape with the machine to the very small commercial establishments" as you would define them?

Mr. HERZOG. That is correct.

Mr. TENZER. So it is your intention to pay a fee for the use of the music?

Mr. HERZOG. We are now so doing.

Mr. TENZER. Would you be paying a fee based upon the number of times you duplicate the record onto the tapes, based upon the number of tapes you manufacture!

Mr. HERZOG. Yes.

Mr. TENZER. May I refer you first to the statement relating to "very small commercial establishments” on page 6, and tie it up with the term on page 2 of your proposed amendment in which you use the terms “personal" and "private"?

Let us take as an example a “very small commercial establishment” serving the public in which they sell merchandise for profit, and where they use your new equipment. Would you consider that personal and private use?

Mr. TENZER. You would not?
Mr. TENZER. I have no other questions, Mr. Chairman.
Mr. ST. ONGE. Thank you, Mr. Tenzer.

Thank you, Mr. Dwan, for your statement, and the help given to us by yourself and your associates.

Mr. Dwan. Thank you, Mr. Chairman and gentlemen.

Mr. St. Onge. The next witness is Mr. Lyle Lodwick, representing Williams & Wilkins Co.

Mr. Lodwick, we want to get the full benefit of your statement, but would it be possible for you to summarize it!

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Mr. LODWICK. Yes, sir.

I would like to introduce Mr. Francis Old. I am director of marketing and Mr. Old is editor in charge of rights and permissions for the Williams & Wilkins Co.

We would be delighted to summarize it, if you would use the statement as source material for any questions that you would like to ask.

Mr. POFF. Before you begin, I have not had an opportunity to read your statement, and while I can't speak for my colleagues, I assume they have not had an opportunity, so I urge you to make all the substantive points you want to make in your summary in order that we will be able to frame our questions based on your verbal presentation.

Mr. LODWICK. Yes, sir.

Mr. ST. ONGE. You wouldn't object if we put your statement into the record at this point, would you?

Mr. LODWICK. We would be delighted.
Mr. St. ONGE. It is so ordered.
(The statement is as follows:)

STATEMENT OF THE WILLIAMS & WILKINS Co. Mr. Chairman, I am Lyle Lodwick, and I would like to introduce my colleague, Mr. Francis old. I am director of marketing, and Mr. Old is editor in charge of rights and permissions, for the Williams & Wilkins Co., of Balitimore, Md. We are publishers and distributors of 45 monthly, bimonthly, or quarterly journals in the biomedical sciences. We also publish, each year, over 125 scientific textbooks, references, and monographs. An affiliated and jointly owned company, Waverly Press, Inc.—also in Baltimore-prints all Williams & Wilkins books and journals, and in addition prints over 100 scholarly, technical, and scientific journals (plus varying numbers of books) for scientific societies, universities, foundations, and commercial publishers. This year marks the 75th anniversary of our founding.

With over 700 employees, our companies are healthy, and they are growing along with science. Our combined sales last year hit close to $9 million, and our net profit on sales-after payment of corporate income taxes—was 6.6 percent.

Our publishing and printing of over 150 different journals and approximately 125 scientific books annually no doubt sounds like a tremendous outpouring of printed material each year. Actually it is a very small drop in the very large bucket of the multi-billion-dollar “copyright industry.” Yet, because of its intimate connection with American science, and because of its function as a means of education and communication for American science, it has an important role in the future of America which is many times greater than its size.

As part of the “free press" of science, we are a typical member of a small and highly spcialized group of publishers who work in fields so limited in scope, so limited in audience, so limited in the number of potential purchasers of its products that any appreciable diminuation of that market-by uncontrolled copying—is a serious threat to our ability to publish for that audience.

Science publishing is a field where an important and successful journal may have 1,000 or fewer subscribers-a field where 1,500 copies of a book can saturate the market.

While the future of our particular company is relatively unimportant in the overall picture of the American economy, we firmly believe that the future of free American science and independent scientific communication is a proper subject of inquiry for this subcommittee, insofar as that future is affected by copyright.

We are here to speak solely and specifically to the point of the possible effect, on American science publishing, of uncontrolled copying as proposed by a segment of those engaged in the fields of education and library service. Mr. Lee Deighton, on May 26, 1965, and Mrs. Bella L. Linden, on June 30, 1965, in behalf of the American Textbook Publishers Institute, have ably and thoroughly presented statements on copying and other copyright matters—and we agree with these statements in general and in detail.

It is our considered judgment that, if the copyright law of the United States should allow, in the name of education, library service, or any other similar public interest, a virtually uncontrolled free copying-even by scientists them. selves of our specialized publications, the immediate or near-future effects will be these:

We will be unable to publish the quality and quantity of scientific information that scientists now demand of us.

Scientists will be forced to rely on progressively larger and larger grantsin-aid to have their information published.

Scientists will have fewer and fewer outlets for publication of their original papers.

Certainly many, and probably most, of the journals we now publish for scientific societies will eventually be forced to suspend publication as free and independent journals; and if they continue it will be as subsidized

organs of some Government agency. Carried from there, in logical sequence, to a not too distant future, there will be:

Direct governmental intervention in science publishing, with an authoritarian bureaucracy loosening or tightening the pursestrings and thereby deciding which scientific journals, even which scientific articles, are to be

allowed to publish, and which must perish. Perhaps it may come to this anyhow. Much of it is here already. The dramatic expansion of scientific activity already requires much in the way of governmental subsidy. So far, only a minute fragment of that subsidy is allotted to publication—and as long as there are free and independent scientific societies to sponsor and encourage research, and free and independent science publishers to publish the results of that research-just so long will there be that much less demand upon the public treasury.

We say this, because only the protection of copyright keeps our company and many of its customers in business.

Most of the organizations for whom we publish and print are independent, private, scientific societies, much of whose purpose and much of whose income comes from publication of one or more highly specialized scientific books and journals. Their activities are educational and nonprofit-and certainly in the public interest. Their mediums of education and communication are the scientific journals which they sponsor and own, and which we publish for them. Without a journal in which to record and transmit information, a scientific society would have little if any reason to continue in existence. There is no other medium in existence today (or predicted for the foreseeable future) which allows so many men to receive so much original information for so little money. If the protection of copyright is diminished, the scientific journal perishes, the scientific society ceases to flourish or even dies—and with it goes a great deal of the scientist's opportunity for his own continuing education and the education of young scientists.

Much has been written, and the subcommittee has heard much worthwhile testimony, on "fair use" and on copying, from people more competent than we in recommending specifically how the copyright law should be revised. As science publishers, we live by our own "doctrine of fair use" whereby we are far more permissive, we allow much more infringement of our market, than most other publishers can tolerate. So, we must refer to their desires on how "fair use" is handled by statute.

We have been surviving with a quite liberal interpretation of a "fair use" doctrine, statutory or otherwise only because we've had to learn how to: the science community and, we believe, the courts wouldn't have it otherwise. As publishers for science, we strongly feel that the phrase from the Constitution “to promote the progress of science" must take precedence over our "exclusive rights."

And so, we must strongly feel that schoolteachers, librarians, and, in particular, scientists, must ask themselves whether the unlimited "right" to copy any copyrighted material—"in the interest of science"-carries with it any implication of loss of independence to our free science community.

We think it does.

We believe the exotic, "gee whiz" appeal of the newer copying machines is becoming the Pied Piper that is leading educators, librarians, and academic scientists into a trap, with 1984 “Big Brother” overtones.

As an example, consider here the testimony—perfectly sound in its own context-of a distinguished medical educator and leader of one of our most important scientific organizations, before the subcommittee reviewing the Medical Library Assistance Act of 1965. We can easily endorse him, his organization, his presentation, and the general objectives of the bill. But, part of his testi. mony-in the context of copyright law—is very relevant to "fair use" and to the future of original scientific publication:

“* * * Such funds would also make it possible for libraries to expand their copying facilities so that most loans can be issued in copy instead of the original.

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