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within 60 days after receiving this communication to state to the contrary, "No, we don't want this included." If they do not so act, then it would be included, adding that to the subject matter of the copyright.

Mr. POFF. May I interrupt to say that I think a more exact parallel and example would be the Reorganization Act of 1949, instead of the procedure for changing the Federal Rules of Procedure.

Mr. NIMMER. You very likely are correct, Mr. Poff.

Now I suggest this is just one approach, but I think the basic problem is, let's be clear now, let's avoid the ambiguity that has existed under the old law. Let's be clear. Is the new law pre-empting the field of writings under the Constitution, or is it being more limited, and, if so, how?

That is one point I would suggest.

Another one, looking at section 203(a) (3), relating to the reversion provisions. It provides that if the author is not living, then all of those entitled to terminate, all of his successors, must join in the request for reversion. I can envisage—and I am sure I am not alone in that-problems there, where one out of several claimants, for reasons good or otherwise, refrains from joining in the request for reversion. Possibly, this could be handled by a court of arbitration decision, or something of the sort. Looking to section 108, subsections (a) and (b), what concerns me is something that I am quite sure is not intended, but I am wondering whether the language might do this. That is to say, here is a provision which, in effect, says that if somebody has a particular copy of the work lawfully obtained, he may transfer, may sell it without infringing the exclusive right to vend or sell, or without infringing the copyright. I have no quarrel with the concept at all, but I wonder whether the wording of this is such that it may go beyond the concept. For example, if I sell my book to Mr. X, and he is in lawful possession of it, but Mr. X and I have an agreement, a contract, whereby Mr. X says he will not resell it, or will only resell it under certain terms and conditions—this gets into an area of law other than copyright.

It is a kind of contract area, and it does raise its own problems of fair trade, and antitrust and so on, but it is quite apart from problems of copyright. Now what concerns me by the language here is that it might be read to mean that even though Mr. X and I have a valid contract under State law, whereby I expressly precluded X from reselling my work, except under certain conditions, it could be said that this Federal law pre-empts any State law to the contrary, and absolutely invalidates the contractual restrictions that he had which would be valid under State law. It seems to me that some rewording is in order to make clear that what is meant is that under these circumstances there will not be an infringement of copyright, but not necessarily that the person who receives the material is blanketly entitled to dispose of it, not withstanding any possible restrictions under the State law of contracts or otherwise.

The final point that I will take your time on is the dual provision relating to notice and registration, where you recall there is a good deal of amelioration in the present bill as compared with the existing law, with regard to forfeiture of copyright if notice is left off.

However, still, under the proposed bill, there will be a forfeiture of copyright—I am oversimplifying-if the notice is left off, and if there is not registration within a 5-year period from first publication; if both occurred, then the copyright may be forfeited.

My own feeling is that there should not be forfeiture in any event. I can see encouraging notices by giving greater remedies where notices are used, that is, permitting statutory damages as well as profits and actual damages, or in the alternative, where a notice is not used, limiting the remedy only to actual damages or profits, and not permitting statutory damages. But to go to the length of forfeiting the copyright under these circumstances, simply because of a failure to comply with a formality which can be a trap for the unwary, I would oppose.

In any event, even if it were retained, I would suggest that the 5year period be extended to some substantially greater period in order to avoid, again, undue hardship to those who are not actually familiar with the copyright law.

Those are the main points I would suggest, Mr. Chairman.
Mr. KASTENMEIER. Thank you very much.

Professor Nimmer, earlier witnesses referred to section 105. Several of them thought that under no circumstances should the U.S. Government hold a copyright. How do you feel about that?

Mr. NIMMER. I agree with the existing provisions in the bill, Mr. Chairman. It seems to me the basic rationale of Government not being entitled to hold copyrights gets at the idea that if governmental funds are being expended and governmental services are being used in the creation of a work, it should belong to all of the people, and there should not be any particular monopoly.

I think you have a different situation where the work is created by a private individual, not under Government auspices, and he then wants to give it to the Government, as a bequest, or as an assignment, and where he does not want to throw it in the public domain, but rather wants the benefits from his work to accrue to the U.S. Government.

I see nothing contrary to the underlying rationale in connection with Government publications in permitting that to occur.

Mr. KASTENMEIER. Mr. Edwards?
Mr. EDWARDS. No, sir.
Mr. Poff. Yes, on page 6 of your statement, Professor, I quote:

What is required is an equitable and convenient means of licensing reprography duplication. It is probably best that the structuring of any such licensing system be accomplished through the flexibility of private arrangements rather than by the inflexible fiat of the statutory command.

Well, of course, beginning with the essential that any such licensing procedure would have to have a basis in a statute, what precisely do you envision as a private arrangement ?

Mr. NIMMER. Mr. Poff, I am not prepared at this moment to spell out any detailed private arrangement, but fundamentally what I am getting at is that, just as under the existing law, all that you see about performances as the statute spells it out, in the case of music, is that the copyright owner has the right to control the public performance for profit of his music. Nothing is said about any private arrangements for licensing or the sort, but we know that out of this grew ASCAP and BMI and so on, private organizations which have licensed, collectively licensed, performing rights.

I think some similar kind of approach, although it could be different, too, but the basic idea would be a private organization in which the photoduplication rights could be generally licensed to libraries, for example. If a library paid—and I hate to get into specifics, because I don't pretend to have thought this out in great detail, or specifics, but I think it certainly conceivable for libraries to pay some kind of an annual fee that they could live with, and get a license to reproduce, under given conditions, a whole catalog or category of materials.

My point, largely, in raising this is to point to the real problem involved, which is to my mind quite opposite, and quite overwhelms the problem set forth by some educators as to their need to reproduce. Obviously, there are socially useful interests on both sides, and one must find the proper balancing, but I don't find the proper balancing in just calling it fair use.

Mr. Poff. Well, of course this committee is aware that the problem exists, and it is our business to try to find a solution which will promote the national interest, and at the same time, do justice to private property rights, and we need some guidance. So far, all the advice we have had has been on one extreme or the other. I would like to see somebody address himself to some middle solution.

Mr. NIMMER. Well, Mr. Poff, I suppose the implication of what I have to say is that the middle solution will evolve, privately, if the users are not handed on a silver platter just an automatic statutory exemption. If they don't have an automatic statutory exemption, and yet the forces of technology are such that these uses are going to continue, it seems to me that the tension between the creators and the users is such that will force a private arrangement.

I could be wrong, and if this does not occur, then perhaps it will be time for Congress to take a second look at that particular problem and create some kind of compulsory licensing situation, or something of the sort, but I would hate to see that rushed into in advance of the opportunity to work it out on a private basis.

Mr. POFF. Well, of course, we don't expect, at least I as one member of the committee realistically do not expect, that we will be able to accomplish the miracle in this one omnibus bill that perhaps is desirable. We are going to do our best to look into the future, and anticipate problems wrought by technological change, but we will not be able to solve all the problems that exist today, much less those which will occur unanticipated in the future, and yet we must try, and we need some advice from those who are learned in the field.

So far, we haven't received it, not on this precise point.

Mr. NÍMMER. May I suggest something I believe or assume was presented to you in the past in these hearings? One possible kind of licensing situation that I think Mr. Irwin Karp of the Authors League has evolved and suggested. I am not sure, but I assume this was offered to you as a possible solution.

I don't necessarily totally endorse that, but I think it is in one possible useful direction, though that, as I recall, involved some statutory implementation. Again, I would like to see the problem solved without statutory implementation, if that were possible.

Mr. Poff. Well, mine has not been an interrogation, but an exchange of viewpoints, but I thank you, sir.

Mr. NIMMER. Indeed.
Mr. KASTENMEIER, Mr. Hutchinson?

Mr. Hutchinson. Professor Nimmer, on page 3 of your statement, at the bottom of the page, you mention the educational television question, and you say “time limitations prevent discussion of the latter issue in this prepared statement."

I was wondering if you desired in the next 6 or 7 minutes to discuss the matter. I am willing to open up the opportunity here.

Mr. NIMMER. Thank you, Mr. Hutchinson. Actually, I don't think I require 6 or 7 minutes. I suppose my position can be summed up that I don't think that there should be an exemption from the obligation to pay for performances merely by virtue of the fact that the operation is an educational station. Because they are taking copyrighted materials, just as much as anyone else is. They are entertaining the public just as much as anyone else is.

True, they are educating the public as well, and there is a particular exemption for educational broadcasts contained in the bill which I do approve of, but which is more limited than merely applying because it is an educational station.

If the argument is made that these educational stations should be encouraged—and I am sympathetic to that argument, I think they certainly should be encouraged, and that they are important to the cultural level of our Nation-I would suggest that the encouragement, and the subsidization, if you will, should come through taxpayer channels and not through the copyright owners' contributing the means of the station's continuing.

Mr. HUTCHINSON. Thank you very much.
Mr. Poff. Will my colleague yield ?

Mr. Poff. Does this mean that you would endorse the recommendation of the Department of Commerce with reference to section 109 (4) ? That section reads as follows:

performance of a nondramatic literary or musical work, otherwise than in a transmission to the public, without any purpose of direct or indirect commercial advantage.

Did you hear the testimony? Mr. NIMMER. Yes, I did, Mr. Poff. Yes, I think I would disagree with the gentlemen who testified for the Commerce Department as to the existing state of the law. At least it is an ambiguous area, and it is debatable. I am thinking of Associated Music v. Debs, a Second Circuit case, where the phrase "for profit” under the existing law was defined as including any nonprofit uses, if there can be direct or indirect commercial gain, even though no admission charge, and if that money goes to pay off the mortgage, let us say, of the nonprofit organization, this is still for profit under the existing law. And that, it seems to me, goes much too far for desirable social policy. I would disagree with that case holding, and I would agree, with clause (4), and hence I guess I would disagree with the recommendation by the Commerce Department.

Mr. POFF. Now, let's see. I think we have kind of muddied the water there a little bit.

Mr. NIMMER. I perhaps have. Let me try and clarify it.

Mr. POFF. As I understand the burden of your statement there, you would agree with the Department of Commerce recommendation. The Department of Commerce, as I understood it, felt that if a fee is charged, the copyright owner should be authorized to decide whether the performance would be allowable under his copyright, even if the proceeds went for a nonprofit or charitable purpose.

Mr. NIMMER. Right. I think I see where the ambiguity lies. Let me try and spell it out. I have said on the one hand that as far as educational television stations are concerned, I don't think they should be immune, but section 109 (4), as it is in the bill, does not go to television stations or to broadcasts, it only goes to perfomances other than in a transmission to the public, so it is not talking about broadcasting. It is talking about in-person presentations, such as in a church or in a school, or whatever. As to that kind of a situation, unlike the educational television station, I would say there should be an immunity, even if there is some paying off of the mortgage, as it were, in connection with the performance.

It might be argued at the present time that the singing of a church choir in a church is a for-profit performance, because there is some relationship between the amount of money that goes into the collection plate and the fact that the people sing in the church choir.

Mr. Poff. This is not the case, you understand. The case is when there has been a fee charged for admission, and the work is used, and the proceeds of the admission fees are designated to a specific charity which may not have the approval of the copyright owner. I believe that was the point the witness was trying to make.

Mr. NIMMER. Yes. Well, there is perhaps a close question of balancing here. My own feeling is that probably the balance where we are not talking about a widespread audience such as television, but only a live performance in person, as it were, if the money goes strictly for educational charitable purposes, then perhaps it is all right.

It seems to me by that limitation, inherently, you are not going to have this abused. You are not going to have it extensively performed by people who simply want to perform the material and genuinely are disinterested in the money. This is what may happen sometimes, but I think, by and large, it is going to be done simply because the religious group or charitable group themselves want to put this on for their own purpose, and although there is a balancing problem, I come out on this particular one on the user's side.

Mr. HUTCHINSON. Would the gentleman yield there?
Mr. PoFF. Yes, sir.

Mr. HUTCHINSON. The Commerce presentation on that point mentioned net proceeds to be applied exclusively. Now there might be a different situation if the gross proceeds were going to go, on the ground that net proceeds means everything left after the expenses are paid.

Mr. POFF. That's true.

Mr. HUTCHINSON. And gross proceeds would constitute a contribution by everybody to the cause, while net proceeds, you see, would only represent the profit after all expenses are paid, and I think the point probably made by Commerce was that if only net proceeds were going

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