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system, multipoint distribution service, subscription service, direct broadcast satellite, or other means of

transmission that are intended for reception in private homes.

SEC. 3. That chapter 5 of title 17 of the United States

6 Code is amended by inserting at the end thereof the following 7 new section:

8 "8511. Additional remedy for infringing importation or

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10

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manufacture, and distribution, of audio and

video recording devices and media

"In any action filed pursuant to section 119(b)(2) or 12 120(e)(2), the court may decree that, in addition to any other 13 remedies provided by this title, for a period not to exceed 14 ninety days the importer or manufacturer shall be deprived of 15 the benefit of a compulsory license under section 119(b)(1) or 16 120(b)(1). In the absence of such license by reason of such 17 decree, any importation into and distribution in the United 18 States, or any manufacture and distribution in the United 19 States, of audio or video recording devices or media by such 20 party is actionable as an act of infringement under section 21 501, and is fully subject to the remedies provided by sections 22 502 through 506, 509, and this section.".

23

SEC. 4. That chapter 3 of title 17 of the United States

24 Code is amended as follows:

AMDT 1333

20

1 (a) Section 801(b)(1) is amended by replacing the period 2 after "118" with a comma, and adding the phrase "and to 3 make determinations as to reasonable royalty fees as pro4 vided in sections 119 and 120," following the reference to 5 "section 118".

6

(b) Section 801(b)(3) is amended by deleting the phrase 7 "and 116," and substituting in lieu thereof the phrase "116, 8 119, and 120."

9

(c) Section 804(c) is amended by adding the phrase "and 10 reasonable royalty fees as provided in sections 119 and 120," 11 following the reference to "section 118" and by changing 12 "that section" to "those sections.".

13 (d) Section 804(d) is amended by deleting the phrase "or 14 116," and substituting in lieu thereof "116, 119, or 120.". 15 (e) The second sentence of section 809 is amended by 16 deleting the phrase "or 116" and substituting in lieu thereof 17 the phrase "116, 119, or 120.".

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SEC. 5. That section 109(a) of chapter 1 of title 17 of 19 the United States Code is amended by replacing the period at 20 the end thereof with a colon and inserting thereafter the fol21 lowing: "Provided, however, That the owner of a particular 22 phonorecord of a sound recording, or a particular copy of a 23 motion picture or other audiovisual work lawfully made 24 under this title may not, unless authorized by the copyright 25 owner, dispose of the possession of that phonorecord or copy

AMDT 1333

21

1 by rental, lease, or lending, for purposes of direct or indirect

2 commercial advantage.".

3

SEC. 6. SUPPLEMENTARY AND TRANSITIONAL PROVI

4 SIONS.

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(a) This Act becomes effective on its enactment. (b) Section 501(a) of title 17 is amended by deleting "118" and substituting in lieu thereof "120.”

(c) The table of sections for chapter 1 of title 17 of the United States Code is amended by inserting after the item relating to section 118 the following:

"119. Limitation on liability: Video recording.

"120. Limitations on liability: Audio recording.".

(d) The table of sections for chapter 5 of title 17 of the United States Code is amended by inserting after the item relating to section 510, the following: "511. Additional remedy for infringing importation or manufacture, and distribution, of audio and video recording devices and media.”.

Amend the title so as to read: "A bill to amend title 17 of the United States Code with respect to home recording and audio and video recording devices and media and for other purposes.".

AMDT 1333

Senator MATHIAS. The opening witness will be Mr. David Ladd, the Register of Copyrights, who is accompanied by several of his assistants from the Copyright Office, whom I will ask him to introduce for the record.

Mr. Ladd?

STATEMENT OF HON. DAVID LADD, REGISTER OF COPYRIGHTS AND ASSISTANT LIBRARIAN OF CONGRESS FOR COPYRIGHT SERVICES, ACCOMPANIED BY DOROTHY SCHRADER, GENERAL COUNSEL AND ASSOCIATE REGISTER OF COPYRIGHTS; HARRIET OLER, KENT DUNLAP, AND MARILYN KRETSINGER

Mr. LADD. In a moment, Mr. Chairman. First of all, I would like to say how delighted I am to share with Miss Sills the audience which the Copyright Office has drawn here today. [Laughter.]

Senator MATHIAS. We will do this for you any time you come.
Mr. LADD. Thank you, Mr. Chairman.

It is, of course, an honor to be invited before the committee to give the Copyright Office views on the legislative issues before you. It is a comparable honor to be invited to appear here in the company of Miss Sills. I have been an opera buff for many years; I have heard Miss Sills many times, and never in my wildest dreams did I ever hope to share the stage with America's prima donna.

Let me take this occasion, though, to express to you, Miss Sills, my admiration for the plans that you explained at the Smithsonian lecture a few weeks ago to create a truly national American opera company, which is already focused on American singers and is increasingly focusing on American composers. When I met Miss Sills on that occasion, I did ask her if she would revive at the New York City Opera Virgil Thompson's "The Mother of Us All." She said she would be delighted, upon my payment of $250,000. And, Miss Sills, I have not yet been able to come up with the money.

Finally, before I turn to my statement, let me say that on this day of my entry into show biz, I am very glad that my act does not follow Miss Sills.

Now let me introduce my colleagues from the Copyright Office. Dorothy Schrader is general counsel and Associate Register of Copyrights; Harriet Oler, Kent Dunlap, and Marilyn Kretsinger, who are all attorney advisers.

Let me open my statement by offering to the committee and to the Congress my congratulations. As I say in the prepared statement, the Betamax decision, which is what brings us here today, did break like a thunderclap over the copyright and entertainment worlds. There was, as you suggest, Mr. Chairman, a considerable amount of sensational and, I believe, distorting publicity about that opinion; but now, at the remove of several months, the Congress is in a position calmly to assess the issues which were raised in that litigation and are raised by the current problems in the industries we are concerned with. I have submitted a rather long statement; and since, as you have directed, it will be entered in the record, I hope to boil this statement down to some essentials-really, to six points. And I hope in going through those six points as briefly as possible, to identify some rather wide swaths of controversy and debate which probably can be eliminated from these hearings.

The first point is that while the issue that we are dealing with here is independently of enormous importance, it is not an isolated issue. It is a particular expression of the continuing problem of adapting copyright to changing technologies. The Congress has already encountered this in trying to adapt the law to the photocopying issue, for example, and if I give you one example, I will show you that this is not atypical-that is to say, the issue before us is not atypical.

Satellite transmission is fairly recent, but already, home-Earth stations are dropping so rapidly in price that the unauthorized interception of those signals is becoming a problem for program producers and suppliers. There, as here, as in photocopying, there is a continuing and accelerating problem of adapting copyright to the technology.

What those instances have in common is the difficulty of finding, discerning, and measuring mass use of copyrighted materials.

The second point that I want to make is there is a basic issue, as you suggested, Mr. Chairman, in your opening statement, that everybody agrees upon. No one is trying to stop home taping. As a matter of fact, I doubt that anybody ever had that in mind at any time. No one is trying to invade the privacy of the home. No bill before the Congress would forbid home taping. Every bill before this committee now expressly allows it.

The DeConcini bill does provide broad exemptions for home taping. Your amendments do, too, but in addition, they provide compensation for the program properties which are used. In video, the authorization for that home taping is for personal use; in audio, the authorization is even broader, because it allows medium-tomedium taping as, for example, taping from authorized copies of discs to tapes.

The mechanism which is proposed in your amendments is a compulsory license, and it follows a model which we already have in the copyright law of the cable television compulsory license. That is to say, there is a royalty imposed upon the tape and hardware, but then, in common with the cable compulsory license, the rates are to be set by the Copyright Royalty Tribunal, collected by the Copyright Office, distributed in accordance with the directions and adjudications of the Copyright Royalty Tribunal, and all of this is subject to judicial review.

The third point is to identify an area which I think you really could eliminate from the discussion, for all practical purposes. There is much debate about whether or not the Sound Recording Act of 1971 included a home audio taping exemption, whether any such exemption was imported sub silentio into the 1976 revision, and whether so imported, it was expanded to videotaping as well. The legislative history on these issues is not altogether clear, but they need not occupy this committee's time. What is clear from the legislative history is that the 1971 Sound Recording Act was directed at commercial piracy primarily, and only incidentally was home taping considered, that no one then saw any practical way of controlling home taping; that the Copyright Office at that time advised the Congress that a crunch would come on home taping, and the crunch is now here.