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We hope that will be the solution. We necessarily oppose the library amendment, and we hope that our proposal will be of assistance to the committee in its determination.

Thank you, Mr. Chairman.

Senator McCLELLAN. It is a very difficult thing involved here. I am trying to understand and sympathize with the viewpoints of all of you with respect to your point that, if you don't have customers, of course, you can't produce.

Mr. SALTZSTEIN. That is our problem.

Senator McCLELLAN. That is your problem, but at the same time, people go to their libraries to get service. If they go to the library and they want to make a copy of a page, if it costs 10 cents or 5 cents or whatever, well, I just don't see how this is going to work. I don't see the economics in it. I don't see how your clients or the authors will really gain anything ultimately.

Mr. SALTZSTEIN. Mr. Chairman, I think one of the problems is, as it's been explained to me, that our publishers hire editorial staffs and they do original research, they ferret out this information, and they disseminate it. Now, if it is going to be at the mercy of a photocopying machine in a library—and granted, there are all kinds of hedges in this—but where does it stop? Maybe we just won't be able to publish any more.

Senator McCLELLAN. We have to try to find some middle ground so the publishers and authors will be protected, that is to say, will be able to get a return adequate to carry on the work before us and also so that the material gets further disseminated, gets further distributed. So you have to make some concessions.

Mr. SALTZSTEIN. I understand.

Senator McCLELLAN. Has to make some concessions to the reader too.

Mr. SALTZSTEIN. Well, I think Williams & Wilkins has made a very, very careful contribution in bringing this action. They are not members of our association, but we certainly commend what they have done in bringing this to the fore. Now, perhaps out of it will come a copyright tribunal payment system.

Senator McCLELLAN. I will commend them, too, if we can find an answer to this.

Mr. SALTZSTEIN. Well, we hope the Commission can find it.
Senator McCLELLAN. Thank you.
[The statement of Robert A. Saltzstein in full follows:]

STATEMENT OF ROBERT A. SALTZSTEIN, GENERAL COUNSEL, AMERICAN BUSINESS

PRESS

Mr. Chairman, members of the Committee: The American Business Press is made up of leading American and international technical, professional, trade and financial publications disseminated to special industries. There are approximately 500 member publications in the association, all published by tax-paying companies.

Typical of publications which belong to the association, are Oil and Gas Journal-Tulsa ; Pulp and Paper-San Franscisco; Progressive Architecture Stamford ; Feedstuffs—Minneapolis ; Construction News-Little Rock; Machine Design-Cleveland ; Electronic Engineering-Philadelphia ; Aviation Week-New York; and Professional Builder—Chicago.

The average circulation of ABP members is approximately 50,000 copies per issue. They have these characteristics in common:

(1) They are circulated to a highly specialized readership which relies on their content for news, research, and other articles of a professional, scientific, and industrial nature concerning the industry or science in which the reader of the publication is engaged.

(2) They require and contain original editorial research, specifically edited for this highly specialized, relatively small circulation universe.

The editorial content ferreted out, researched, and then published in these journals has been protected by the existing copyright law. Fair use, as it has developed in the courts, has enabled a publisher, at the very outset of a new industry, to make an investment in a publication edited for that industry, with the knowledge that for the investment made he would have relative security as to the circulation of that publication, with redress if there was subsequent copyright infringement. The growth of many industries would have been slower had technical and trade journals not been able to maintain their circulations secure against copyright piracy. We welcome the inclusion of Section 107 in the legislation before you.

A publisher frequently carries his publication at a loss for years before a profit is earned. By way of example: In the noise-pollution field, a small public cation published in Cleveland, Sound and Vibration, was started in 1966 and turned the financial corner only in 1972. If its material had been subject to publication without effective copyright protection, its continuing contribution to noise-pollution control might well have been choked off, if the publication failed.

Admittedly, there is no effective way to police photocopying within a company. However, one of the largest American corporations had instituted a policy of digesting various business publications, then circulating the digest by way of photocopy machine. This served to cut down the circulation of technical publications distributed in that company. The company soon realized that its employees' need to know, and the need for others in industry to know what that particular company was doing in product development and research activities, would be impaired if the circulation of business publications would be so reduced as to lower the quality of editorial content, or alternatively, to reduce advertising availability. Fortunately, this company rescinded its digestphotocopy arrangement, respects copyrights, and encourages its employees to subscribe to as many specialized business publications as possible.

It is for this reason that the American Business Press urges the Committee to delete Section 108 at this time; we urge that this section be referred for study to the National Commission to be established under Title II of S. 1361.

The Commission will be in a position to expertly analyze the following situations:

(1) When an article is out of print, what is the obligation of a library to determine whether copies are available, and what is the obligation of the publisher to supply that article?

(2) How bona fide is the claim that technical journals are out-of-print and unavailable to libraries from publishers upon request?

In our opinion, the incidence is rare when a publisher denies access to reproduction upon request. Frequently, reprint permission with appropriate public acknowledgment of the original source of the article is given without charge.

A system which permits one copy to be made could be a system which could permit more than one copy to be made in any given time frame and is, in our opinion, impossible of enforcement. Once the copyright protection established in the Constitution is eroded by law, fair use may become impossible to determine, and copyrights could be meaningless.

We respectfully submit that there has been no demonstration of the need for Section 108 or for the American Library Association Amendment. That Amendment would permit partial photocopying rights without investigation of any kind and goes even further than Section 108. We believe that before this fracturing of copyrights is enacted into law, that there should be a much clearer demonstration of need than has heretofore been produced. This must be a fit subject for determination by the Title II Commission.

An additional reason for deleting Section 108 and rejecting the Library amendment pending the study is the inclusion of Section 504 (c) (2) which provides :

"In a case where an instructor, librarian, or archivist in a non-profit educational institution, library, or archives, who infringed by reproducing a copyright work in copies or phonorecords, sustains the burden of proving that he believed and had reasonable grounds for believing that the reproduction was a fair use under Section 107, the Court in its discretion may remit statutory damages in whole or in part.”

This provision is protective of libraries and librarians and still preserves fair use. Nothing more is needed pending the study.

While the Commission is making its determination, we can assure the Committee that the tax-paying business press of this country, as represented by the American Business Press, will promptly comply with any reasonable request received from any library for any publication, or part thereof, in print or out of print. An appropriate reproduction charge may be assessed ; frequently, there is no charge. But reservation of the right to charge is necessary to preserve the integrity of what a copyright is all about.

As producers of software so capable of reproduction by photocopy machine, or of mashing into computer systems, we are most seriously concerned with any change in the copyright law, whether it be Section 108, the proposed American Library Association-American Research Library Amendment.

We believe that prior to legislative enactment, the Title II Commission should evaluate the need for these provisions. If that is demonstrated to be actual, then the effect of a loosening of the copyright laws will have upon the origination of necessary scientific and technical information should be considered by that Commission and reported to Congress.

The American Business Press has participated in a series of meetings under different and friendly auspices, all of which have attempted to resolve the dispute which has arisen since the Williams and Wilkins decision. We would like to take this opportunity to commend Williams and Wilkins, not a member of our association incidentally, for the initiative they have taken before the Court of Claims.

We stand ready to work out any reasonable settlement with those who desire the right to photocopy without benefit of copyright, whether it be one copy or many copies. Imposition by statute of a provision granting the right to photocopy, copyright not withstanding, however restricted, can only impede settlement negotiations and could prejudge a situation which may not be as serious as it is made out to be.

We appreciate this opportunity to appear before you. We urge you to defer action on Section 108 and the library amendment pending such time as a reasonable solution can be arrived at without congressional action, or until such time as either the Title II Commission or the parties themselves come to an agreement which congressional action could then indeed solidify.

Thank you.

Mr. BRENNAN. Mr. Chairman, speaking of the Williams and Wilkins Co., we come now to Williams and Wilkins.

Senator McCLELLAN. Williams and Wilkins come around. Very well. Mr. BRENNAN. Would you identify yourselves?

STATEMENT OF MRS. ANDREA ALBRECHT, DIRECTOR OF MARKET

ING RESEARCH, ON BEHALF OF WILLIAMS AND WILKINS CO.; ACCOMPANIED BY ARTHUR GREENBAUM, COUNSEL

Mrs. ALBRECHT. Mrs. Andrea Albrecht, director of marketing research of the Williams & Wilkins Co., accompanied by Mr. Arthur Greenbaum, our counsel, of the firm of Cowan, Liebowitz, and Latman.

Senator McCLELLAN. Do you want to place your statement in the record or would you like to read it?

Mrs. ALBRECHT. Yes; we would like to place our complete oral statement in the record.

Senator McCLELLAN. Let it be placed in the record. You may highlight it as you wish.

Mrs. ALBRECHT. And our complete written statement, which we submitted on July 25, we would like that also to be placed in the record.

Senator MCCLELLAX. All right.

Mrs. ALBRECHT. It is our belief that the information contained in scientific periodicals should be disseminated as widely and quickly as possible by any method now known or which is yet to be developed, and of course including photographic methods. All of our statements have stressed that we, in no way, wish to interrupt or halt the dissemination of scientific knowledge through photocopying—but we believe that there must be compensation for this photocopying if the scientific periodical is to remain economically viable and independent of Government subsidy.

It is virtually impossible to increase the number of subscribers beyond those individuals in the discipline served by the periodical or beyond those libraries serving the scientific community.

In 1971 we had 24,217 library subscriptions to our journals; in 1972, 24,502; and as of July 1, 1973, 23,300.

As the figures indicate, there was little library circulation growth in 1972 compared to 1971, and the current 1973 figures indicate our circulation will actually decrease by about 600 subscriptions among libraries.

Senator McCLELLAN. Do you attribute that to the fact they can go to the library and make a copy?

Mrs. ALBRECHT. This is certainly very much one of the factors, sir. Senator McCLELLAN. Do you think that is a factor!

Mrs. ALBRECHT. Yes. We tried in our own way to prove this as much as we could prove it by doing a random sampling of those libraries which had canceled their subscriptions. We called them on the phone and specifically asked them if a patron were to come in and ask for an article from this journal which had been canceled, how the library would then supply this patron? And the library's response was invariably “through the inter-library loan program.” This means one photocopy from one library to another.

Several reasons could be offered to explain the decrease. The number of scientific journals continues to grow while publishers are charging ever-increasing subscription rates. Obviously, if library budgets cannot increase proportionately, some journals must be cut from their lists. Certainly, librarians must be more concerned today about the quality of journals they are purchasing than ever before.

At the same time, however, the number of different libraries purchasing journals is increasing mainly due to the continuing emergency of the Community Hospital Library, but libraries are purchasing smaller numbers of journals, certainly of journals published by Williams and Wilkins. In 1973, we had about 300 more libraries (5,800 total) purchasing our journals than in 1971 but as the figures indicate, fewer journals are being purchased among the total libraries.

Considering the relative quality of W. & W. journals, the above indicates that the interlibrary loan program is working, but not in the best interests of Williams & Wilkins library circulation. If this trend continues, we could experience a 50-percent decrease in library circulation over the next 5 years while the number of libraries served through this well-planned and funded interlibrary loan network will continue to increase.

There may be no valid argument that the above is not in the best interest of the national library economy, but it is evident that, in order to survive, the scientific journals must receive additional income from the libraries engaged in supplying interlibrary loans.

Thus, simply raising the subscription price to those who do subscribe to the journal does not solve the problem. To do this would only result in fewer subscriptions at prices higher than the marketplace can stand and ultimately cause the demise of the periodical itself.

If Congress decides that these limited circulation scientific periodicals (and in 1972 the circulation of our periodicals ranged from a low of 1,200 to a high of 19,000), can be photocopied without reasonable compensation, many of these journals will eventually die. The only way we can see to save these journals from extinction is to broaden their income base by spreading publication costs among those who make use of the information in the journal through means of photocopying.

Libraries pay the Xerox Corp. for the copying equipment, the paper manufacturer for the paper, the utility companies for the electricity to run the equipment, the Post Office for stamps to mail the copies, salaries to the workers who do the copying, and to the librarians who supervise the copying. Many libraries now charge a "transactional" charge for photocopying to cover at least part of these obvious costs. Someone has to pay for these costs and we certainly see nothing wrong with the library's passing these costs on to those who use the information in the form of photocopies. We also think it entirely appropriate that to these many costs there be added a reasonable royalty to the publisher to insure that the publisher can continue to make the obviously useful work available in the future.

It must be continuously remembered that there will be nothing to copy unless the journals remain alive, and that uncompensated photocopying will in the end kill them. By means of blanket license, clearinghouses, or computer accounting, à reasonable royalty for copying can be easily paid to the publisher without the need for complicated bookkeeping, interruption or interference in services. These royalty costs can then easily be passed on to the patron who orders the photocopy. We our selves favor a blanket license plan where the license is incorporated in the subscription price of the journal largely because by this method, no recordkeeping, no accounting, no interruption in service can be experienced by the library.

We believe that those who use the copyrighted information in journals by photocopying should contribute to the cost of publishing and that copyright is the traditional instrument for insuring this contribution while protecting the public interest in wide distribution. If a new theory, i.e., free, indiscriminate and repeated photocopying is legislated, it, in tandem with the new technologies, will destroy the journals and thus create irreparable damage to the public interest.

Finally, our position on the pending copyright revision bill is that we are in favor of bill S. 1361. as submitted, with some amendments for the sake of clarity. We are opposed to any legislative history which appears to construe fair use so as to permit the photocopying of single copies of entire articles without compensation because fair use is a judicial doctrine and its construction is best left to the flexibility of the courts. As for guidance, the ultimate decision in Williams & Wilkins v. United States, will aid in pointing the way in this area.

Senator McCLELLAN. Let me ask you a question. Suppose students want a copy of a short article and the student goes into the library and gets the book and just sits down and copies off in his own hand writing. How can you stop that?

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