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BACKGROUND OF THE WILLIAMS & WILKINS LICENSING PLAN W&W journals would carry an institutional rate, the difference between the individual subscription rate and the institutional rate would constitute the license fee. The fee would be based on the number of text pages published in the journal in 1972, the susceptibility of the journal to be photocopied (based on our experience with reprint requests) multiplied by a ratio no higher than 5€ per page. (Five cents per page is our average price per page for all printed copies of all our journal.) As a result of using this formula and our desire not to place too great an economic burden upon the library whose practice is not to pass costs on to patrons, the average increase in subscription prices to institutions was $3.65. In all cases the photocopy fees averaged less than one cent per text page published in 1972, however the actual license was to be effective for photocopying materials from Volume 1 through the 1973 volume of the journals. This amounts to thousands of pages for each journal, thus making the average photocopying price per page extraordinarily minimal.

The license fee would apply to single copy photocopying only, as librarians seemed to concede that they do not permit multiple copies. However, to facilitate dissemination where multiple copies were needed, the library was permitted to do so upon remittance of 5¢ per page per copy.

The resulting institutional license fee was too minimal to cover income losses in cases of the interlibrary loan system, which absolutely replaces library subscriptions. To charge a flat rate for every library, great and small, sender or receiver of interlibrary loan copies, would be inequitable. Since the interlibrary loan system already provided for the administration of enumerating individual articles, it seemed reasonable that these "lending or sending" libraries could more equitably be licensed on a pay as you go basis.

On July 31, 1972, Dr. Martin Cummings, Director of the NLM replied to our licensing plan (Ex. 6) with the following: “It is our position that we would accede to a rise in price based on an institutional rate which would be applied 'to all libraries, great and small', but could not accept the implication that a license for photocopying is necessary. We would be pleased to renew our subscriptions at the individual rate, or at an institutional rate which does not include a license for photocopying. If you insist upon tying the renewal of our subscriptions to payment of a license fee, however, we shall have no option other than to let them lapse."

This statement from Dr. Cummings, his similar statement of July 31, 1972 (Ex. 7), along with published statements by the American Library Association, The Special Libraries Association, and the Medical Libraries Association (Ex. 8) in response to our licensing plan, brought forth a deluge of letters from librarians threatening a boycott of W&W journals on the basis that a license for photocopy was not necessary.

WE WITHDRAW OUR LICENSING PLAN Because such a boycott would affect both The Williams & Wilkins Co. as well as the professional societies of which we publish not only in subscription income but also in the indication by the National Library of Medicine that it would exclude our journals from listing in Index Medicus (Ex. 9), we had no alternative but to accept the position advocated by the NLM.

On October 2, 1972 we again sent letters (Ex, 10) to all of our customers and friends describing our new position as follows: "In order to allow the NLM and all libraries to subscribe to W&W journals at increased rates and include them in Index Medicus, we now accept the NIH-NLM position. Our new institutional rates which we shall continue to request shall have no connection whatever with a license to photocopy, implied or otherwise. In short, libraries may continue to supply their users with royalty free single-copy reproductions of W&W journal articles as they have done in the past. As stated many times, we have no desire to obstruct the dissemination of scientific information between library and scholar, which would certainly be the result of cancellation of subscriptions. Further, in the same spirit we are, again without prejudice, withdrawing our proposal for the five-cents-per-page interlibrary loan fee until the appeal of our case is heard."

A letter of similar content (Ex. 11) was again mailed to all libraries on January 11, 1973.

We stand ready and willing to reinstate the license to photocopy as a part of the institutional subscription price as and when Commissioner Davis' opinion is confirmed in the appeal of our case before the Court of Claims. Furthermore, we have developed a similar type plan to deal with the problems connected with the Interlibrary Loan procedures. The salient points of this plan are described in our letter of April 30, 1973 to Dr. Martin Cummings (Ex. 12). This implementation of the Interlibrary Loan plan also awaits the outcome of our lawsuit in the Court of Claims.

STATISTICAL PROOF OF MARKET LOSS Although common sense would tell one that the making of photocopies of millions of pages of articles appearing in scientific periodicals would have an adverse effect on the sale of subscriptions, it has been difficult in the past to statistically prove this contention. However, library subscriptions to Williams & Wilkins journals for the past three years now show beyond a reasonable doubt that the Interlibrary Loan procedure is damaging our market.

In 1971 we had 24,217 library subscriptions to our journals; in 1972, 24,502; and as of July 1, 1973, 23,363.

As the figures indicate, there was little library circulation growth in '72 compared to '71, and the current '73 figures indicate our circulation will actually decrease by about 600 subscriptions among libraries.

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 emergence of the Community Hospital Library, but libraries are purchasing smaller numbers of journals, certainly of Journals published by Williams & 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, i but not in the best interests of Williams & Wilkins library circulation. We recently surveyed a random sampling of librarians who had cancelled their subscriptions and asked how they intended to service patrons who might want to use the cancelled journal. Invariably, the replay was, "by means of interlibrary loan," which means one library supplying another with a photocopy. If this trend continues, we could experience a 50% decrease in library circulation over the next five years while the number of different 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 interests 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.

Other figures which we might sight fail to show the same precise cause and effect relationship as is shown by reduction in library subscriptions. For example, we believe that persons who live in the United States and who do not receive a journal as a part of their membership in a sceintific society are the ones most likely to photocopy rather than become or to remain subscribers to the journal. This belief is borne out by the fact that this class of subscribers has actually decreased in 1973 as compared to 1972 with 11 of the journals which we publish and this despite the fact that we have greatly increased our promotional efforts. However, on the other hand, 15 of our journals have responded to our intensified promotion and in these instances the number of domestic non member subscribers has increased.

The following clipping from the July 20, 1973 issue of Science points out the economic pressure to photocopy rather than to subscribe.

THE PRICE OF BOOKS The price of scholarly books has increased drastically in recent years. The books reviewed in Science as of 1 June cost 5.0, 5.3, 6.3, 7.2, 7.7, 8.8, 8.9, and an

1 For a description of Interlibrary Loans for Hospital Libraries see. Chap. 15_of Library Practice in Hospitals- A Basic Guide, edited by Harold Bloomquist, et al, The Press of Western Reserve University, 1972.

incredible 11.0 cents per page. As the cost of copying has dropped in recent years, one can copy a book at 5 cents a page in most libraries on public copiers and, by copying two pages at a time, reduce the cost to 2.5 cents per page. Of course, this is an infringement of the copyright but, at today's prices, a practice that will become increasingly common. Book publishers appear to be urgently in need of technological advances that will cut the cost of production.

DAVID LESTER, Psychology Program, Stockton State College, Pomona, N.J., Science, Vol. 181.

We fear that no technological advances can cut the cost of production sufficiently to make up for the fact that the photocopy at present bears no part of the editorial and composition costs which are incurred before a single copy can be reproduced.

New Technological Uses of Copyrighted Works 2 : Until the last decade, the vast majority of library resources were in printed form. Library procedures were accomplished using paper products, with an occasional assist from the telephone. The recent proliferation of new media for packages of information has been surpassed only by the rapid birth and growth of technologists concerned with transmission, description, identification and retrieval of these information packages.

Libraries are involved in every phase of information processing from identification and ordering through retrieval and dissemination.

Examples of some current and future library-usable technologies : 1. Facsimile Transmission

Facsimile transmission devices can rapidly transmit exact copies of information over long distance network transmission points. While the systems currently on the market are costly and not quite compatible to one another, it is reasonable to believe that problems will be overcome in the future and could provide a working system for the rapid transmission of materials from one library to another. 2. Satellites

NASA and HEW are jointly exploring the use of experimental satellites for the exchange of information; one of the tests will involve the exchange of interlibrary loan materials. 3. Video Telephones

Video telephones which display pictures from one telephone to another are presently in operation. Certainly future technological improvements will bring about decreased operational costs and hard copy reproductions of video displays.

We believe that these few examples of new technologies in information dissemination should be the subject matter of study for the National Commission on New Technological Uses of Copyrighted Works proposed in Title Il of S. 1361.

We are in favor of Bill S. 1361 as submitted, with some amendments for the sake of cl ity. 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. U.S. will aid in pointing the way in this area.

THE WILLIAMS & WILKINS Co.,

Baltimore, Md. EXHIBIT 1

TO OUR FRIENDS AND CUSTOMERS : On February 16, 1972 a Commissioner of the United States Court of Claims issued an opinion sustaining our claim for copyright infringement resulting from the unauthorized reproduction of our copyrighted materials on photocopying machines in certain Government libraries. The Commissioner held that we are entitled to "reasonable and entire compensation.” We have prepared a digest of the Commissioner's opinion, a copy of which

2 See "Advanced Technologies/Libraries" published by Knowledge Industries, Inc. 1971-72.

3 Also see Chap. 16 Health Sciences Information Retrieval Systems Library Practice in Hospital-A Basic Guide Edited by Harold Bloomquist, et al. The Press of Case Western Reserve University, 1972.

is enclosed with this letter. We believe that you who are deeply concerned with the health of scientific journals will read this with interest.

Although the Government does have a right to carry the proceedings further, it is, of course, our hope that this will mark the end to four years of litigation to establish the right of medical journals to remain viable so that they might continue to serve the scientific community.

Commissioner Davis' statement, "the plaintiff does not seek to enjoin any photocopying of its journals” should once and forever allay the fears of libraries and their patrons that our suit was aimed at the curtailment of photocopying (see p. 6 of the Report of the Commissioner).

Another concern of the libraries has been that a complicated and costly system of record keeping would be required to handle the payment of royalties to copyright owners. Nothing could be further from the truth. We have developed a simple and workable plan whereby libraries would be permitted to make single photocopies upon payment of a reasonable annual license fee. No record keeping or accounting would be involved. At the same time the plan recognizes that the cost of publication should be spread in a fair manner among the users of medical and scientific publications, including photocopiers, to avoid even higher subscription costs.

We hope that Government libraries as well as other public and private institutions will work with us toward a solution which gives proper balance to the public right to the flow of scientific information and the need of the author or publisher to compensation for having made the information available.

We welcome comments or questions from our many friends in the scientific world in reference to this matter which is of such vital importance to us all. Most sincerely,

WILLIAM M. PASSANO,
Chairman of the Board.

EXHIBIT 2

DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE,
NATIONAL INSTITUTES OF HEALTH,

March 7, 1972.
To: Resource grants grantees.
From : Associate director for extramural programs, NLM.
Subject: Payment of royalties to publishers.

1. On February 16, 1972, a Commissioner of the United States Court of Claims recommended to that Court that the plaintiff in the case of the Williams & Wilkins Company v. the United States is entitled to recover reasonable compensation for infringement of copyright. The Williams & Wilkins Company publishes 37 medical journals and has sued the United States Government alleging that the National Library of Medicine has infringed the copyright that Williams & Wilkins holds on four of those journals, namely Medicine, Journal of Immunology, Gastroenterology and Pharmacological Reviews. The alleged copyright infringement is said to have resulted from the practice of the National Library of Medicine in supplying photocopies of articles from those journals.

2. The recommendation of the Commissioner will now be considered by the full Court of Claims and in all probability will ultimately be carried to the United States Supreme Court. Accordingly, a final decision will not be forthcoming for some time.

3. The Williams & Wilkins Company, following the recommendation of the Commissioner of the United States Court of Claims has approached several libraries requesting royalty payments from the libraries for the right to photocopy articles from the journals. Conceivably, other publishers may do the same.

4. The expressed purpose of this memorandum is to inform you that grant funds from the National Library of Medicine must not be used for royalty payments to publishers without prior approval from the National Library of Medicine. This matter is now under intensive study at various levels and will be considered by the National Library of Medicine's Board of Regents on March 28, 1972. You will be kept informed concerning this matter but until further notice, you are not authorized to utilize grant funds for payment of royalties to any publishers.

L. L. LANGLEY, Ph. D., Associate Director for Extramural Programs.

EXHIBIT 3

The Williams & Wilkins Company v. The United States

A STATEMENT OF FACT AND FAITH

We, as a leading publisher of medical books and journals, are dedicated to the concept of the proper dissemination of medical knowledge.

In 1968 we filed suit against the United States Government for infringement of certain copyrights in medical journals resulting from the unauthorized reproduction of our copyrighted materials by photocopying equipment. In the Report of the Commissioner to the Court of Claims (February 16th, 1972), the following facts are reported :

(1) Article 1 of the copyright statute says that the copyright owner shall have the exclusive right: (a) to print, reprint, publish, copy and vend the copyrighted work ..."

(2) Each article in a journal is protected from infringement to the same extent as the entire journal issue.

(3) The Williams & Wilkins Company is entitled to recover reasonable and entire compensation for infringement of copyright.

These are the facts of the court case, but the implications may well be causing grave concern to librarians and the users of libraries. Let us make our position clear. We are by no means going to halt the proper dissemination of medical knowledge; our ideals now are the same as formerly—to serve the medical and science communities to the best of our abilities.

There will be no halt to the photocopying of material, as such a halt would indeed be harmful to the dissemination of knowledge. Neither will there be an unmanageable, unwieldy and costly system of record-keeping of photocopied materials as such a system would be detrimental to the library profession.

Instead, we have worked out a simple plan based on the idea of a reasonable annual license fee for the right of copying our materials. In this way, the librarian will be licensed to photocopy copyrighted materials without infringing copyright law, and the publisher will be recompensed for the use of his materials.

We are hopeful that this statement will allay any fears which librarians or library users may be harboring. We welcome your comments and questions, and conclude by assuring you of our good faith and commitment to the medical communities and the library profession.

THE WILLIAMS & WILKINS Co.,

Baltimore, Ma.

EXHIBIT 4

A STATEMENT TO LIBRARIANS FROM THE WILLIAMS & WILKINS Co. The Wiliams & Wilkins Company has always charged the same subscription price to libraries that it charges to individuals despite the fact that for many years it has been customary for publishers to charge institutional subscribers to journals a higher subscription rate than that paid by individual subscribers. The concept of special institutional rates evolved from the idea that the copy of a journal owned by a library or other institution serves many more readers than does the copy owned by an individual. In light of this, the higher rate is charged to spread fairly the ever-increasing costs of publication among all those who use the journal and to components for possible loss of individual subscription revenue. If uncompensated, this loss is suffered not only by the publisher, but by those professional societies dependent on income from their journals.

Another aspect of multiple use is the photocopying of material contained in a journal and its subsequent distribution to library users. By allowing the use of photocopying equipment, librarians effect increased use and readership of the journal. The journal paid for by one institutional subscription is thus, through photocopying and multiple exposure, used far more than the journal paid for by an individual.

We have always felt that photocopying without the consent of the copyright owner was against the law. This view has not been confirmed in the first case ever brought on the issue, a suit filed against the United States Government by The Williams & Wilkins Company.

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