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4. Exclusive licensing of copyrighted works for use in one

STI system could have two undesirable results: (1) It
would prevent other systems from attaining comprehensive
coverage of the whole body of works in a particular
field, thus putting researchers to the inconvenience of
searching through several systems; and (2) It would tend
to foster the monopolization of STI system services to one
or two giant systems.

The first two of these special features would seem to indicate that the copyright law should recognize, as it now appears to do, that the conversion of copyrighted works into machine-readable form and their input and output in the operation of computerized STI systems require the consent of the copyright owner. The last two of these special features would seem to indicate that there may be a need to establish, at least in some situations, either voluntary "clearinghouse" systems for the blanket licensing, on a nonexclusive basis, of the use of copyrighted works in computer systems, or a statutory system of compulsory licensing for the use of such works in those systems.

A.1.3.10 Clearinghouses and Compulsory Licenses. The clearinghouses operated by the American Society of Composers, Authors, and Publishers (ASCAP) and by Broadcast Music, Inc. (BMI) for the blanket licensing of public performances of musical compositions, have frequently been cited as possible models that might be adaptable for the blanket licensing of reproduction rights in journal articles and other works. The operation of these two organizations and the factors that have contributed most importantly to their effectiveness are outlined in this report. Some of the major problems that would be faced in attempting to establish a clearinghouse for the reproduction of journal articles are mentioned and some approaches for meeting those problems are suggested in the report.

Provisions for a compulsory license for the recording of copyrighted musical compositions were enacted in the Copyright Act of 1909. That compulsory license was designed to prevent the establishment of a monopoly in making recordings of music under exclusive licenses that would otherwise have been granted. One of the practical consequences of these compulsory licensing provisions, incidentally, has been the voluntary establishment by music publishers of a centralized agency (the Harry Fox Office) for the issuing of negotiated licenses on standard terms for the music of most of the major publishers.

The Copyright Act of 1976 provides for compulsory licenses of a different character in three additional situations: for the performance of music in jukeboxes, for CATV retransmissions of broadcasts of copyrighted material, and for the use of certain works in noncommercial broadcasting. These three compulsory licensing systems are examples of blanket, nonexclusive licensing established by statute. The purpose of the compulsory license in these three instances is not to prevent a monopoly, but is to avoid the difficulties and high transaction costs that would be entailed if the user groups had to obtain licenses from and pay fees to the individual copyright owners.

If a voluntary clearinghouse satisfactory to both copyright owners and users can be organized, that would seem to be preferable over a statutory compulsory licensing scheme. Among other reasons mentioned for this preference, perhaps the most important is the greater flexibility of a voluntary arrangement and its easier accommodation, by negotiations between the groups concerned, to experience and changing circumstances.

A.2

ADAPTATION OF THE COPYRIGHT LAW TO NEW TECHNOLOGIES

A.2.1 IN GENERAL

Since the enactment of the first United States copyright statute by the First Congress in 1790, the copyright law has had to be added to, modified, revised, and interpreted to meet changing conditions brought about in large part by new technological developments. The statutes were completely rewritten in 1831, 1870, 1909, and just recently, in 1976. In the intervals between those comprehensive revisions, the statutes were amended in some particulars, and they were further adapted to changing conditions by judicial interpretation and, to some extent, by business practice.

Adaptation of the copyright law to changing conditions brought about by new technology has been especially necessary in the twentieth century, primarily for the obvious reason that the rate of technological development has accelerated rapidly. And, because of the long interval of more than 65 years from the 1909 revision, with the statute being amended during that period in only relatively minor respects, the courts have been called upon to take a large part in adapting the law, by interpretation, to meet the problems emanating from the new technologies.

An analysis of the more significant court decisions dealing with those problems, particularly as the decisions reveal the basic principles and philosophical approaches adopted by the courts in construing the copyright statues, may contribute to an understanding of how the copyright law has been shaped and reshaped to fit new conditions flowing from technological innovations, and may be useful in indicating approaches to the solution of similar problems that may be raised by the newer and emerging technologies of today and the foreseeable future.

In this section we shall seek to show how the copyright law has been adapted to resolve the questions raised by the new technologies of the twentieth century that were not dealt with specifically in the statutes because they were just beginning to emerge or were unknown when the statutes were enacted. Among these new technologies are:

motion pictures, silent and with accompanying sound;
sound recordings and sound reproducing mechanisms;
radio and television transmission and reception;

rapid, effecient copying machines;
-- cable television systems;
-- microfilm, videotapes, and computer programs.

We shall review principally the adaptations of the copyright law in court decisions, but some attention will also be given, in passing, to industry practice and to the regulations and practices of the Copyright of fice. In addition, we shall summarize the adaptation to the several new technologies reflected in the copyright law revision enacted in 1976.

A.2.1.1 Philosophical Basis of Copyright. To understand how the copyright law has developed and has been adapted to meet new issues, it is important to keep in mind the fundamental philosophy underlying copyright. The basis of copyright is stated in broad terms in the clause of the United States Constitution empowering Congress

"To Promote the Progress of Science and useful Arts, by
securing for limited Times to Authors and Inventors the
exclusive Right to their respective Writings and Dis-
coveries."

We deduce from the Constitution that the end purpose of copyright is to "promote the progress of science and useful arts," that is, to stimulate the growth and spread of learning and culture for the benefit of society at large; and that, as a means toward achieving this end, authors are to be given exclusive rights in their works; thus, the creation and public dissemination of works of authorship are to be fostered by giving to authors the legal means to realize the economic value of their contributions to society.

The United States Supreme Court has expressed the underlying purpose of copyright as follows:

"The primary object in conferring the monopoly (of copyright) lie(s) in the general benefits derived by the public from the labors of authors. A copyright, like a patent, is 'at once the equivalent given by the public for benefits bestowed by the genius and meditations and skill of individuals, and the incentive to further efforts for the same important objects." (Fox Film Corporation v. Doyal, 286 U.S. 123, 1932)

"The economic philosophy behind the clause empowering Congress
to grant patents and copyrights is the conviction that en-
couragement of individual effort by personal gain is the best
way to advance public welfare through the talents of authors
and inventors in 'Science and Useful Arts'. Sacrificial days
devoted to such creative activities deserve rewards, commen-
surate with the services rendered.'
(Mazer v. Stein, 347 U.S. 201, 219, 1954)

We move on now to a review of how the courts have dealt with the issues raised by the new technologies for which the statutes then in effect made no specific provisions.

A.2.2 MOTION PICTURES

Motion pictures have been a prime example of a new technology raising questions, as to the application of the copyright law, that the statutes currently in effect did not deal with specifically. The courts were called upon to resolve these questions in various situations involving (1) the status of motion pictures as copyrightable subjectmatter, (2) the use of copyrighted literary and musical works in motion pictures, (3) the rights embraced in the copyright in motion pictures, and (4) the copyright status of motion picture sound tracks.

A.2.2.1 Copyrightability of Motion Pictures. The question of whether motion pictures could be copyrighted arose at the beginning of the twentieth century when the motion picture art was in its infancy. The pertinent statute then in effect (Section 4952 of the Revised Statutes) had been enacted (in 1870) when motion pictures were unknown. The statute did specify, among the categories of copyrightable works, "any photograph or negative thereof." In the case of Edison v. Lubin, decided in 1903, the maker of a series of 4500 photographs which together were to be projected through a machine to show, as a moving picture, the launching of Kaiser Wilhelm's yacht, asserted copyright in the series of pictures as a single "photograph" under the statute. In the District Court (E.D. Pa., 119 F. 993), it was held that the statute did not extend to "an aggregate of photographs," but that each individual photograph would have to be registered separately and to bear the prescribed notice of copyright in order to be protected. On appeal the Circuit Court reversed, holding that the series of photographs, which were all on one continuous strip of film, was copyrightable as one "photograph" within the statute (3d Cir. 122 F. 240).

The differing opinions of the District and Circuit Courts in this case are illustrative of two opposite judicial approaches to the application of the terms of the copyright statute to a later technological innovation. The District Court said:

"It may be true, as has been argued, that this construction of
the section renders it unavailable for the protection of such
a series of photographs as this; but if, for this reason, the
law is defective, it should be altered by Congress, not
strained by the courts. I understand that when this act was
passed these groups of consecutive photographs were practi-
cally speaking, not in existence; and, in the absence of any

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