which would benefit the author. I think all individuals are convinced that this is a necessary revision in the present law. (5) The compulsory licensing rate.-The final disputed issue-a refreshingly simple one in some ways and an extremely complicated one in others-is whether the present statutory 2-cent rate for compositions recorded under a compulsory license should be raised to 3 cents. This is essentially an economic issue, and your committee will undoubtedly receive substantial quantities of statistical evidence bearing on it. My comment on the question is summed up in the following quotation from the Register's supplementary report: As we see it, the statutory rate should be at the high end of a range within which the parties can negotiate, now and in the future, for actual payment of a rate that reflects market values at that time. It should not be so high, however, as to make it economically impractical for record producers to invoke the compulsory license if negotiations fail. In closing I should like to say one thing more. It is certainly true that copyright law revision in this country is long overdue, and that it cannot be put off much longer without doing serious damage to our arts and humanities. I confess that when I became Register of Copyrights, less than 5 years ago, I did not foresee the extent to which copyright has emerged as one of the most important elements in the communications revolution that is changing our lives. Those 5 years have enabled us to see what copyright really means in the communications field, and they have also shown us some of the ways the copyright law must change to meet this unequaled challenge. It is exciting to have had a part in the development of what will surely prove one of the most significant and far-reaching legislative measures to be considered by this Congress, and I am grateful to have been given the opportunity. Mr. Chairman, I should like to emphasize another point. We in the Copyright Office are considering recommendations for revisions, and we hope to do so until the bill is finally submitted to the floor of Congress for vote. We hope we can be of assistance in offering explanations, in further drafting, and in cooperating with the subcommittee in any possible way. Thank you. Senator MCCLELLAN. Well, Mr. Kaminstein, I think you will have that opportunity. I do not see any possible way of getting this bill processed through the committee and on the Senate Calendar before the end of this session. We may succeed in doing it, but obviously, as you have demonstrated from your testimony, there is a great deal at issue in the details of the legislation, and many of these issues are controversial. They will have to be studied, and they will have to be studied by those of us who know very little about the actual workings of our copyright laws. We will endeavor to consider all the points of view and to resolve them by revising the bill where needed to meet what we think are the demands of our time in this field. So I think it is well for you, particularly in the position you occupy, to follow these hearings closely and to give us the benefit of your counsel and suggestions as we go along. You may very well have some recommendation of changes in the provisions of the bill. I do not know whether anybody on the committee has any preconceived ideas on these hearings-I know I have not-but merely desire to bring up to date an antiquated law to meet the modern needs and demands of our time. I hope we can do it, as you said, so as to benefit both those who create these instruments of culture and education, and so forth-in other words, the authors-as well as to accommodate their users. Certainly the man who dedicates his life to this creative service should be adequately paid for it. So we really have problems. Mr. KAMINSTEIN. Mr. Chairman, I am sure you will find it an arduous task, but I think you will also find it a very interesting and enjoyable experience, once you have gotten into it. Senator MCCLELLAN. I think I would find it so if I could give it that time. But I tell you, with our responsibilities here today, we have to rely largely upon you people who are competent in the particular field when you come before us and testify. I can appreciate that in this instance as in most all others, there will be differences of opinion. We will just have to use our best judgment in resolving these differences. Does the young lady wish to add anything to what Mr. Kaminstein has said? Miss RINGER. No, thank you, Mr. Chairman. I am very grateful for your remarks, and I endorse everything that has been said. Senator MCCLELLAN. I will tell you what you do. You keep counseling him, then. Miss RINGER. I certainly will. Mr. KAMINSTEIN. I hope she will have an opportunity to say something later on, Senator McClellan. We shall be here. Senator MCCLELLAN. As I said to you, any time that you feel you would like to make any comment or file any statement, we shall be glad to receive it. Thank you very much. Mr. KAMINSTEIN. Thank you, Mr. Chairman. Mr. BRENNAN. In your report in 1961, Mr. Kaminstein, you state: We have previously mentioned the fundamental principle of copyright that the author should have the exclusive right to exploit the market for his work except for where it conflicts with the public interest. Would you develop for the record the relation between this statement and your position on section 113 of the bill, relating to compulsory licensing. Mr. KAMINSTEIN. Mr. Brennan, the 1961 report states the general principle which was enunciated in that report accompanying the 1909 bill. We feel that that principle still holds, but accommodation is required where you have a sharp conflict such as that reflected in the compulsory licensing provision. There has been a compulsory licensing provision in the law since 1909, and in our 1961 report we recommended that the compulsory license provision be removed. Over the course of the last 4 years we found that the general sentiment was that people could live with this compulsory license; in fact, that the industries concerned felt that there might be total disorganization if the compulsory license was removed. We thus have come from our position in 1961 of pure principle to one in 1965 where people have said that this may be something that is beneficial. The argument now has really become one of economics: Is the 2-cent rate adequate after all these years, or should it be raised to 3 cents, especially since it is an upper limit? Mr. BRENNAN. Thank you. Mr. KAMINSTEIN. There are also other changes, along the same lines, that we have made in the bill as opposed to the original recommendations. Senator MCCLELLAN. Thank you very much. Mr. KAMINSTEIN. Thank you. Senator MCCLELLAN. Who is the next witness? Mr. BRENNAN. Mr. Toomey and Mr. Diamond, of the American Bar Association. STATEMENT OF JAMES E. TOOMEY, CHAIRMAN OF THE AMERICAN BAR ASSOCIATION SECTION ON PATENT, TRADEMARK, AND COPYRIGHT LAW; ACCOMPANIED BY SIDNEY A. DIAMOND, CHAIRMAN, COPYRIGHT DIVISION OF THE PATENT, TRADEMARK, AND COPYRIGHT SECTION Senator MCCLELLAN. Gentlemen, do you have a prepared statement? Mr. DIAMOND. Only Mr. Toomey does, Mr. Chairman. I am Mr. Diamond. I do not have any prepared statement. Senator MCCLELLAN. All right, Mr. Toomey. You may identify yourself, and Mr. Diamond, and then you may proceed with your statement. Mr. TOOMEY. I am James E. Toomey, of Oakland, Calif. I am chairman of the patent, trademark, and copyright section of the American Bar Association. I am also patent counsel of Kaiser Aluminum & Chemical Corp., of Oakland, Calif. I appear today solely on behalf of the American Bar Association, an organization of more than 120,000 lawyers throughout this country and appear for the purpose of advising the subcommittee of the ABA position on revision of the copyright laws. Senator MCCLELLAN. Very well, Mr. Toomey. Mr. Diamond, do you want to identify yourself? Mr. DIAMOND. Yes. I am Sidney A. Diamond, of New York City, Mr. Chairman. At the present time I am chairman of the copyright division of the patent, trademark, and copyright section of the American Bar Association, and I am here to accompany Mr. Toomey and offer any assistance that the committee may require. Senator MCCLELLAN. Thank you very much. All right, Mr. Toomey, you may proceed. Mr. TOOMEY. We expect to be joined by Mr. John Schulman, one of the elder statesmen of the copyright bar, who is now testifying before the House subcommittee hearing that went on at 10 o'clock this morning. Mr. Schulman has chaired the committee within the ABA which has studied the revision of the copyright laws, and from which a resolution emanated which was adopted by the American Bar Association at its meeting last week in Miami. May I say that this section itself has a membership of approximately 3,000, which includes substantially all of the active members of the copyright bar. Following is the resolution which was adopted as a result of the report of Mr. Schulman's committee and presented to the house of delegates of ABA last Thursday afternoon at the annual meeting of the association in Miami and sets forth the position of ABA: Resolved, That the American Bar Association approves the following principles as the basis for the revision of the United States copyright Act, Title 17, U.S.C.: (1) A single Federal System of copyright; (2) A basic term consisting of the life of the author plus fifty years after his death, with an extension of subsisting copyrights, and for works made for hire, the term should be seventy-five years from publication; (3) The modification of the existing statutory license for the making and distribution of phonorecords of musical works to provide greater advantages to the copyright proprietor and provide a broader recovery against infringers; (4) A form of reversion after thirty-five years, but permitting the continued use of derivative works made during the thirty-five year period; (5) Protection of sound recordings against unauthorized duplication; (6) Recognition of the doctrine of fair use; (7) Elimination of the jukebox exemption; (8) A relaxation of formalities as to notice consistent with reasonable notice and equitable treatment in the case of failure to comply; (9) Recognition of divisible interests in copyright and of separate ownership thereof; (10) Provision for judicial review of a determination by the Copyright Office; (11) Protection of foreign works, both published and unpublished, only on the basis of treaty of proclamation. And be it further resolved, That the American Bar Association opposes the following: (1) United States Government ownership of copyright; (2) Limitation of copyright by way of a manufacturing clause; and (3) Recognition of a certificate of registration as constituting prima facie evidence of the validity of the copyright. The foregoing resolution was arrived at as a consequence of extensive study by the patent, trademark, and copyright section of ABA over the past 10 years, and particularly intensive study in the past 3 years. Symposia were presented in conjunction with and as part of our section meetings in 1962, 1963, and 1964, and on two occasions this year, including the Miami meeting last week, in which the principal provisions of the proposed legislation were considered and debated. The first 10 items enumerated as approved in principle by the ABA are embodied in the bill before you. Item 11 is a variation on section 104 of the bill. Further, the matters disapproved in the ABA resolution are departures from the bill. The first item of the principles opposed would vary section 105 of the bill, the second item disapproved would eliminate section 601 of the bill, and the third item disapproved would vary section 409 (c) of the bill. Senator MCCLELLAN. If I understood you correctly, there are only three particulars in which the resolution of the bar association challenges the provisions of the bill. Mr. TOOMEY. There are four. This item 11 is a variation also. There are three propositions which are stated in disapproval of the bill. Item 11 is a departure from the bill. Senator MCCLELLAN. This indicates to me, then, that you approve of about four-fifths of the bill. Mr. ToOMEY. Yes, Senator. Senator MCCLELLAN. Now, let us take the disapproval and ask you to state your reason briefly. You say you disapprove. Mr. Diamond, if you wish, take your items 1, 2, and 3, where the bar association opposes, as has been identified here in this statement, and give us the reasons why, briefly. Mr. DIAMOND. Yes, Mr. Chairman. Let me preface my remarks, if I may, by saying that although this portion of the resolution is expressed in terms of opposition to certain principles, that does not necessarily mean that we are opposed to the bill, because the bill in some respects also follows this same line. Specifically, as to item 1, "The U.S. Government ownership of copyright," the American Bar Association opposes that. It has been a tradition of our law-and you will find it in the present 1909 act which is now applicable-that there shall be no copyright on works of the U.S. Government, on the basic philosophical theory, if you will, that the same sovereign power of the U.S. Government which grants copyright should not grant any such exclusive right to itself in the products of its own officers and employees in the scope of their official duties. The bill now before you, in section 105, continues that same basic approach, but with certain specific limitations. There is a definition in section 105 of the bill before you which says that A "work of the United States Government" is a work prepared by an officer or employee of the United States Government within the scope of his official duties or employment. The supplemental report of the Registrar of Copyrights explains that the section 105 is still limited in order to make it possible for works, for example, produced by an independent contractor under an arrangement with the Government to be subject to copyright protection. The American Bar Association resolution simply states the broad general principle of opposition to the U.S. Government ownership of copyright. On this specific detail of whether it is proper to define the work of an independent contractor under a Government contract as a work of the U.S. Government, there was no clear consensus of the American Bar Association, and the resolution therefore does not speak on that specific issue. Senator MCCLELLAN. What about the Government receiving transfers of assignments of copyright? Do you oppose that provision? Mr. DIAMOND. The specific detail, again, has not been passed upon by the American Bar Association, Mr. Chairman. Senator MCCLELLAN. Then, how do you take a position of opposition, when you say nothing is specific? Mr. DIAMOND. The entire resolution was deliberately drafted in terms of general principles. I don't think there is a single item which goes into the type of detail about which you are now inquiring-not that I am objecting, of course, to your inquiry. Senator MCCLELLAN. Now, let us take section 105 as an illustration. Would you strike that entire section? Mr. DIAMOND. Certainly not, Mr. Chairman. We are in favor of the principle on which section 105 is based. Senator MCCLELLAN. Then, what would you substitute for it? Mr. DIAMOND. We have no substitute to offer at this stage, because the American Bar Association, Mr. Chairman, speaks only in terms |