in the recording .' (Emphasis added.) It is clear from this language that the exclusive right accorded by this bill does not extend to the reproduction of the sounds themselves, as, for example, by playing a sound recording over the broadcast media." Letter from Deputy Attorney Richard D. Kleindienst to Senator James O. Eastland, April 21, 1971. We trust the Committee will note in its report that it is equally clear that the exclusive right would not extend to reproduction of the sounds themselves by playing a sound recording on an automatic phonograph. S. 646 is most vulnerable in that it creates a complete monopoly on behalf of the sound recording copyright owners, the record and tape manufacturers who are relatively few in number. As the activities of the unauthorized copyists testify, recent technological advancement has made economically feasible activities which previously have not been possible. There is no reason to conclude that such technological advancement is going to stop at the present moment; indeed, it is more likely that advances will continue to be made. The purpose of the copyright power is not to forclose the public from enjoying the bene fits of these advances or to prevent advances from being made but rather to assure that authors are justly compensated for their creative efforts. When legislating to assure this compensation, Congress must not lose sight of the fact that the purpose of the Copyright Clause is "To promote the Progress of Science and useful Arts," not to stifle it. In our opinion, the objec tionable aspects of S. 646 in this regard can be eliminated, or at least greatly moderated by the addition of a compulsory licensing provision. We see no reason why a compulsory licensing system could not be developed which would both maintain freedom for making new uses of sound recordings and insure a fee large enough to provide fair compensation for the sound recording copyright owner. Evidently, this idea, in undefined form, was before the Senate Judiciary Committee when it considered S. 646, but the concept was dismissed with only brief comment. Senate Committee on the Judiciary, creation of a Limited Copyright in Sound Recordings, S. Rep. No. 92-72, 92d Cong., 1st Sess. 6 (1971). We find the reasons stated in this report and other places to be completely unpersuasive It has been argued that to permit a compulsory license would lead to the destruction of the recording industry. It is unlikely that this would occur any more than the creating of a compulsory licensing system in 1909 has led to the disappearance of music composers or publishers. Indeed the compulsory licensing provisions of the 1909 Act were the direct result of the concentrated ownership of the great portion of contemporary copyright music in several monopolies, "The Music Trust." The argument that recording companies must make tremendous investments does not cut in favor of there being no compulsory license. it merely implies that the license fee should be substantial but not anticompetitive. The Senate Committee Report indicated that sound recordings were different from musical compositions because sound recordings are "fiinished products:" Ibid. It is obvious that this distinction is of questionable validity. In view of available technology it is readily apparent that it is possible to use sound recordings not only as finished products but also as basic materials for making other products. By doing this, copyists could indeed develop valuable types of competition, ones which would not be merely parasitic exploitation. For example, if copyists were allowed to purchase via compulsory license the right to copy sound recordings they could assemble sound recordings taking from existing sound recordings the more successful pieces. This would furnish the consumer with the opportunity to purchase in one recording a series of desired pieces. There would appear products which would contain renditions by performers not all of whom were employees of the same recording company, which products would be a valuable addition to the market place. There are doubtless also many possible technical applications of existing sound recordings which involve combinations of electronic and technical forms which have not as yet been envisioned. A corrolary to the above is the fact that a compulsory licensing system would put pressure on existing sound recording manufacturers to improve the quality of their products. It is well known that traditionally the manufacturers of sound recordings have chosen to include in their products many pieces which they had every reason to suspect would not be successful. By tying these pieces with those for which they do anticipate success, the manufacturers have successfully increased the amount which the consumer must pay to obtain that which he desires. Now that the "flip side" is no longer a technological necessity, the Congress certainly should not use the power of the Copyright Act to perpetuate monopoly exploitation of the consuming public. One of the arguments, more emotional than objective, that is made against the establishment of a compulsory licensing system is that the unauthorized copyists are "pirates" and simply are not the kind of people who deserve the benefits of a compulsory licensing system. We wish only to point out that this is really an irrelevant issue. The purpose of creating a compulsory licensing system would not be to confer benefit upon the copyists but rather to confer upon the consuming public the benefits of competition. The interest of the automatic phonograph manufacturers in securing for the public the advantage of such competition arises from the fact that our customers, the automatic phonograph operators, are from the standpoint of dollar volume a significant segment of the consuming public. Consequently, we urge the Committee in evaluating S. 646 to assure that the scope of the monopoly created for sound recording manufacturers is no broader than necessary to prohibit bootleg copying. Secondly, we urge that the Committee recommend the amendment of the bill to include a statutory compulsory licensing system so that the benefits of competition will be afforded to consumers and the potential of technological innovation will not be lost. Very truly yours, KIRKLAND, ELLIS, HODSON, CHAFFETZ, AGENCY REPORTS THE LIBRARIAN OF CONGRESS, Hon. EMANUEL CELLER, Chairman, Committee on the Judiciary, U.S. House of Representatives, Washington, D.C. DEAR MR. CELLER: This is in response to your letter of May 4, 1971, requesting our comments on S. 646, a bill to provide for the creation of a limited copyright in sound recordings for the purpose of protecting against unauthorized duplication and piracy of sound recording, and for other purposes. This bill was reported by the Senate Judiciary Committee on April 20, 1971, (S. Rep. No. 92-72) and was passed by the Senate on April 29, 1971. I am fully and unqualifiedly in favor of the purpose the bill is intended to fulfill. The recent and very large increase in unauthorized duplication of commercial records has become a matter of public concern in this country and abroad. With the growing availability and use of inexpensive cassette and cartridge tape players, this trend seems certain to continue unless effective legal means of combatting it can be found. Neither the present Federal copyright statute nor the common law or statutes of the various states are adequate for this purpose. The best solution, an amendment of the copyright law to provide limited protection against unauthorized duplication, is that embodied in S. 646. We also support in general the language of the bill amending title 17 of the United States Code. This amendatory language draws heavily upon the language of the bill for general revision of the copyright law now pending in the Senate (S. 644). An earlier version of the general revision bill was reported favorably by your Commission in 1966 and 1967 (H.R. Rep. Nos. 2237 and 83) and was passed by the House of Representatives on April 11, 1967. The provisions of that bill dealing with unauthorized duplication of sound recordings were the same in substance as those of S. 646. In favorably reporting S. 646, the Senate Judiciary Committee adopted certain amendments, all of which were incorporated in the bill as it passed the Senate, all of which we favor. In particular, we strongly support the addition of a new section 2, removing an anarchronistic and unfair limitation on the remedies available to owners of copyrighted musical compositions against record pirates. This new section 2 also is the same in substance as provisions included in the general revision bill passed by the House of Representatives on April 11, 1967. We also endorse the interpretation of the bill, as stated in S. Rep. No. 92-72 that "this limited copyright not grant any broader rights than are accorded to other copyright proprietors under the existing title 17." Under this interpretation, any act that would be considered "fair use" of a recorded musical composition would be considered "fair use" of the recording itself, and thus outside the reach of copyright in the recording. The most fundamental question raised by the bill is its relationship to the program for general revision of the copyright law. As noted above, the revision bill now pending in the Senate has parallel provisions, and if general revision were on the threshold of enactment, S. 646 would be unnecessary. However, some fundamental problems impeding the progress of general revision of the copyright law, notably the issue of cable television, have not yet been resolved. We agree that the national and international problem of record piracy is too urgent to await comprehensive action on copyright law revision, and that the amendments proposed in S. 646 are badly needed now. Upon enactment of the revision bill they would, of course, be merged into the larger pattern of the revised statute as a whole. I should also mention that the problem of record piracy is one of immediate concern internationally, and that a draft treaty closely corresponding to the content and purpose of S. 646 was adopted by a Committee of Governmental Experts on March 5, 1971. This draft convention will be the subject of an International Conference of States to be convened in Geneva in October of this year. Favorable action on the domestic bill will not only help our negotiators but also encourage protection of our records against the growing menace of piracy in other countries. For the foregoing reasons, I recommend that your Committee give S. 646 its favorable consideration. Sincerely yours, Hon. EMANUEL CELLER, Chairman, Committee on the Judiciary, U.S. House of Representatives, Washington, D.C. L. QUINCY MUMFORD, DEPARTMENT OF STATE, DEAR MR. CHAIRMAN: This is in response to your request of May 4, 1971 for a report by the Department of State on S, 646, a bill to amend title 17 of the United States Code to provide for the creation of a limited copyright in sound recordings for the purpose of protecting against unauthorized duplication and piracy of sound recording, and for other purposes. The Department of State fully endorses and supports this Bill. The recent and growing increase in the unauthorized duplication of legitimate commercial recordings has become a matter of public concern both in this country and abroad. The widespread availability and use of phonograph record and tape-playing machines, particularly the comparatively inexpensive cassette or cartridge tape players, give added impetus to piracy of sound recordings. This trend is certain to continue and to grow unless effective legal methods to combat and reverse it are provided. At present, there is no Federal statute that expressly prohibits commercial traffic in unauthorized duplications of legitimate sound recordings. S. 646 would answer that need and would provide a satisfactory means of combatting and curbing the unauthorized duplication and piracy of sound recordings. The problem of unauthorized duplication of sound recordings is also one of immediate concern internationally. An international treaty which would include provisions that correspond closely to the content and purpose of S. 646 is presently under considertion. This treaty would give to producers of phonograms who are nationals of contracting states protection against the making, distribution, or importation of duplicates made without their consent where such acts are for the purpose of distribution to the public. The United States has played an active role in the development of the treaty, and if current plans remain unchanged the treaty will be adopted at a diplomatic conference to be held in Geneva in the fall of this year. United States ratification of or adherence to the proposed treaty depends, of course, upon enactment of a domestic law such as S. 646. Accordingly, passage of the proposed legislation is necessary to give the Department of State an effective basis for continuing its efforts to secure international protection for American sound recordings. For the foregoing reasons, the Department of State fully suports S. 646 and recommends its early enactment into public law. The Office of Management and Budget advises that from the standpoint of the Administration's program there is no objection to the submission of this report. Sincerely, DAVID ABSHIRE, Assistant Secretary for Congressional Relations. Hon. EMANUEL CELLER, OFFICE OF THE DEPUTY ATTORNEY GENERAL, Chairman, Committee on the Judiciary, Washington, D.C., June 29, 1971. DEAR MR. CHAIRMAN: This is in response to your request for the views of the Department of Justice on S. 646, a bill to amend title 17 of the United States Code to provide for the creation of a limited copyright in sound recordings for the purpose of protecting against unauthorized duplication and piracy of sound recordings, and for other purposes. S. 646 incorporates many of the provisions embodied in the bill for general revision of the copyright law (S. 644) which in similar form has been under consideration by the Congress for some years. Action on this general bill has been delayed by concern with issues unrelated to the problem of piracy of sound recordings. There has recently been a large increase in unauthorized duplication of sound recordings for profit. Under existing law sound recordings are not copyrightable. Capitol Records, Inc. v. Mercury Record Corp., 221 F. 2d 657 (C.A. 2, 1955). Under state law the record industry had been able to fashion some protection, against competitors who commercially transcribe their recorded performances, based upon the misappropriation theory of International News Service v. Associated Press, 248 U.S. 215, 236 (1918). That decision found a quasi-property right in the dissemination of news that could be protected, under the law of unfair competition, against copying by a competitor. But the continued validity of Associated Press has been questioned in the light of later judicial developments. In Sears, Roebuck & Co. v. Stiffel Co., 376 U.S. 225 (1964) and Compco Corp. v. Day-Brite Lighting, Inc. 376 U.S. 234 (1964)-both actions to enjoin imitation of unpatentable designs-the Supreme Court restricted the scope of state unfair competition remedies by limiting state regulation to labeling requirements to prevent "palming off." The Court in Compco held that: * when an article is unprotected by a patent or a copyright, state law may not forbid others to copy that article. To forbid copying would interfere with the federal policy, found in Art. I, § 8, cl. 8, of the Constitution and in the implementing federal statutes, of allowing free access to copy whatever the federal patent and copyright laws leave in the public domain" (376 U.S, at 237). A Court of Appeals has held that Sears and Compco overruled International News Service. Columbia Broadcasting System, Inc. v. De Costa, 377 F. 2d 315, 318 (C.A. 1, 1967). Under the bill, sound recordings are defined as "works that result from the fixation of a series of musical, spoken, or other sounds, but not including sounds accompanying a motion picture." "Reproductions of sound recordings" are defined as material objects in which sounds other than those accompanying a motion picture are fixed and include the parts of instruments serving to reproduce mechanically the musical work, mechanical reproductions, and interchangeable parts, such as discs or tapes for use in mechanical 'music-producing machines. Copyright protection under the present Copyright Act (17 U.S.C. 1 et seq.) is extended prospectively to sound recordings. The exclusive right created thereby is limited to the duplication in tangible form of the specific recorded performance copyrighted: it does not include imitation or simulation of that performance. The rights conferred are limited in duration to twenty-eight years with the right of renewal and extension for an additional twenty-eight years. 17 U.S.C, § 24. The bill does not apply retroactively and Section 3 expressly states that it should not be construed as affecting in any way any rights with respect to sound recordings fixed before the date of enactment. It thus does not deal with recorded performances already in existence. Instead it leaves to pending or future litigation the validity of state common law or statutes governing the unauthorized copying of existing recordings. The result of making this copyright authority prospective only is to create at least one ambiguity. The bill would not directly grant any copyright protection to existing records since the new copyright in sound recordings would be applicable only to recordings made after four months after enactment of the bill. However, since the bill provides that the amendment to 17 U.S.C. 101 (e) will take effect immediately upon enactment, criminal sanctions would seem to be available to prevent further piracy of existing recordings where copyrighted music was used and the pirate does not pay the statutory royalty to the holder of the musical copyright. Whether such criminal prosecution is possible depends on the interpretation of the clause in Section 3 of the bill at page 5, lines 13–16 which reads: "* * * nothing in title 17 of the United States Code shall be applied retroactively or be construed as affecting in any way any rights with respect to sound recordings fixed before that date." It should be made clear either by amendment or committee reports whether the amendment to section 101 (e) is intended to apply to the manufacture, use, or sale after enactment of the bill of pirate recordings of records made prior to enactment. We believe that extending copyright to reproduction of sound recordings is the soundest, and in our interpretation of Sears and Compco, the only way in which sound recordings should be protected. Copyright protection is narrowly defined and limited in duration, whereas state remedies, whose validity is still in doubt, frequently create broad and unwarranted perpetual monopolies. Moreover, there is an immediate and urgent need for this protection. Not only does the creative record industry have a legitimate interest in protecting its substantial investment in the production and promotion of recorded performances, but such protection would also preserve employment opportunities for performers and encourage their future contributions to society's general fund of intellectual creations. The competition provided by the pirate record industry does not promote any of the traditional benefits of competition. Although the pirate record companies may greatly undercut the prices charged by the creative industry, their ability to do so results in large part from the fact that they do not compensate the creative writers and artists involved. Such practices discourage the investment of money and talents in new performances and has the potential to gravely injure creative recording. The bill limits the exclusive right of the ownership of a copyright in a sound recording "to the right to duplicate a sound recording in a tangible form that directly or indirectly recaptures the actual sounds fixed in the recording * * *.” [Emphasis added.] It is clear from this language that the executive right accorded by this bill does not extend to the reproduction of the sounds themselves, as, for example, by playing a sound recording over the radio. In the case of a recording of music which is itself copyrighted, the copyright granted to a sound recording by the bill would apparently be subject to 17 U.S.C. 7. Section 7 provides that versions of copyrighted works produced with the consent of the copyright owner shall be regarded as new works subject to copyright. This section, which would prevent persons from obtaining a copyright for an unauthorized sound recording, seemingly creates an issue as to whether a record manufacturer relying on the provisions of 17 U.S.C. 1(e) would be entitled to copyright his recording since he need not have the express consent of the copyright owner of the sheet music. This follows from the provision in section 1(e) that, when the owner of a musical copyright has permitted anyone to record his music, any other persons may make similar use of the musical work upon payment of a royalty of two cents per recording. It is likely that a court would find acceptance of the royalty to imply consent, nevertheless we believe that this ambiguity should be removed. We suggest an amendment of 17 U.S.C. 7 as follows: "Compilations or abridgments, adaptations, arrangements, dramatizations, translations, or other versions of works in the public domain or of copyrighted works when produced with the consent of the copyright proprietor of such works or, in the case of sound recordings, manufactured in compliance with section 1, subsection (e), of this title, or works republished with new matter, shall be regarded as new works subject to copyright ** *." [Material in italic is new.] Criminal prosecution of tape and record pirates under existing copyright law |