Senator SPECTER. Thank you very much. I would like now to turn to George David Weiss, president of the Songwriters Guild of America. Mr. Weiss. STATEMENT OF GEORGE DAVID WEISS Mr. WEISS. Thank you, Senator. I am certainly grateful, like the other people, for the opportunity to talk about this issue. My name is George David Weiss. I am president of the Songwriters Guild of America, my position is an unsalaried one, and I am a full-time songwriter. I will submit to this committee a list of my major compositions in support of my statement that songwriting has been my major talent and sole occupation since I was a teenager, which was quite a few years ago. The pending legislation which seeks to overturn the 5-to-4 decision of the U.S. Supreme Court in Snyder v. Mills has the support of every creator whose copyrights are properly exploited by the media. Its purpose is straightforward-to close the loopholes in sections 203 and 304 by making crystal-clear that in enacting the 1976 copyright law Congress not only championed the rights of creators, but took into account the rights of those who employed the creators' talents in other media. The 1976 copyright law provides creators and users with new rights. It enlarged the term of copyright protection, it returned to authors, or their heirs, the copyrights previously assigned by them, it preserves to motion picture and record companies their ownership of derivative works. Derivative work owners who use our copyrights may continue to exploit such work as they did before the 1976 copyright law was enacted, on the same terms and conditions as existed before termination. The balancing of the equity between creators and users is indeed one of the major hallmarks of the 1976 act. New rights under copyright and new sources of income were recognized-that is, the obligation of jukebox owners to recognize copyrights; the obligation of educational TV and cable retransmitters to pay royalties for use of copyrighted music. While each of these newly recognized rights of users carries the obligation to compensate the copyright proprietor, the latter is similarly obliged to allow the user to exploit our works on a nonexclusive basis. Therefore, the benefits of our talents are truly shared. The fallacy underlying the Supreme Court's decision is its failure to recognize that Congress was focusing its attention on the creator of both the original copyright and the derivative work. It did not seek to remunerate the music publisher, who the circuit court of appeals in its unanimous decision termed the middleman. Nor is it my intention to argue, as would some, that the middleman music publisher is not entitled to the benefits of its contract with the creator. What I do argue is that Congress recognized that the middleman has received its contractual benefits. It has received just rewards for its time and investment. The middleman has been deprived of nothing. Why? One: It has been fully remunerated for at least 28 years, and in most cases, for 56 years. Two: Its initial investment has long been paid off. Three: The royalties in question accrue from the investment and continued exploitation by the record companies, not the publishers. Four: Indeed, in the overwhelming majority of cases, the original publisher of the song has disappeared, the shares of stock having been sold to a conglomerate at a handsome profit-a profit, mind you, in which the songwriter whose copyright is sold does not share, despite some voicings of the word "partnership" between the songwriter and the publisher. We do not share when the publisher sells our product. Mills is a perfect case in point. Within the last 25 years, Mills Music and its catalog have been acquired by a company called Utilities and Industries; then by a publicly traded trust; then, in rapid succession, by Esquire Magazine, Gulf + Western, and most recently by Columbia Pictures, which is now a subsidiary of Coca-Cola. The only loser under the Supreme Court's decision is the songwriter, or his or her statutory heirs, who alone of all these parties must rely on a handful of copyrights to support their old age. If a songwriter is very lucky, while he or she may write hundreds of songs in a normal lifetime, only perhaps a handful will become hits and even fewer standards. Those standards become the writer's social security and legacy to his or her family. Of course, I agree that there are some singer-songwriters who may have become millionaires, but No. 1, they are few in number, and their financial well-being is derived primarily from their role as a performing artist, not from their copyrights. As conclusively demonstrated by the Songwriters Guild at the 1980 hearings before the Copyright Royalty Tribunal held to adjust the mechanical rate, the annual mean income of our 4,000 to 5,000 members was between $5,000 and $7,500, taking into account our royalties from all sources. It is our view, which finds support in the position taken by the Honorable Ms. Ringer, as Register of Copyrights at the time the 1976 law was enacted, that the act sought to primarily benefit the creator-author. This, the U.S. Supreme Court failed to understand. The 5-to-4 decision focused on facts never argued or discussed by any of the litigants in any of their briefs, and in so doing, totally misconceived the manner in which the music industry operates. The Court held that since the royalties payable by record companies were set in the mechanical license originally issued by Harry Fox Agency as agent for the original publisher, which issued a license, that that publisher was entitled to continue to receive royalties after termination of its rights. What the Court overlooked was that those licenses were issued by music publishers in their capacity as the then copyright proprietor. However, once termination occurred and the publisher no longer held any copyright, the rationale for its continued receipt of royalties ended. Indeed, as we cited in our Supreme Court petition for review, the Court assumed that the entire mode of behavior of our industry supported their premise. Untrue. There are many, many situations where copyrights are assigned from one publisher to another, and the Harry Fox Agency automatically pays royalties to the new publisher at the rate established in the existing mechanical license. It is an accepted fact of our industry; indeed, it is so obvious that neither Fox nor Mills ever raised the issue of the mechanical license as a rationale for their alleged right to continue to receive royalties. The rest of my remarks will be included in my major statement, and I certainly thank you, sir, for this opportunity to talk. [Prepared statement follows:] PREPARED STATEMENT OF GEORGE DAVID WEISS SUMMARY The Songwriters Guild of America, on behalf of its 4,500 songwriter members, urges the Committee to support S. 1384, concerning SS 203 and 304 (c) of the Copyright Act. These sections provide authors and their statutory beneficiaries with the right to terminate grants made under copyright for the extended 19 year term added by the 1976 Copyright Act to copyrights subsisting before 1978; and 35 years after a grant is made for works created after 1978. An exception to the termination right is the right of owners of derivative works made from the original work to continue to exploit such derivative works made before the effective date of termination. We have no quarrel with the derivative work exception. However, the U.S. Supreme Court, in Mills Music Co. v. Snyder, 83 L. Ed. 2d 556 (1985), recently held, in a case dealing with sound recordings made prior to the effective date of termination, that royalties payable by the record companies accruing after the date of termination must be shared between the songwriter and his music publisher pursuant to the terms of their now terminated publishing agreement. We believe that the Court erred in its interpretation of the 1976 Copyright Act, its legislative history, and its policy of extending protection to authors, in holding that the middleman music publisher, whose rights have been terminated, is entitled to participate in income earned from record sales after the date of termination, where it is the record company, and not the music publisher, which is the actual utilizer of a derivative work. In our opinion, (which is supported by 4 Justices of the U.S. Supreme Court and a unanimous decision of the U.S. Court of Appeals) it was the intent of Congress in extending the original 56 year term of copyright to 75 years and allowing authors to recapture their copyrights for this extended 19 year term, to benefit the authors or their statutory successors, and the users of derivative works (such as record and movie companies) who had expended considerable time, effort, and talent in creating such works; not the music publisher who is neither an owner of the copyright nor the creator of a derivative work. By enacting the 1976 Copyright Law, Congress created a delicate balance between the interests of authors and those who would properly exploit their copyright in the derivative market. The Supreme Court has misconstrued that intent and upset this delicate balance. S. 1384 would amend SS 203 and 304 (c) of the Copyright Act to clarify such intent. We ask this Committee to recommend its passage. A more extensive discussion of our position is set forth in the accompanying paper. 1. I am George David Weiss, a songwriter and president of The Songwriters Guild of America, an organization heralded as America's voice of the songwriter in contractual, legislative and judicial matters. Our organization has for over 50 years been the spokesman, before Congress and the American public, in all areas which vitally affect our ability both to create and to earn a decent living from our creative gifts, which has nourished this country. 2. Their average $7,500.00 range as Contrary to popular belief, the overwhelming majority of songwriters do not earn "megabucks". standard of living falls within the $5,000.00 compensation for their creative genius. The vast majority are required to seek outside means to support their talent. 3. Evidence of the above was fully documented in the 1980 hearings on the Mechanical Royalty Rate before the Copyright Royalty Tribunal (CRT). As this Congress is aware, the 1976 Copyright Act, characterized by the then Register of Copyrights, Barbara Ringer, as an "author's bill of rights" gave new protection to all writers; created never before existing sources of revenue; and eliminated many technicalities which served to impede rather than promote copyright. At the same time, that law removed from creators and songwriters in particular areas of exclusivity over their copyright in exchange for the right of users to employ their works non-exclusively on payment of royalties, certain of which were fixed by law and others of which were subject to adjustment by the CRT. I cite as examples the juke box royalties; the obligation of imposed or secondary transmissions; the educational TV royalty and of course the compulsory mechanical license governing the manufacture and sale of phonorecords. The compulsory royalty on mechanicals has been with |