Lapas attēli
PDF
ePub

STATEMENT OF RALPH OMAN

REGISTER OF COPYRIGHTS AND
ASSISTANT LIBRARIAN FOR COPYRIGHT SERVICES

Mr. Chairman

and members of the Subcommittee, thank you for the

opportunity to appear here today. My colleagues and I in the Copyright Office have studied the sparse legislative history of the termination clause of the

1976 Act, and we have concluded that the Specter bill is consistent with

congressional sentiment during the reform process.

So the Copyright Office

weighs in in support of the goals of S. 1384, even though we might have some

suggestions for improving it. As you know, I've come directly from testifying

on the House side, so if any references to satellite dishes creep into my

testimony, please bear with me.

I am accompanied today by Dorothy Schrader, the General Counsel of the

Copyright Office, and Marilyn Kretsinger, a Senior Attorney on the General

Counsel's staff.

The bill addresses important issues, and in theory millions of dollars

ride on the outcome.

If the bill passes it may well change dramatically the

way authors and publishers do business.

And these changes might not

necessarily all be in the long-term interests of authors.

But on balance, the

bill will restore to authors in a very narrow area of the law some of the

bargaining power Congress thought it was giving them back in 1976.

The 1976 Act is in many ways a pro-authors' rights document:

it gave

authors rights they never had before; it extended the length of the life of

the author's copyright by many years; and, for the first time it made juke box

operators and cable television companies pay the authors for using their

works.

Another of the rights the '76 Act gave authors and their families was

the right to recapture their copyrights, which they might have negotiated away

when they were young and foolish or when they were struggling artists with no bargaining power, and they had to accept a publisher's "Take it or leave it"

offer.

The '76 Act allows this recapture by letting the author terminate at

certain specific times any contract transferring his or her rights in the work

to a publisher, to an agent, or to a friend.

I won't get into the details of the provision.

I'm sure that the

earlier witnesses have already done so.

The question we get into today relates to a specific exception to these

new recapture rules.

We know it as the derivative work exception. A

derivative work is a work based on an earlier

ork in the same or another

medium

a movie based on a novel, like Gone with the Wind; or a Broadway

musical based on a play, like Hello Dolly. Congress exempted these works from

the recapture provision to prevent hardship.

The situation we face is this:

the author assigns his rights to a

publisher, including the right to make or authorize others to make derivative

works. In return for this arrangement, the author may get a lump sum payment,

say $20,000, or a smaller amount in return for a share of future royalties.

In turn, the publisher makes a derivative work or sells someone else the right

to make a derivative work. And that fee, or royalty, is paid to the publisher. That royalty may be paid on a continuing basis, rather than a lump sum. The author may not get a dime. (I'm simplifying this for the sake of clarity.) Many years later, the author is free to terminate the publisher's

assignment, and the author or heirs can get back the copyright

except for

the derivative works.

The owner of the rights in the derivative work can

continue to use the work under the terms of the original contract.

All the

derivative work owner has to do is continue to pay royalties under the

contract with the publisher. And that brings us to the question raised by the

Specter bill and the Supreme Court decision

who should get the royalty?

5.1384 would amend the derivative works exception by specifying that

"any right to royalties from the derivative work shall revert to the person exercising the termination right."

Congress wrestled with these termination-recapture provisions for a long

time in an attempt to balance the interests of individual authors and their

transferees in a fairer way than the renewal provision of the old Copyright

law.

The derivative works exception of the 1976 Act does not specify how

these royalties are to be disbursed; it only specifies that "a derivative work

prepared earlier may continue to be utilized under the conditions of the

terminated grant."

In the Mills Music case the author's heirs terminated the

publisher's grant and recaptured the rights during the extended term.

But

the record company went on using the derivative work and paying royalties to

the publisher under his contract.

so the issue was joined:

who should

receive the royalties from recordings licensed by the music publisher under

the grant from the author.

The Supreme Court held that the royalties for

continued use of a derivative work should be disbursed under the terms of the

original contract between the author and the publisher.

Or, simply stated,

all royalties did not revert back to the original author along with the other

rights; the author got a 50 percent split, in accordance with the terms of the

contract.

The question before the Senate today is how to resolve a dispute between

two classes of copyright proprietors: authors and publishers.

As I've already said, evidence of congressional intent on this narrow

issue is very sparse.

The most that can be said is that Congress wanted the

authors to benefit from the windfall nineteen-year increase in the life of

existing copyrights. Congress wanted to stimulate creativity, and it seems more likely that Congress wanted this windfall to go to the authors and not to

the publisher.

It seems to me that the burden of showing the unfairness of

the proposed legislation should rest with the publisher.

In enacting the termination clause, Congress wanted to give authors more money for their works that turned out to be popular and long-lived. Congress

gave them the chance to get a better deal than they did early in their careers

when they were untested and unknown.

So a bill that achieves the goal of

S.1384 seems on balance an appropriate way to carry out the intent of Congress

in balancing the equities between authors and the publishers.

Congress will also have to look at the constitutional issues raised by

the bill, especially in terms of impact on existing property rights. That is

[blocks in formation]

constitutional impediment, the Copyright Office would support the principle of S.1384. I would suggest several refinements. I think the derivative works

exception of both the provision terminating subsisting copyrights in Chapter 3

and the provision terminating post January 1, 1978,

copyrights in Chapter 2

should be amended.

Direct amendment of the clause containing the exception

seems preferable to indirect amendment as you do in S. 1384.

[blocks in formation]
[blocks in formation]

"clarification." The bill should also be worded to ensure that the royalties

go to the person in whom the reverted rights vest.

This person may be

different than the person exercising the termination right.

The Copyright office is prepared to help you work out these details.

Thank you.

Ms. Schrader, Ms. Kretsinger and I will be pleased to

respond to any questions.

PREPARED STATEMENT OF RALPH OMAN

REGISTER OF COPYRIGHTS AND
ASSISTANT LIBRARIAN FOR COPYRIGHT SERVICES

Mr. Chairman and members of the Subcommittee I appreciate the opportunity to appear here today and testify in support of the principle of S. 1384, the "Copyright Holder Protection Act of 1985." This bill would amend 17 U.S.C. $304(c), the termination-reversion provision of the Copyright Act, to provide that "any right to royalties from the utilization of the derivative work shall revert to the person exercising the termination right."

The termination provisions are the result of considerable compromises that attempted to balance the interests of individual authors and their transferees in a fairer way than the renewal provision of the former Act. Basically, the termination right was given authors in order to give them the benefit of a long-lived copyright that they might have assigned to a grantee for less than its worth at a time when the grantee had a more favorable bargaining position. The derivative works exception to the termination provision(s) was designed to protect those creators of derivative works who had used the underlying copyrighted work to create a new work at considerable expense.

The exception of the current Act does not specify how royalties are to be disbursed; it only specifies that "a derivative work prepared earlier may continue to be utilized under the conditions of the terminated grant." At issue in the Mills Music litigation was who should receive the royalties from recordings licensed by the music publisher under a grant from the author. Ultimately the Supreme Court held that the royalties for continued utilization of a derivative work should continue to be disbursed under the agreement that existed between the author and the publisher prior to the author's termination of the grant pursuant to 17 U.S.C. $304(c).

The extension of subsisting copyright created a windfall continued copyright protection and profits for a popular work.

Evidence of congressional intent on this narrow issue is very sparse. The most that can be said is that Congress wanted the authors to benefit from the nineteen year extension of the term for subsisting copyrights. In consonance with the underlying purpose of copyright, to stimulate creativity, it is more likely that Congress intended this windfall as a reward to the author instead of the publisher. The burden of showing the unfairness of the proposed legislation should rest with the publisher.

*

Mr. Chairman

and members of the Subcommittee I appreciate the

opportunity to appear here today and testify in support of the principle of

S. 1384, the "Copyright Holder Protection Act of 1985." This bill would amend

17 U.S.C. $304(c)(6) the derivative works exception to the termination

new

reversion provision of the Copyright Act, title 17 U.S.C., by adding a

subsection (7) that clarifies the operation of this exception.

A bill in the other body, H.R. 3163, would amend both the

[blocks in formation]

The 1976 Copyright Act contains a "recapture of rights" provision that permits the termination of transfers and licenses executed by the author

on or after January 1, 1978, and reversion to the author or heirs, under the conditions set out in 17 U.S.C. $203. The renewal provision of the prior law 1/ was retained for subsisting copyrights but if the copyright is properly renewed, the renewal term is extended for nineteen years $304(b), and section 304(c) permits the termination of transfers and licenses executed by the

author or a statutory successor and reversion under the conditions stated.

The conditions that must be met for termination of a grant under

$203 and those that must be met under $304, although very similar, differ to some extent because of the constraints of the 1909 Act's renewal provision; however, both $203 and 9304 contain an identical derivative works 21 exception

to the termination-reversion provisions, $203(b)(1); 3304(c)(6)(A).

This

1/ Section 24 of the 1909 Copyright Act gave the author of a work copyright protection for a maximum period of 56 years an initial 28 year term and a renewal term of 28 years. Under the 1976 Act works created after January 1, 1978, may be protected for the life of the author plus fifty years. 17 U.S.C. $302(a).

21 A "derivative work" is defined in 17 U.S.C. $101 as "a work based upon one or more preexisting works, such as a translation, musical arrangement, dramatization, fictionalization, motion picture version, sound recording, art reproduction, abridgement, condensation, or any other form in which a work may be recast, transformed, or adapted....

« iepriekšējāTurpināt »