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The activities of the British Lending Library could be considered a violation of section 108 (g) (2) in its present form, if that section were applicable. But, under section 602, libraries are allowed to import up to five copies for ordinary library lending or archival purposes, even where the copies would have been considered piratical or unauthorized at the place where they were made.

If title 17 were applicable to such transactions, as a result, we would have a great many copies coming into this country that might have been made in violation of section 108(g) (2). All I am doing at this point is alerting you to the question, in relation to the general library photocoping problem, and I do think the subcommittee should consider this problem when it comes to that section in the markup:

This concludes my presentation on this chapter, Mr. Chairman,
Mr. DANIELSON. Thank you, Ms. Ringer. Mr. Drinan.
Mr. DRINAN. Not at this time. I thank her for her presentation. I
yield to you.

Mr. DANIELSON. Mr. Pattison.
Mr. PATTISON. No questions.

Mr. DANIELSON. One observation. If the manufacturing clause is not a violation of the letter of some things but is in violation of the spirit, are we to gain some comfort and peace of mind from that?

Ms. RINGER. I would say not. Mr. DANIELSON. Is it better to violate the spirit or the letter? I was yielding to my spiritual consultant here.

Mr. DRINAN. If I may, I wonder, Ms. Ringer, do you think that it is hopeless for us to try to repeal that manufacturing clause?

Ms. RINGER. I would not say that it is hopeless, Mr. Drinan. We have reached the present stage through a long series of compromises, and I think the basic conclusion that I was trying to express in this chapter was that perhaps it would be radical, if not hopeless, to repeal it flatly out of hand right now. I would hope, however, that a terminal date could be put on it, because that would seem to be the within the realm of possibility.

Mr. DRINAN. If we did, through some miracle, drop it in the subcommittee here, what would be the lobby that would be clawing at us?

Ms. RINGER. The typographical unions. Mr. DRINAN. We might as well get the unions involved. Everybody else is involved.

Ms. RINGER. They are already involved, believe me.

Mr. DANIELSON. I have two comments which may be supplemental, at least to Father Drinan's here. I guess I am awfully simple or something, but I have trouble justifying a manufacturing clause on printed matter, and yet I have a lot of the clothing workers in my district. Apparently it is a bad thing to put a ban on the importation of foreign manufacture of clothing, but it is perfectly all right to put a ban on the importation of foreign manufactured printing. I have a little problem with that, and I would like help if you can give it. Maybe you cannot even give me any help.

Mr. Drinan. No. At the appropriate moment, I would be happy to move to a ban, to drop the manufacturing clause.

Mr. DANIELSON. You and I may have a lot in common.

The other observation I am going to make--I had the high privilege this summer of accompanying the speaker through a tour of the socialist countries, and we were protesting that they would not allow enough of our books and magazines and printed matter in to their people, for their people to read, and it was shocking to find that they import 5 or 6 times as much, 500 or 600 percent as much printed matter into their countries as we import from them.

Frankly, I had no answer for that, but it is a factor we ought to consider. The flow of information ought to go in two directions, I suppose.

Mr. PATTISON. I might point out that it has been said that consistency is the hobgoblin of the small mind.

Mr. DANIELSON. Thank you very much. Let us move on to the next point.

Ms. RINGER. The next point returns to chapter VIII, which is part of the material given to you this morning. The question covered concerns the exclusive rights in sound recordings, and on pages 1 through 13 of this chapter, I seek to review the evolution of this problem in the context of what is now section 114 of the revision bill and of H.R. 5345, which is your bill, Mr. Danielson, on performance royalties.

I will summarize those 13 pages very briefly by saying that in 1965 and 1966 through 1967, this subcommittee, the House Judiciary Subcommittee, accepted the principle of the copyrightability of sound recordings and proposed protection for these works against unauthorized duplication, but not against their unauthorized performance by radio, jukeboxes and music services. This was the status in 1967.

However, partly because of the testimony and the discussions that arose from the consideration of the bill at that time, in 1968 and 1969, performers unions and individual performers in the record industry joined together and pushed very hard for protection in the Senate. This was a new coalition, with a new cause, and a clear-cut goal. In the course of this effort, the opposition, or the concerns, of the traditional copyright owners—the songwriters and composers—began to be less evident. Perhaps it is an overstatement to say the opposition from these quarters evaporated, but certainly the feelings that had been expressed earlier were not being iterated. It is perhaps a bit of an exaggeration to say that the performing rights societies and the authors and composers favor, or strongly support, performance royalties with respect to sound recordings, but I think it is accurate to say they do not oppose them. And this is quite a change.

This was simply an evolutionary change in attitudes in what people look upon as in their best interests. As a result, Senator Harrison Williams introduced amendments in both 1967 and 1969 to establish a performance royalty in records. These were amendments directed to the revision bill, and in December 1969, the Senate Judiciary Subcommittee accepted the Williams' amendment, with some changes and it was in the bill until 1974, when it was knocked out on the Senate floor when the bill passed the Senate.

As my report notes, it seems to me that the entire bill probably would not have passed the Senate with that provision in it. That is only supposition, though I am certain it would not have passed by 70 to 1 if the provision had not been deleted. From all appearances, it was the most controversial provision in the 1974 Senate bill.

Meanwhile, as you all know very well, the emergency presented by tape piracy, the proliferation of which caused Congress to enact first a temporary, and then a permanent amendment to the 1909 law granting exclusive rights against the unanuthorized duplication of sound recordings.

Now, there are three issues in this chapter, and I think that we can dispose of two of them rather quickly. The first involves a proposal by the Justice Department, supported by the record industry and accepted by the Senate in the reported bill you just received, which essentially would give the owners of copyright in sound recording the right to make derivative works of them. We in the Copyright Office support this in principle, but we have some concerns about the language in which it is clothed in the Senate amendment and we would hope that perhaps a better formula could be found.

The second question involves the testimony that you heard from the tape duplicators, and others, concerning the possibility of a compulsory license for the duplication of sound recordings. And I would like to read from pages 22 and 23 of this chapter on this point, Mr. Chairman.

The House Judiciary Subcommittee on July 17, 1975, heard testimony frum Alan Wally, David Heilman and Thomas Gramuglia, representing tape duplicators. A point urged during this testimony was that a few very large record companies control the bulk of the records distributed, and that a huge number of recorded performances, going back several decades, are completely unavailable to the public because the "majors” will neither release them, license them, nor permit their unauthorized duplication. The witnesses urged that a compulsory licensing system be provided that would permit the public to have access to these old recordings and would generate royalties for the performing artists.

Without either accepting or rejecting any of the specific charges made in this testimony, the Copyright Office is convinced that a real problem exists with large and growing catalogues of recordings that record companies are sitting on and will neither release nor license. Unless voluntary licensing methods can be found for providing access to these recordings, it may well be that some kind of compulsory licensing system will eventually have to be devised to deal with the problem. While we have no specific recommendations for amendments in the bill, we do not feel that this problem can be swept under the rug. One constructive suggestion might be to mandate the copyright royalty tribunal, as part of its survey of the recording industry in connection with rate adjustments under section 115, to probe into the question of how serious this problem actually is.

Mr. DANIELSON. Let me interrupt if I may. We have not as yet your copyright royalty tribunal.

Ms. RINGER. That is right. Though it is in the bill before you, and I will discuss it in my testimony this morning, if time permits.

Mr. DANIELSON. As yet, it is just a concept.

Ms. RINGER. Right. What I am recommending, though, as part of this whole package—and I think I will come back to this when I discuss the tribunal later this morning-is that the tribunal would actually be able to go deeply into the economic and factual situations in these industries. It would have a subpena power, for example.

Mr. DRINAN. Will the owner of the copyright under this circumstance have any right to go into court and compel the holder of the copyright or the company to release the record ?

Ms. RINGER. They certainly would not under the bill. We are not recommending that this be changed, but, on the other hand, there are very large catalogs that are not available to the public. If you have a book, and it is in libraries, people can get access to it and, in many cases, photocopy it rather extensively, but this is not nearly as true in the record industry. There is a large body of material there that is really pretty well kept out of the public's access.

Mr. DRINAN. Did the original vocalist or the original performer in the contract that he made with Columbia Records, did he waive all of his rights thereafter?

Ms. RINGER. I cannot say, Mr. Drinan. I think that, by and large, the individual performers did not have any continuing rights, although some major stars may well have retained rights.

Mr. DRINAN. Thank you.

Mr. DANIELSON. That would be in the event there were a performance royalty.

Ms. ŘINGER. Yes.

Mr. DANIELSON. But as to access to the work of art, you still have a continuing compulsory royalty situation.

Ms. RINGER. We are talking now about the duplication of actual recordings, and in this situation I do not believe that individual artists retain or necessarily ever had, the kind of rights which they could assert in court, to answer Mr. Drinan's question.

Mr. DANIELSON. Thank you.

Ms. RINGER. We now come to the question of performance royalties, and this is probably one of the most difficult in the bill. We do seem to have a confrontation on this issue.

I have tried to lay out the present situation and the arguments on pages 24 to 26 of the report. I did testify on July 24 in the Senate, and as stated on page 26, I do feel it necessary to recognize that we are at a dangerous impasse on this issue. But I still feel, speaking for the Copyright Office, that we cannot just temporize the needs to be confronted and dealt with.

I would like, since I did not testify at the same time as the group which testified on this issue, to give you the gist of my testimony in: the Senate, which by coincidence happened to occur the day after you: subcommittee heard testimony on this.

I do agree fully with the fundamental aim of your bill, Mr. Daniel son, to create within the framework of Federal copyright law a publie performance right in sound recordings for the benefit of performers and record producers.

I am reading now from page 27:

Congress and the courts have already declared that sound recordings as a class are constitutionally eligible for copyright protection. With this principle established, any broadening of protection for sound recordings to include a public performance right becomes one not of constitutionality but of statutory policy.

In considering this pivotal policy question, Congress should first take a hard look at just what the lack of copyright protection for performers has done to the performing arts profession in the United States. The 20th Century technological revolution in communications has had a fundamental impact on a number of forms of creative expression, but there is no case in which the impact was more drastic or destructive than that of the performing artist.

Performers were whipsawed by an unmerciful process in which their vast live audiences wee destroyed by phonograph records and broadcasting. But they were given no legal rights whatever to control or participate in any commercial benefits of this vast new electronic audience.

The results have been tragic: The loss of a major part of a vital artistic profession and the drying up of an incalculable number of creative wellsprings. The effect of this process on individual performers has been catastrophic, but the effect on the nature and variety of records that are made and kept in release, and on the content and variety of radio programing, have been equally malign. Most of all, it is the United States public that has suffered from this process.

Congress cannot repair these past wrongs, but it can and should do something about avoiding or minimizing them in the future. There is, in the United States today, no more vital and creative force than that of performed music. Adequate protection for those responsible for this creative force involves much more than economics and the ability or willingness of various communications media to pay performing royalties. It is, first of all, a matter of justice and fairness; but, beyond that, it is in the paramount national interest to insure that growth in the creativity and variety of the performing arts in this country is actively encouraged by reasonable protection rather than stunted or destroyed by the lack of it.

There are problems with the bill in its present form. It is cast in the form of an amendment to title 17 of the present law, and I do not think that it will quite work in that form. There is no doubt in my mind it could be made to work in another form.

It is less important whether the performance royalty for sound recordings be established under the revision bill, or through separate legislation, or just exactly how it is done, than that Congress act affirmatively by declaring itself in favor of the principle of such a payment. Whatever form the legislation takes, I recommend that such a step be taken by the present Congress and that, recognizing the damaging effects of legislative inaction in the past, it not again postpone this affirmative declaration to another Congress, or another decade, or another generation.

At the same time it must be said that, on the basis of experience, if this legislation were tied to the fact of the bill for general revision of the copyright law, there is a danger that it could turn into a “killer” provision that would again stall or defeat omnibus legislation. This danger exists even more clearly than when I testified to this same effect last July, and would be very severe if the potential compulsory licensees-notably the broadcasting and jukebox industries-exerted their considerable economic and political power to oppose the revision bill as a whole. Should this happen, there could be no question about priorities. The performance royalty for sound recordings would have to yield to the overwhelming need for omnibus reform of the 1909 law.

I pass on now to page 29 of my statement, Mr. Chairman, in which I am trying to lay out some alternatives, because we do have a terrible confrontation and impasse on this issue.

An obvious possibility would be for Congress to accept the principle of payment but delay implementation for a period long enough to allow the working out of a viable compulsory licensing procedure.

Another possibility would be, as in the case of the previous legislation on copyright for sound recordings, to put a terminal date on the legislation, leaving it to a future Congress to judge on the basis of actual experience whether it should be extended permanently.

Other alternatives might include a transitional period during which all payments would go to the National Endowment for the Arts while a workable procedure for distributing license fees to individual copyright owners was being worked out.

I am not committed to any of these, and all I really wanted to say is what I expressed at the end of my statement, which is my hope that these alternatives and others might be worked out and explored in a spirit of goodwill and give and take, with the aim of providing a framework in which the fairest and least burdensome payment mechanism could be established.

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