ommend some of the witnesses that we're going to hear from. He is not on the subcommittee but has done important work in trying to protect consumers fair use rights.

Thank you, Mr. Chairman for holding this hearing. I look forward to participating in it.

[The prepared statement of Hon. Joe Barton follows:]

PREPARED STATEMENT OF HON. JOE BARTON, CHAIRMAN, COMMITTEE ON ENERGY AND COMMERCE

Good morning. Thank you, Chairman Stearns, for holding this important hearing. The doctrine of "fair use" has a long history in our country, and I'm glad that we have such a distinguished panel to talk about the issue.

It is extremely important to protect people's intellectual property, and our copyright protections stem directly from our nation's founding document. At the time that the Framers were meeting, piracy involved rogue sailors with cutlasses and cannon and a taste for gold. Their only worry with the law was that if it caught them, it would hang them. With some notable exceptions, today's pirates are more likely to come armed with computers and pocket protectors. They still don't have much concern for legalities, however, and they retain a taste for unearned wealth. The Framers didn't anticipate the digital age, but they did anticipate theft. It seems to me that they would have no problem identifying the modern pirates who steal other people's creative work and sell it. As this subcommittee has explored with hearings in the past, international and domestic intellectual property infringement is a real problem, and we must vigorously prosecute those who break the law.

I think that the people who wrote the Constitution also would recognize the difference between a pirate and a consumer. Copyright owners, for example, do not have eternal and complete control over their works. Over the years and with the Constitution as their guide, the courts have determined-and Congress has codified certain restrictions, including the "fair-use" doctrine. Simply put, consumers are allowed to use copyrighted works without permission of the owner under certain limited circumstances. These limited circumstances have been a strength of our system, not a weakness. They allow paying consumers appropriate access to, and use of, copyrighted works. At the same time, ownership rights have been secured in order to encourage creativity and innovation. America is a nation that values ideas, and the freedom of Americans to innovate and invent is another of our great strengths. Fair use is a fundamental part of that.

I am concerned that some attempts to protect content may overstep reasonable boundaries and limit consumers' legal options, particularly in the light of the emerging technologies that we are beginning to see in the marketplace.

It boils down to this: I believe that when I buy a music album or movie, it should be mine once I leave the store. Who doesn't believe that? Does it mean I have unlimited rights? Of course not. But the law should not restrict my fair-use right to use my own property.

Current law provides that I am liable for anything I do that amounts to infringement, but current law also prevents me from making legal use of content that is technologically "locked," even if I have the key. This doesn't seem to make sense. In defending this conflict, some say that fair use leads to piracy, or that it is piracy. No, it isn't. By definition, "fair-use" is a use that DOES NOT infringe on owners' rights.

am very interested in the state of content-protection technology. Is it effective? Has it limited consumers' fair use rights? How might these developments hurt consumers in the future? How has the consumer electronics industry been affected? How will it affect the research and scientific communities?

I look forward to finding some answers to these difficult questions and to a comprehensive discussion about the doctrine of "fair use," its historic origins, its future, and the real world effects in the marketplace.

Finally, I want to thank Mr. Boucher for attending this hearing today to hear from our witnesses and discuss the topic. He is not on the subcommittee, but has done important work trying to protect consumers' fair use rights. I want to welcome him, and commend him for his leadership on the issue.

Thank you, Mr. Chairman, and I yield back the balance of my time.

Mr. STEARNS. I thank the gentleman.

Ms. DeGette?

Ms. DEGETTE. Thank you, Mr. Chairman.

I will not make a long opening statement. I would like to associate myself with a lot of the comments people have made. I was reading recently about Google is going to scan full text of books and put it on the internet. That really raises an issue about how far we go with the fair use doctrine and that is why I am so delighted that you have decided to schedule a serious of hearings on this issue. And I look forward not just to this hearing but also future hearings to see where we put the balance between fair use and copyright protection because really copyright protection is the bow work of the intellectual, artistic, and commercial flourishing in the last few centuries in this country.

And I yield back.

Mr. STEARNS. The gentlelady yields back.

Mr. Murphy?

Mr. MURPHY. I thank you, Mr. Chairman. I also thank you for holding this hearing.

As an author myself and when I have the concerns about what is happening with text of books it-I know how much time it takes to put into a manuscript, sometimes hundreds of hours including research goes into preparing a book. And certainly in any case whether it is text books or whatever that book may be, to use them for the standard issues of reviews, critiques, and scholarship all within the bailiwick of what copyrights should allows. But as we look at the ease by which other people may copy material as the gentlelady was just saying whether it is making it available on line or whatever the case may be, it is a concern that those people who are out there trying to make a living by writing in essence we are taking away their ability to make a living when it is distributed whether they are singers or songwriters, recording artists, authors. I wonder what would happen if similar things were done to just tell other professions that we could simply take their services and access it for free and provide that free on line and no on could charge for it anymore. What good is it to have a specialty? What good is it to even work if we open that up to the marketplace?

So I am pleased we are having this hearing. I look forward to getting some answer to this and how in this new world of technology we can indeed protect the efforts and the work of so many who put in so much time and research into their creative endeavors and we need to make sure that we protect their part of the economy as well.

And I yield back the balance of my time.

Mr. STEARNS. The gentleman yields back.

Mr. Green?

Mr. GREEN. Mr. Chairman, I will waive opening statements and submit a statement to the record.

Mr. STEARNS. The gentleman waives.

Ms. Bono?

Ms. BONO. Thank you, Mr. Chairman. I would like to begin by thanking you so much for holding this hearing and the chairman of the full committee also for being so willing to hear me out all the time with my thoughts on this. I would like to thank our panelists for what is going to be a lively and spirited debate about something that is extremely important to us all.

I just want to start by saying if we are going to talk about H.R. 1201, I am a staunch opponent and I hope we can certainly slow down this movement of this bill if not stop it all together. I speaking for myself as a consumer, I am also a copyright holder. I have personally three iPods. I have gone through 5 or 6 for whatever reason. My children each have gone through two iPods. Now when I put my iPod when I connect it to my computer, the same list of songs is downloaded from iPod to iPod to iPod. Now is that technology mutual? I do not think so. I think technology is benefiting. I am paying the songwriter. I'm paying the royalty once 99 cents to iTunes.

So I think it is important to realize fair use is alive and well with these issues. What scares me the most is that the revolution that we are witnessing that my colleague talked about is a very, very exciting one for technology and for content providers. I have always said the inner key is the creator's greatest tool. I can, you know, we can talk about some song, we can hear it on the radio, we go home, we look it up on iTunes or either Yahoo, whatever we want, we find it and we hit enter and we have that song. But if we go forward with something like 1201 which basically guts DRM, Digital Rights Management, no longer allows this to work for us, it is going to stifle both technologies and the sale of intellectual property.

So I have great concerns. And I often think about this fact. We have not talked about this with books. We do not say, okay, I just bought a new book, the great book on Lincoln's political leadership and if I ruin it, if I drop it in a puddle of water going to Dulles Airport, do I call the publisher and say I bought that book once, I want another one for free, that is fair use? This is something we should talk about. Why can't we? I have already paid for the intellectual property. I paid that writer for her work, why am I not entitled to a whole new book for free? But we do not think like that. I have already paid you once for property but the publisher and I do not want to send shutter through the publishing community right now. I know, you know, I am really speaking metaphorically here. But we are not talking about that. We pay the provider, we pay the content creator once, and we share that amongst multiple platforms.

I think it is important when I talk to my colleagues about MP4 files, movie files, we as consumers have gone, all of us in this room have probably, every Super Bowl we go out and buy the latest, greatest biggest screen we can find and we brag about it to our friends, I have got a 60" HDTV, you know, LCD screen whatever it is and this is what I have. But we're also now going to iPod style 1" screens that we are all going to buying for Christmas for ourselves so we are going to be staring at these little teeny tiny screens. Thanks to digital rights management, we can download different movies, we can download different television programs. But if we make it legal to circumvent encryption technologies that allow us to have that on our personal player, we are going to stifle this whole globe.

So I have great concerns. I think that there have been mistakes made, there are no questions. I think people have made mistakes in being way too proprietary with their technology and protecting

their content. But I think we need to partner with industry, Mr. Chairman and work with them and shape with them policies that say you own this, you have got this once, you can move it to multiple platforms. But I think to say remove encryption technology, let people ahead and make-and if it happens to be pirated, if it happens to end up on the internet, oh, well it was not my fault. I think that is reckless and I think it is dangerous to this country. As my colleague said too, I believe our country is the greatest Nation on this earth because of intellectual property whether it is writing song, whether it is writing a book, whether it is creating a patent, whatever it is, I think we need to hold those things near and dear. And I think this is a very important issue and I am hoping again we look at 1201 and we do not undo something that is very important to our country. So I look forward to hearing all of you in the question and answer.

And again, thank you, Mr. Chairman, I yield back my time. [The prepared statement of Hon. Mary Bono follows:]

PREPARED STATEMENT OF HON. MARY BONO, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA

Mr. Chairman, thank you for holding this hearing today.

We are all very fortunate to live in a world where music, movies and other forms of entertainment are just a mouse click away. I've always maintained that the "enter" key is the entertainment industry's best friend if they manage to tap into this digital revolution.

And yes, the onus is on this industry to adapt to the changing environment. But, they cannot make this successful transition if the federal government decides their intellectual property is free for the taking under the "fair use" doctrine.

Mr. Chairman, there are some who suggest that technology will be stifled if Congress insists on protecting IP rights. I would assert just the opposite. Why would a company put financial resources behind a product that can be taken for free?

Furthermore, under current law, technology and innovation are blossoming at the same time copyrights are protected. It seems as if there is a smaller, sleeker MP3 player or gaming device coming out every week! Even founders of the illegal Grokster see a successful business model predicated on copyright protection.

Our country has a long tradition of protecting property rights and copyright. We have frowned upon "takings" without permission or due compensation. However, if Congress amends the DMCA, "fair use" will resemble "unfair takings."

During recent debate, Congress rejected "unfair takings." In a vote of 376-38, the House passed a bill to address the Supreme Court's flawed decision in the Kelo case. Both Republicans and Democrats from across the political spectrum agreed that the federal government could not use "eminent domain" for economic development purposes.

It is my hope that in relation to the new digital era, Congress does not allow "fair use" to embody the haunting specter of Kelo's "eminent domain." If we are to allow "fair use" to run this course, we will not only undermine one of this nation's most important industries, but will also weaken our position in protecting intellectual property rights internationally.

I am glad we have an opportunity to explore this issue today. Believe me, I want the Internet to serve as the portal to entertainment. There are many exciting advances on the horizon. But, I hope Members keep one thing in mind: Property is property, whether we are talking about private property or intellectual property or whether we are seeking to protect ranchers or rockers. That is the history of our great nation and we must continue in this tradition.

Thank you and I yield back.

Mr. STEARNS. I thank the gentlelady.

Mr. Towns?

Mr. TOWNS. Thank you very much, Mr. Chairman and also thank you Member Schakowsky for arranging the hearing today.

We will be addressing a very delicate topic this morning and I look forward to hearing from all of the witnesses. I am pleased to

see the videogame industry represented here today. Any discussion of the impact of the fair use doctrine on consumers should include this important segment of the entertainment industry.

The videogame industry has experienced significant growth in recent years and one reason for such growth is due to its meeting and often exceeding consumer expectations with regard to accessing and playing content. In 2004, the sale of computer and videogames in the United States topped $7 billion. And the global entertainment software market reached $25 billion. I look forward to this exciting vibrant industry to continue to flourish and to continue to meet the demands of its consumers. It must continue to be able to reasonably protect intellectual property. Further, it must have the confidence that Congress is not going to upset the balance that has resulted in a win-win situation for the videogame industry and its consumers.

Today's hearing is also about how to best balance consumer demand for content with the copyright holders ability to protect that content. These are both important goals. But as I see it, the marketplace is working fairly well. Content companies are using technology to develop innovative ways to protect their intellectual property while allowing consumers to make their personal uses that they want to make. Sometimes the technologies are not perfect as we saw recently with some content protection technology. But webut as we saw in that case and as we see it all the time, when new software is developed and released, the marketplace responds very quickly to consumer concern. So I firmly believe this is how the industry should be allowed to grow and we must allow it to be involved innovation.

On that note, Mr. Chairman, I yield back the balance of my time and I am anxious and eager to be hearing from all of the witnesses. Thank you very much.

Mr. STEARNS. I thank the gentleman.

Anyone else seek opening speech?

[Additional statements submitted for the record follow:]

PREPARED STATEMENT OF HON. BARBARA CUBIN, A REPRESENTATIVE IN CONGRESS

FROM THE STATE OF WYOMING

Thank you, Mr. Chairman, for holding this timely hearing on the fair use of copyrighted works. Copyright litigation has focused increasingly on digital media exchange and its inherent piracy risks. How these disputes are settled stands to impact in a very profound way the level and nature of consumer access to digital entertainment.

Historically, copyright law has adapted in the face of new technologies, as have consumer expectations as to what constitutes fair use. When Congress passed the Digital Millennium Copyright Act (DMCA) in 1998, we could not possibly have foreseen the rapid advances in technology that would ensue in just a few short years. The public audience for digital entertainment has grown, along with technological restraints on the use of that entertainment. In particular, the "anti-circumvention" clause of the DMCA has allowed the content community to successfully limit the circumvention of digital copyright protections.

Members of the content industry insist on the value of the DMCA for their continued ability to market and distribute their products. Consumer advocates, however, believe this protection regime jeopardizes their right to fair, noninfringing use of copyrighted works. This is one of many fair use issues likely to be brought up by today's panelists, who represent both the content community and consumer rights advocates.

I hope today's hearing will help our committee better understand the growing tension between consumers, who desire to exercise the fair use of legitimately pur