challenges us to rethink the whole proposition. I want to thank you for giving us this.

Let me move on a couple of points. Your three or four points were that we should not move incrementally but should take a much more radical or comprehensive view of the subject; that we should take copyright from the courts because they tend to face the past rather than look to the future. You suggested that this committee and all committees need images of the future so that we might understand the field we have to cope with.

I think your fourth point, which is a very big one to us, is to ignore the screams of those who would be dislocated or discommoded by these moves.

That fourth point, of course, is a big political problem to all of us because when the screams arise from certain quarters it is hard not to try both in humanity as well as in practical reality, to deal with them.

Let me ask about a couple of things. Your images of the future were well done, including the one that you gave us last about airplanes leaving New York bound for Kingston, and work to be done that is turned around and sent back to New York. That, I guess, could as well be done eventually by some data link, is that correct, and-

Mr. COATES. That's right.

Mr. MAZZOLI [continuing]. Not even have the airplane trip at all. Could it be that with this Ph. D. level talent in India one could also allow something to be done over there which could be shot back here by some data link?

Mr. COATES. There can't be any question about that; yes. Increasingly what is happening is, information is available everywhere, at declining costs. The technology for the dispersal of this is at the ground level microwave and fiberoptics technology in the local area; satellite and microwave for longer range transmission. And whether the unit over which you transmit is New York to California, Maine to Ohio, or Florida to India, is just a technical detail. Mr. MAZZOLI. The interesting part to me is, we are very well aware that the creative community-and I think the gentlelady from Colorado brought this up earlier-needs some reason to create, and they have to have incentive to create. If you cut off the incentive, you may have cut off their creativity which, of course, hurts us in the world.

Let me try to turn that around just a little bit. Is there any way to quantify or make relative the harm to the intellectual community in having their work rapidly assimilated by the general population and used without, in each case, some method of repayment? In effect, the harm to them may not equal the gain to the population as a whole, the gain to the Government, the gain to the world, by having this information used.

I think you talked about the so-called information commons in which this material becomes, whether the creator likes it or not, part of the information upon which the world needs to move forward.

I wonder if you could help me just for a few minutes on that area. Is there anything which tends to quantify that or is it impossible to quantify that? Because if the harm doesn't equal the gain,

maybe we have to change copyright entirely and say that they create either because they get it up front, or they create because they have some altruistic end in mind.

Mr. COATES. I don't think anyone can answer that question for you. We have looked at the question and there isn't any definitive information on it. What makes Johnny run? What makes the productive scientist and engineer produce? Well, obviously, money is one, but only one, aspect of that.

Much of what the controversy hinges around is not the physical side, the relatively patent-protectable side of the technology, but it hinges around the software, the programing for the electronic devices.

It seems to me there are several strategies that are worth exploring. First, do you tie people's names to things? In other words, how do you create heroes? How do you develop credit for the work which is done?

There are very few opportunities now in business and commerce for creating heroes. It is a strategy well worth exploring.

Second, one level closer to the copyright concept, is what is it you want to protect? The tendency is to want to protect the physical embodiment. This goes back to the industrial model. The protection should rather move from the physical embodiment to the capability.

If someone generates a capability to do something, that is perhaps the unit which should be protected in the future. And that capability, then, will permit variations within a framework-minor improvements, process improvements, incremental improvementsbut still provide a core protection.

It seems to me that a concept that is worth exploring is: Can you protect the capability?

Mr. MAZZOLI. Let me ask you this, and this will be my last area. Well, it looks like we really have some problems.

Very quickly, if we are looking for pole stars, is one of them the use of money or the acquisition of money as a profit from the use? And I get back to the taping of something in your home for your personal use, as against taping it for showing for profit. People obviously think the latter is an infringement, the former is questionable.

Is the use of the person's property for individual gain anywhere a pole star in this swamp?

Mr. COATES. I think it is mixed. Now, take the case of the symphony orchestra performing. Who are the drivers behind record protection? It is not the symphony orchestra. It is the company that presses the platters. The symphony orchestra, I am sure, would be delighted to have its music heard far and wide and build its reputation that way. That reward is probably more significant for them than is the royalty from the platter, although the intermediate group, the union, enters into that in an interesting way. I think in many cases the original creator is the one who ends up being shortchanged in almost every regard. If you make software for IBM, a billion dollar operation, and you are John Brooks, one of their software geniuses, you are probably paid on the order of tens or maybe a hundred thousand bucks. So it is the original creator who almost always gets relatively shortchanged.

Mr. MAZZOLI. So in some cases when we think we are protecting the creator, we are just protecting the middleman through copyright?

Mr. COATES. Yes; I am not saying it is not legitimate, but recognize what you are doing.

Mr. MAZZOLI. I thank the gentleman and I thank the committee. Mr. KASTENMEIER. Let me confer with my colleagues. We have a quorum call on. Is it your desire to stay and ask questions or would you care to come back after a 10-minute recess?

Mr. MAZZOLI. I will come back.

Mr. KASTENMEIER. We can proceed for a few minutes if you like. Mr. SAWYER. I don't have very much if you are recognizing me. Mr. KASTENMEIER. I yield to the gentleman from Michigan.

Mr. SAWYER. Can you give me an example, and it doesn't have to be anything that is exclusive or anything else, but what are an example or examples of restructuring of the copyright system?

I don't know if I grasp the concept, really.

Mr. COATES. Let us go back to the notion of what are you trying to protect. Let us say I produce a piece of music. What is copyrighted are several things along the way: The music itself, a particular performance as embodied in a record or a tape or something like that.

You basically protect the book, the record, the sheet music, and

so on.

It is the physical embodiment of the intellectual product that you protect.

The fundamental change that is occurring is that we need not have physical embodiments any longer which fit the model of what you are protecting. When you can have complete convertibility and literally make a product invisible, what is it that you want to protect? Do you want to protect the physical embodiment? Do you want to protect the original product? Do you want to protect the point at which it is used?

That seems to me to be one of the controversies that you should engage. My sense of the shift is that you should be moving from the physical embodiment to the capability. In some cases you still want the physical embodiment but in many cases it is the capability, what is inside the electronic box that you want to protect. Mr. SAWYER. I yield back.

Mr. KASTENMEIER. The gentlewoman from Colorado.

Mrs. SCHROEDER. I thank you, Mr. Chairman, and I am sorry I won't be able to return because we have DOD on the floor which is another committee that I sit on.

One of the things that I worry about as I listened to you is I think we are tending to reflect our culturist technology junkies. I mean, the machines we are all talking about, the taping machines, and the computer machines, and all of those things, they are all going to be protected. But it is almost like there won't be any there.

What is going to be the incentive to put something into that machine?

What is going to be the incentive to put the Bible in the box if we don't find some way legally to protect intellectual property as much as we do physical?

I think that is the real problem that I have as I look for this balance between the two things. We don't mind paying for the patent rights on all the things on the machines but we get really upset about the tapes or the intellectual property. We must keep a bal

ance.

Mr. KASTENMEIER. If the gentlewoman will yield, perhaps the Bible isn't the best example of protected works.

Mrs. SCHROEDER. That's true, I guess they don't need a copyright on that.

I do think that there are many other things, music and so forth, where it is very difficult to say that that is of a lesser order than designing a machine.

Mr. COATES. I think one of the things to keep in mind as part of a long-term trend which I hadn't mentioned, is that much of the creativity in the United States and in the rest of the world is increasingly done in an institutional framework. And those institutions are the mechanisms which often provide the reward.

For example, the software generators at IBM are working in an institutional context.

Mrs. SCHROEDER. If I can yield, we do have to leave at the second bell. My response to that is yes, but part of the reason is the institution isn't doing it because they love artists. They are doing it because they get remuneration back.

Second, I am not sure we want to say, well, all artists have to go to work for institutions. It is like saying, OK, artist, go find a king that will support you, or find a church to have you paint or you can't paint.

I think you are forcing us into that kind of mind set and I worry about that.

Again, I apologize for having to leave but if you could put stuff in the record countering them I would be very appreciative because that really troubles me.

Mr. COATES. That would be fun to do.

Mrs. SCHROEDER. It troubles me a lot.
Thank you.

Mr. KASTENMEIER. We will recess but I encourage the gentlewoman from Colorado and the gentleman from Michigan to return. In addition to Mr. Coates, we have Professor Lange who will be our next witness after the recess.

Mr. Coates, if you are able to stay for a few minutes, I would also appreciate it, because I have a couple of additional questions. Mr. COATES. How long do you think that will be?

Mr. KASTENMEIER. Ten minutes.

Mr. COATES. Fine, thank you.

Mr. KASTENMEIER. The committee will be in recess for 10 minutes.

[Recess.]

Mr. KASTENMEIER. The committee will come to order.

I am not sure we will have many other members here. The reprimand question is being taken up on the floor.

Thank you for staying, Mr. Coates, I appreciate it. I just have a couple of questions, but since some of the colloquy did deal with these things, I wanted to discuss them with you.

Those of you who testify, in fact, are likely to be authors in a traditional sense. But I would observe that increasingly, as we move into this new information age, the identification of the author is in doubt, often even as to whether there is an author or work. The fact is that we are, I think, increasingly facing a society in which those who contribute to creation will be nameless.

That is to say that increasingly the proprietors of copyrighted material are not creative individuals anymore but are major corporate entities.

One of the typical cases is whether an NFL football game is an intellectual work, whether it has an author, and whether it should be protected. Increasingly in the programing which has developed, even for entertainment purposes, it is probable that you will not be able to identify a single author for protection.

Mr. COATES. I think there are two things to keep in mind here reflecting two trends which are both real and seemingly moving in opposite directions. Let me note that the proposal has even been put forward that Nobel prizes should be awarded to teams, not to individuals or mere pairs of people.

The team and the collective group as the source of development is very real. That reflects the growth and the central importance of large institutions in our society. The trend will undoubtedly contin

ue.

But running right parallel with that is a new and in some ways more exciting trend-an explosive growth in small production of all sorts. There are about 15,000 publishers of newspapers, books, and periodicals and thousands of others producing newsletters and other ephemeris; publishers, not just working in publishing firms, but publishers.

We have the production of artistic works in very small lots. It is not unthinkable in terms of some of these new technologies that a poet might be able to produce 300 copies of his poems; an artist might be well able to produce 300 copies or reproductions of a sculpture or painting. Certainly people will provide specialty software, one, two, three versions of it, for selected customers.

But paralleling the development of new production in large institutions is this exciting parallel development in small to tiny organizational settings.

I think the committee needs to be aware of both of those in its deliberations.

We, in some way, have less to be concerned about in protecting IBM, General Motors, and General Electric than we do in protecting the small and mid-size producer and purveyor of new information.

Mr. KASTENMEIER. Can that distinction be reflected in copyright law?

Mr. COATES. I don't know. I think you have got to go back to the question of what it is you are trying to protect. That is the core question. We have mentioned several different aspects of that question: Are you protecting only physical embodiments, or are you protecting capability; are you protecting rights to acknowledgement; are you protecting the rights to label; are you protecting the rights over a scope of activity, and so on?