Section 108(i) of the Copyright Act requires the Register of Copy rights to report to Congress, every five years, on the extent to which $108 of the Act has achieved the intended statutory balance between the rights of creators and the needs of users of copyrighted works. The first of these reports was submitted in January, 1983. In it the Copyright Office discusses the evidence adduced and comments made at several regional hearings, empirical statistical evidence on photocopying practices contained in a contractor's report, the legislative history of §108, various technological and international developments, and the recommendations made by various interested parties concerning possible changes in the law. The report concludes with several statutory and nonstatutory recommendations. Among the problem areas identified and discussed at some length in the report are questions concerning: * Eligibility criteria for libraries and archives desiring to avail themselves of $108 privileges. * The scope of $108 privileges for libraries in for-profit organizations. * The extent to which certain fundamental principles and rules in section 108 are being understood and followed, including: The principle that $108 was enacted to make lawful cer- The clear rule that all copying authorized by $108 must • The relationship between §§107 and 108. The rules in subsections 108(g)(1) and (2) which place a The report concludes that $108 contains a sound structure for obtaining the desired balance, but that the balance has not been achieved in practice, either because the intent of Congress, as manifested in §108, has not been fully carried out, or because that intent is not clear to all the parties whose behavior lies within this law's ambit. The paramount recommendation contained in the report, which is repeated therein at several junctures, is that the parties would be best served if they could hammer out their differences, as to both legal interpretations and acceptable photocopying practices, in negotiations among themselves. Although little progress was made during a series of meetings at the Copyright Office in 1982, useful accommodations have been reached in the past, particularly when Congress stated plainly that it desired and expected the parties to come to an understanding. This was seen in the creation of the music, classroom, CONTU, and off-air taping (for educational purposes) guidelines. Indeed, two of the Copyright Office's four statutory recommendations involve the endorsement, either in principle or as drafted, of compromises worked out among diverse interests. These were the "umbrella statute," which would encourage publishers and libraries to join in collective organizations which could authorize photocopying beyond the scope of $108 in a simplified large-scale manner, endorsed by the Association of American Publishers and various forprofit entities; and the proposal to permit certain limited copying of music for research purposes, endorsed by the Music Library Association and the Music Publishers Association. The other statutory recommendations were that the law be made to state clearly that the notice required to be placed on photocopies prepared under the auspices of $108 be the same as the notice required to be placed on published works, i.e., "Copyright [Copr.] [C in a circle], Owner's Name, Year date of publication," rather than a "warning" that the work "may" be protected by copyright; and that the law be clarified to state that the copying of unpublished works under subsections 108(d) and (e) is forbidden. The chief nonstatutory recommendations, beyond encouraging voluntary agreements among the parties, were to study various mechanisms for compensating copyright owners for the photocopying of their works. These mechanisms surcharges on equipment, sampling techniques, and collective licens include: ing arrangements. In addition, two related recommendations concern the need for further study of new technological issues, and an examination of the complex issues surrounding massive archival preservation projects. Although the library and publishing communities spent much time immediately after the current copyright law was enacted in advising their members about the rules in $108, the level of understanding in the library community, which is, of course, the situs of the copying governed by the section, appears less than complete. Although certain rules are apparently being looked to, the methods of compliance appear, in some instances, imperfect. From both the hearings and the statistical surveys, the relationship between sections 107 and 108 appears less than well understood, with the scope of fair use "beyond" $108 the subject of widely disparate interpretations. A large amount of the photocopying done in libraries by and for library patrons is done for job-related reasons, rather than for the type of private study, scholarship, or research which the law explicitly favors. Most copyright proprietors who have put their views on the record believe that the present system is not in balance, i.e., that more photocopying should be the subject of permission or payment than the 1.1% which was reported by libraries in 1980. The proscription of "systematic" copying (except for certain interlibrary transactions), appears to mean strikingly different things to different parties. Although the Senate, in its committee report concerning $108, called for negotiations to give meaning to the undefined term (systematic), that has never occurred. In addition, substantial photocopying by libraries (more than 25% of all transactions) of copyrighted library materials consists of the preparation of two or more copies a quantity of photocopying which the law does not appear to allow. If the parties will come together and negotiate in good faith about outstanding issues of deep concern to everyone, then little in the way of amendments to the law should be necessary. Such voluntary arrangements would perforce enjoy wider acceptance than legislatively (or judicially) imposed solutions. They have already been achieved in several areas of copyright. And the Copyright Office believes that an expression in Congress that such volum tary resolutions are desired and expected would have good effect. voluntary resolutions, however, further legislative action may well be Failing required. ADMINISTRATIVE DEVELOPMENTS Let me now turn briefly to the administrative condition of the Copyright Office. During my nearly three-year tenure as Register of Copyrights, one of my chief concerns has been to increase the productivity of our staff while maintaining the quality of our services. As you know, the GAO study of the Copyright Office, which was reported to us in the fall of 1982, also recommended reduction of Office correspondence, improvement of work flow, and further implementation of data processing within the Office. We have made substantial progress toward achieving those goals during the past year, resulting in an immediate reduction of 12 staff positions and a projected net reduction of $158,000 in appropriated budget funds for the coming fiscal year. During fiscal 1982, the Copyright Office made marked gains toward reducing its working inventory to a normal condition, and eliminating the "backlog" of pending registration claims. Workload figures, detailed in the chart of Copyright Office Key Indicators appended to this statement, show a steady decrease in staffing amounting to 19% from fiscal year 1979 to 1982. During the same period, the annual rate of intake has steadily increased, by 17% in FY 1982 over FY 1979; the amount of work completed has increased 8%, and the physical inventory of work on hand has decreased substantially from 150,000 pieces to 106,000. Despite a loss of 10 trained, professional copyright examiners and an increase of nearly 36,000 claims in fiscal 1982, there was only a small decrease (18) in the number of certificates issued; and the time expended to |