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Senator DECONCINI. Thank you, Senator Cochran. I appreciate your statement, and this committee intends to move on your bill and make some decisions this session if we possibly can. You raise a very cogent issue and I can assure you of the careful attention of this subcommittee.

I have no questions for the Senator from Mississippi.
Senator Hatch.
Senator HATCH. I have no questions either.
Thanks, Thad. We appreciate having your testimony.

Senator COCHRAN. Thank you very much for allowing me to appear.

Senator DECONCINI. Our next witness will be Mr. Ralph Oman, Register of Copyrights. Please come forward. Dorothy Schrader will be with him.

Mr. OMAN. And with your permission, Mr. Chairman, Mr. William Patry, a policy and planning advisor.

Senator DECONCINI. Please proceed. If you would summarize your testimony, Mr. Oman. STATEMENT OF RALPH OMAN, REGISTER OF COPYRIGHTS,


Mr. OMAN. Thank you very much, Mr. Chairman. I have prepared a written statement and I would submit that for the record, with your permission.

Senator DECONCINI. Without objection
Mr. OMAN. Let me summarize that statement.

Senator Cochran's bill seeks to change the provisions of the Copyright Act concerning work made for hire and joint works by amending the definitions of these terms in section 101 of the Copyright Act. Unlike previous efforts, S. 1253 does not seek to reorder the marketplace in any major way; it only tries to clarify the existing provisions.

As Senator Cochran just noted, the first great rule of copyright law is that the man or woman who creates a copyrighted work is the copyright owner. The work made for hire doctrine represents a departure from this general rule.

in the two circumstances, the law treats the person or company who hires the real author as the legal author and copyright owner, first, where the work is created by an employee within the scope of his or her employment, and in the case of commissioned works where the work falls within one of nine special categories and the parties sign a document agreeing that the work is made for hire. Otherwise, a commissioned work can never be a work for hire.

In June, of course, as we have learned, the Supreme Court in a unanimous decision for the first time interpreted the “work made for hire” provisions of the 1976 act in CCNV versus Reid. As you know, Mr. Chairman, Mitch Snyder's group commissioned a Baltimore sculptor to create a statue of a homeless family. The Court said that since the work didn't fit into one of the nine enumerated categories, it could not be a commissioned work for hire under the second circumstance.

The Court also said that we should define "employee" in the first circumstance, with reference to agency law, looking at factors like actual control. With this definition they found that Mr. Reid did not qualify as an employee.

The question naturally arises, Mr. Chairman, as to why we need legislation after the Supreme Court's authoritative ruling. I see two reasons why Congress should act.

First, the Court's decision on the agency question rested on an absence of Congressional guidance on the definition of employee, guidance that Congress can now provide.

Second, as a matter of policy, the Court by adopting an agency standard for work made for hire raises some real problems. It introduces uncertainty into the business relationship by setting out 11 different interrelated criteria that should be examined. That is quite a burden on transactions in copyrighted works.

The agency approach also makes many ownership determinations ad hoc and post hoc because we cannot evaluate many of the criteria until after the work is completed.

So the Cochran bill defines employee as "formal, salaried employee,” which greatly reduces the possibility of confusion and uncertainty. Unless the real author or artist is actually on your staff, or unless the work falls into one of the nine categories of commissioned works, you cannot own the copyright as the author of a work made for hire.

Of course, the freelance author can then assign all rights of exploitation to the person who pays for the work, but the author would then recapture those rights after 35 years under the termination clause. In most cases the work has no commercial value after 35 years, so this termination of the assignment has no economic significance, but in some rare cases it may have value, and this troubles some of the publishers. If they had to renegotiate a fresh assignment for a work of enduring value, the bargaining power of the author could allow some polite extortion.

With regard to commissioned works, the Cochran bill also makes explicit that the parties must sign the written agreement before the author begins work. It doesn't make good business sense to wait until after the work is created to begin bargaining over ownership. A carpenter who is about to build

a house would not want to start negotiating with the owners of a piece of property over the price of the house after he had completed the house on their property. The negotiation should take place before the work is done, when the bargaining power of both parties is the greatest, so Congress should require a written agreement for all nine categories of commissioned works before the artist starts working. This approach is fair to both sides.

The second major area addressed by S. 1253, Mr. Chairman, is that of joint authorship. In CCNV, the court of appeals remanded this issue back to the district court, and the Supreme Court left it undecided.

Under the current joint authorship doctrine, when two authors intend to merge their individual contributions into a single, unitary whole, like the words and music of a song, each author owns an undivided one-half interest in the work and can market the work without the other author's permission. All they have to do is account for profits to the joint author.

The circuit court opinion in CCNV hinted that a so-called joint author may not need to contribute what they called copyrightable authorship in order to be considered a joint author. This reasoning is wrong as a matter of both statutory construction and policy. Applying this theory, unscrupulous people could take advantage of freelancers by forcing them to agree to a phony joint authorship arrangement. Congress opposed this potential exploitation back in 1976, and Congress should oppose this reading of the law today.

Mr. Chairman, the court of appeals in CCNV recognized that a more restrictive definition of work made for hire might just shift the battle over work made for hire from that arena into the joint works arena. Congress should treat work made for hire and joint authorship as a package and lay all of these issues to rest once and for all

S. 1253 offers a fair, comprehensive solution. While I see some areas for improvement, I support it. It will not help one side or the other so much as encourage the creation of new works, which is the underlying purpose of the copyright clause of the Constitution. At bottom, Mr. Chairman, the public will benefit.

That concludes my oral presentation, Mr. Chairman. I would be pleased to answer any questions.

Senator DECONCINI. Thank you, Mr. Oman. I will submit some questions due to time here.

[The prepared statement of Mr. Oman and responses to additional questions follow:]



Before the Subcommittee on Patents, copyrights

and Trademarks
Senate Conmittee on the Judiciary
101st Congress, First Session

September 20, 1989

Mr. Chairman and members of the Subcommittee, I am Ralph Oman, Register

of Copyrights in the Copyright Office of the Library of Congress and Assistant

Librarian for Copyright Services. I thank you and the Subcommittee staff for giving me the opportunity to testify today on S. 1253, a bill to amend the Copyright Act with respect to works-made-for-hire and works of joint



Under the Copyright Act of 1976, the copyright in a work vests initially

in the author or authors of the work. 17 USC 201(a). In the case of so-called

"works made for hire," "the employer or other person for whom the work was

prepared is considered the author" and, "unless the parties have expressly

agreed otherwise in a written instrument signed by them, owns all of the

rights comprised in the copyright." 17 USC 201(b).

Section 101 of the Act defines two categories of works that may, under

specified conditions, constitute "works made for hire." One category, defined


in subdivision (1), includes works "prepared by an employee within the scope

of his or her employment." The Copyright Act does not, however, contain

definitions of the terms "employee" or "scope of employment." The other

category, defined in subdivision (2), includes works "specially ordered or

commissioned for use as a contribution to a collective work, as a part of a

notion picture or other audiovisual work, as a translation, as a supplementary

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material for a test, or as an atlas, if the parties expressly agree in a

written instrument signed by them that the work shall be considered


made for hire."

The purpose of the work-made-for-hire provisions is to protect the rights of individual authors while still providing employers and those camissioning works a mechanism by which to secure the usage rights that their financial and editorial support warrant. 1 The Act accomplishes this purpose by providing, on the one hand, that in the case of works created by employees within the scope of their employment, their employer automatically owns all rights in the work, and, on the other hand, that the types of specially ordered or conmissioned works-made-for-hire are limited to those falling within one of the nine enumerated categories of works in subdivision (2), and by further conditioning work-made-for-hire status for works falling within

1. Section 201(d) permits transfer of all or part of a copyright "by any means of conveyance or by operation of law." Thus, even if an employer or conmissioning party cannot abtain rights to a particular work through work-made-for-hire status, all or selected rights may be obtained, on an exclusive or nonexclusive basis, through negotiation with the author. Although nonexclusive licenses may be oral, exclusive licenses and transfers of all rights (other than by operation of law), must be in writing. 17 USC (204 (a).

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