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Senator DECONCINI. Thank you.
Mr. Veliotes?

STATEMENT OF NICHOLAS A. VELIOTES, PRESIDENT, ASSOCIATION OF AMERICAN PUBLISHERS, WASHINGTON, DC

Mr. VELIOTES. Thank you very much, Mr. Chairman. You do have my longer statement. I have also submitted for the record a statement by three copyright experts on the moral rights situation. Although I will not be addressing moral rights here, I hope the record will show that we are concerned, very concerned and very

Senator DECONCINI. Indeed, the record will show that. This is the second of three hearings. We will have all of that on moral rights before us. We're going to do another hearing on that particular area, so be assured that your statements—the same with you, Mr. Klipper—will be included.

Mr. KLIPPER. Thank you.
Mr. VELIOTES. Thank you very much.
Senator DECONCINI. We won't charge you for that time.

Mr. VELIOTES. Our basic concern is that we do not believe that the system is broken. Since it isn't, we think it would be a mistake to try to fix it along the lines of S. 1253. We are not calling into question here anyone's motives; certainly not these people who spoke before us today. This was a very sincere group of human beings who have problems as they perceive them, and certainly not Senator Cochran. We understand the concern, and we all share this for our creative artists.

Basically, we believe that changes along the lines proposed would be harmful and would lead to more unpredictability and uncertainty in an already highly complex and intensely competitive area and add even more risk to the publishing process.

I will only mention one example from book publishing, and that's textbook publishing, where you may invest $20 to $30 million. It could take you 5 years to develop a textbook. You will have graphic artists; you will have photographers; you will have a series of authors, maybe dozens of people involved. There is no guarantee that you're going to sell it. If you do sell it, then you must revise it periodically, and it is important that you have the future rights to these works.

I would like to end my statement with one clarification. Mr. Clancy's experience, as I understand it, is highly unusual with respect to book publishers and authors. Tradebook publishers work on clearly defined contractual principles, and I'm certain that Mr. Clancy is satisfied with his current publishers. I should note that they are members of my association.

Thank you, Mr. Chairman.
[The prepared statement of Mr. Veliotes follows:

TESTIMONY OF AMB. NICHOLAS A. VELIOTES

President, Association of American Publishers

Mr. Chairman, I am here today to offer the views of the

Association of American Publishers (AAP)

a member of the

Committee for America's Copyright Community on two important issues: moral rights, as they might apply in the context of the publishing industry, and the work-made-for

hire doctrine, particularly as it would be dramatically

recast if s. 1253 were to pass.

AAP strongly opposes both

the adoption of a federal moral rights regime and the

enactment of s. 1253.

The copyright and contractual systems

under which our members do business today have placed the

United States in a position of world leadership in the production and export of all manner of books and educational

materials.

No one has demonstrated the compelling need to

drastically change our quite successful system by imposing moral rights doctrine upon it or by disturbing the balance now present in the work-made-for-hire doctrine.

AAP is a trade association of book publishers.

Our

approximately 300 members, who employ more than 40,000

people, publish between 70 and 75% of all books published in the United States, including text, technical and reference

books, works of fiction and general nonfiction.

In addition,

our members publish a variety of works in other media

including computer software and databases.

This hearing raises the threshold policy question of whether to superimpose vague, subjective, and wholly

unpredictable new rights upon a long-standing, balanced and successful copyright system. Moral rights, with their roots in the continental civil law tradition, conflict with many

traditional contract and business practices, and would

radically redirect our entire copyright system. The second subject of the hearing, work-made-for-hire doctrine, involves the determination of who should own certain traditional copyright rights and the formula by which that determination

is made.

Before I address today's questions in some detail, I

would like to make clear AAP's position regarding a fundamental issue underlying both the moral rights and workfor-hire components of today's hearing: the notion that relationships between publishers and their contributors are

seriously imbalanced.

Our members, together with other members of the copyright community, daily produce thousands of different copyrighted works: textbooks, novels, biographies,

dictionaries, encyclopaedias, popular and scholarly periodicals, tests and related educational materials, newsletters, computer software and data bases, and more. The creation and publication of almost every one of these works is the subject of a separately negotiated contract (including those establishing consensual copyright relationships) between publishers -- both large and small -- and contributors -- who run the gamut from individual authors of

unsolicited manuscripts to independent contractors having a firm relationship with a publisher to employed staff. Both publishers and creators need the ability to ensure that their contractual rights and obligations will be preserved.

The relationships among those who invest in and perform the publishing function, on the one hand, and those who create, on the other, have been established over a long period of time. The allocation of economic (not moral) rights in the Copyright Act of 1976, which provides the basis upon which these relationships rest, was the result of a long process during which Congress heard from all parties and established a delicately balanced system in which the rights of creators, publishers and the public were all taken into

account.

While some recent hearings and perhaps today's may create the impression that relations between publishers and contributors resemble those of two warring peoples, that is simply not true. We need contributors; they need us. We have worked and will continue to work with contributors to improve the process by which rights are contractually

established and transferred.

Our system can continue to

thrive, so long as its inherent balances are left undisturbed.

To adopt, as a nation, a system granting certain noncopyright owners rights to control or hinder the process by which publishers seek to exercise the copyright rights that

they own (and for which they have paid), would open the floodgates to a wave of vexatious litigation that could

threaten to end our enviable position as the world's foremost

producer of copyrighted works.

I would like to turn now to a detailed examination of today's issues.

I. Moral Rights

Moral rights, however benign the name may sound, would, simply put, disturb the balance now manifest in our copyright system to a greater extent than anything short of repeal of the copyright statute. Copyright, as the Supreme Court and the Congress have often noted, is designed to promote the dissemination of works of authorship. 1 Moral rights are designed to impede or block dissemination by giving authors and their heirs, after the copyright in a work has been transferred or licensed to a publisher by contract, a right of aesthetic veto over the distribution of that work as reproduced or modified by the publisher.

A few examples of the incredible effects of moral rights may be seen in judicial decisions from moral rights nations:

The Canadian creator of a sculpture portraying geese in flight enjoined the owners of the sculpture (who owned the shopping center where it was displayed) from draping the geese with colored ribbon as part of a Christmas display. The court

1 However one feels about whether copyright owners or members of the public at large are the intended primary beneficiaries of the current copyright system, it is completely clear that the purpose of the system is to induce the creation and dissemination of creative works.

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