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Permit me to express my personal appreciation for the courtesy which you, your colleagues, and your staff extended to me during my recent visit to Washington to testify before the subcommittee in my capacity as Chairman of the Legal Affairs Committee of the Magazine Publishers of America (MPA).

I have fully briefed my committee on the matters which were
discussed during the course of the hearing. You will be pleased
to know that, as a result of the concerns which you expressed
during the hearing, special study is being given to the use of
"check endorsements" in the work-for-hire context.

I wish to clarify my oral testimony concerning magazine
publishers' use of check endorsements. I understand that, in
some circles, my remarks are being construed as an outright
rejection of the lawfulness and efficacy of all uses of
endorsement language. Such a construction of my testimony is not

accurate.

Some MPA publishers do use check endorsements to confirm the
parties' work-for-hire understanding, often in conjunction with
other documents (such as work orders) and/or the established
pattern and practice of their work relationship. There can be no
doubt as to the legality, efficacy and propriety of such
"work-for-hire" check endorsements in such cases. Indeed, the
use of check endorsements to confirm an agreement -- and, in the
eyes of the law, to constitute the requisite "writing" for
Statute of Frauds purposes is a well established and widely
accepted practice in many businesses. For example, parties to
real estate transactions often use check endorsements to confirm
terms and conditions.

To my knowledge, as I hope I made clear during my oral testimony, no MPA publisher engages in the practice of using check endorsements in situations where the endorsement is the first notice to the contributor that the work is to be considered a work-made-for-hire. In such situations which we believe are extremely rare the endorsement could not reflect any prior understanding of the parties. The use of such endorsements in such cases would not be defended by MPA.

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Please be assured of MPA's continuing support for your efforts to ensure the fair operation of our nation's copyright law. Once again, I thank you for your courtesy.

CC: The Honorable Orrin Hatch

Sincerel

Victor Kovner, Esq.

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)

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a member of the

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on two

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

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