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or ITC's "new treatments" of public domain faces. "New treatments" is simply a euphemism for an old face which has been reintroduced and repromoted by ITC. ITC's brochures and advertising materials are slick and their channel of communication to the advertising agency is direct. They are selling and collecting royalties on typeface designs that are old and well known and the public domain origin of many of the typefaces promoted as "new" ITC faces can be found in old works such as the ATF 1923 type catalog. Attached hereto as Exhibit G is a sample page from ITC's promotional literature on the Souvenir face as carried by ATF in 1923. These typefaces are essentially identical.

For the right to use this "new" typeface treatment in fonts for its machines, the manufacturer has had to pay a royalty of approximately 100 percent of the price of the font. For example, the royalty paid to ITC on an Alphatype font (list price $65) was $40.00. The manufacturer is instructed that this royalty should be passed on directly to the manufacturer's customer, the typographer. This in fact is done and an Alphatype font (which normally sells for $65), sells for $100.00 wherein it relates to an ITC "new treatment". Similarly, a Mergenthaler font for an ITC face on which Mergenthaler paid a royalty of approximately $200.00 per font, sold for $331.00 rather than the usual $131.00. The manufacturer, therefore, has nothing to lose by "taking a license" in that the entire royalty obligation is passed on directly to his customer, the typographer. The typographer is in no position to refuse to purchase the new face because his customer, the advertising agency, to whom ITC has promoted its "new" treatment, demands the new face.

To date, in the absence of copyright, ITC has obtained its royalties by threats and coercion; by giving favorable treatment to certain manufacturers while denying admission into ITC to others; by decrying "piracy" to the type customer and requiring agreements of its members and typographers to boycott fonts not manufactured under the sponsorship of ITC (even those bearing the old Souvenir face). If new exclusive rights were created, without appropriate safeguards, ITC's power would control the industry. If ITC had the power to deny its new face to any particular manufacturer or any particular typographer, it would have the power of life or death over that typographer or manufacturer.

Even more significant, if exclusive rights become available, ITC and the present manufacturers will be in a position to prevent new firms (including our client) from entering the phototypesetting machinery business. Interestingly, the very first thing Alphatype, and all the other manufacturers did on going into business was to provide on their machines all popular typefaces then on the market which their customers needed. Without these typefaces, the typographer would have no use for a new manufacturer's equipment. If, after some period, the popular faces are owned exclusively by the large manufacturers or groups of manufacturers, no new firms will be able to enter the phototypesetting field.

To summarize, the right to exclusively control new typeface designs is the power to control the typesetting industry. This is what the advocates of copyright are after and this is what they will have if such rights are created.

Because of the practices of ITC and its manufacturer members and the power they have exercised to exclude competition; and faced with the choice of joining ITC or being branded as a “pirate", our client sought an opinion on the legality of ITC's activities from Anti-Trust counsel. A copy of the opinion of Weil, Gotshal & Manges, Esqs., on ITC's practices will be submitted to the Committee at the hearings. The opinion concludes that ITC's activities "raise most serious antitrust problems both for ITC and its members" and that there would be a substantial anti-trust risk involved in joining ITC. As a result of this opinion and the inherent unfairness of the ITC scheme to the typographer, my client has gone the other route and been branded a "pirate".

The practices of ITC and the manufacturer have been called to the attention of the Department of Justice and the Department has authorized an investigation into ITC's activities. We hope this investigation will proceed rapidly to expose and put an end to ITC's methods and prevent ITC from dominating the typographic industry in this country.

BASIS FOR OUR OPPOSITION TO EXTENSION OF THE PRESENT BILL TO EMBRACE TYPEFACE DESIGN

Because of the economics of the typographic industry, and the natural tie-in between typeface designs and typesetting machines, there is no public interest to be served by creating exclusive rights in typeface designs. Those who introduce new typeface designs under the present system obtain more than adequate

return to create incentive for innovation and to provide a good return on their investment. At the same time, creation of such rights would have adverse economic consequences for the typographic industry far beyond the issue of typeface protection.

As to the present Bill, there are several additional reasons to oppose the creation of exclusive rights in typeface design under the term of this legislation. as follows:

1. Any creation of exclusive rights in typeface design must be accompanied by mandatory licensing at reasonable rates to prevent the manufacturers from tying typerace designs to the sale of equipment, i.e., requiring that one buy their typesetting machine to use a particular typeface or completely preventing competitive manufacture of fonts for their machines. The designers themselves in the AIGA position paper insist on mandatory licensing and apparently even the proponents of change concede that mandatory licensing would be required. Inclusion of type face design in the present Bill will not provide mandatory licensing. 2. Amendment of the present Bill to bring typeface design within the scope of Title I would be entirely unworkable and unreasonable. The traditional concepts of copyright as embodied in decisions under the present law create standards for the creation of copyright which are totally inapplicable to utilitarian items such as typeface design. Decisions under the present law have granted copyright to more "distinguishable variations" of public domain works. While this standard may be appropriate in works of art, it is entirely inappropriate where utilitarian articles such as the alphabet are involved. This is clearly recognized in Title II where Section 202 precludes design protection of utilitarian articles which are merely traditional or commonplace variations of public material. If typeface design is considered under any section of the Bill, it cannot be Title I.

3. The present Bill provides substantial procedural advantages for the copyright or design proprietor on the assumption that he will be the small and weak party in any enforcement procedure. Just the opposite is true in the case of typeface design. For example, under the Bill, even if a claim to copyright were rejected by the Copyright Office and registration refused, the owner could still bring an action against an alleged infringer under section 411(a) which permits a Court to determine registrability in an infringement action. A similar provision is contained in Section 220 (b) of Title II. Coupled with the manufacturers' disproportionate economic power, this provision would give the manufacturer virtual control of the market since no one could finance the legal battles required to survive.

4. As presently prepared, the Bill provides no meaningful prescreening of works alleged to be subject to protection (as opposed to the design patent laws where typeface designs are now protected and wherein a thorough search is made by the Patent Office). As indicated in testimony during the hearings before the Copyright Office, there are presently approximately 20,000 typefaces which are in the public domain and under the Bill the Copyright Office cannot conduct any search or investigation in connection with an application for registration. The designers themselves (as represented by the AIGA) suggest that a group of experts be formed to determine what typefaces, if any, could be deemed new and entitled to protection. Obviously, neither the Copyright Office nor the Administrator of Designs under the present Bill is in a position to make use of such expert advice and investigation.

The great danger in our view is that, because of the relatively small size of the industry involved, the Committee will not see fit to tackle this problem in the detail that it requires. If such is the case, the Committee must leave the Bill in its present form (which does not provide exclusive rights to the typeface designs) and consider the typeface question at a later date, perhaps under the Design Patent Statute. Arbitrary inclusion of typeface design in the present Bill would be a reckless and damaging step.

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Printer Benjamin Franklin apprenticed with his brother James in Boston. As a journeyman printer in England and in Philadelphia, Franklin picked up the fragments of knowledge which made him one of the most heroic figures of an heroic age. With a fellow workman Hugh Meredith, Franklin began his own publishing house, bought the Pennsylvania Gazette and made it liberal and clever, and began Poor Richard's Almanack which made Poor Richard into wealthy Ben. One of the most clever men of the time, Franklin used his printing press to argue for the financial changes which might have saved the Colonies for England. He pamphleteered for the formation of a Pennsylvania militia, and, ultimately, for the independency for the American States. Franklin encouraged Paine to come to the new world in 1774, to become editor of the Pennsylvania Magazine. Another man for the age, Paine helped to create the new nation and also served as a volunteer pamphleteer in the Continental Army during the War of Independence.

Newspaper-printers served an eminently active part in the American Revolution, William Bradford, a later editor of the Pennsylvania Journal, also served as a soldier-editor of the Revolution. During the British occupation of New York City

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revolutionary newspapers were printed further north of the Hudson River. When Newport, Rhode Island was captured by the British Army, printer Solomon Southwick buried his press and type. After the British were driven out, the printer exhumed his tools and with difficulty continued publication.

Now let us step back for a moment from the time of the American Revolution to consider this thing called printing.

In the first place, modern society, as we know it, simply could not exist without printing, without thought formed by words and cemented by the printing press. Printing has been the single indispensible tool for the formation of new knowledge and the preservation of old wisdom. Printing has also provided us with education; information, amusement; it has worked for the distribution of goods and services, it prints our money; makes our stamps and brands identification.

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