their allies. Our industry requires designs unencumbered by a monopoly.

Mr. DANIELSON. Thank you very much, sir.

[The combined prepared statement of Walter Dew and Charles Mulliken follows:]

COMBINED STATEMENT OF WALTER DEW, ADVERTISING TYPOGRAPHERS ASSOCIATION AND CHARLES MULLIKEN, INTERNATIONAL TYPOGRAPHIC COMPOSITION ASSOCIA

TION

This statement is submitted on behalf of the International Typographic Composition Association and the Advertising Typographers Association. These organizations represent 350 small, commercial and advertising typographers throughout the country. The average, annual gross sales of our member companies are under a million dollars.

Our members are the "men in the middle". As typographers, they buy typeface designs or fonts, as they are commonly referred to, traditionally from the same people who sell them typesetting equipment. These type fonts are used to operate typesetting equipment for the production of typographic composition to service graphic arts buyers such as advertising agencies, publishers, printers, public institutions, display media and other disseminators of the printed word, and, indeed, industry and the public generally.

Our members are of the view that creative designing deserves its reward and that such reward is sometimes dependent on federal statutory protection. Accordingly, we are in favor of some form of protection for type designers that provides economic incentive to create and design good, unique, new and original typefaces, which are readily available to all at a competitive price. At the same time, we believe that copyright is not the proper vehicle for protection of typeface designs. For this reason our associations testified before the Register of Copyrights, supporting the established practice of the Copyright Office in refusing registration of typeface designs. We are not aware of any intent thus far in Title I of H.R. 2223 to change existing law and practice in the regard. Moreover, we believe that typeface designs should not be covered within the works protected by Title I of H.R. 2223. The reasons for this view follow:

Typefaces, both in text and display sizes and varieties, are important tools to the typographic industry. This is true regardless of the age or origin of the design. At present there are literally thousands of typefaces available to the typographer and his clients. In truth, there are so many, and so often their designs are so similar, that even the trained eye has difficulty in identifying any particular typeface.

Where does the demand for new typefaces originate? We believe the answer is crucial to the subject of this hearing. The demand is created not by typographers or even their customers-advertising agencies and other end users-but rather by manufacturers of typesetting equipment or marketing organizations, such as the International Typeface Corporation. As a result the typographer is truly the man in the middle. He is forced by the promotional efforts of the manufacturer/marketer to buy items which he may not want or need.

The consequences of this situation are bad enough today; under copyright they would be intolerable. To begin with, we are met with the obvious economie waste and higher costs inherent in this artificially promoted market. But even more significant perhaps is the question of availability to the typographer of a new typeface for which a demand has been "manufactured". Examination of this question requires a closer look at today's typesetting equipment.

As there are numerous phonograph record players in use today, there are also a number of phototypesetting machines. Those most used in the typographic industry (Sic 2791) include Alphatype, Linofilm, Fototronic, VIP, Pacesetter, Comp/Set 500 and CompuWriter. In all there are about a dozen manufacturers of phototypesetters, each offering many different models. But, unlike record players which can accommodate all phonograph records (produced of course by a multitude of producers other than the phonograph manufacturer) phototypesetting machines will accommodate only the type fonts (typeface masters or matrices) of that manufacturer. No two manufacturers' fonts are interchangeable and indeed, there is not even compatibility between different machines of the same manufacturer in many instances.

Because type fonts are produced by phototypesetting equipment manufacturers. and are not compatible one with another, a typographer may and often does

find that typefaces requested by his clients are not available on his equipment. Without access to currently popular typefaces, a typographer is placed in a most unfavorable competitive position.

A recent example of such a situation occurred in a large plant on the eastern seaboard. Its basic phototypesetting equipment was Fototronic. Many of the popular faces demanded by clients were not available on the Fototronic since equipment manufacturers refuse to grant licenses to independent typeface manufacturers. Accordingly, it was necessary to purchase a second phototypesetter (manufactured by Alphatype) which did have available the faces that clients demanded. The new equipment was installed solely for the available typefaces. It cost over $60,000.

Thus, without independents who can produce type fonts for any or all typesetting equipment, the typrographer's only source for the type fonts for his equipment is the manufacturer of that equipment. Therefore, if that manufacturer is not licensed to produce a new typeface, or does not choose to do so, the user of that equipment is in big trouble either he does not meet his client's demand or he has to put in new equipment which offers the faces he needs. All of this increases costs for the user, and restricts sources of supply.

We would prefer to see universal licensing of new designs so that independent manufacturers of type fonts could flourish. There is no reason, economic or social, why manufacturers of typesetting equipment should be the only source of type fonts for that equipment. Protection for the designer does not require insulation of the manufacturer from competition in a free market. In no way do we condone piracy and when we speak of independent font manufacturers it is with the understanding that they pay proper compensation to the designer.

Our experience has shown that we are very far from this ideal today because of the restrictive practices of the manufacturer/marketer. This experience convinces us that copyright protection would move us even further from this goal. Copyright protection for typeface designs would create a complete monopoly for franchisors by providing the opportunity to copyright proprietors to create a demand which could only be satisfied by certain typographers.

The practice of franchising of typeface designs to typographers has resulted in the largest and most successful typographers being chosen as exclusive franchisees. When the non-favored typographers, unable to receive or afford a franchise, are pressed by their clients for typefaces popularized by the manufacturers and franchisors, their only competitive way out thus far has been to meet their clients' needs with "similar" faces.

This practice has, up to now, been limited to display typefaces e.g., those used in headlines. These are assembled manually or by semi-automatic photolettering devices and do not require license by photolettering machine manufacturers. However, at least one franchisor is now providing type fonts for use on phototypesetting machines to produce text sizes with royalties based upon the amount of work produced.

A news article in the February issue of Art Direction magazine quotes supporters of copyright protection for typeface designs as wanting royalties of 2-3% of typesetting fees. If such protection were available to generally popular typefaces in use by typographers, magazines, newspapers and others, it is impossible to picture the administration of such a program and resultant cost to the consumer.

Copyright would remove these competitive avenues. Access would be denied in a number of ways.

(a) A typographer could be denied access to a universally popular typeface because he does not have access to a franchise.

(b) A typographer could be denied access to a universally popular typeface because a license was refused to the manufacturer of his phototypesetting equipment.

(c) A typographer could be denied access to a universally popular typeface because the manufacturer of his phototypesetting equipment did not manufacture the type font and independent typeface font manufacturers were refused license to manufacture.

We, of course, are speaking primarily from the point of view of the typographer. But we think the impact on potential competitors of the proponents of change, on the designer, and on the consumer supports our position:

(a) Refusal by copyright proprietors to grant licenses for typeface designs to new firms seeking entry into the field of manufacturing phototypesetting machines could prevent such entry.

(b) The small, independent and little-known typeface designer will not be served by copyright protection because the demand is largely created by manufacturers and marketing organizations for their own typeface designs. And, much if not most, of this work is performed by staff artists who work for wages. (c) Under copyright, the consumer would pay a higher price. Experience within this particular industry may be unusual but it indicates a price premium of 25 to 100% for "licensed" typeface designs. Moreover, there would be forced obsolescence, as marketing organizations modify the thousands of typefaces in the public domain and promote them under the guise of a new name.

Over and above the foregoing, copyright in the area of typefaces could well produce a rash of litigation or threat of litigation, either of which would drastically reduce the demands for new faces. Today there are literally thousands of typefaces with new entries coming into the market every day. And with all deference to typographic designers, the similarities between some of these faces is astounding. It is a mess today, and a potential catastrophe under copyright.

Copyright protection under Title I could result in typefaces presently in the public domain being slightly modified, copyrighted, promoted, and finally replace the face on which they were based. The risk of innocent infringement by printers, publishers and authors is enormous. Moreover, the minimal requirements of "originality" under copyright law, the large number of designs in the public domain, and the absence of search procedures in the Copyright Office will result in certificates issued for invalid copyrights, but such certificates will nevertheless constitute the means for harassment.

Potentially catastrophic to our industry is a provision in both Title I and Title II of H.R. 2223 (Title I, § 411 (a) and Title II, § 220 (b)) permitting suits for infringement even if registration has been denied. We believe these provisions to be an invitation to litigation, which in the hands of large manufacturers, would be intolerable and should in any event be deleted.

Thus, the undersigned typographic associations do not believe the appropriate method to insure protection for the type designer is to be found in copyright as it is presently written and practiced, or as it would be presented under Title I.

We note that the design patent route presently affords some protection to the truly new, original and unique design which we think does deserve protection in our industry. Whatever may be the broader protection afforded by Title II of H.R. 2223 to designs in general, it would cover, in reference to typeface design only truly original designs but most assuredly not the mere modification or reworking of existing typeface designs.

The proponents also seem to recognize, in principle, the need for a reasonable licensing plan in the event protection is to be expanded. We must note that talks, thus far, on the specifics of licensing have offered no reassurance to typographers. While some manufacturers and marketers have stated that they would license more readily under copyright, there is by no means common agreement among them. Only one or two giant phototypsetting equipment manufacturers and two or three typeface marketing and franchising organizations have worked for the change. The others have either taken a "wait and see" attitude or have even rejected the idea of gaining protection.

An industry-wide agreement on licensing presently proposed by the proponents provides for licensing between manufacturers of typesetting equipment, but excludes independent type font manufacturers. Another provision allows manufacturers to set their own royalty structure. At the same time, the current policy of a leading proponent of copyright protection for typeface design has a public policy "to refuse to grant licenses to permit others to manufacture font strips and thereby reduce (their) market for the sale of font strips". Thus, licensing decisions, so far, have followed the self-interest of copyright proprietors and are far too restrictive.

We are supported in our view for a requirement of broader licensing by one of the strongest proponents of protection for typeface designs. The American Institute of Graphic Arts. AIGA is an organization of 1700 members who are both typeface designers and typographic consumers-graphic designers and graphic production people who design with and specify typography. Their statement of position issued February 3, 1975 says in part:

"1. We would like to see universal licensing of typefaces to all legitimate manufacturers. We consider it healthy to have typefaces obtainable from more

than one source, provided there is good quality control. Because typeface designs are unique, they must be meticulously and accurately reproduced. Their extension to matrices or grids (fonts) for equipment other than that for which they were originally designed is to be carefully controlled by the original designer or design team. Only with this kind of quality control, which insures compatibility, can designers specify type with the assurance that their finished designs will reflect their graphic plans." and "4. AIGA wants to be certain that the cost to type composition remains reasonable-that a royalty and licensing system will not inflate rates unfairly; it also wants to be sure that any royalty or license charge will be collected only once, when the font or grid is sold..."

In addition to the foregoing, the AIGA statement calls for specific legislation to prevent a copyright proprietor from gaining an injunction against an author, printer or publisher who used an unauthorized copy for a protected (type) face. This relates to the concern of the Hearst Corporation, as expressed by Mr. Wasserstrom, and of many other publishers.

We strongly agree that licensing and regulation of fees would be needed before protection is expanded. Because of the peculiar facts of life in our industry, such licensing must be provided in the law. These facts, as mentioned above, include in particular the following: (1) type fonts are traditionally produced only by the relatively few large manufacturers of the equipment on which they are used, and (2) the fonts are not interchangeable or compatible as between the equipment of different manufacturers.

In summary, we think that any increase Congress deems appropriate in the protection available for typeface designs-including the enactment of Title IIshould be accompanied by a compulsory license system on reasonable terms. In no event, however, do we believe that copyright protection under Title I is the proper route.

Mr. DANIELSON. And now, Mr. Wasserstrom, could we hear from you, sir.

Mr. WASSERSTROM. Yes. I would be glad to speak.

Mr. Danielson, Congressman Pattison, eminent counsel, my name is Alfred Wasserstrom. I am senior member of the law firm of Lipton, Wasserstrom, and DeGroot. We are general counsel to the Hearst Corp. The Hearst Corp., if I may be permitted to just amplify a little bit on the nature of our client, publishes 11 magazines, 8 newspapers, and conducts a paperback book operation, Avon Books, which isAvon Books, are published under various imprints, and it also operates King Features Syndicate, a division of the Hearst Corp., which is a rather large, if not the largest, newspaper syndicate in the country. Only by way of-in a somewhat tangential manner and only by way of giving you a little of my background, I am also and have been for upward of the past 10 years the chairman of the legal affairs committee, quondam, the copyright committee of the Magazine Publishers Association which is perhaps the largest association of consumer magazine publishers in the United States.

Gentlemen, I have no economic ax to grind. I am speaking here in behalf of our client, the Hearst Corp., not in behalf of the Magazines Publishers Association, only because I am not specifically authorized to do that, although I dare say our views coincide. Our committee has not made a recommendation to the Magazine Publishers Association, but only because of lack of time.

As I say, I am here in behalf of the Hearst Corp., and I am here because of what I consider genuine fears that publishers must confront if you were to permit original typeface designs to acquire copyright status.

Now, I want to emphasize at the outset that the kind and type of typography that I am concerned about, and I think solidly and

soundly concerned, not gratitously concerned, is the typography of publishing and if I had any doubts about the efficacy of my position or any doubts about the fears that I had before I entered this hearing room this morning, those fears have been dissipated by what we heard this morning in behalf of the proponents and especially when Congressman Wiggins raised a very pertinent and seminal question when he said I can't get it through my head-I am paraphrasing him and I hope he will forgive me. I am not doing it very well. He said, I just can't bring myself to believe that there is originality in the alphabet, and that is precisely what is the basis of our fear as publishers, and that is that typefaces which are in the public domain and have been in the public domain for hundreds of years and at present have been estimated the alphabetical designs in the public domain are in the nature of about 12,000. I think that is a modest estimate. What we are fearful of is the existence of but slight modifications. They would perforce have to be minuscule in order to serve-I am talking about minuscule ornamentation, changes of a serif here, or the shape or shading of an arch there-in order to maintain the readability of the typefaces which is the primary purpose of typeface, and also suffice for copyright purposes.

Now, that is the paradox. You can't have ornamentation and readability if you are going to spread them too far apart. You would have to sacrifice one for the other. We are not concerned, and I don't think publishers in general are the least bit concerned about completely ornamental typefaces, typefaces that one would see in a gallery, for instance, that are basically decorative, but what we are concerned about, and deeply concerned about, is that egregious copyright infringement demands will be made upon publishers and who incidentally do not do their own printing in the main. I am talking now about magazine publishers and book publishers. They rely upon printers to do it and typographers who deal with printers to do the typesetting and do the printing for them. So that despite their innocence, the innocence of the publishers, my submission is that they will be or they very well may be subjected to extraordinary demands by copyright owners, if you were to open the door of copyrightability either under title I or title II of H.R. 2223 which is the bill which we have under consideration.

If you were to admit to copyright original typeface designs, the alphabet, the typeface of publishers, the typeface that is used in texts, in books, in magazines, in newspapers, you would proliferate claims and lawsuits for infringement against innocent publishers, those unconscious of any wrongdoing.

But when you rely upon others, as magazine and book publishers do by settled practice, on printers then no matter how innocent you may be under title I which is basic copyright law, and I am not arguing against strict liability in the field of infringement, but I am suggesting here that this particular kind of work which has for many, many years, harking back for more than 65 years to 1910, has been disentitled to copyright status under existing law, should not now be accorded copyright status.

Mr. DANIELSON. I want to again caution that everybody is even now in fact.

Mr. WASSERSTROM. May I