Mr. KASTEN MEIER. Do you have any jurisdiction or a single authority that says the contemplation of the framers of the Constitution is contrary to what the bill proposes?

Mr. GOLDBLOOM. It is only our reading of the Constitution.

Mr. KASTENMEIER. Would you answer the question of whether you found or looked for an authority?

Mr. GOLDBLOOM. We have looked, but haven't found any.

Mr. KASTENMEIER. It's all on the other side?

Mr. GOLDBLOOM. I don't know that it's there either.

Mr. KASTENMEIER. We have concluded that the State Department and most nations of the Earth are out of tune with the contemplation of the Founding Fathers?

Mr. GOLDBLOOM. I don't believe that most nations of the world are enacting legislation on the basis of the Constitution of the United States.

Mr. KASTEN MEIER. In describing the effect of the term, I think you said it has the effect of doubling the present term, the present term being 50 years. It would make it 112 if you subtract the 50. It means that you are suggesting that after creation, the average author lives 62 years; is that correct?

Mr. GOLDBLOOM. I don't believe we intended to be precise in mathematics: it was an approximate figure that we were trying to get.

Mr. KASTENMEIER. To me it doesn't even seem approximate. I don't mean to nitpick, but I think the effect is somewhat overdescribed in saying that it doubled the term. Perhaps it might increase it by a probable figure of 50 percent but it scarcely doubles it.

I think you are entitled to take whatever point of view the Department desires to in that connection and I would say that the burden is on those proposing to change, to justify the change. I think that is the case and to that extent you are probably not to be criticized.

In title II, which covers ornamental design, is it your point of view that what is done is appropriate or is it your point of view that nothing should be done with respect to that which is proposed to be covered in title II?

Mr. GOLDBLOOM. It is our point of view that nothing should be done. Mr. KASTEN MEIER. I'm going to yield to the gentleman from New York, Mr. Pattison. I caught you by surprise that time, didn't I?

Mr. PATTISON. You surely did. I am interested also in his opinion on the term and I also respect your opinion that it should be something other than life plus 50, but I do wonder if you are serious about that, being that we are somehow constitutionally constrained for some period of time?

It is limited as opposed to unlimited. Certainly, it could be life plus 50 or 1,000. Constitutionally, couldn't we do anything we want?

Mr. GOLDBLOOM. Sure. My statement is not to say that there is any limitation but the provision is to promote and advance science and the useful arts and for the protection of authors.

Mr. PATTISON. You can protect them. We generally operate with notions against having rights fixed in perpetuity. Property rights certainly are not fixed that way. In other words, after our death we can enjoy still those rights in essence.

Mr. GOLDBLOOM. There are limitations on that generally in the law but we have here other considerations. Those considerations are, as I say, the promotion of science and the useful arts and the protection

of authors. If we focus on these, we find in the Constitution a sense of not having it for a very extensive term.

Mr. PATTISON. But, is there not any kind of definitional problem; you don't think it defines anything else than what is proposed in this bill?

Mr. GOLDBLOOM. No.

Mr. PATTISON. I'm interested in the fair-use provision that you have remarked on. It seems to me you are proposing as to nonprofit institutions that there be limited use of reproduction. In other words, schools, libraries, and things like that can reproduce without any consideration. If you want 50 copies for your class, then without having to buy 50 copies of the journal, you can go ahead and reproduce it and that is OK?

Mr. GOLDBLOOM. Yes.

Mr. PATTISON. And that is related to nonprofit organizations?
Mr. GOLDBLOOM. Yes, educational activities.

Mr. PATTISON. When I think in terms of the fact that many things are written for that market, how do you respond to that; in other words, if something is designed to be used in an educational institution which is normally nonprofit, how do you protect that author?

Mr. GOLDBLOOM. This is not designed to make unlimited reproductions of copyrighted material, but it is designed to expand and broaden.

Mr. PATTISON. Doesn't it make it unlimited when it is used in nonprofit institutions?

Suppose I am writing a school book and they are the only people that are going to use it. I am not going to sell my book in the local drugstore. The book I am writing is for the use of schools which are almost always theoretically nonprofit. How do I protect that author? Isn't it true that under your remarks you would eliminate that protection?

Mr. GOLDBLOOM. Well, we think it could be protected perhaps by contractual rights between the publisher and the user. It is not our purpose to support unlimited copying of textbooks.

Mr. PATTISON. But, I think your remarks would do that; I think your suggestion would actually do that, wouldn't it? You exempt the fair-use provisions for educational use by nonprofit institutions. Therefore, if somebody reproduces a textbook and distributes it to their class, even 1,000 copies, that would not be prohibited under the act as changed by your suggestion?

Mr. GOLDBLOOM. I do not believe that we would want this construed to allow unlimited reproduction of textbooks where textbooks are written for purposes of education.

Mr. PATTISON. On the area of CATV, I take it your suggestion as to the CATV system within the normal grade B or normal viewing area where the signal reaches users, that the system would not have to pay anybody for that. As for importation of signals from outside that contour you would approve of them paying something?

Mr. GOLDBLOOM. Yes. It is only where there is reproduction of the signal within the local service area.

Mr. PATTISON. They then would not have to pay for that.

Mr. GOLDBLOOM. Yes, the importation into that area or exportation outside of that area would have to be compensated for.

Mr. PATTISON. Thank you.

Mr. KASTENMEIER. The gentleman from New York, Mr. Badillo.
Mr. BADILLO. No questions.

Mr. KASTENMEIER. The gentleman from Massachusetts.
Mr. DRINAN. Thank you, Mr. Chairman.

May I ask you, sir, by what process does the Department of Justice come to these conclusions and, who is the "we" you keep referring to? Mr. GOLDBLOOM. In our statement, broadly, we consulted various segments of the Department's divisions that have interests concerning this bill.

Mr. DRINAN. From what premise did you operate; why are you inferring something that is all within a legislative judgment? Is it your premise that the first amendment of the Constitution will provide that protection, or what?

Mr. GOLDBLOOм. We have different divisions within the Department that have an interest in this. The Antitrust Division has broad interests in the administration of the antitrust laws. The Criminal Division has an interest in the bill to the extent that there are criminal provisions.

Mr. DRINAN. An interest; what do you mean by that? From what premise do you operate; why are you here? In other words, do you want a law that is easy to execute or what is your major premise?

Mr. GOLDBLOOM. The Antitrust Division administers the antitrust laws and, to the extent they feel that the provisions in the copyright law have an effect upon their broad interest in the economy of our country, they have set forth their interests in this.

Mr. DRINAN. Did you testify in the Senate?

Mr. GOLDBLOOM. I personally did not testify.

Mr. DRINAN. On page 24 of your statement, I have been very interested in the fact that you mentioned here that:

At present, the government has no clear-cut authority to destroy infringing articles which have been seized or otherwise obtained in the investigation or prosecution of a tape piracy case or, for that matter, any criminal copyright infringement case. This lack of specific authority has resulted in critical storage problems for many FBI and U.S. Marshal's offices throughout the country and poses the embarrassing possibility that the government may be ordered to return known infringing articles to a convicted defendant.

Do you have the power to seize them?

Mr. MURPHY. We have the power to seize them as evidence for violations of the law pursuant to a warrant, either pursuant to a warrant of arrest or to a search warrant. The problem arises when we seize substantial quantities of these things that are possessed with the intent to violate the law, and what to do with them. There is no clearcut authority, and we stress the clear cut because there is provision in the copyright law for the destruction of materials that are infringement oriented.

Frankly, of course, until the enactment of Public Law 92-140, the privilege of seeking the destruction of those materials alluded only to the copyright owner. We think by the enactment of Public Law 92140 the Federal Government has been vested with the authority for forfeiture and destruction of such infringing materials. But, in order to make it absolutely clear that that right exists in the Federal Government, we propose this forfeiture provision.

Mr. DRINAN. You suggest on page 24 that the FBI and U.S. marshal's office are posed with the embarrassing possibility that the Government may be ordered to return known infringing articles to a convicted defendant. Tell me more about that; can anyone sue?

Mr. MURPHY. Yes, sir, some have sought orders from the court. Mr. DRINAN. Why would that be embarrassing if you are just doing what the law gives you authority to do?

Mr. MURPHY. We don't say it is embarrassing to do what the law provides for, but that there are erroneous judgments on the part of courts that have resulted in the return of materials to the violator.

Mr. DRINAN. But you want the authority over all of the equipment to be able to destroy it and never return it and not give any compensation for it when some of that could be used

Mr. MURPHY. May I point out that the copyright owner has that authority right now, to seize the infringing materials.

Mr. DRINAN. That is an entirely different question.

Mr. MURPHY. Well, it is similar, it seems to me. These are materials that are used and possessed with the intent to violate the law. Mr. DRINAN. Once again you are telling me, you are stating that the Government is continuing to possess these things when the owners may well come under the law, have the right to take possession of the infringing articles.

Is there anything here, sir, any policy position you take on the question of performance royalties?

As you know, the Senate is deeply divided on this. Is there anything in your statement as to any position that the Department of Justice takes on that?

Mr. GOLDBLOOM. NO.

Mr. DRINAN. You have taken a position on other questions here. How come you missed this very fundamental one that this committee has to decide?

Mr. GOLDBLOOM. We attempted to limit our position to those areas of interest that the Department of Justice administers or represents, insofar as it represents other Federal agencies and departments. Mr. DRINAN. I yield back.

Mr. KASTEN MEIER. The gentleman from California, Mr. Danielson. Mr. DANIELSON. Could you tell me, sir, what is the nature of the property rights in copyrighting, in this context. Is my copyright and my property right subject to execution and sale under a valid judg

ment of a court?

Mr. GOLDBLOOM. I believe it is.

Mr. DANIELSON. Could it be pledged as security and subsequently my security interest be foreclosed?

Mr. GOLDBLOOM. I believe it could be.

Mr. DANIELSON. In other words, it could be taken from me by law? Mr. GOLDBLOOM. Yes; depending on the State law.

Mr. DANIELSON. Under section 104 (c) the State Department representative pointed out that it favored section 104 (c) which would tend to prohibit the enforcement of the valid judgment of a foreign court as to the copyright of one of its nationals within the United States; are you willing to comment on that?

Mr. GOLDBLOOM. I would prefer, if I might, to supplement the record on that. We have not had an opportunity before today to see the State

Department's position on that and the Department of State may very well have a position on that.

Mr. DANIELSON. I only make a request. I don't know some of the answers, but I am seeking them and any help that you could provide I would appreciate. I personally have a problem; I don't see how we can hang on to our comity with other nations if we refuse to recognize the judgment of their courts whether we agree or not. That poses a problem for me and I would appreciate any information you can get for me.

Mr. GOLDBLOOM. I will try.

Mr. DANIELSON. On the subject of cable television, you stated on page 16 that you feel that secondary transmission should be completely royalty free and free of liability so long as it is within the local service actually, because they are just filling in blind spots and improving transmission?

Mr. GOLDBLOOM. Yes.

Mr. DANIELSON. And then you conclude that such transmission does not impair the primary transmitter's market and, in talking about the broadcasting stations, in fact you say it enhances it and I concur. Then you say the copyright holder is helped and not hurt by such activity. What is the rationale for that?

Mr. GOLDBLOOM. To the extent that there might be an agreement between a copyright holder and the broadcaster concerning the use of the material, that the ability to enhance the viewing and the numbers of viewers within the local service area, would seem to be some consideration between the parties. If it is demonstrable, more people would have access to this.

Mr. DANIELSON. Are you saying in effect that when a copyright owner enters into a royalty agreement with a broadcaster, usually a TV broadcaster, that the amount of royalty which is paid is based at least in part upon the number of viewers which the station can demonstrate watch the program at time 7 p.m., for example?

Mr. GOLDBLOOM. It may be something other than royalties for the copyright; it may just be advertising ability, the possibility of advertising a copyrighted work.

Mr. DANIELSON. It is something of value to the copyright owner whether it is money or prestige or whatever, his sense of value is entirely subjective. I understand that, but the point is that the compensation in my money or money's worth to the copyright owner is based in part on the numbers of viewers?

Mr. GOLDBLOOM. That is correct.

Mr. DANIELSON. That is my understanding. All right, for that reason I will once again state your conclusion in the last sentence of paragraph 1 on page 17 of your statement, "the copyright holder is helped and not hurt by such activity."

What the copyright owner gets at this consideration is greater or less depending upon the rated viewing of the program at the time. of the publication?

Mr. GOLDBLOOM. Yes.

Mr. DANIELSON. We are talking about a secondary transmission within the primary viewing area. Let us take for an example southern California which has our largest metropolitan area, Los Angeles. That area is a basin surrounded by a wall of mountains. It is a lovely area,