put in the position of having to choose whether to ignore the law, therefore breaking down everyone's respect for the law.

Would you like to comment on this statement and what you feel the situation is as to the honest Americans who would like to obey the law? What do you think they are going to do?

Mr. WAZ. Well, sir, when one has available to one a consumer technology of this nature that either makes it more convenient or more cost effective to acquire programing in a fashion other than what might be called traditional marketplace channels-the incentive is to make use of such a product.

The question of unenforceability, however, I think is the biggest drawback in any suggestion by the ninth circuit; and, of course, the suggestion of an injunction against recording equipment was only one of many possible remedies that the ninth circuit suggested the lower court consider on remand.

I do believe that, again, if there is any demonstrable loss on the part of copyright holders, their rights, just as the rights of the viewer, merit protection, because the marketplace can be adversely affected, and that in turn results in reductions of consumer choice.

On the other hand, anything that would resemble a punitive tax on equipment or tapes would not be effective for the industry, would be unenforceable, and would give greater incentive to consumers to find other ways to circumvent reasonable legal restrictions. Consequently, that is why I do believe the royalty compensation tax, if a compensation method is necessary, would be most usable, most enforceable, and most effective.

Senator DECONCINI. One great concern I have with this whole idea of taking away the public's ability to finally gain some control over their television viewing is that this technology finally seemed to afford to parents an ability to control what their young children view on television. Through the use of video recorders, parents, for the first time that I know of, except by turning it off, could prescreen what their children view.

Have you heard of any other consumer groups or organizations that are concerned about this issue as it relates to children's viewing television, and do you have any comments regarding that aspect?

Mr. WAZ. There are an array of national and local organizations that are extraordinarily concerned with the quality of children's programing and the parent/child relationship in the viewing of such programing. I am sure Peggy Charren of Action for Children's Television in Boston would be would be an effective and forceable spokesperson for the parents' interest on that particular issue.

By the same token, I know the organization Morality in Media is particularly concerned with cable programing entering the home, as is the Coalition for Better Television. Groups across the spectrum are seriously concerned with that.

There are some protections available, particularly through cable-the so-called lock box that allows the television to be used for all channels except those that might contain programing potentially offensive to particular viewers or not suitable for viewing by children. These lock boxes which are sometimes standard equipment, perhaps not frequently enough, on cable systems allow the parent to make those channels effectively off limits.

Senator DECONCINI. Thank you, Mr. Waz.

Senator D'Amato, do you have any questions?

Senator D'AMATO. Thank you, Mr. Chairman. Yes, just one.

You discuss as a possibility placing a tax on the tapes or cassettes for sale. Is that correct?

Mr. Waz. Yes.

Senator D'AMATO. Are you aware if there is any tax that exists, for example, on audio tapes?

Mr. WAZ. Currently in the United States there is none. I do know that such remedies have been placed into operation in other countries.

Senator D'AMATO. That being the case-there being no tax placed on audio tapes which are used for home recording-why would you think it would be proper to indulge in placing a tax on those tapes that would be used for home recording of video? Is there a distinction between audio and video? Do you think they should be treated differently?

Mr. WAZ. If there were any distinction to be made-and if I were to look at industry figures, such as from the Recording Industry Association of America-I would expect that home audio taping far outstrips the amount of home videotaping going on and perhaps as a percentage of revenue. Again, if there is a demonstrable link between a loss of revenue and home taping, there may be a serious issue to be considered here.

Senator D'AMATO. If one industry that is utilizing the taping at home-and we are talking about audio now, and far more than 3 million tape recorders than there are video at this point in timewould it not be discriminatory to even consider placing a tax on video recording as opposed to audio recording? We have accepted, and it has been written into the law, that they will be exempt. There is no copyright infringement. Is that correct?

Mr. WAZ. That is correct.

Senator D'AMATO. If we evolve a policy that people should have a right to record that which enters into their home, why would we then move to place some kind of tax on the tapes?

Mr. WAZ. The tax suggestion I make is in the broader context of examining the impact of all home consumer technologies on the video programing marketplace. I do stand behind the bill that is being considered today, S. 1758, as an important remedial measure that will at this time remove any uncertainty about home recording.

However, the proliferation of this equipment does raise some realistic questions, some of which do deserve an airing and do deserve the development of an objective evidentiary basis rather than a taping industry throwing its facts at the other facts being developed by the production industry. The entire question does merit an airing where consumers, as I also suggested, may also have an active role.

Senator D'AMATO. But you do support S. 1758 as it presently stands?

Mr. WAZ. I do. I would recommend solely that any legislative intent that may accompany the bill would make it clear that Congress, as always, would be vigilant in terms of the concerns of copyright holders.

Senator D'AMATO. Thank you, Mr. Chairman.

Senator DECONCINI. Congressman, do you care to make any statement?

Mr. PARRIS. I have just one very brief question, Senator.

I would like to pursue what Senator D'Amato was driving at, as I understand it. If I could be presumptuous enough to summarize your statement, you express legitimate concerns about fair compensation on these other questions, but you do support the concept that is implicit here-to separate those issues from the question of the consumer use of owned equipment for personal use-and do support strongly the adoption of this legislation at this time as an initial step. Is that correct?

Mr. WAZ. That is correct. I would say that is essentially correct. Mr. PARRIS. Thank you.

Senator DECONCINI. Thank you very much, Mr. Waz. We appreciate your testimony. You have been very helpful to us.

Mr. WAZ. Thank you.

Senator DECONCINI. At this time in the record I would like to submit a letter dated November 25, 1981, from Senator Mathias to Senator Thurmond, supporting the legislation, with some caveats. It will appear in the record, without objection, at this point. [Material follows:]

U.S. SENATE,

COMMITTEE ON THE JUDICIARY, Washington, D.C., November 25, 1981.

Hon. STROM THURMOND,

Chairman, Senate Judiciary Committee,
U.S. Senate, Washington, D.C

DEAR STROM: My long-time interest in intellectual property is well known to you. While I am in sympathy with the general thrust of Senator DeConcini's bill to permit home recording for private use, I feel strongly that rights in intellectual property should be protected. To that end, I have drafted an amendment to S. 1758 that would provide some protection to those whose creative property is recorded, and assure that the home recording privilege does not unfairly abuse the rights of property owners. I will circulate my amendment later this week.

As you know, I will not be able to attend the first hearing on November 30, but I did want to make the Committee aware of my interest in this matter and my intention to introduce an amendment to S. 1758 that I consider necessary and appropriate. I understand that we will have an opportunity to hear additional testimony on this very important issue early next year, and I look forward to working with you to hammer out a bill that is fair to all concerned.

With best wishes,
Sincerely,

CHARLES MCC. MATHIAS, Jr.,
U.S. Senator.

Senator DECONCINI. Our next witness will be Mr. Friedman. Senator D'Amato, would you like to introduce your constituent? We appreciate having him here.

Senator D'AMATO. Thank you very much, Mr. Chairman. It is my distinct privilege to present to the committee Prof. Leon Friedman, who is a distinguished professor of law at Hofstra University, where he is one of the leading experts in constitutional law.

It is indeed a great pleasure to have you here, and we welcome you and thank you for having taken of your time, Professor Friedman, to prepare your testimony and give it to this committee. Mr. FRIEDMAN. Thank you, Senator D'Amato. Senator DECONCINI. Thank you, Senator.

STATEMENT OF LEON FRIEDMAN, PROFESSOR OF LAW,
HOFSTRA UNIVERSITY LAW SCHOOL

Mr. FRIEDMAN. Mr. Chairman, I do have a statement which I would like to have inserted in the record.

Senator DECONCINI. Without objection, that will be included in the record.

Mr. FRIEDMAN. I will be very brief. I will just try to summarize what my statement says.

I believe that S. 1758 is both an appropriate remedy for Congress to take at this point and that it is a desirable response to the ninth circuit decision in Universal City Studios.

I think it is appropriate for Congress to act at this point, because basically what both the district court and the court of appeals did was try to guess at what Congress' intention was in enacting the 1976 revisions.

Practically nothing is said in the legislative history about videotape recording. There was some brief legislative history that was outlined by the district court judge, Judge Ferguson, when he talked about the 1971 amendments relating to section 1(f) of the old law. But if you look through the legislative history and look through the statute itself, you will find that there is simply no discussion of the new technology in videotape recording.

Both the district court judge and the court of appeals had to guess at what Congress had in mind. Did they intend to have this videotape recording as an act of infringement? Did they intend that the fair use doctrine would cover this home recording?

Their guess and the guess of the district court and the guess of the court of appeals can only be supplemented by a guess of the U.S. Supreme Court if they go up on appeal. But if they are simply dealing with the same legislative history, which is practically nonexistent under the 1976 law, it seems to me entirely appropriate for Congress to come in and say, "Here's what we really intended, or here's what we really want out of this situation."

The court decisions are not a constitutional interpretation of the copyright clause of the Constitution. They are trying to guess at what the operative statute means in respect to an entirely new technology involving billions of dollars, involving millions of consumers at home trying to deal with this technology, and there simply is not an adequate legislative base for dealing with this problem.

It seems to me that Congress can come in at any time-after the district court decision, before it came down, after the court of appeals has issued its opinion-and say, "Here's what we really have in mind. Here are the kind of exemptions we think really should exist in the law."

If you will look at the existing statute, you will see that Congress has already stepped in in a variety of situations and said, "As far as infringement is concerned, we want this to be totally exempt.' Under section 110 of the law they list nine exemptions. If you will look at the very heading of section 110, you will see that it says, "Notwithstanding the provisions of section 106"-section 106 was the basis of the court of appeals decision-"the following are not infringements of copyright." Then they add nine areas-certain

kinds of educational use, certain kinds of use of music in a religious ceremony, certain kinds of transmissions for educational or governmental use. There are nine separate areas where, notwithstanding the broad grant of right of copyright owners under section 106, Congress said it does not want the following uses to be considered infringement of copyright.

There are a whole group of other areas-section 112 dealing with cable, section 118 dealing with other kinds of uses-in which they have determined that they want certain kinds of compulsory licenses to be issued.

The whole section 115 on compulsory licenses for records was an example of Congress stepping in and saying,

These would otherwise be an example of an infringement. We do not want it to be an infringement because of other purposes served by these uses, and either we want a low amount of money to be paid or no amount of money to be paid for this particular kind of use.

I think the closest analogy is in section 504(c)(2) statutory damage provisions, where they say as to librarians and people who work in archives or schools,

If they make excessive photocopying, photocopying that they think would be fair use but a court later determines is not fair use, we do not want them to pay even the $100 statutory minimum provided by the statute.

So we have a whole series of examples in the statute already where Congress has exempted certain uses as infringements or said, "We don't want damages to be paid at all, or if damages or royalties are to be paid they have to be paid at an absolute minimum amount." So S. 1758 just fits right in to what is already found in the statute and indicates where Congress intended it does not want certain acts to be considered infringements.

I think it is also appropriate, because there is simply a total lack of statutory materials dealing with this issue under the existing law.

Now, is it desirable to pass this legislation? Is it desirable to exempt home video recording from the reach of the copyright law? I think it is an entirely desirable response by Congress to the ninth circuit decision, and I think for two related reasons.

One is that, no matter how you measure it, you are going to have to go into the home to determine who, or how, or why, or how often this recording takes place. The court of appeals made no attempt at all to come in to fashion a remedy. They remanded it back to the district court, and they indicated that the district court judge should look at statutory damages.

The statutory damage vehicle says it is either between $100 and $10,000 per act of infringement, and apparently that is to be paid either by the consumer each time he records or by Sony as the contributory infringer, but it is per act of infringement.

If we talk about the hundreds or even thousands of acts of infringement, the act of infringement being the recording and the replay at a later time and whether Sony stands in the shoes of the consumer or the consumer has to pay it itself, there is simply an enormous, totally unforeseen liability in this sort of area.

One way or another, Congress has to do something. The existing damage provision is totally inadequate for dealing with this mass,