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the Judiciary Committee of the U.S. House of Representatives shouldn't consider that seriously. And I don't think it behooves the Judiciary Committee to pass a piece of legislation that may well be unconstitutional.

Mr. DRINAN. Just one last piece of information. Would the chairman tell me what the 1967 bill from this committee included ? Mr. Karp says in that report you people stated, “There is no justification in principle for the manufacturing requirement."

Was section 601 of the manufacturing clause, was that completely out of that bill?

Mr. KASTENMEIER. No, it was not. As a matter of fact, and I think the gentlemen who are witnesses here are more knowledgeable than the Chair on this, my recollection is that bill is very much like 2223.

Mr. KARP. The report talks of the clause as it would be under 601, Mr. Drinan. It still says that is not justifiable in principle.

Mr. DRINAN. But the committee recommended that the clause ultimately should be repealed. Is that in the original

Mr. KASTENMEIER. No, the point of the report, while it suggested disaffection for that clause, but mindful that compromises and conciliations have already taken place, and that the clause as represented in this bill—and I am talking about 1965, 1966, 1967—but rather than to go and outright repeal it, or something else, that subcommittee at that time accepted more or less the language in 2223, but expressing this as a point of view.

However, the point of view was not written into the bill. In other words, if I understand the law, the present law exempts 1,500 copies and the bill exempts 2,000 copies. This particular proposal exempts Canadian publications, I think. I am not sure whether our bill did in 1967, did it?

Mr. KARP. No. That is a change.

Mr. KASTENMEIER. That is a change. And there may be certain other changes you have indicated in terms of typography and so forth that I am not clear on. I am not clear on the technical changes between H.R. 2223 and the present law. Perhaps Mr. Sandler or Mr. Van Arkel could enlighten the committee as to precisely what changes are represented from present law and 2223, from the present text? Mr. VAN ARKEL. Well, I think

Mr. KASTENMEIER. Does anyone at the table have knowledge on that?

Mr. VAN ARKEL. Well, I think you touched on the important ones, Mr. Chairman.

Mr. DRINAN. Mr. Chairman, I would just urge these two contending parties have a long lunch and study their difficulties on section 601 and come to the best compromise they can make.

Mr. STRACKBEIN. May I say, the impression seems to be entertained by some people that this manufacturing clause would prevent the importation of books, this language, from abroad. Of course, it does nothing of the kind. It is only if they want to enjoy a copyright in this market that they must manufacture in this country.

Mr. KASTENMEIER. Yes, I think everyone understands that.

Mr. STRACKBEIN. In other words, if you want to manufacture abroad, you have access to this market, but you don't get the copyright.

Mr. KASTENMEIER. Do I understand the effect of the present law is to enable foreign book manufacturers and publishers to import into this country 1,500 editions, which are protected by copyright, and then having tested the market, they may not thereafter import more into this country, but then they would have tested the market for an American manufacturer and that

Mr. STRACKBEIN. That is correct.

Mr. VAN ARKEL. No, there is no prohibition on importing any number he wants to. The only consequence is that, if he imports more than 2,000, as provided in this bill, he will not receive later copyright protection. He has a 5-year period of testing the market to find out whether or not he wants to put out an edition in the United States.

Mr. STRACKBEIN. I think the 5 years is not in this bill.

Mr. KASTENMEIER. But the bill is predicated on the notion that copyright protection for authors for publishing and, indeed, as affects book manufacturing, is an essential economic protection.

I yield to the gentleman from California.

Mr. Wiggins. This is addressed to any one of the gentlemen who can answer this question. Do the copyright laws of other countries contain similar restrictions?

Mr. KARP. I don't know of any Western European country; I don't know of any country that has a manufacturing clause.

Mr. VAN ARKEL. Mr. Chairman, the British, and I feel quite sure other countries as well, have the exact equivalent of a manufacturing clause for copyrights. That is to say, in order to achieve a patent on anything, on any invention, you must manufacture in Great Britain or some other country in order to retain your patent.

Mr. WIGGINS. Do you disagree with the gentleman with respect to copyrights, however?

Mr. VAN ARKEL. I know of no other country that has a similar provision with respect to copyright; no.

Mr. KASTENMEIER. The gentleman from New York ?

Mr. PATTISON. I think we have pretty much exhausted the subject, but let me just follow up the notion you can import all you want, but all you lose is your copyright protection. Wouldn't the effect of that be that anybody who imported, let us say, 3,000 copies and thereby lost his copyright protection after the 2,000 copies, the effect of that, wouldn't it be, that any printer or any person could simply copy that book and sell it without any liability?

Mr. VAN ARKEL. Well, Mr. Congressman, if we didn't think this clause had some economic effects, we wouldn't be here in support.

Mr. Pattison. So that, in effect, really, as a practical matter, it does prohibit the importation of more than 2,000 copies?

Mr. Van ARKEL. No, it prohibits nothing.

Mr. PATTISON. I understand it doesn't actually prohibit it, but in effect it prohibits it?

Mr. VAN ARKEL. Well, in effect, it says you may not have a monopoly in the American market if you import more than 2,000 copies.

Mr. Karp. Mr. Pattison, may I respond to that? It is obvious that when an act of Congress inhibits somebody from acting because of a severe penalty if he acts, then it acts the same as a restraint. The Supreme Court decisions are full of examples of self-censorship, of coercing somebody into not doing something because of the serious

damage he might suffer. And more than one act of Congress or the State legislatures has been stricken down because it coerced and caused self-censorship. And that is precisely what this law does. An American author who has a book published abroad can't bring in more than 2,000 copies for fear of losing his copyright. Under the present example, he can only bring in 1,500, if he gets an ad interim copyright. It is the most effective form of restraint there is. Indeed, the bill is written as an absolute prohibition. It says you can't import them and then it implements it by saying that you lose your copyright.

But even assuming it only meant that you lost your copyright, that is the whole ballgame.

And I do think, as I said before, this word monopoly, which is always bandied about in testimony, you know, a copyright isn't a monopoly in an antitrust sense in the same way a union is but for that exemption of the Clayton Act. And, ironically, the biggest suit in publishing right now is an antitrust suit which deals with this very type of restraint. And here is the most effective restraint of all, that has been enacted by Congress.

Mr. Patrison. Let me just ask one more hypothetical question. We make a lot of paper in my congressional district. Suppose this manufacturing clause was expanded and said it not only had to be printed here but had to be printed on a paper that was manufactured here. Now would that differ in principle from what you are talking about?

Mr. SANDLER. I think by stating it had to be printed here, I think to some extent you are including it has to be manufactured on paper printed here.

Mr. PATTISOX. Yo: I realize that is not in the law, but

Mr. SANDLER. No; but the fact of bringing the paper in here, I mean, the paper is here and this is one of the economic advantages, as opposed to the paper being from Europe. And

Mr. PATTISON. Well, suppose it came from Taiwan. Suppose we got really cheaper paper from Taiwan and the paper manufacturers in this country said, "Hey, you are producing books on a lot of paper that is cheaply manufactured in Taiwan.” That might be of concern to us in this country.

Mr. SANDLER. Well, frankly, I am surprised that the paper industry is not represented here, because I think they have as much an interest as the book manufacturers have. If these books are manufactured in Europe or Taiwan, it is going to be on paper made in those countries.

Mr. Pattison. Maybe I should tell the paper manufacturers in my district.

Mr. KARP. Mr. Chairman, I might note in response to Mr. Pattison's question that one of the greatest ironies of this clause is that if an author does allow more than 3,000 copies to come in, then copyright is forfeited, and every Taiwanese book pirate and every cheap printer all over the world is perfectly free to copy the book and send it into the United States to compete with this labor.

Mr. SANDLER. May I address myself to that, or at least refer to the BMI legal counsel? We discussed this subject this morning, and he is better prepared to respond to this than I am.

Mr. OWEN. I think there is a little misstatement-
Mr. KASTENMEIER. Would you identify yourself for the record ?

Mr. OWEN. Yes; Steve Owen, Counsel for BMI. I think the question here is this bill has been liberalized considerably in effect so that if a person exceeds 2,000 copies into the United States, then at some later period he can resurrect his copyright merely by going to an American book manufacturer and having another edition printed. He immediately gets back his copyright. He doesn't lose it. So that ad interim copyright of the prior language in the law is changed substantially in section 601; the ad interim copyright is out of this bill.

Mr. Karp. I wasn't talking about that, Mr. Chairman. Under this bill as now drawn, and under the present law, once the American author's protection is forfeited, and this bill says it allows 3,000 copies to be brought in with his authorization


Mr. Karp. Oh, 2,000. I beg your pardon. I am not trying to get 3,000. That is hardly worth quibbling about. That is not the point.

If 2,000 are brought in with his authorization, he loses his protection, and then anybody can print an infringing edition and that means anybody anywhere. All he can do if he can find an American publisher to print the book, he can only protect himself against further infringements by others. The damage is already done.

And in fact, if the pirates abroad can pour cheap copies into the country, then no American publisher is going to publish it anyway.

Mr. KASTENMEIER. If the gentleman from New York would yield on that a moment? If a prominent author living in Paris had a Parisian publisher and book manufacturer, and introduced 2,000 copies into this country, and finally an extra 1,000, he would forfeit his copyright in the interim in this country. But, if you were in that situation, presumably, you would have gotten a copyright in France, and those other copyrights would continue to protect the author and publisher in those countries.

Mr. Karp. Not against distribution and sale in the United States. And there are plenty of countries—in fact, the countries with the cheapest labor are the ones that don't necessarily prohibit printing. I mean, Taiwan theoretically has a copyright treaty with us. I am talking about distribution in the United States here. And the prominent American author in Paris has an American publisher who publishes here. That is my point. If you can find an American publisher, then that American publisher isn't going to send abroad for a foreign edition of a novel or a biography or current history.

This dispute isn't about that and doesn't even involve authors. It is big American publishers who turn out great big fat expensive colored books for distribution here and who send the printing work abroad. Now, that is not the author's problem. And the irony is that when an American publisher now or under this clause wants to bring those heavily colored books in with the text, he avoids the manufacturing clause completely by hiring himself a Canadian author or a British author or a French or a Russian author to write the text in England and then he doesn't have to comply with that clause. All that happens is that American authors are out of work. I guess if we affiliated with the AFL-CIO, they would have a problem. They wouldn't know which bunch of laborers to protect; either the authors or the printers, because that is just what happens under the manufacturing clause.

Mr. STRACKBEIN. Mr. Chairman, may I make one last observation here. No. 1, that the importation of books free of duty was provided under the Florence Convention. The Congress of the United States, under the trade agreements legislation, had no authority to reduce any duty to zero. By an end-run through the Florence Convention, this was accomplished; that is, completely removing the duty by means of a treaty, thus circumventing the constitutional power of the House to initiate legislation in this field. So they do have free importation of books into this country, without any duty.

Now, that in itself, has certainly liberalized the trade in books. And in fact, as stated in my statement, the importation of books has almost tripled within less than 10 years time. So that actually, from the point of view of the economics of it, the retention of a manufacturing clause is the only thing that is left by way of giving protection to the workers in the printing trades in this country. Other than that, they are bereft of any further

protection. Mr. KASTENMEIER. Any further questions? Mr. PATTISON. No.

Mr. KASTENMEIER. If not, that concludes the testimony this morning on the manufacturing clause.

The committee is indebted to you, Mr. Strackbein, to Mr. Van Arkel, to Mr. Sandler, and Mr. Karp.

Next, the Chair would like to call the witness on the question of nonsimultaneous recording right for cable system in noncontiguous areas. We have Mr. Lee Holmes, president of Guam Cable TV Co., to be introduced by the Honorable Antonio Borja Won Pat, Delegate from Guam.



Mr. Won Pat. Thank you, Mr. Chairman and distinguished members of the committee. My statement will be very short, and a more comprehensive statement will be made by my constituent, the owner of the cables, Mr. Lee Holmes, who is accompanied by his wife, and his counsel.

Mr. Chairman and honored members of this subcommittee, I appreciate this opportunity to address the need for special copyright provisions to protect the thousands of cable television subscribers in Guam.

Under the 1909 copyright statute currently in force, cable stations in the 48 States have legally been held free of liability for simultaneous transmission of copyrighted programing. This has twice been upheld in the landmark legal decision of Fortnightly Corp. v. Columbia Broadcasting System, Inc.

The cable television system in Guam, however, does not enjoy such protection. Our local system, known as the Guam Cable Television System, does not rebroadcast simultaneously. Because of their great distance from mainland video signals, they retape the programs on

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