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mented was that for foreign authors qualifying for protection in the Universal Copyright Convention, the manufacturing clause was done away with, provided the work was published with the familiar "c" in a circle notice.
This was the key compromise in the Universal Copyright Convention, and as things have evolved, there is an enormous paradox here. This point was made, but I will make it again, that Henry Clay started out trying to deal with foreign works by foreign authors, foreign manufactured works by foreign authors; the whole structure of the evolution of the manufacturing clause has been in the direction of foreign works. We are now at the point where the principal impact, the great majority of the impact of the present law is on American works, American authors, and where, under the revision bill, the total impact would be on works by 'American authors; foreign works are exempted entirely.
I think I will leave you to read this, if I may, because it is just too complicated to try to summarize, but I will turn to the summary of the present law, which is on page 12, and this is what we have come to. After the original act was in 1891, there were amendments or revisions in 1904, 1905, and then the act was revised in 1909, and there have been revisions in 1919, 1926. 1949 and, again, effective in 1955.
This is the present law, not the bill. We are now dealing with books and periodicals in English, except where the work is exempted under the Universal Copyright Convention, and, as a practical matter, this means that the requirement now applies almost entirely to American authors. There are certain provisions dealing with graphic works. They are a terrible nuisance. I am not sure they serve a great deal of purpose for anybody, but they are still a part of our law. They would be deleted under the revision bill.
It is interesting to observe now, in the light of what we have been through over the last 10 years, that one major issue seems to have receded. Section 16 of the present law is poorly worded; they were trying to cover everything, and as a result they left some gaping loopholes, and one of them was an apparent loophole that allowed U.S. publishers to have foreign manufacturing firms do the composition of the type abroad and then import certain artifacts and reproduce the copies here. The wording of section 16 was so ambiguous that this was a possible interpretation, and they were certainly doing that, and this was hotly contested in the middle 1960's.
Basically, the intention of section 16 is that all forms of book manufacturing be done in the United States. It did not have that effect. Under the present law, the principal exception. if you cannot get out from under the manufacturing clause directly, the principal exception is known as the ad interim exception, or an ad interim copyright. For books and periodicals by U.S. citizens, first manufactured and published abroad, and for the few foreign works still failing to qualify under the UCC, a 5-year ad interim copyright can be secured by making registration and deposit within 6 months after first publication. This temporary copyright can be extended to the full term by manufacture and registration of a U.S. edition within the 5-year period.
This class of registration, which was once quite widely used, is now not rare, but it is mainly American authors, and it is certainly a small form of registration compared to what it once was. Under an ad interim copyright you can import up to 1,500 copies. This was a compromise that was reached in 1949 and expanded in 1954, intended to allow the testing of a market. In other words, this exemption is of recent date, relatively, and it is the core of this section 601 that you are now considering.
Again, the Copyright Office has taken an active role in the 1949 amendment, as it had in the development of the Universal Copyright Convention. It was not surprising, therefore, that the 1961 Register's Report took a fairly strong position favoring elimination of the manufacturing clause as a condition of copyright protection. We hoped that the economic situation had changed sufficiently that the thing could be considered a last leaf on the tree and allowed to drop. That was not to be, at least then.
The expressed hope of the Copyright Office that "economic factors had changed sufficiently to permit the dropping of domestic manufacture as a condition of copyright” was dashed to earth by the book manufacturing industry, whose representatives, in the words of the 1965 Supplementary Report of the Register, “took a very strong posi. tion against complete elimination of the manufacturing requirements in the copyright law," and I think you heard again not a terribly strong echo of that in the testimony heard on September 18, but it was the same basic argument. It was a hot issue in the early 1960's, and it was pretty obvious that it had to be compromised, and the process, believe me, was familiar with respect to the manufacturing clause.
In the 1963 preliminary draft, we put forward two alternatives : one opted for outright repeal, the other for a 1,500-copy limitation with the following subsection, and I think if you read this you will see that what I say in the next paragraph on page 15 is true, that with many changes in language and specific content reflecting a long series of compromises, this second alternative remains the basic approach of section 601 of the 1975 bill: domestic manufacture should no longer be a condition of copyright, and the ad interim and other formalities connected with deposit and registration would be eliminated. However, with many limitations and exceptions, the copyright owner would be prohibited from importing more than a certain number of copies manufactured abroad; this would be enforced by offering a complete defense to infringers who can prove violation of the import restrictions.
This is a very general summary, not only of what we put forward in 1963, but also of the present bill, with many changes in language and content. There was a very good spirited effort to compromise this. I would say that of these various efforts to compromise, this was one of the less rancorous. There was a genuine effort to go forward, but they could not reach a compromise by the time the House hearings were held in 1965 because of this loophole that I mentioned, which no longer seems to be that important, although that may be a little bit deceptive. The publishers were arguing strenuously that they should be allowed to compose their text abroad and then do the rest of the manufacturing here, and the book manufacturers and the unions were not prepared to accept that without some other compromises.
Essentially, therefore, they were not able to come to your subcommittee in agreement. They were in basic disagreement, and they argued the principle of the manufacturing clause; yet, once again, the 1965 House hearings appeared as a sharp and fundamental confrontation, but beneath the surface a current of compromise was still flowing. The House Judiciary Committee, in its 1966 and 1967 reports, adopted language intended to resolve the "repro-proof” controversy in favor of the publishers. This was embodied in your bill when it passed the House on April 11, 1967, and it formed the basis for further compromises that were going on during this whole period, both with respect to the repro-proof issue and the section 601 as a whole.
When you get to the well, let me come back to the 1967 hearings in the Senate, and summarize the statement this way. Representatives of publishers and manufacturers reached a formal agreement, which I have included in its text and in this chapter, in 1968 as to the contents and wording of section 601, and have continued to adhere to that agreement to the present time. Because of this factor, the hearings on the manufacturing clause before the House Judiciary Subcommittee in 1975 approached some of the problems obliquely, and did not dig very deeply into the basic issues, and therefore, I have reprinted on pages 16 through 19 the summary of the arguments pro and con that was included in your committee reports in 1966 and 1967. I think they are still valid; I do not think they have changed at all.
Your committee concluded on the basis of these contradictory arguments—and this is at the middle of page 19—that:
Although there is no justification on principle for a manufacturing require ment in the copyright statute, there may still be some economic justification for it. Section 601, as amended by the Committee, represents a substantial liberalization that will remove many of the inequities of the present manufacturing requirement. The real issue that lies between Section 601 and complete repeal is an economic one, and on purely economic grounds the possible dangers to the American printing industry in removing all restrictions on foreign manufacture outweigh the possible benefits repeal would bring to American authors and publishers.
The following paragraph, which is at the bottom of page 19, is also from the 1966 report and has been picked up again in the 1974 Senate report, and I think it is of some importance:
The committee is aware that the concern on both sides is not so much with the present but with the future, and because new machines and devices for reproducing copyrighted text matter are presently in a stage of rapid development, the future in this area is unpredictable. Outright repeal of the manufacturing requirement should be accomplished as soon as it can be shown convincingly that the effects on the U.S. printing industry as a whole would not be serious. Meanwhile the best approach lies in the compromise embodied in section 601 as amended.
Mr. DRINAN. Excuse me, Ms. Ringer. To what extent would that formal agreement in 1968 differ with section 601?
Ms. RINGER. The formal agreement in 1968 was based on 601 as it now exists, and I think that with some minor changes, both sides are really supporting it.
Mr. DRINAN. It is substantially
Ms. RINGER. Yes; it was basically directed at equating Canadian manufacture with U.S. manufacture, and this was the last of a series of compromises that were reached during this period, and it has held. In other words, no one is breaking the line. There have been some suggestions for changes here and there, but basically, 1968 is essentially what you have in front of you.
Mr. DRINAN. Well, you say when we had those people here earlier this year that they did not dig very deeply into the basic issues. Does that mean that the basic issues have been resolved ?
Ms. RINGER. No, because I think the Chairman asked the representative of the State Department on the second day of your hearings, would it be possible to phase this out, and the answer was positive, and I think it was picked up by the representative of the Authors' League, and I would call your attention to the fact that this agreement is only among certain segments; it is not a universal agreement. The Authors' League representative did testify against the manufacturing clause in general, although he said he supported the compromise with a phaseout and with another amendment that I will come to. But, essentially, there is some disagreement and, obviously, the publishers and authors would like to see the thing gone, but they have, because of an evolutionary compromise during the 1960's, reached agreements which they are not prepared to abandon, and I think this is creditable, but I do not think these agreements are necessarily binding on you.
Anyway, one thing that happened-and I do not think it was really noticed as much at the time as it should have been—was that on October 14, 1966, 2 days after you reported the general revision bill in 1966, Congress passed a public law implementing the so-called Florence agreement, which is a UNESCO sponsored agreement, that in effect removed all U.S. tariff barriers on the importation of the great bulk of books and educational materials. They are just gone. So that in effect anybody who wanted to argue, well, let us do away with the manufacturing clause and put tariffs on books, could not do that anymore because after 1966 you cannot put any tariffs, on books, and the extent to which you can put quantitative limitations is something I am going to come to. This is still an issue that I am afraid you have to wrestle with.
The Senate Judiciary Subcomittee held hearings on section 601 5 days after the House passed the bill, and it was obvious that between 1965 and 1967 there had been a considerable coming together on this and that a compromise was within reach, and I will not try to paraphrase Mr. French's testimony, which is laid out at the bottom of page 20 and on all of 21, but I think it worth reading. It tried to express the way the compromise sat at that point, and essentially it was, nobody really likes this, but everybody is agreeing to it with one proviso, with one condition, and that is that you try to get Canada equated with the United States in terms of where manufacturing complies with the manufacturing requirement, and the reasons for this proposal are laid out in his testimony.
Now, everyone was uneasy with this. It was fine to say you had had a compromise, but no one really knew what the effect of this Canadian exemption would have, and Senator McClellan wrote to the Department of State, requesting its views in April of 1967, and the Department responded in September of 1967 in the negative. It took the view that the proposal presented serious, if not insurmountable, problems, legal problems, and would conflict with Government policy goals, which they described as "to maximize international trade through the most-favored-nation principle and to maintain the strength of the GATT organization.” The State Department summarized its position as follows:
"As long as the manufacturing clause remains a part of the copyright law, it would not be proper to except any nation from its provisions. We therefore would advise against the amendment proposed by” the book manufacturers. Now, the book manufacturers took on this argument vigorously, and did a great deal to try to refute it and, as I tried to present later, it is not that clear. I think there are strong arguments on both sides, and I will try to, without bogging you down in the technicalities of the General Agreement on Tariffs and Trade, try to show what I mean. In any case, while all of this was going on, the book manufacturers and the publishers were seeking to find something formal in which to put forward this Canadian exemption, and they went to Toronto and had a meeting in February of 1968, and the Agreement of Toronto, which is a formal document, as reproduced here on page 24 and 25, was adopted. Essentially it'involved an acceptance of 601 as it stood then with the addition of Canada to the United States, plus an agreement on the part of the Canadian representatives at this meeting to do everything they could to get the Canadian Government to accede to the Florence Agreement, which, I think, would be of considerable value to U.S. interests. And there was at that time a great international crisis in copyright which involved Canadian agreement to make common cause with the United States in trying to press our positions.
Rather than going through the lengthy legislative history of this, let me say that there have been some technical amendments by the Senate to section 601, which I will address, but by far the most important was the addition of Canada to the bill in the form in which it had been proposed, and that has held up, despite the State Department demurrer, and in the report explaining the change, the State Department opposition was not mentioned. It was repeated when the State Department came here to testify on May 8.
Let me turn to page 28 and call your attention to the comparative summary of section 601 with the present law and the 1967 House version, and this runs over to page 31. I am a little reluctant to dig into the details of this unless you would like me to.
Mr. KASTEN MEIER [presiding]. In view of the hour, I think we can pass over it.
Ms. RINGER. Mr. Chairman, I do not have to finish this chapter today, but it would be nice if I could, so if I may press on.
We come to the primary question which is, should any manufacturing requirement be retained in the General Revision bill, and in this chapter, I have, perhaps unwisely, combined my background discussion of issues with my comments and recommendations, so everything is in here together in pages 32 to 52.
The first question is basically whether the manufacturing clause ought to be retained at all, and I quote what I thought was a very apt statement from a 1959 law review article, saying that