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It would be of assistance to the Subcommittee in its deliberations on this issue if you could inform us of what procedures and regulations you contemplate in connection with the section of the Health Science Library Assistance Act which I have quoted. Specifically, I would like to know whether it is anticipated that libraries receiving assistance under this Act would duplicate or reproduce copyrighted materials without permission of the copyright owners. As you may know, the doctrine of fair use permits the reproduction under certain circumstances of short excerpts of copyrighted works, particularly, if this will not harm the commercial market of the copyrighted work. I would welcome your comments concerning the length of excerpts and the number of copies to be reproduced. With kind regards, I am

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Chairman, Committee on the Judiciary, Subcommittee on Patents, Trademarks, and Copyrights, New Senate Office Building, Washington, D.C.

DEAR SENATOR MCCLELLAN: Thank you for your letter of October 7 relating to the photoduplication of copyrighted materials in medical libraries to be supported under the Health Science Library Assistance Act. The Public Health Service is aware of the complex problems faced by the Senate Subcommittee on Patents, Trade-Marks and Copyrights in modifying existing legislation to reflect the practices and needs of a contemporary society.

Ever since Medicofilm was established in the National Library of Medicine to provide microfilm copies of individual articles to medical officers overseas during World War II, the National Library of Medicine has incorporated photoduplication as one of its principal mechanisms of public service. It has done this under the "fair use principle," making single copies only of individual articles appearing in scientific journals for purposes of research and study. These are made, of course, in lieu of manual transcripts; they are also in lieu of the lending to other libraries of the original volumes containing these articles. On the basis of our statistics kept through the years, the average length of articles copied is 10 pages.

This service has been provided under the authority of Public Law 941-84th Congress, Chapter 907-2d Session, S. 3430, Sec. 372 which requires the Surgeon General through the National Library of Medicine to "make available, through loans, photographic or other copying procedures or otherwise, such materials in the Library as he deems appropriate." The service is carefully controlled; requests to make more than one copy, or to make photocopies of copyrighted books, as distinct from copyrighted journal articles are rejected. In short, the Library's photoduplication activities represent a considered balance between its national mission of providing for the availability of research publications and its responsibility as a Federal agency not to cause damage to private property rights.

In this connection, a recent study of photoduplication activities in the National Library of Medicine, reported at a meeting of the American Institute of Textbook Publishers, revealed that of the 100 scientific journal titles most heavily copied, 63 were American; of the 63 American, 56 were the property of scientific and professional societies and only 7 the property of commercial publishers.

By and large, the medical library community to which the National Library of Medicine releates and which it will be supporting, is similarly aware of the provisions of copyright law, and conducts its photocopying activities responsibly under the concept of fair use. The National Library of Medicine intends to achieve informal understanding with libraries to be supported, that the principles of fair use be observed. Specifically, it will discourage the making of multiple copies of a single article, the making of copies of entire issues of scientific journals, or the making of copies from books without prior permission of owners of copyrights of such publications.

Regulations for the conduct of programs under this Act are currently being developed. The extent to which the Public Health Service can or should, in the

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absence of specific statutory mandates, includes provisions requiring adherence to other Public Laws, is under review.

I sincerely hope that this information may be of value to you and your committee.

Sincerely yours,

WILLIAM H. STEWART,

Surgeon General.
ОСТОВЕР 7, 1965.

Mr. ABRAHAM L. KAMINSTEIN,

Register of Copyrights, Copyright Office,
Library of Congress, Washington, D.C.

DEAR MR. KAMINSTEIN: As Chairman of the Senate Subcommittee on Patents, Trademarks and Copyrights, my attention has been directed to the recently passed Health Science Library Assistance Act of 1965. This legislation as passed by the Senate (S. 597) in section 399 authorizes the Surgeon General to make grants to various medical libraries which have agreed "to provide free loan services to qualified users, and make available photo-duplicated or facsimile copies of biomedical materials which qualified requesters may retain."

As you know, this Subcommittee is now engaged in the consideration of S. 1006 to provide for a general revision of the copyright laws. From the limited testimony which I have heard on this bill, and from discussions with interested individuals, it is apparent that one of the most difficult issues is the extent to which copyrighted materials may be reproduced for educational purposes without permission of the copyright owner or payment of a royalty.

It would assist the Subcommittee in its consideration of this subject if the Copyright Office would submit a report as to the copyright implications of the section of the Health Science Library Assistance Act which I have quoted. I would like to receive these comments based both on the existing law and court decisions concerning fair use, and what the law would be if S. 1006 were to be enacted in its present form.

For your convenience, I am enclosing the text of S. 597 as reported in the Senate. The language relevant to my inquiry will be found on page 22.

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DEAR SENATOR MCCLELLAN: This is in reply to your letter of October 7, 1965, concerning the possibility of a conflict between a provision of S. 597 (which subsequently became P.L. 89-291, approved October 22, 1965) and the copyright law or the proposed revision of that law, S. 1006.

At the outset, it should be pointed out that my comments are based upon the present copyright law, and that they would still be applicable to S. 1006, since the bill does not propose to make any changes in this regard.

Section 399 of S. 597, about which you inquire, and which became section 398 of the law as enacted, provides in part in subsection (c) as follows:

"(c) (1) Grants under this section shall be made only to medical libraries which agree. ... (B) to provide free loan services to qualified users, and make available photoduplicated or facsimile copies of biomedical materials which qualified requesters may retain."

You request our comments as to the copyright implications of this provision of the above law, which is known as the "Medical Library Assistance Act of 1965," The new law amended a 1944 Public Health Service Act, which in 1956 was further amended by the transfer of the Armed Forces Medical Library to the newly established National Library of Medicine. That Act provides, inter alia, (42 U.S.C. 276) that the Surgeon General shall "make available, through loans, photographic or other copying procedures or otherwise, such materials as he deems appropriate. . ." (Italic supplied) The 1956 amendment to the Public Health Service Act also provides for the establishment by the Surgeon General

of a Board of Regents, which as a part of its duties is the prescribe "rules under which the Library will provide copies of its publications or materials." Since the provisions of section 398 are basically no different from the provisions of the 1956 amendment, it may be of interest to ascertain the administrative interpretation of that earlier copying provision.

A study of the minutes of the Board of Regents discloses that the agenda for the very first meeting of the Board, on March 20, 1957, included the distribution of a paper entitled Considerations for the Formulation of Loan Policy (of the National Library of Medicine). That paper contains a clear recognition of the copyright problem:

"To start with, it must be pointed out that there are legal restrictions to the unlimited copying of published works; restrictions which are vague in some respects but which have been interpreted fairly definitely in most. The two most important interpretations for this problem are that whole works may not be copied and that multiple copies may not be made." This policy paper was the subject of discussion at the meeting of the Board on April 29, 1957, at which the recommendations were approved. It is significant that the minutes of that meeting disclose the following:

"Dr. Mumford [the Librarian of Congress] raised the question of copyright restrictions. It was stated that while the recommended new policy would not obviate the copyright problems, it would not raise more, and probably raise fewer difficulties in this area than does the current policy." Further evidence that the Board was aware that copyright problems existed appeared in the minutes of the Board meeting for September 23, 1957, in the following notation:

"The Director [of the National Library of Medicine] expressed his concern 'with the continuing vexing problem of copyright restrictions.' He indicated that the Library is proceeding as circumspectly as possible, but that it is possible, if not indeed probable, that the years would bring, sooner or later, a test of the issue in the courts... The Director took pains to indicate that despite the difficulties of the situation it seemed clear to him that the Library could do no other than pursue its present course, since a very large part, if not the major part, of the Library's services is dependent upon it." The foregoing would appear to indicate that, from the outset of the establishment of the National Library of Medicine, there has been an awareness of the existence of copyright restrictions with respect to the use of the copyrighted works in its collections. Nowhere does it appear that the policy-making body, the Board of Regents, considered that the above-quoted provision authorizing the Surgeon General to make the material in the Library available by "photographic or other copying procedures" was in any way in derogation of the rights granted under the copyright law to the proprietor of the copyright. On the contrary, the evidence indicates that the Library attempted to formulate a policy that would take due regard of the provisions of the copyright law.

Examined from the legal point of view, it is a well-established principle of statutory construction that statutes are presumed to be passed by Congress with full knowledge of existing laws. If a new statute appears to be in conflict with a prior one, it is to be interpreted, if at all possible, as consistent with the earlier one. In short, a statute is not to be considered as repealed or modified unless convincing evidence so requires. The point has been well stated by the Supreme Court:

"Much of our national legislation is embodied in codes, or systematic collections of general rules, each dealing in a comprehensive way with some general subject such as the customs, internal revenue, public lands, Indians, and patents for inventions; and it is the settled rule of decision in this Court that where there is subsequent legislation upon such a subject it carries with it an implication that the general rules are not superseded, but are to be applied in its enforcement save as the contrary clearly appears." U.S. v. Barnes, 222 U.S. 513, 520 (1911).

The same thought was reiterated in a more recent case in these words:

"As a general rule, where the legislation dealing with a particular subject consists of a system of related general provisions indicative of a settled policy, new enactments of a fragmentary nature on that subject are to be taken as intended to fit into the existing system and to be carried into effect conformably to it, except as a different purpose is plainly shown." U.S. v. Jefferson Electric Manufacturing Co., 291 U.S. 386 (1933).

The hearings and reports on S. 597 and the related House bill, H.R. 3142, are bare of any intention to affect or modify the present copyright law. Under the principles of statutory construction, it would seem therefore that the provisions of the Medical Library Assistance Act of 1965 are not to be construed contrary to the existing copyright law.

In sum, the provisions of section 398 of P.L. 89-291, the Medical Library Assistance Act of 1965, appear to me to constitute an authorization of the grant of funds, under specified conditions, in support of the congressional policy estab lishing certain regional medical libraries, in no way to be considered in derogation of the current copyright law or the principles of fair use thereunder as formulated and interpreted by the courts. The available evidence would appear to indicate that the administrative interpretation of a similar existing provision of the law also takes due regard of the provision of the present copyright law. It appears reasonable to assume that in its formulation of policy under the new law, the Board of Regents will continue to recognize the existence of the principles of the current or future copyright law.

Sincerely,

ABRAHAM L. KAMINSTEIN,

Register of Copyrights.

(The following letter and memorandum were subsequently received and printed in the appendix by order of the chairman:)

SELLERS, CONNER, & CUNEO, Washington, D.C., October 11, 1967.

Hon. JOHN L. MCCLELLAN, Chairman, Subcommittee on Patents, Trademarks, and Copyrights, Committee on the Judiciary, U.S. Senate, Washington, D.C.

DEAR MR. CHAIRMAN: On September 19, 1967, some five months after its views were requested, the Department of State wrote you a letter opposing the enactment of an exception for Canada from the provisions of Section 601 of S. 597, the Manufacturing Clause of the Copyright bill. Exclusion of Canada from the provisions of the Manufacturing Clause had been recommended in the hearings by all representatives of the United States book manufacturing industry and the international trade unions representing the graphic arts workers in the United States and Canada.

With all due respect to the expertise of the Department of State in the interpretation of international agreements, we believe that in this case the Department has made an incorrect interpretation of the provisions of the General Agreement on Tariffs and Trade (GATT) and of bilateral commercial treaties to which the United States is a party. We have prepared, and enclose herewith, a memorandum which, we believe, effectively disposes of the technical objections raised by the Department.

In this letter, we wish to concentrate upon certain deficiencies in the Department's basic approach and perspective concerning this legislation. These deficiencies cast considerable doubt upon the soundness of the Department's opposition, which is perforce dictated by the "spirit," and not the letter, of this country's most-favored-nation obligations under its international commercial treaties. The basic flaw that permeates the entire negative attitude of the Department is that this controversy is cast in the light of a free trade question. The Depart ment's letter gives the impression that the manufacturing clause would apply to all works imported into the United States and that the partial denial of copyright protection is merely the means of enforcing a trade restriction. Putting the issue in this light is very misleading and sows confusion where clarification is needed if the Congress is to legislate effectively in this complex area.

The manufacturing clause is a copyright provision and should not be dealt with as a simple trade restriction. Copyright does more than simply recognize the right of an author to the creations of his mind. It creates an economic property exploitable only by the holder thereof. Through assignment, the holders of these economic monopolies normally are large publishing houses, not the authors themselves. These publishing houses employ the book manufacturing concerns and graphic artisans to manufacture the multiple copies of such works. Once a book manufacturer is designated, he, too, becomes the recipient of the benefits and protection conferred by the copyright monopoly.

If a publishing house designates a foreign book manufacturing concern in order to obtain the copies at a lower cost, or for whatever reason, that foreign book manufacturer becomes the beneficiary and the equitable owner of the copyright monopoly at the book manufacturing level of the process. The copyright is enforceable by the publisher to protect the copies manufactured by the selected producer against the independent manufacture of copies by any other book manufacturer including all American book manufacturers. Normally, only a single manufacturer is chosen to manufacture all of the copies for the national market. Accordingly, to discuss the manufacturing clause of our copyright law as a restriction upon international free trade is anomalous. Trade in books that are subject to a copyright monopoly cannot be free trade in any real sense, either domestic or international. All stages of the production and sale of such books are covered by the copyright umbrella. The manufacturing clause is, in reality, a limitation on copyright that simply requires that the benefits of this monopoly not be utilized in such a way as to give foreign concerns and foreign workers a monopoly to the exclusion of American book manufacturing firms and graphic artisans. This limitation derives major economic significance from the fact that most foreign concerns, enjoying production costs far below the costs experienced by their American counterparts, have a very distinct competitive advantage. However, it is not the competitive advantage in and of itself which gives rise to the need for the manufacturing clause, it is the copyright monopoly.

The Congress long ago decided that a limitation, i.e. the manufacturing clause, prohibiting, under certain circumstances, the extension of the copyright monopoly to foreign book manufacturers is a reasonable limitation upon copyright. This limitation has been steadily narrowed through the amendment process, and the bill that is before the Senate today would apply the manufacturing requirement only to copies above 2,000 of copyright works that are non-dramatic literary works in the English language. The new clause would not apply to works written by foreign or expatriate American authors; nor would it apply to musical works, dramatic works, works in a language or languages other than English, or works that were not copyrighted or are no longer protected by copyright. Neither would it apply to works printed in small (i.e., under 2,000 copies) quantities. In short, all types of works with respect to which American printers cannot legitimately claim the right, and need, to be brought under the copyright umbrella, are excluded from the clause. It is submitted that this limitation is eminently reasonable and is essential to prevent great harm to American book manufacturing by producers in a large number of low wage foreign countries.

It is precisely because no such injury would result from extension of the copyright monopoly to Canadian book manufacturers that all segments of the American industry have been willing to support the exclusion of Canada from the provisions of the manufacturing clause. The wages of Canadian graphic artisans and the overall costs experienced by the Canadian book manufacturers are on a par with those of American book manufacturing concerns. It must be recognized that there is an enormous imbalance in the trade in printed matter between the United States and Canada and that the United States and Canada in reality constitute a single market for literary materials. Accordingly, the objective seems to us to be crystal clear and unquestionably desirable. The only remaining question is whether the United States can accomplish this purpose without violating its other international obligations. In our view, the Department's letter itself impliedly admits that this goal can be accomplished.

The State Department's opposition, as indicated in its September 19 letter, is based upon an adherence to the most-favored-nation ideal that is so rigid and slavish that it poses a challenge to the leadership of the Senate in the field of foreign policy. The Department asserts that the exclusion of Canada from the manufacturing clause would violate the "spirit" of the most-favored-nation requirement found in Article I of the GATT. We read this assertion as a clear admission by the Department that exclusion of Canada from the requirements of the manufacturing clause would not constitute a violation of the actual requirements of the most-favored-nation article. One is moved to inquire why the Department would oppose a move that has the backing of all affected interests on both sides of the border and that does not violate the letter of this country's GATT obligations.

It is perhaps understandable that the Department of State has focused its attention on one narrow segment of one issue involved in this problem, i.e., its possible bearing on our international trade policies. The Committee's consideration must obviously be far broader as we have attempted to point out. Vital in

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