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As I understand it, you feel that it is too early for us to undertake to legislate because we would not know what we are legislating about? You believe, that your two interests are so common and you have such a mutual anticipation of future relationships and profits that it will be almost compelling that you work out your own solution, is that correct?

Mrs. LINDEN. That is exactly correct.

Senator McCLELLAN. Let us hope so. We would much rather have you do it than have us do it.

Senator BURDICK. Senator Fong. Senator FONG. Am I correct that in the House bill there are provisions dealing with copyright material as far as computer use is concerned?

Mrs. LINDEN. Well, in the sense that the uses that are protected by copyright are protected under the proposed bill. Whether such uses are via computerized system or printing presses or Xerox machines--in other words, the law as proposed does not treat one piece of hardware as though it required very special treatment. The law deals conceptually with the idea that the author has certain rights. Whether an information network acts as a publisher or a reprint publishing house, the author's rights are the same.

Senator Fong. Using your analogy of the customer walking into a restaurant, you say you cannot give him what he wants until he tells you what he wants, does this provision charge the customer when he walks into the restaurant and picks up the menu?

Mrs. LINDEN. I am sorry, does it change?

Senator Fong. You say you do not know enough of the situation to really legislate on it. Yet it seems to me that the analogy that you presented to us of a man walking into the restaurant and you are not able to give him what he wants to eat until he knows what he wants to eat-it seems to me that you are charging him for walking in the restaurant.

Mrs. LINDEN. We are not charging him anything, because until he orders something, he does not have to pay.

Senator Fong. When the man uses the computer and puts copyrighted material into the computer he has not used it yet?

Mrs. LINDEN. He is where he is using something. Actually, what happens when you put material into a computer, educational material, which I am most familiar with, a reading textbook, a third-grade reader-no one sits down and reads it cover to cover. A chemistry textbook is not read cover to cover. You use snips and pieces at a time. That is the way it is used.

A computer output, in our lifetimes at least, is most unlikely to give to a user entire reference books or entire works. In fact, that would defeat the very purpose of the technology. It gives us little pieces and bits.

If there is no system of licensing or controlling the input, the little bits and pieces would not be sufficiently subject to control of the author or publisher to amount to very much. In other words, one cannot say

that just because the restaurant owner bought a cow, until he cuts off pieces, the farmer is not hurt yet. There is a cow available in the restaurant. The computer user does not go out and buy a book because he can go and knows that he can get his slice via the computer

network. He does not have to buy the whole cow. The farmer is hardly comforted by that. Authors and publishers find little comfort in this kind of argument.

Senator Fong. I think your point is well taken. Thank you.

Senator BURDICK. Let us hope that no one starves to death in this cafe. Thank you very much.

Mrs. LINDEN. Thank you.

Senator BURDICK. The next witness is Mrs. Gladys Barnette, of Learning Through Seeing, Inc., to be introduced by Congressman Reinecke, of California.

STATEMENT OF HON. ED REINECKE, A REPRESENTATIVE IN

CONGRESS FROM THE 27th CONGRESSIONAL DISTRICT OF
CALIFORNIA
Mr. REINECKE. Good afternoon, Mr. Chairman, gentlemen.
It is a pleasure for me to appear before this committee this afternoon.

I represent part of the San Fernando Valley in California, which is very vitally interested in the proper protection of the originators of various creative works, both from the artists' and the creators' points of view, and from the technicians' and the businessman's point of view in producing this in order that these original creators and the businessmen themselves might be properly protected throughout the year.

I think I can safely say that many thousands of people who live in the San Fernando Valley are vitally dependent upon their rights being adequately protected, because this is the center of a great deal of creative activity.

With that in mind, I have read Mrs. Barnette's statement; it is pertinent and I am sure it will be interesting to you gentlemen.

I am happy to present my constituent and friend, Mrs. Gladys Barnette.

Senator BURDICK. First of all, Mrs. Barnette, your statement will be made a part of the record, without objection. If you care to summarize it, it will be appreciated.

STATEMENT OF MRS. GLADYS J. BARNETTE, EXECUTIVE AND

FI VICE PRESIDENT, LEARNING THROUGH SEEING, INC., SUNLAND, CALIF.

Mrs. BARNETTE. I think it would be, perhaps, easier for me to read it if you do not mind, Mr. Chairman.

I may interpolate and summarize, perhaps, where possible.
Senator BURDICK. Very well.

Mrs. BARNETTE. Mr. Chairman, esteemed gentlemen of the Senate committee, a request to testify before the Committee on the Judiciary of the Senate regarding Senate bill No. S. 597 was made by our company, Learning Through Seeing, Inc., solely for the purpose of asking the committee to define in a very specific and positive way exactly what would be "fair use" when the materials in question are produced exclusively for educational purposes and have no possible sales other than to institutions of education.

To clarify the reasons why the "fair use" section of # revised copyright law should be stated in specifics, it seems best to present

some background information regarding educational materials which are produced for no other purpose than helping all students to learn more effectively and to keep pace with the knowledge explosion.

Learning Through Seeing, Inc. is a small business. Its principals have long been active in the generation of educational materials exclusively for classroom use. Many years have been spent in the development of teaching techniques and programs. During these years a substantial number of copyrighted programs have been developed and more are in preparation, including auditory materials. The materials developed so far provide an integrated, sequential succession of film frames which together constitute carefully prepared and highly sophisticated lessons in a course of study having a specific purpose, such as the teaching of mathematics, English, vocabulary, language arts skills, and the improvement of reading. In order to prepare complete programs, authorities in a given field are employed or affiliated and the necessary creative and testing work is done to insure that the programs accomplish the purposes for which they are intended. The programs are then sold at prices scaled to the budget of school districts. Profits are such that a considerable number of programs must be sold to recover basic cost.

The Learning Through Seeing, Inc., organization and its programs have now engendered a justified confidence within the educational market. This confidence has not been easily earned since it has required constant effort at refinement and extension of basic techniques, continued maintenance of the highest standards and complete professional and financial commitment on the part of the principals.

It now appears that efforts, such as these, which have been entirely independent and have involved great risk with no substantial profit, and which have contributed greatly to the full effective use of educational budgets, are in danger of becoming economically unsupportable under the "fair use" provision in the new copyright bill.

The danger stems from the apparent license given to those in the educational field to utilize materials of this nature with impunity, and of course from the widespread and increasing availability of data reproduction equipment and services. The "fair use” provision contains no exception as to the use of materials prepared directly for the educational market. The usual example given in support of the provision is that of the educator who desires to copy excerpts study and analysis and the rationale is that the cause of education will be furthered by releasing such educators from theoretical damages for copyright infringement. This view does not, however, consider the basic fact that the entire tenor of the usage is changed when the materials have themselves been prepared expressly for educational purposes. Under such circumstances, copying can only be intended to employ the materials in whole or in part for the specific objectives for which they were prepared. The copying of such materials should not be excused either under the "fair use" provision or under a compulsory licensing provision because copying of this nature constitutes deliberate infringement.

Consultation with the Learning Through Seeing, Inc. copyright attorneys suggests that it may be contended that the "fair use" provison of paragraph 107 sets forth four standards that would preclude damage to the portion of publishing and creative industries

which directly serves the educational market. The discussion in Report No. 2237 of the Committee on the Judiciary of the House of Representatives on the "fair use" provision gives a number of specific examples of the manner in which the criteria are to be applied. These examples when objectively considered do not support widespread extension of the present "fair use" doctrine. In fact, however, the educational community now appears to feel that these very examples in the House Judiciary Committee Report give it freedom to copy materials to any extent desired. Once this position gains sufficient currency only direct negation will serve to prevent widespread copying as a general practice, because the educational community will not be seeking legal advice as to its internal affairs.

There are other problems with the copying of these materials. To be properly used--and I am speaking specifically of our materials their integrity must be preserved, in the senses that they cannot be used piecemeal or partially or revised at the whim of an individual who does not have the totality of their form or content in mind. Learning Through Seeing, Inc. has had a number of experiences in which its materials have been misused in such fashion, with consequent damage to its reputation and goodwill stemming from unsatisfactory results on the part of our user. Consequently, Learning Through Seeing, Inc., sells its program only in complete form, except for replacement filmstrips. Unauthorized copiers of these materials are far more likely than regular customers to misuse the programs, and to degrade the reputation of the Learning Through Seeing, Inc. work and product.

The dangers in the "fair use" provision are most evident when viewed in terms of the broader effect on the segment of private industry which offers educational materials of a copyrightable nature. If a school can buy one filmstrip and make 100 copies, it appears inexpensive as generally only the cost for supplies and processing are seen. Many schools now have magnetic tape duplicators and educators feel they can duplicate auditory instructional materials quickly and at a low cost. There is a tendency for educators to ignore the overhead of their buildings, the capital outlay for the equipment and the labor costs when these facilities and personnel, which are paid for by the taxpayers, are used and to count only the cost of the raw materials consumed. Any private business originating such materials would be foolish to expend moneys on the development of a new educational system or on particular programs or individual lessons without increasing prices to levels consistent with the degree of expected copying. The costs of an educational system are minimized when private industry expends its own money in the generation of new materials and the development of new techniques. A school district then has a greater number of options available, all of which options are in full competition with each other so that fair pricing is inherently insured. Where the additional factor of uncontrolled reproduction is introduced, however, the entire private enterprise segment of the educational field loses its sound financial basis.

In addition, education would undoubtedly lose much of its present creativity for educators would have no incentive to create and author programs for which they would receive minimal return for their time and effort if reasonable royalties or consulting fees could not be paid.

Thus education might find itself in a position which is somewhat a problem now but which would become increasingly severe where the institutions of education have a considerable amount of equipment or "hardware" but not enough educationally sound programs to always merit its use. It has been suggested many times that teachers need to be more creative, but with their very heavy schedules it is apparent that few of them have the ability, drive, and time to create programs for specific needs unless there is some financial reward for their efforts. This would undoubtedly lead to the need for programs being created almost entirely by the Federal Government and could mean the destruction of the taxpaying educational materials industry.

Would educational districts in fact utilize reproduction services to the detriment of owners of intellectual property in the educational field? A school district must utilize the funds available to it in the most productive fashion. If educational systems are granted impunity with respect to the copying of materials intended specifically for instructional use, then the economic and other forces acting on educators to force copying will be too strong to resist effectively. The proposed "fair use" provision does not limit the freedom to copy even though the copying may include purposes other than instructional use. If educational institutions and educators are to be excused from copyright infringement in the use of commercial materials for instruction or investigation, they should not be given the same license when the copying acts are such as to directly subvert the purposes of the copyright work.

Furthermore, we are aware of instances in which school districts have extensively duplicated source materials in film or tape form. A school district has utilized a tape duplicating system to make many copies of phonorgraph or magnetic tape materials, on a systematic basis. With the increasing use of photo reproduction services, filmstrip materials can be duplicated in identical form, or can be duplicated in content by conversion to aperture cards, microfilm, microfiche, video tape and a wide variety of other forms. With the recent advent of low-cost television recorders, and the more extensive use of closed circuit television networks, the possibilities for, and the likelihood of, widespread use of visual and audio educational materials are virtually limitless. At the present time, duplication of auditory materials is the form of reproduction most likely to be used, but all materials can be duplicated at less cost than they can be originated.

Finally, we point out that authorities in the copyright field are uncertain as to the interpretation to be placed upon the "fair use" provision. The provision contains no positive expression of what "fair use" shall be and leave "fair use" as a matter to be litigated between the parties on the basis of a number of subjective criteria. The expense and delay of litigation in the Federal courts should not be imposed on an industry when it should be possible to provide an expression of congressional intent that is at least clear as to limited and specific examples in the educational field. No organization likes to sue one of its one customers, particularly when its actual and potential customers are educational institutions engaged in the highest form of public service and so closely united they are likely to be affronted as a group by action against any of their number. Under the present version of the bill, the question of "fair use" cannot be re

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