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We submit that it is not in the interest of science and of this country for people like ourselves to have to make these decisions in order to insure survival.

And, certainly, litigation will come too late, and prove nothing.

It seems fairly certain that if we all do not face up to the 1967-reality of the copying machine, some 21st-century historian is going to look back and ask "Who Killed Cock Robin?" in the limbo-years between the copying machine of the mid-1960's and the promises of the new computer- and "imaging-technologies” of the mid-1970's. Mr. Chairman, the great A. North Whitehead said:

"A clash of doctrines is not a disasterit is an opportunity." There is a very great opportunity for all of us involved in this complex dialogue to come quickly to a practical, realistic solution to the problem of directly or indirectly compensating authors and publishers for the manufacture of facsimiles of their copyrighted works by any mechanical or electronic device.

It is to deal with the copying machine, by itself, as a current problem.

If we cannot now work out a reasonable, simple accommodation to the present impact on creativity and enterprise of the copying machine-a relatively unsophisticated and definable device-how on earth can we ever face up to the more complex problems of the very near, very sophisticted future imposed upon us by the computer and its related, more sophisticated technologies ?

To put it more positively, doesn't the copying machine and its copyright implications give us an easy "pilot-plant" opportunity and challenge to sweat out the principles and mechanisms which can be later applied to all other imaging processes of the "communications revolution”?

*Control of the imageis, after all, at the heart of all we are debating about.

In pointing out the necessity for compensation to authors and publishers, Mr. Herbert S. Bailey, Jr., of the Princeton University Press, has aptly stated (in "Saturday Review”, June 11, 1966):

"The new technologies make it clear that what a publisher sells is not a book but the image of a book. The author writes the manuscript ; then the publisher selects it for publication, edits it, and gives it a suitable typographic dress-an image. Currently he sells his image as printed on paper and bound in cloth or paper at a single manufacturing establishment; in the future he will usually sell the image as reproduced on copying machines at many

locations, by remote or local control, on demand ..." Mr. Chairman, the atmosphere is right and ready for immediate statutory recognition in S. 597 of a copying-machine royalty system on a par with the recognition accorded juke-boxes, CATV and the like.

Many scientists we have talked with recognize the ultimate implications of uncompensated copying.

Many librarians we have talked with are sympathetic to a simple solution for indirectly compensating authors and publishers.

In a recent editorial, "Piracy by Photocopy, which appeared in the October 1966 issue of Bulletin of the Medical Library Association, a national leader in library science and member of the President's "National Advisory Commission on Libraries", Dr. Estelle Brodman, points out:

“Although the technological form might differ, the basic problems of copyright infringement and the basic arguments for copyright protection remain the same. They consist, essentially, of the ethical requirement that a person get an equitable return for his endeavors. An author should be compensated for the toil of producing a work-book, journal, article, picture, computer program and a publisher for the risk to his capital ..

"The questions involved in solving the copyright problem of the midtwentieth century have excited more heat than light . : . What is needed is for sympathetic publishers, librarians, scholars, lawyers and accounting experts to sit down together in calm and quiet and debate this question on an intellectual piane, instead of an emotional one. Surely a society which can bring forth a computer and an understanding of the mechanisms of the genetic code can figure out a system of copyright protection which is not burdensome to any group. Librarians have a particular interest in seeing this

happen". We would like to offer a solution. We believe it is simple in principle, practical in application, painless to all, and—paradoxically, it will probably cause an even bigger boom in the use of copying machines.

It is to impose a flat, nominal, non-punitive tax on copying machines ind their entir-e output:

(1) to fund certain information activities of the government operated for the particular benefit of business, scientific and educational organizations ;

(2) to fund the collection, accounting and distribution of copying royalties to participating copyright owners.

The rationale behind the first objective is that those of us in business and industry, in the sciences, and in education who benefit the most from specialized governmental information services (the National Library of Medicine, the National Agricultural Library, the Clearinghouse for Federal Scientific and Technical Information, services of the Departments of Commerce and Defense, the National Referral Center for Science and Technology, ERIC, etc.) should directly support these necessary and socially-desirable functions in direct proportion to our own information and communication needs and activities for which copying machine usage and volume is as good and as reasonable a barometer as any. And, since many other sectors of government benefit from publication activities of both the specialized government information services and of the "private sector", the copying machine output of government agencies themselves would help fund, through royalty credits, distribution of earned royalties to owners of copyrighted material that is reproduced by the government itself.

The rationale behind the second objective is self-explanatory: to have one central location from which earned royalties from photocopying can be determined and periodically distributed to participating copyright holders.

Underlying both objectives is a basic assumption that in general, copyrighted work can be copied without the necessity for the copier to get advance permission of the participating copyright holder.

Just what is involved?

In the words of Eliot Morison in a great book, "Men, Machines, and Modern Times" :

"The problem presented (is) one filled with measurable, quantifiable data susceptible of analysis and the drawing of reasonable conclusions". Defining just what is "a copying machine" is the first problem, and collection the corollary.

Let us assume 800,000 "copying machines" by generally accepted trade definitions. This excludes higher-volume duplicators, over 12-million in number, and producing, by some estimates, over 25 times the number of copies that are produced by the newer "convenience-copiers" ! Some copying machines are "infringing” into the market traditionally held by duplicators. Should duplicating devices be included in the excise-tax plan? We think not—the traditional ground rules of copyright and copyright infringement can apply here, as always.

Since the market-erosion of "copying machines" is primarily in the 1 to 100 copies-per-page area, the liability for paying the tax could be limited to owners or lessees of most machines with this economic capability.

Assuming that a reasonable, workable definition of a "copying machine" can be hammered out-by parsing prose, by actual definition by manufacturer and model, by volume considerations, by compromise-should an excise tax on output be applied to the vast majority of copying machines the small, desk models so useful in businesses and in offices?

We think not-they are, by and large, self-limiting in their effect on copyright owners; there would be too much red-tape in accounting internally for what was copied; and, what is copied in the privacy of an office is nobody else's business anyway. A flat $50/year tax would seem to be reasonable, and would yield rerenues and credits (from governmental installations) of about $25,000,000 a year.

With “duplicating” arbitrarily excluded, and the smaller copying machines taken care of by a simple, flat-sum tax, where is the primary source of revenues necessary to finance the information-dissemination and copying-royalty distribution actirities of the government?

It mainly lies in those machines which, on a normal 8-hour-a-day basis, produce from about 1.000 to about 25,000 copies a month, and account for about 90% of all page-images copied—over 12-billion copies last year. Practically all have me tered output, and most are leased. In the case of the latter, all that is necessary is for the copying-machine manufacturer to collect monthly from his lessees the tax on the output and turn it over to the government.

At 12-cent a page tax, a 10,000/month machine would yield $50 a month ; at 2-cents a page tax, the national output in 1966 would have yielded $240-million. (“It's amazing how those coins add up."!)

Whatever rate established and it should be only enough to cover minimal needs and not be a deterrent to legitimate copyingthe collection mechanism

involves no more than adding an additional amount to the usual rental charge. **On-premises" owners would merely remit directly to the U. S. Treasury.

Now, if the collection problem is "susceptible of analysis and the drawing of reasonable conclusions", so is the determination of actually how many pages of the 14-million currently photocopied were from copyrighted sources.

First, we propose that publicly-supported, "not-for-profit, libraries be required, in this public interest, to keep track of the number of pages photocopied from each work bearing a copyright notice in their collections, and report this information periodically to whatever copyright-royalty clearing house facility is established to handle the situation. (This does not apply to coin-operated copying machines furnished by commercial operators where the librarian has no control over the operation by patrons of the library-these are subject to the excise tax on their metered-output, but no reports are required).

We would like to emphasize that the librarians' responsibility for copying machine usage does not require any more bookkeeping than logging and accumulating the amount of pages copied by users of the copying machines under the library's control, and identifying the source-items bearing a copyright notice and the quantities copies therefrom. It is reportable if it bears a copyright notice (from 1910 on)—as pointed out later, royalty distribution will be made only (by the Clearing House) if the copyright is valid and the owner requests participation.

We would also like to re-emphasize that this is no more than a straight, simple record-keeping operation, much of the labor of which can be handed over to the patron desiring photocopies.

What would this information, reported by all publicly-supported libraries yield?

A national picture of hom many times each copyrighted work was copieda national sum of just how much copying of copyrighted works is done by patrons of “not-for-profit" libraries a national sample of the relative copying-popularity of copyrighted works that can be a reasonable basis for extrapolating the total copying of each copyrighted work.

Again, common-sense and reasonable accommodation must play a role.
If, from this "quantifiable" procedure we find out:

(1) what percentage of the total of last year's 14-billion photocopies were processed by "not-for-profit" libraries serving all types of patrons in government, in all types of business, commerce industry, and in science, technology and education, and

(2) the frequency to which each copyrighted book and journal was copied, we at least have the beginnings of a basis for distributing royalties to the copied copyright owners. In short, we now know that (for purposes of illustration) say, 500-million out of the 14-billion photocopies made can be accounted for by "notfor-profit" libraries.

What more is copied of copyrighted works by those other than publiclysupported libraries!

Plenty, we believe.
We are now close to both the heart of the problem, and the means of solution

And, we are coming close to determining how much copying royalty should be distributed to the copyright owner. Just how much is left of the 14-billion photocopies that will determine what final percentage of it is of copyrighted works, irrespective of an identification of which works were photocopied ?

Therefore, our second proposal is to have an appropriate governmental agency determine (1) how many pages are photocopied and what is the percentage of copying machine output by the government itself of copyrighted works, and (2) what is the copying machine output and what is the percentage of total output.-off-premises of their libraries, but on-premises of academic, "not-for. profit" institutions of copyrighted works? If administrators of the former do not know, perhaps the taxpayers ought to. Administrators of the latter certainly ought to be in a position to know how many copying machines are owned and/or leased "on campus” and in the schools and what their total annual output is of copyrighted works versus administrative forms, theses and the like. Rough-heft and ball-park estimates will do.

Summing up so far, we now have the total quantities of photocopies of copyrighted material made by publicly-attended libraries of all types, governmental institutions, and educational institutions. For purposes of illustration only it might break down like this:

Type of institution :

Libraries, all classes.
Educational institutions
Government, Federal, State, local ---

Number of pages

photocopied

annually of copyrighted works

500,000,000 1, 500,000,000

750, 000, 000

Subtotal

2,750,000,000 What about photocopying by business and industry, and by commercial photocopying services?

Here, all we need are total quantities. Since the machines are taxed on an entire output basis, there would be no advantage in reporting anything but a reasonable, accurate estimate, perhaps once a year, to the copying machine manufacturer. Thus, a company liable for the excise tax on, say 1,000,000 photocopies a year, could report that approximately 10%, or whatever, was from material bearing a copyright notice. Again, ball-park estimates will do.

Let us assume that business and industry account for 250,000,000 photocopies of copyrighted material. We now have a grand total of 3-billion copies as a base for redistributing copyright royalties.

Now, only libraries have to identify what copyright sources were actually copied from.

Can we assume that a frequency distribution of copying based on library experience only can be applied to all copying of copyrighted works? We think so. Libraries serve all segments of the American public-all types of students, scholars, and businesses.

There is a big enough mix of needs mirrored in library photocopying traffic to justify it as a giant and valid sample for determining copying royal distribution.

Thus, if library photocopying were 500-million of the 3-billion, it would be a fair assumption that any royalty page rate established for a copyrighted work should be multiplied by a factor of 6 to reflect the total effect of all copying on that work.

Here's how it might work with a typical scientific journal. Most of ours averag 2e-a-page as a pro-rata of their subscription price. If library experience indicated that all libraries made 50,000 copies of pages from a particular journal, then the royalty distribution would be $6,000 ($.02 x 50,000 x 6). If this particular journal had a subscription rate of $30/year, the $6,000 copying royalty payment would reimburse the scientific society and its publisher for the loss of income from only 200 potential subscribers lost to "convenience copying."

Mr. Chairman, all of what we have said is only a start toward a solution. We strongly believe that reasonable people could constructively work out better principles of analysis, clearer details of execution, more realistic "balancing of equities” than we have sketched above. And, quite obviously, there are plenty of "ifs, ands and buts" which would have to be hashed out. For instance, the above, we believe, would be entirely acceptable to us as a publisher of scientific journalswe would definitely participate. But, as also a publisher of textbooks more and more subject to anthologizing, we probably would elect not to participate in royalty distribution for those particular copyrighted works.

This is basically a "no-tickee, no-washee" system for authors and publishers. If they elect to participate in copying-royalty distributions for any particular cops. righted work, they waive the right to require advance permissions for non-commercial copying. Quite obviously, as this system develops, copyrighted works will. in the future, have to bear both permissive and limitative conditions as a guide to the copiers. And the transition into this "way of life" will involve many headaches which reasonable people will have to live with.

Thanks to computer and systems technologies, the copying-royalty clearing house facility need not be much more than a modern, sophisticated acounting operation. It will have core storage of all active copyright owners; their names and addresses, their royalty rate per page (based on pro-rata of list price); whether or not they are participating in copying-royalty distributions. It will receive as "input" the reports from the libraries showing how much each copyrighted work was copied. It will pay out, say once a year, earned royalties above a reasonable minimum level.

We believe the copying-royalty clearing house should be under the jurisdiction of the Congress, and under the supervision of the Library of Congress.

Mr. Chairman, we do not have the competence to draft the specific legislative language that would carry out the objective of our recommendation that a nomi

nal tar finance selected information-dissemination activities of the government, establish a copying-royalty clearing house facility, and fund copying-royalty payments.

We do feel, however, that S. 597 should give some broad, statutory recognition of the concept.

And, since "the way to begin is to begin," there is no reason a reasonable time-table could not be set up along the lines of the following: (1) develop and enact the necessary tax legislation, to be effective January 1, 1968; (2) authorize the Library of Congress to establish a Copying-Royalty Clearance Facility to be operational for the distribution of royalties by January 1, 1969.

We fully appreciate the complexities involved, but we are completely convinced that the effect of the copying machine on independent publishing must be faced up to now.

In summary, if all of us can only work out together a reasonable accommodation to the photocopying problem in the context of the basic principles of copyright, living with the computer age will come a lot easier. What a wonderful and challenging opportunity!

We appreciate the opportunity to appear before you, and will welcome any questions.

Senator BURDICK. Thank you for your very challenging testimony.
Mr. LODWICK. Thank you, sir.
Senator BURDICK. Does that complete the presentation ?
Mr. LODWICK. Yes, sir; unless you have some questions.

Senator BURDICK. I do not have any. The next witness will be Mr. Aleinikoff, Mr. Cohen, Mr. Taverner, and Mr. Quayle.

STATEMENT OF EUGENE N. ALEINIKOFF, GENERAL COUNSEL,

NATIONAL EDUCATIONAL TELEVISION

Mr. ALEINIKOFF. Mr. Chairman, we are very happy to have the opportunity to appear once more. Our testimony was interrupted, as you will recall, last month, and we are back again to discuss educational television and copyright revision.

Senator BURDICK. I hope it won't be interrupted any more this a fternoon.

Mr. ALEINIKOFF. Mr. Robert Hudson was with us last time; he is senior vice president of NET. He completed his testimony, so he is not back with us again.

We now have Mr. Taverner, who was ill the last time, and can be with us today. Mr Taverner is chairman of the board of the Eastern Educational Network and with him is Mr. Don Quayle, who is executive director of the Eastern Educational Network,

On my right is Mr. Edwin Cohen, who is executive director of the National Center for School and College Television, which is the national exchange organization for instructional television.

I think that, perhaps, it is almost better that we were interrupted last time, and that we are back now. You will recall at that time we expressed some deep concerns about S. 597 and what kind of effect it would have on educational television programing and broadcasting,

I am very happy to report today that obviously some of the Members of the House of Representatives had equal concerns, because when H.R. 2512, which was very much in the same form as S. 597, was adopted vesterday, it was adopted with at least two amendments which went to the heart of instructional television exemption.

The first such amendment, in effect, erased the 100-mile limitation that had appeared in section 110(2) and restricted exempt instructional broadcasting to an area of a radius of 100 miles.

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