The threat to the "software" camp can best be illustrated, perhaps by hypothesizing a situation which could well come into existence a few years hence. Let us suppose that a large corporation-say a Monsanto or a Du Pont-has established a company-wide (and hence a nationwide) computerized technical information system for use at the touch of dozens of consoles by its hundreds of scientists and engineers. Let us also suppose that the "hardware" camp has prevailed in the copyright argument and that the corporation is free to store the whole of Perry's Chemical Engineers' Handbook in its computerized system. Let us finally suppose that the corporation buys one copy of this handbook, stores its content, and then puts it to the seemingly "fair" uses described above. Obviously, in a situation such as this the one stored copy could take the place of as many as 500 or even 1000 copies of the handbook as it is now used. And if eight or ten other large corporatons did likewise, there would be no remaining market sufficient to sustain publication. And soon no one would bother with compiling, editing, and printing a work of this sort. What then?

When this question has been put to members of the "hardware" camp, the answer usualy has come quickly: "That's easy-the corporation itself will produce the data needed for its system." This is an easy answer, certainly, but it provides a rather difficult solution to the problem. To begin with it would be neither efficient nor economical, and hence would be more costly on the national scale. More important, it would more likely restrict than widen dissemination, because once a company had made a large investment in building up a mass of valuable research, design, and operating data, it would hardly be willing to share it with all comers. And, as usual, the little fellow would be the one most hurt. He could not afford to develop a comprehensive data system of his own, yet the springs of presently available copyrighted data would have been dried up.

In the face of these foreseeable difficulties and uncertainties, would it not be wise to proceed with the enactment of the proposed new copyright bill with its provison for the protection of copyrighted works from unauthorized storage? Both camps would have to be prepared to deal with permissions at the storage point, and also with fees in cases in which more than "fair" use is involved. Neither requirement should be onerous. Since storage is a one-time thing, fees could be fixed for annual payment. Further, as the dimensions of possible use could be estimated for each system, the question of setting proper fees or userates would not be difficult. (If it were worthwhile to do so, accounting subsystems could be built in to provide exact information on high-volume usage.) Moreover, since haste comes with retrieval rather than with storage, there would usually be ample time to negotiate permissions and fees. In short, there seems to be no practical problem that could not be met without undue effort, expense, or delay.

What else can be said and done?

Well, it can be said that both camps should make every effort to be flexible and originative in helping to meet the imperative national need for the development of large-scale computerized systems. The authors and publishers must frankly face the fact that their copyrighted materials must be made available to such systems, and on reasonable terms and conditions. "Hardware" manufacturers and systems developers must realize that neither their particular interest nor the general public interest is so important as to justify a demand for public expropriation of private literary property, either legally or otherwise.

Above all, authors and publishers must not be obstructionists in carrying out their obligations to protect their conventionally printed products. To the contrary, they should actively seek ways to promote the use of their materials in mechanized systems-making sure, of course, that they receive adequate fees to compensate for the consequent loss of sales of printed copies.

Why should publishers not vend many of their products in both magnetictape and printed form? Probably they should, but if they do, they must be careful not to accept licensing practices that might trap their authors and themselves in another "juke-box exemption" situation a few years hence which is to say that they must not accept a licensing practice under which the copyright owner receives only a one-payment fee for the right to "record" a work on a computer tape which could be used over and over again in any number of informational systems without additional payments.

Above all, the "hardware" manufacturers and systems operators must be careful that their demands and practices do not hurt the generation and flow of copyrighted scientific and technical information. They must avoid demands that

might cause a sacrifice of human creativity to the convenience of their machines. And they must realize that assaults on copyright protection of literary property in the name of overriding public interest can only invite similar assaults on patent protection of their machines and industrial processes.

When these accommodations in thinking and attitudes have been made on both sides, practical business solutions to the remaining problems must be sought and found. This may not be easy, but certainly it can be done, and done with fairness to all interests. "Be there a will, and wisdom finds a way."

UPPER MONTCLAIR, N.J.,

April 4, 1967.

Hon. JOHN L. MCCLELLAN,
U.S. Senate,

Washington, D.C.

DEAR MR. SENATOR MCCLELLAN: It is with extreme reluctance that I address you again on the matter of Copyright, for you may very well tell me that I have had my day in court. Your own earnest statement, however, of your wish and that of your committee to arrive at a fair and just law encourages me to do so.

Despite the fact that the music publishers agreed to hold to the complete statement on "Fair Use" (section 107 in S. 597) mutually agreed on by themselves. book and textbook publishers, the Author's League, and the Ad Hoc committee of educators at the compromise conference called by the House Subcommittee on the Judiciary, Mr. Philip Wattenberg, testifying for the music publishers, after the Ad Hoc committee made its appearance before you, assailed Section 107, made many false accusations against teachers, and endeavored to reintroduce the wailing wall attitude that had previously frustrated all efforts at compromise. I am deeply concerned with Mr. Wattenberg's vilification of the teaching profession, for its possible subtle effect in influencing reactionary legislation and the withdrawal of sanctions for teachers included in the bill after exhausting struggles extending over months and years. In this vilification he is joined by Mr. Sydney M. Kaye, representing Broadcast Music, Inc.

Mr. Wattenberg charges, “. . . some teachers and personnel of school music departments violate the copyright law promiscuously and with complete knowledge of what they are doing. Their incentive is selfish. . . ." Mr. Kaye adds, "The efforts to erode this bill come from persons who have never paid and who do not want to pay. . . ." Mr. Watenberg makes his "some" seem huge by pointing out there are 125,921 schools of all sorts in the U.S., presumptively all customers of his clients.

The big money in music publishing is, of course, in records. Here is the refrain of a number that was popular last summer:

"Roll me over

And do it again."

If I have misquoted this elevated passage, doubtless any adolescent can provide you with a correct version. Needless to say, schools rarely, if ever, use this type of recording. As a matter of fact, the most frequently used sheet music in schools is classical music-the work of Schubert, Gounod, Beethoven, Brahms, Chopin and others. In testifying before you, Mr. Wattenberg did not mention that the majority of firms specializing in sheet music for schools get their income from classical music-which is long out of copyright. Such firms as G. Schirmer, of New York, have a high reputation and do a tremendously extensive business in the schools-which reflects strangely on any charge of excessive copying, does it not? No copyright stands in the way.

Syncopation, off-beat music, and the like the studies in advanced courses in music, but they are studied from purchased records. Record purchases are very considerable for music courses at all levels from primary to graduate schools. To charge that music teachers "have never paid . . . and don't want to pay" is completely false. In addition to buying quantities of records, those teachers who edit music texts pay very high "permission fees" or royalties for things in copyright. I haven't comparable figures for music texts, but I and my collaborators paid off something like $30,000 for two editions of a literature anthology.

I have taught for 45 years, in the Middle West, in California, in New York City, and wish to report that I have never seen an actual case of teacher in

fringement in all that time. Such cases as have been reported to me fall into. the categories of hearsay and innocent infringement. It is not singular that there has been only one case of a teacher prosecuted for infringement since 1909? Is it not striking that if copying is wholesale, the opponents of Section 107 have not brought in piles of evidence? The going rate for Xerox copying in most libraries is from 10 to 25 cents a page. Reluctant as the learned counsellors find teachers to spend money, it seems strange that allegedly they are copying for classes of 60 or 100.

Mr. Wattenberg's seemingly inocuous proposal "b" that every copy made under the sanction of "Fair Use" shall bear a copyright notice completely violates the principle of "Fair Use." As a matter of fact, the courts were so sympathetic to music publishers before the latter began to make fortunes from records that in practice there is at present no "Fair Use" of popular lyrics under the existing (1909) law. Novelties quoting a single line from a popular lyric have to clear it with the music publishers. It is a strange practice, surely, that better protects a lyric from a Broadway musical (or the wretched lines I have quoted above) than it does a poem by Carl Sandburg or Robert Frost. Mr. Wattenberg's “b” proposal is not aimed especially at teachers; it is aimed to perpetuate a special privilege a now undeserved privilege that music publishers have enjoyed under the current (1909) law. Section 107 as written will put music publishers on even footing with other publishers-which is precisely what they do not want. Section 107 in Senate 597 is as good a statement of "Fair Use" as probably ever wil be phrased. It satisfies a very considerable number of conflicting interests. There was a moment, at least, when it satisfied the music publishers. I implore you and your committee to keep it completely unchanged.

May this rejoinder be printed as an Appendix to my statement made before your committee when it very courteously listened to the representatives of the Ad Hoc committee of educators?

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

DEAR MR. CHAIRMAN: I am writing with regard to S. 597, which provides for general revisions of the copyright law, and I ask that this letter be made a part of the record of the hearings 'opening on the bill on March 15.

I ask that state fairs be exempt from the provisions of the bill which require the payment of royalties on phonograph records played for profit. As you know, it is the custom at many state fairs to play lively music which is carried throughout the fair grounds by loud speakers, and most of this music comes from phonograph records. However, in my estimation this is quite different from the use of phonograph records by radio stations between commercial advertisements, or for other types of commercial use of records.

Also, the state fairs are on a very different financial basis than is a commercial enterprise. Most state fairs are subsidized by the states in which they appear. and by the counties which participate in them. Very few are able to show a profit. They usually operate for only about ten days, and the expense of setting them up for such a short time is great. It is therefore imperative that operating costs be kept at a minimum.

The state fair is an American institution, a very wholesome and worthwhile one. It encourages individual initiative and awards accomplishment and merit. It seems to me we should be encouraging it rather than putting extra financial burdens on it.

Sincerely,

FRANK E. Moss.
U.S. Senator.

MEMORANDUM STATEMENT BY THE COPYRIGHT COMMITTEE OF THE MOTION PICTURE ASSOCIATION OF AMERICA, INC., OF S. 597, THE GENERAL COPYRIGHT LAW REVISION, MAY 10, 1967

INTRODUCTORY

A. THE SCOPE OF OUR COPYRIGHT ACTIVITIES DOMESTICALLY AND INTERNATIONALLY The members of the Motion Picture Association of America, Inc. consist of the major American producers and distributors of theatrical motion pictures. These are the feature and short subject films which are created primarily to entertain upward of forty million people weekly at some 17,800 conventional and drive-in theatres in the United States, and an even greater number at many of some 125,000 theatres in other parts of the world.

During the past dozen years or so, producers and distributors have made available from their libraries upward of eleven thousand of these feature films for television broadcasting, with some five to six hundred being added yearly.

In addition, member companies are heavily engaged in creating motion picture programs, particularly of the "series" type, directly for television. A number are finding television markets abroad. Feature length motion pictures are now being produced for first release over network television broadcasts, and possible theatrical release thereafter.

Producers further make available their pictures, reduced in size to 16mm. from the standard theatrical 35mm. width, to the Army, Navy, Air Force, Veterans' Administration, and Red Cross, for distribution to their installation in this country and elsewhere throughout the world; also to 16mm. non-theatrical distributing agencies which serve planes, boats, trains, schools, churches, hotels, clubs, camps, homes, and other non-theatrical situations, here and abroad.

Our member companies are not only creators, authors, owners and distributors of copyrighted works in motion picture form. They are very substantial users of copyrightable works created by others in the form of plays, novels, short stories and music adapted into their motion pictures.

Hundreds of millions of dollars are spent annually in film production and distribution. Payroll alone for production and distribution employees here and abroad amounts to over $350,000,000 annually. Our films are a major cultural and financial export of the United States. Somewhat over half the income of our member companies comes from the distribution of these films abroad where they capture some 55% of the available playing time. Our member companies repartriate over $250,000,000 annually from film rentals abroad toward closing the dollar gap-and it is fortunate that they can do so. Catering to public taste by film making and distribution is an exceedingly high risk investment in a day and age when so many other media compete for expanding leisure time and entertainment dollars of the public.

For further details in the above regard, as well as an extended analysis of H.R. 4347 (89th Cong.), a substantially similar predecessor of S. 597, we respectfully ask you Committee to incorporate by reference the following statements submitted in behalf of our Association at the 1965 Hearings before House Judiciary Subcommittee No. 3 on H. R. 4347 :*

These statements are by: Adolph Schimel, Vice-President of Universal Pictures, as Chairman of our Association's Law Committee (2 Hearings, p. 983); Edward A. Sargoy, as Special Counsel for our Association's copyright Committee (2 Hearings, p. 1051); and such Committee's accompanying detailed Memorandum Statement (2 Hearings, p. 987).

B. OUR POSITION AS TO REVISION LEGISLATION

In our above Memorandum Statement at the June 16, 1965 House Hearing, we described our basic position on the pending legislation as follows:

1. We have already indicated that we are reasonably satisfied with the compromise on "authorship of works for hire."

*H.R. 4347, of which S. 1006 was a counterpart in the 89th Congress drew the favorable recommendation, with certain changes, of the House Judiciary Committee in House Report No. 2237. As so changed, it was introduced in the 90th Congress as H.R. 2512. and as S. 597 now before your Committee. H.R. 2512, as approved again by the Judiciary Committee in House Report No. 83, was passed by the House on April 11 last, with a few floor amendments. Since such House Report No. 83 is a virtual duplication of House Report No. 2237 in the preceding Congress, references in this memorandum to House Report No. 83 are intended to include its said predecessor. House Report No. 2237, in connection with the latter's discussions of our position at the House Committee Hearings on H.R. 4347.

2. Although we are still strongly opposed in principle to the very concept of statutory recapture in any form, the compromise worked out, after much travail, in H.R. 4347, is a minimal basis on which we can learn to live with such a provision, and accept the same in the interests of furthering an adequate revision statute. We must accordingly be strongly opposed, if these minimal provisions, or those as to works for hire, are diluted or changed to our disadvantage.

3. We are fully in accord in principle with the need for a general overhauling to bring into the latter part of this 20th century, a modernization of the 19th century copyright concepts on which our 1909 Act is essentially based.

4. We approve the basic approach, the purposes, and the essential major principles laid out in pending H.R. 4347. We are proponents of copyright revision along such principles.

5. We agree with many of the details of H.R. 4347, and express our compliments to the Register and his Copyright Office staff for the cogent way in which they have reduced to a logical structure and generally understandable language, the maze of conflicting theories and confusing language of the first tentative drafts which disturbed the many participants in the revision effort not too long ago. The exchanges of views over the years at the public panel meetings held by the Copyright Office, the various bar association symposia, the exchange of position papers and commentaries by the various groups represented, the articles and panel papers published in law journals, have all evidently served a very effective role in the common copyright education of every one concerned.

6. However, the bill is concededly not a perfect instrument now ready for passage. There are some substantive provisions requiring amendment which very seriously affect motion pictures, which we believe may have been inadvertently included, or our situation not fully understood. We refer, for example, to the provisions concerning ephemeral recordings, free use of our films in schools, exemptions of libraries importing our films, exchange or other disposition of our deposited prints by the Library of Congress without our consent. There are quite a number of other provisions, primarily of a housekeeping nature, which require clarification to avoid that great bugaboo of copyright legislation, the ambiguities which will later plague the courts and copyright interests. In respect of such clarification, our views are essentially much the same as those of authors and publishers in the literary, dramatic, and musical fields, who have detected a similar necessity for like clarification.

We further indicated at the above 1965 House Hearings, and here repeat, that basically we approve the major principles of the copyright legislation as embodied in H.R. 4347, and now contained in S. 597. These are: (a) automatic copyright from creation under a single federal system; (b) the proposed provisions as to length of copyright term; (c) the statutory creation for the first time of an exclusive motion picture performing right; (d) the definition of "publicly" as modified by the House Judiciary Committee, passed by the House in H.R. 2512, and now appearing in S. 597; (e) the statutory creation of a distribution right by way of lease, rental and loan as well as by sale or other transfer of ownership; (f) the provisions as to fair use; (g) divisibility of copyright and its enforcement; (h) the amelioration of registration and recordation hardships; (i) requirement of a writing for transfer of exclusive rights; (j) the elimination of mandatory deposits as a condition upon copyright; (k) amelioration of the rigidities of the present notice system; (1) civil remedies.

As to the above mentioned compromise on "authorship of works made for hire," the same had been strongly recommended and clearly explained by the Copyright Office (1965 Supplementary Report of the Register, Part 6, pp. 66–68), as well as by House Report No. 83 (pp. 85-87). The compromise has been preserved intact, both in H.R. 2512 as passed by the House, and in S. 597 now pending before your Committee.

Concerning the above compromise on statutory recapture by an author of his transferred rights, to which we have been opposed in principle, there was a small modification by the House Judiciary Committee, which is embodied in H.R. 2512 as passed by the House, and similarly embodied in S. 597. This provides for a change from the prior requirement of "unanimity" to one of "majority" action in the notice by which the recapture option is exercised, as to grants directly made by authors themselves after the effective date of the new Act. We are reserving at this time, pending our continued deliberation, our view as to whether such change represents such a dilution or change to our disadvantage, as to call for a withdrawal of our acceptance of the compromise recapture provisions of H.R. 4347.