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copies of the materials they need, cut off a large part of the revenue to authors and publishers that induces the creation and publication of those materials. We believe that a statutory recognition of fair use would be sufficient to serve the reasonable needs of education with respect to the copying of short extracts from copyrighted works, and that the problem of obtaining clearances for copying larger portions or entire works could best be solved through a clearinghouse arrangement worked out between the educational groups and the author-publisher interests.
This problem, like the related problems of library photocopying, educational broadcasting, and computer uses of copyrighted material, has arisen because of the development of new marvels in the technology of communications.
A report dated February 4, 1965, from the Office of Federal Education Activities, Federal Education Programs Branch, Office of Education, Department of Health, Education, and Welfare, states that the estimated obligations of Federal funds for education and training and for the support of academic science” is more than $6 billion for fiscal 1965 and close to $9 billion for fiscal 1966. Obviously, some of these enormous sums will be used to acquire new devices intended for the reproduction of copyrighted works. In my opinion the copyright law should not only shield authors and publishers from the potential destruction of their educational markets through the widespread use of these devices, but it should insure that they receive a fair compensation for the use of their works. On the other hand, if a satisfactory clearinghouse arrangement cannot be worked out, I believe there is merit in the argument that individual teachers should not be faced with difficult clearance procedures and the dangers of statutory liability for the occasional copying of excerpts for limited classroom distribution. It will take some doing, but I am convinced that the legiti. mate interests on each side of this controversy can and should be balanced for the ultimate benefit of both.
(2) The jukebox exemption.—The issues raised by the present law's exemption of performances on coin-operated machines are so familiar by now that they do not require extended comment. It should be noted, however, that during the recent hearings on this bill in the House, the possibility of another solution to this problem was suggested in the form of a special performance fee, to be paid in addition to the mechanical royalty, which would free a particular record from any further royalties for jukebox performances.
As in the past, objections were raised to this alternative as they have been raised to every alternative suggested. Here, they were raised on the ground that record companies should not be forced to maintain double inventories or to act as involuntary collection agents. It has been pointed out, however, that this solution would not necessarily have to involve the record manufacturer in the payment procedure. Alternative methods, such as the purchase from a performing rights society or other copyright owner of stamps at a fixed rate for affixation on jukebox records, might be worked out under statutory safeguards. Here again, the Copyright Office is not committed to any particular formula for working out this problem, but urges that all concerned give the possibility of alternative proposals their careful and openminded consideration.
(3) Community antenna systems. The problem of whether community antenna systems, which transmit commercial broadcasts over wires into subscribers' homes, should be liable for the use of copyrighted material included in the broadcasts is one of the most difficult this committee will have to face. It is complicated by uncertainty as to what the present law on this question is. The issue is now before the courts in several cases, but it may not be finally resolved for some time.
Without taking any position as to what the present law may turn out to be, the Register's supplementary report concluded that there are valid arguments on both sides of the question, but that on balance the copyright owner should be compensated for the use of his works by CATV systems. The report added, however, that the problem of how a CATV operator would go about getting advance clearances for all of the coprighted works he uses is a real one which cannot be ignored.
The recent action of the Federal Communications Commission in taking jurisdiction over community antenna systems for certain purposes has raised speculation as to whether the copyright problem might not be solved by requiring the CATV operator to obtain permission from broadcasters to transmit their signals, thus automatically clearing any copyrighted material included in the broadcast. While this possibility has not been debated publicly as far as I know, I am inclined to doubt whether it would meet with much favor from either the copyright owners or the CATV operators.
(4) The manufacturing requirements. The present law requires, with a number of exceptions and qualifications, that English-language books and periodicals must be manufactured in the United States in order to be entitled to full-term copyright protection. The main impact of this requirement today falls on works by American authors, which in some cases are thrown into the public domain as a result of the failure to comply with the law's strict requirements. For example, today, if this clause is violated, the author loses not only is publishing rights but his motion picture rights, which have no real connection with the book manufacturing industry.
The bill would retain a manufacturing requirement, but with substantial changes that would make its results less drastic. The bill's provision appears to be generally satisfactory to the American book manufacturing interests, but the book publishing industry favors complete elimination of the requirement. The publishers are particularly concerned lest the statute be construed as prohibiting their present practice of printing American editions from imported"reproduction proofs” prepared from type composed abroad.
As I have said many times in the past, I believe that in principle none of the exclusive rights of a copyright owner should be made to depend upon compliance with manufacturing requirements. However, in an effort to compromise this extremely difficult question, we have gone forward with a provision that would greatly liberalize the requirements now in effect and that would preserve the present language supporting the use of “reproduction proofs." Efforts to achieve a further compromise to resolve this issue more satisfactorily have continued until recent weeks, but so far have not borne fruit, and apparently have broken down.
I should like to point out that the recent hearings on August 11 and 12 in the House indicated widespread support, and really almost no opposition, to the proposed provisions of the manufacturing clause
which would benefit the author. I think all individuals are convinced that this is a necessary revision in the present law.
(5) The compulsory licensing rate. The final disputed issue-a refreshingly simple one in some ways and an extremely complicated one in others—is whether the present statutory 2-cent rate for compositions recorded under a compulsory license should be raised to 3 cents. This is essentially an economic issue, and your committee will undoubtedly receive substantial quantities of statistical evidence bearing on it. My comment on the question is summed up in the following quotation from the Register's supplementary report:
As we see it, the statutory rate should be at the high end of a range within which the parties can negotiate, now and in the future, for actual payment of a rate that reflects market values at that time. It should not be so high, however, as to make it economically impractical for record producers to invoke the compulsory license if negotiations fail.
In closing I should like to say one thing more. It is certainly true that copyright law revision in this country is long overdue, and that it cannot be put off much longer without doing serious damage to our arts and humanities. I confess that when I became Register of Copyrights, less than 5 years ago, I did not foresee the extent to which copyright has emerged as one of the most important elements in the communications revolution that is changing our lives. Those 5 years have enabled us to see what copyright really means in the communications field, and they have also shown us some of the ways the copyright law must change to meet this unequaled challenge. It is exciting to have had a part in the development of what will surely prove one of the most significant and far-reaching legislative measures to be considered by this Congress, and I am grateful to have been given the opportunity.
Mr. Chairman, I should like to emphasize another point. We in the Copyright Office are considering recommendations for revisions, and we hope to do so until the bill is finally submitted to the floor of Congress for vote. We hope we can be of assistance in offering explanations, in further drafting, and in cooperating with the subcommittee in any possible way.
Senator McCLELLAN. Well, Mr. Kaminstein, I think you will have that opportunity. I do not see any possible way of getting this bill processed through the committee and on the Senate Calendar before the end of this session. We may succeed in doing it, but obviously, as you have demonstrated from your testimony, there is a great deal at issue in the details of the legislation, and many of these issues are controversial. They will have to be studied, and they will have to be studied by those of us who know very little about the actual workings of our copyright laws. We will endeavor to consider all the points of view and to resolve them by revising the bill where needed to meet what we think are the demands of our time in this field.
So I think it is well for you, particularly in the position you occupy, to follow these hearings closely and to give us the benefit of your counsel and suggestions as we go along. You may very well have some recommendation of changes in the provisions of the bill.
I do not know whether anybody on the committee has any preconceived ideas on these hearings—I know I have not—but merely desire
to bring up to date an antiquated law to meet the modern needs and demands of our time. I hope we can do it, as you said, so as to benefit both those who create these instruments of culture and education, and so forth-in other words, the authors—as well as to accommodate their users. Certainly the man who dedicates his life to this creative service should be adequately paid for it.
So we really have problems. Mr. KAMINSTEIN. Mr. Chairman, I am sure you will find it an arduous task, but I think you will also find it a very interesting and enjoyable experience, once you have gotten into it.
Senator MCCLELLAN. I think I would find it so if I could give it that time. But I tell you, with our responsibilities here today, we have to rely largely upon you people who are competent in the particular field when you come before us and testify.
I can appreciate that in this instance as in most all others, there will be differences of opinion. We will just have to use our best judgment in resolving these differences.
Does the young lady wish to add anything to what Mr. Kaminstein has said?
Miss RINGER. No, thank you, Mr. Chairman. I am very grateful for your remarks, and I endorse everything that has been said.
Senator McCLELLAN. I will tell you what you do. You keep counseling him, then.
Miss RINGER. I certainly will. Mr. KAMINSTEIN. I hope she will have an opportunity to say something later on, Senator McClellan. We shall be here.
Senator McCLELLAN. As I said to you, any time that you feel you would like to make any comment or file any statement, we shall be glad to receive it. Thank you very much.
Mr. KAMINSTEIN. Thank you, Mr. Chairman. Senator McCLELLAN. Oh, I beg your pardon. Counsel wishes to make a comment. Mr. BRENNAN. In your report in 1961, Mr. Kaminstein, you state: We have previously mentioned the fundamental principle of copyright that the author should have the exclusive right to exploit the market for his work except for where it conflicts with the public interest.
Would you develop for the record the relation between this statement and your position on section 113 of the bill, relating to compulsory licensing.
Mr. KAMINSTEIN. Mr. Brennan, the 1961 report states the general principle which was enunciated in that report accompanying the 1909 bill. We feel that that principle still holds, but accommodation is required where you have a sharp conflict such as that reflected in the compulsory licensing provision.
There has been a compulsory licensing provision in the law since 1909, and in our 1961 report we recommended that the compulsory license provision be removed. Over the course of the last 4 years we found that the general sentiment was that people could live with this compulsory license; in fact, that the industries concerned felt that there might be total disorganization if the compulsory license was removed.
We thus have come from our position in 1961 of pure principle to one in 1965 where people have said that this may be something that
is beneficial. The argument now has really become one of economics: Is the 2-cent rate adequate after all these years, or should it be raised to 3 cents, especially since it is an upper limit?
Mr. BRENNAN. Thank you. Mr. KAMINSTEIN. There are also other changes, along the same lines, that we have made in the bill as opposed to the original recommendations.
Senator McCLELLAN. Thank you very much. Mr. KAMINSTEIN. Thank you. Senator McCLELLAN. Who is the next witness! Mr. BRENNAN. Mr. Toomey and Mr. Diamond, of the American Bar Association.
STATEMENT OF JAMES E. TOOMEY, CHAIRMAN OF THE AMERICAN
BAR ASSOCIATION SECTION ON PATENT, TRADEMARK, AND COPYRIGHT LAW; ACCOMPANIED BY SIDNEY A. DIAMOND, CHAIRMAN, COPYRIGHT DIVISION OF THE PATENT, TRADEMARK, AND COPYRIGHT SECTION
Senator McCLELLAN. Gentlemen, do you have a prepared statement?
Mr. DIAMOND. Only Mr. Toomey does, Mr. Chairman. I am Mr. Diamond. I do not have any prepared statement.
Senator McCLELLAN. All right, Mr. Toomey. You may identify yourself, and Mr. Diamond, and then you may proceed with your statement.
Mr. Toomey. I am James E. Toomey, of Oakland, Calif. I am chairman of the patent, trademark, and copyright section of the American Bar Association. I am also patent counsel of Kaiser Aluminum & Chemical Corp., of Oakland, Calif.
I appear today solely on behalf of the American Bar Association, an organization of more than 120,000 lawyers throughout this country and appear for the purpose of advising the subcommittee of the ABA position on revision of the copyright laws.
Senator McCLELLAN. Very well, Mr. Toomey.
Mr. DIAMOND. Yes. I am Sidney A. Diamond, of New York City, Mr. Chairman. At the present time I am chairman of the copyright division of the patent, trademark, and copyright section of the American Bar Association, and I am here to accompany Mr. Toomey and offer any assistance that the committee may require.
Senator McCLELLAN. Thank you very much.
Mr. TOOMEY. We expect to be joined by Mr. John Schulman, one of the elder statesmen of the copyright bar, who is now testifying before the House subcommittee hearing that went on at 10 o'clock this morning. Mr. Schulman has chaired the committee within the ABA which has studied the revision of the copyright laws, and from which a resolution emanated which was adopted by the American Bar Association at its meeting last week in Miami. May I say that this section itself has a membership of approximately 3,000, which includes substantially all of the active members of the copyright bar.