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Foundation Professor at the Harvard Business School. Dr. Etzioni is the author of 24 books.

The next witness is Jack Valenti, who has served as the President and Chief Executive Officer of the Motion Picture Association of America for the past 38 years. Born in Houston, Texas, Mr. Valenti was the youngest high school graduate in the city, and became a highly decorated serviceman while serving in the Army Air Corps in World War II. He has a BA from the University of Houston and an MBA from Harvard.

Our last witness is Penny Nance, who is President of the Kids First Coalition, a nonprofit organization that works to educate Congress, State and local officials, and the media on a variety of issues relating to children. Kids First Coalition works to promote and encourage traditional families, as well as to help those in crisis pregnancies.

Welcome to you all. As you know, we have your written statements. We ask that you limit your testimony to 5 minutes, and without objection the complete testimonies of all witnesses will be made a part of the record.

Ms. Peters, before we begin with you, I'd like to take a minute to recognize Jack Valenti.

Jack, this may or may not be your last time to testify before a congressional Committee. I hope it's not your last, but if it is, I just want to thank you for your service to our country, for your service to your profession, whom you have served so well, as I mentioned a while ago, for 38 years. You have brought to the task intelligence, wit, integrity, credibility and even charm. Those are examples for all of us to follow, and we hope that even though you may go on to other endeavors, that certainly your example will continue with us to emulate.

I'm tempted to quote-I think it was Bob Hope who said "Thanks for the memories." And we certainly, if you do retire in the near future, we'll remember all of those good memories and we will remember them for a long time to come. So we appreciate your being here.

Ms. Peters, we'll begin with you.

STATEMENT OF THE HONORABLE MARYBETH PETERS, REGISTER OF COPYRIGHTS, COPYRIGHT OFFICE OF THE UNITED STATES, THE LIBRARY OF CONGRESS

MS. PETERS. Mr. Chairman, Representative Berman, Members of the Subcommittee, I am pleased to appear before you to discuss H.R. 4586, the "Family Home Movie Act of 2004."

Litigation addressing whether the manufacture and distribution of software that automatically mutes certain sounds and skips past certain images in a motion picture when a consumer plays a DVD of the motion picture in the privacy of his own home is pending in Federal Court in Colorado. Although I'm reluctant to express a view on that pending litigation, it's necessary for me to do that in order to address the issues related to the merits of the bill.

The Family Movie Act would provide that it is not a copyright infringement for the lawful possessor of an authorized copy of a motion picture to make imperceptible limited portions of audio or video content of the motion picture in the private home viewing of

an individual. It would further provide that the use of technology to make such audio or video content imperceptible is not an infringement.

As I understand the technology, it involves software that instructs a DVD to mute limited portions of the audio content or to fast forward past limited portions of the audio-visual content of a motion picture in order to avoid exposing the viewer to language or images that the viewer might find offensive. To qualify for the exception no fixed copies of the altered version of the motion picture may be made.

I understand there's a scrivener's error that will be protectedthat will be corrected, rather, in the version that was introduced yesterday. The requirement that no fixed copy of the altered version may be made is supposed to apply to both the act of making the content imperceptible and the use of technology. The way it's worded in the bill that was introduced yesterday, it would apply only to the use of technology and not to the conduct.

The conduct that takes place in the context of individuals and families making private performances of movies in their homes. The legislation basically says that this applies only to private home viewing, and it would have defined, as the version I saw was, "private home viewing" as: viewing in a household by means of consumer equipment or services that are operated by an individual in that household and that serve only that household. My written testimony describes the bill as permitting private home viewing and as containing that definition.

The bill, as actually introduced, doesn't use that term, but the concept of private home viewing remains in the bill, which now uses that definition to describe the context in which the conduct is permitted.

I believe that both the conduct and the technology should be lawful, but I also believe that such conduct is already lawful.

For that reason and for others, I oppose enactment of this legislation. Should this conduct be permitted? For me it's a close call. We can all agree that someone watching a movie on a DVD has the right to press the mute button and to fast forward to avoid hearing or seeing parts of the movie. On balance I believe that a technology that basically automates that process for the consumer serves a beneficial purpose.

I do, however, have a number of reservations which I elaborate on in my written testimony. I will mention only one this morning. Permitting a product that results in altered performances of a motion picture certainly raises questions about whether the moral rights of the directors have been violated. Because this alteration consists of only bypassing limited portions of the motion picture in context with a private performance, where that altered performance is desired by the person watching the movie, I think there is no violation of moral rights.

But that is not to say that the creator of the motion picture does not have a legitimate artistic reason to complain, and I'm very sympathetic to those complaints.

In any event, it seems clear to me that under existing law this conduct and these products are lawful. I believe that in order to violate the right to prepare derivative works, that the derivative

work must be fixed, that is, an actual copy of the derivative work must exist. According to my understanding of the technology, there is no fixation of a derivative work, and if that's true, there can be no infringement.

I admit that my reading of the statute is at odds with what the 1965 Report of the Register basically recommended, and with the legislative history. However, I can't get to where they wanted to be with the language of the statute. I believe that fixation is required.

I do, however, with regard to new technology, see that looking at the derivative work right and what it should be and what its scope should be in light of new technology is something that we probably should in fact be doing, and I basically hope that we have an opportunity to do that.

Because I see that my time has run out, let me just quickly say that with regard to why I oppose it, I don't see a need for it. I think the law is already clear. Second, I see little risk that the law will find that this conduct is unlawful, and I'm not in favor of enacting legislation to fix a nonexistent problem. I'd rather take this opportunity to look at what new technology may cause with regard to real life problems.

I'd like to end by saying that I have a concern that basically with where we are, the pendency of this legislation will make the settlement in the Colorado litigation less likely, and enactment certainly will remove all incentive for the companies to work together to work out a negotiated settlement.

If you enact this legislation, please include a sunset provision that will expire in two or 3 years. That will provide continuing incentives for motion picture companies and companies that produce these products to negotiate and come up with arrangements that provide both family friendly versions of movies to the public and give directors and motion picture studios more control over how their works are presented to the public. If the negotiations don't work, then you can always renew the Act.

[The prepared statement of Ms. Peters follows:]

PREPARED STATEMENT OF MARYBETH PETERS

Mr. Chairman, Representative Berman and Members of the Subcommittee, thank you for inviting me to appear before the Subcommittee to discuss H.R. 4586, "The Family Movie Act."

The Family Movie Act would make it lawful for a person who is watching a motion picture on a DVD in the privacy of his or her own home to use software that filters out certain types of content that the person would prefer not to see or hear. As you pointed out at a hearing last month, Mr. Chairman, such software can be used by parents to assist them in preventing their children from seeing or hearing objectionable content by muting the sound or fast forwarding past objectionable material. What material is to be filtered out is determined by the provider of the software, but such software can include options that give the user the ability to select categories of material that the user prefers not to see or hear.

I do not believe that such legislation should be enacted-and certainly not at this time. As you know, litigation addressing whether the manufacture and distribution of such software violates the copyright law and the Lanham Act is currently pending in the United States District Court for the District of Colorado. A summary judgment motion is pending. The court has not yet ruled on the merits. Nor has a preliminary injunction been issued or even sought. At the moment, providers of such software are free to sell it and consumers are free to use it. If the court ultimately rules that the making or distribution of the software is unlawful-a ruling that I believe is unlikely-the time may then be opportune to consider legislation. But meanwhile, there is every reason to believe that the proposed Family Movie Act is a solution to a problem that does not exist.

It is difficult to address the merits of this legislation without addressing the merits of the litigation in Colorado-something that I would prefer not to do, in part because the litigation remains at a very early stage. The Copyright Office generally expresses its views on individual copyright cases only in those cases that involve important questions of copyright law and policy and in which an erroneous ruling would create precedent harmful to the appropriate balance between the rights of copyright owners and the needs of users of copyrighted works. For example, I have spoken out on issues relating to copyright infringement on peer-to-peer networks while litigation involving those issues has been pending because I believe that mass infringement on such networks poses an unprecedented threat to creators and copyright owners. In contrast, I do not believe that the litigation relating to the subject matter of this legislation implicates such issues, and I have no desire to be drawn into the Colorado litigation.

Nevertheless, I cannot avoid offering some views on the current state of the law, because my recommendation against the enactment of the Family Movie Act is based in part on my conclusion that the conduct that it is intended to permit is already lawful under existing law.

POLICY CONSIDERATIONS

Let me start with a proposition that I believe everybody can agree on. I do not believe anybody would seriously argue that an individual who is watching a movie in his or her living room should be forbidden to press the mute button on a remote control in order to block out language that he or she believes is offensive. Nor should someone be forbidden to fast-forward past a scene that he or she does not wish to see. And certainly parents have the right to press the mute and fast-forward buttons to avoid exposing their children to material that they believe is inappropriate.

Does that mean that parents should be able to purchase a product that makes those decisions for them-that automatically mutes certain sounds and skips past certain images that the provider of that product believes parents would not want their children to hear or see? What if the parent is able to determine what categories of material (e.g., profanity, nudity, violence) should be blocked, and is willing to trust the provider of the filtering product to make the ultimate judgments about what material in a particular movie falls into the selected categories?

It is very tempting to say that consumers should be able to purchase such products, and that providers of such products should be permitted to develop and market them. But I have to say that I am hesitant to endorse that proposition.

First of all, I cannot accept the proposition that not to permit parents to use such products means that they are somehow forced to expose their children (or themselves) to unwanted depictions of violence, sex and profanity. There is an obvious choice-one which any parent can and should make: don't let your children watch a movie unless you approve of the content of the entire movie. Parents who have not prescreened a movie and made their own judgments can take guidance from the ratings that appear on almost all commercially released DVDs. Not only do those ratings label movies by particular classes denoting the age groups for which a particular movie is appropriate (e.g., G, PG, PG-13, R), but those ratings now also give parents additional advice about the content of a particular motion picture (e.g., "PG13 Sexual Content, Thematic Material & Language" (from "The Stepford Wives") or "PG-13 ..Non-stop Creature Action Violence and Frightening Images, and for Sensuality" (from "Van Helsing")). It is appropriate that parents and other consumers should be given sufficient information to make a judgment whether a particular motion picture is suitable for their children or themselves to view. And there are many third-party services that supplement the information provided by the movie studios. For example, the "Weekend" section of the Washington Post contains a "Family Filmgoer" column that briefly summarizes current motion pictures and offers more detailed commentary on the suitability of each movie for children of various age groups. For example, last week's column made the following observations as part of its commentary on the current motion picture, Saved!:

[H]igh schoolers may find it both humorous and intriguing. A little too adult for middle-schoolers, the movie contains a strongly implied sexual situation and rather romanticizes the idea of being an 18-year-old unwed mother. Other elements include profanity, sexual slang, homophobic talk, drunkenness, smoking and a jokey reference to bombing abortion clinics.

It seems that if a parent doesn't want a child to see offensive portions of a particular movie that's available on DVD, or if a person doesn't want to watch such portions himself, there is a simple choice: don't buy or rent the movie. In fact, those

of us who are truly offended by some of the content found in many movies might ask ourselves whether we are doing ourselves or society any favors by buying or renting those movies. I have always had great faith in the marketplace, and I believe that if enough people simply refuse to spend their money on movies that contain offensive material, the incentives for motion picture studios to produce them will diminish.

I also have to wonder how effective such filtering products are. A review of one such product in the New York Times observed:

The funny thing is, you have to wonder if ClearPlay's opponents have ever even tried it. If they did, they would discover ClearPlay is not objectionable just because it butchers the moviemakers' vision. The much bigger problem is that it does not fulfill its mission: to make otherwise offensive movies appropriate for the whole family.

For starters, its editors are wildly inconsistent. They duly mute every "Oh my God," "You bastard," and "We're gonna have a helluva time" (meaning sex). But they leave intact various examples of crude teen slang and a term for the male anatomy.

In "Pirates of the Caribbean," "God-forsaken island" is bleeped, but "heathen gods" slips through. (So much for the promise to remove references to "God or a deity.")

Similarly, in "Terminator 3," the software skips over the Terminator-a cyborg, mind you-bloodlessly opening his abdomen to make a repair. Yet you're still shown a hook carving bloody gouges into the palms of a "Matrix Reloaded" character. 1

Again, perhaps it's just better to avoid getting the offending movie in the first place.

Moreover, I have serious reservations about enacting legislation that permits persons other than the creators or authorized distributors of a motion picture to make a profit by selling adaptations of somebody else's motion picture. It's one thing to say that an individual, in the privacy of his or her home, should be able to filter out undesired scenes or dialog from his or her private home viewing of a movie. It's another matter to say that a for-profit company should be able to commercially market a product that alters a director's artistic vision.

That brings me to an objection that is more firmly rooted in fundamental principles of copyright, which recognize that authors have moral rights. To be sure, the state of the law with respect to moral rights is relatively undeveloped in the United States, and a recent ill-considered decision by our Supreme Court has weakened the protection for moral rights that our laws offer.2 Moreover, I am not suggesting that enactment of the proposed legislation would violate our obligations under the Berne Convention to protect moral rights.3 In fact, I do not believe that the Berne Convention's provision on moral rights forbids permitting the making and marketing of products that permit individual consumers to block certain undesired audio or video content from their private home viewing of motion pictures. But beyond our treaty obligations, the principles underlying moral rights are important. The right of integrity-the author's right to prevent, in the words of Article 6bis of the Berne Convention-the "distortion, mutilation, or any other modification of, or other derogatory action in relation to [his or her] work, which would be prejudicial to his honor or reputation"-is a reflection of an important principle. As one leading commentator has put it:

Any author, whether he writes, paints, or composes, embodies some part of himself-his thoughts, ideas, sentiments and feelings-in his work, and this gives rise to an interest as deserving of protection as any of the other personal interests protected by the institutions of positive law, such as reputation, bodily in

1 David Pogue, "STATE OF THE ART; Add 'Cut' and 'Bleep' To a DVD's Options," New York Times, May 27, 2004, page G1.

2 Dastar Corp. v. Twentieth Century Fox Film Corp., 539 U.S. 123 S.Ct. 2041 (2003). While the Dastar decision is not the subject of this hearing, I believe that the subcommittee should examine whether section 43(a) of the Lanham Act should be amended to reflect what was the longstanding understanding prior to Dastar-that section 43(a) is an important means for protecting the moral rights of attribution and integrity. Although I will comment no further on Dastar at this hearing, and although I will not comment on the portion of the proposed legislation that would provide an exemption from liability under the Lanham Act, it is worth noting that in the wake of Dastar (and, for that matter, even under pre-Dastar law), there may be little reason to be concerned that the conduct proposed to be covered by the proposed Family Movie Act would violate the Lanham Act in any event.

3 Berne Convention for the Protection of Literary and Artistic Works, Art. 6bis.