(b) Recommend that clause (4) of section 109 be amended by inserting in line 8 after the last comma and before “if” the following:

"except that any such payment shall not cause a performance, which would otherwise be noninfringing, to infringe any copyright if such payments are made out of funds of the United States Government or any State government,”.

(c) Recommend that the following new clause be added after clause (7) of section 109:

"(8) performance of a nondramatic literary or musical work, or exhibition of a work, by or in the course of a transmission made by the United States Government primarily for reception by United States Government employees, including military personnel, and their families."

Comment: The recommended changes will largely protect the free performing rights which the Government currently enjoys in nondramatic literary and musical works.

The change in section 109 (2) avoids any possibility that closed circuit instructional television of any governmental activity would be excluded from 109 (2) by a limited interpretation of "educational institution."

Section 109 of the bill reflects the effort to compromise the conflicting desire of copyright proprietors to be compensated for every “public” performance of their works, on the one hand, and the desire of users to retain their present privilege of performing copyrighted works publicly as long as the performances are not for profit. Section 109 as drafted retains a free performing right for certain specifically defined types of nonprofit performances. However, it denies free performing rights generally to noncommercial broadcasts and to performers when the performers are paid a fee or other compensation. Thus, unless this bill is amended the Defense Department will have to obtain licenses and pay royalties for the use of copyrighted works by Armed Forces broadcasting stations and by military bands and choruses. Licenses will also have to be arranged to cover the use of copyrighted works in free military-sponsored shows, concerts, etc., featuring paid civilian performers.

The Army alone has 68 full-time military bands in geographical areas to which the copyright statute extends; perhaps 90 percent of the music played is copyrighted as original or derivative works. There are 39 Air Force bands, 12 Air National Guard bands, 50 Navy bands, and 14 Marine bands. The Armed Forces Radio and Television Service operates three short-wave radio stations in the contiguous United States, and broadcasts on standard commercial bands from radio and television stations in Alaska and Puerto Rico. The military departments operate about a dozen TV translator outlets. Performing rights licenses are likely to cost the Defense Department a considerable sum each year (apart from internal DOD administrative burdens and costs) if section 109 is enacted without change.

The change in section 109 (4) preserves the present exemption from copyright infringement of public performances of military bands at concerts and parades. Such public performances should be exempt notwithstanding the fact that the bandsmen receive military pay which makes 109 (4) of the bill inapplicable. The reference to State government in the proposed language is included to exempt public performances of National Guard military bands.

The new clause (8) will preserve the status quo with respect to the operation of radio and television stations by the Armed Forces for the benefit of service. men and their families at places not served by commercial broadcasters. The performance and exhibition of certain types of work, for example music, by Armed Forces stations will continue to be privileged and noninfringing. Clause (5) of 109 does not seem to preserve this privilege to Armed Forces stations inasmuch as it applies only to "further transmissions" (not initial broadcasts) and it applies only when the original transmission is unaltered. When an Armed Forces station broadcasts a recorded commercial program it is required by DOD Instruction 5120.20 to eliminate advertisting material.

The Department, nevertheless, singles out clause (5) of section 109 for support because that portion of the bill insures that nonprofit retransmission of radio and television programs by community antenna systems (CATV) and by TV translators (which merely retransmit a signal on a different higher frequency will be a noninfringing activity. The military departments do employ such apparatus at isolated posts so that servicemen may see television shows which they could not receive with their individual equipment.

The Defense Department urges the adoption of 109 (5) and (8) not only because they continue an existing legal privilege and should save the public considerable sums of money but also because these provisions are not unfair to the copyright owners whose works are broadcast or retransmitted by military facilities. Military broadcasting and retransmitting facilities within the United States are restricted by regulation and practice to areas not reached by private broadcasters. DOD Instruction 5120.20 provides:

"The mission of Armed Forces Radio and Television Service is to provide United States Armed Forces personnel outside the continental United States, in certain isolated areas, and in specified military and veterans' hospitals in the United States, where U.S. commercial radio and television programs are not available or adequate, with programs of information, education, and entertainment which would otherwise be unavailable to them."

In addition, the DOD instruction provides that Armed Forces Radio and Television material will not be used for:

"*** commercial purposes, or in any manner that would constitute competition with, or otherwise be detrimental to, commercial artists, copyright owners, or other private interests determined to be competitive in nature;". [Emphasis added.]

Thus the Defense Department's activities do not reduce the commercial market to which a copyright owner may license his musical or other works. In fact, much of the material which is broadcast by military stations, and all the material which is "retransmitted" by CATV and translator apparatus, is originated by commercial networks and stations which pay royalties to the copyright owners.

TRANSITIONAL AND SUPPLEMENTARY PROVISIONS

Recommend that 28 U.S.C. 1498 (b) be amended to read as follows:

"(b) Hereafter, whenever the copyright in any published work protected under the copyright laws of the United States shall be infringed by the United States, by a corporation owned or controlled by the United States, or by a contractor, subcontractor, or any person, firm, or corporation acting for the Government and with the authorization or consent of the Government, the exclusive remedy of the owner of such copyright shall be by action against the United States in the Court of Claims for the recovery of his reasonable and entire compensation [as damages] for such infringement, including the minimum statutory damages as set forth in section 101 (b) of title 17, United States Code]: Provided, That a Government employee shall have a right of action against the Government under this subsection except where he was in a position to order, influence, or induce use of the copyrighted work by the Government: Provided. however, That this subsection shall not confer a right of action on any copyright owner or any assignee of such owner with respect to any copyrighted work prepared by a person while in the employment or service of the United States, where the copyrighted work was prepared as a part of the official functions of the employee, or in the preparation of which Government time, material, or facilities were used: And provided further, That before such action against the United States has been instituted the appropriate corporation owned or controlled by the United States or the head of the appropriate department or agency of the Government, as the case may be, is authorized to enter into an agreement with the copyright owner in full settlement and compromise for [the damages accruing to him by reason of such infringement and to settle the claim administratively out of available appropriations." [Italics and black brackets supplied to show change in language.]

Comment: In order to take cognizance of the changes proposed in sections 104(a) and 301 of the bill with respect to copyrights in unpublished works, and to eliminate references to minimum statutory damages, it is suggested that section 1498 (b) of title 28, United States Code, with reference to remedies available to copyright proprietors in the case of infringement by the U.S. Government, be amended.

The word "published" is inserted in the proposed amendment to 28 U.S.C. 1498 (b) to assure that the liability of the United States under the new copyright law would remain substantially the same as it is now. At present, the Government can be sued under 28 U.S.C. 1498 (b) only for infringement of works "protected under the copyright law of the United States"; such works are primarily "published" works. Since the bill would bring many categories of “un

published" works previously protected only by State literary property law within the scope of Federal copyright law, this limitation to published works is needed. As to statutory damages, we found no reported decisions or legislative history interpreting 28 U.S.C. 1498 (b), but we believe it is rather clear that the Court of Claims presently has discretion to award or withhold minimum statutory damages in suits against the Government. Section 504 (c) gives a copyright owner an absolute right, at his election, to statutory damages in a minimum amount of $250 for all infringements of any one work. In our opinion, 28 U.S.C. 1498(b) should not incorporate this principle of mandatory statutory damages.

If statutory minimum damages were to apply at the election of the copyright owner in suits against the Government, section 1498 (b) would lose its eminent domain aspect. Government agencies might then be faced during administrative settlement negotiations with claimant's arguments that negotiations start with $250 as a lower limit even though the owner's actual damage may be nominal (e.g., in a case where a few photocopies have been made by the Government of a copyrighted article). The present language of 28 U.S.C. 1498 (b) as to administrative claims further supports this proposal to omit reference to statutory damages.

Section 504 (c) also incorporates under statutory damages, damages for willful infringement which were not previously provided in 17 U.S.C. 101 (b). Such damages are completely inconsistent with the eminent domain aspect of 28 U.S.C. 1498 (b) and should not be awarded in an action against the United States under that section.

This report has been coordinated within the Department of Defense in accordance with procedures prescribed by the Secretary of Defense.

The Bureau of the Budget advises that, from the standpoint of the administration's program, there is no objection to the presentation of this report for the consideration of the committee. Sincerely,

LEONARD MARKS, Jr.,

Assistant Secretary of the Air Force.

Hon. EMANUEL CELLER,

U.S. DEPARTMENT OF JUSTICE,

OFFICE OF THE DEPUTY ATTORNEY GENERAL,
Washington, D.C., May 20, 1965.

Chairman, Committee on the Judiciary,
House of Representatives, Washington, D.C.

DEAR MR. CHAIRMAN: This is in response to your request for the views of the Department of Justice on H.R. 4347 "for the general revision of the copyright law, title 17 of the United States Code, and for other purposes."

The bill constitutes a complete rewriting of the Copyright Act of 1909, as amended, title 17, United States Code. Among the more notable revisions which would be effected in existing law, is the change in the present dual system of protecting works under the common law before publication (17 U.S.C. 2), and under the act after publication (17 U.S.C. 10), in favor of a single Federal statutory system for the protection of all works whether published or unpublished (sec. 301).

Also, there would be a change in the duration of the copyright period which is now 28 years from the date of first publication with notice, and renewal for an additional 28 years, or a total of 56 years (17 U.S.C. 24). The bill (sec. 302) would substantially increase the duration of the copyright by providing for a term consisting of the life of the author and 50 years after his death, and for anonymous works and works for hire, a term of 75 years from publication or a term of 100 years from creation, whichever expires first.

Although the bill does not provide for renewal of copyrights, as authorized under existing law, it does provide (sec. 203) for the termination, by the author or his heirs, of the original transfer of rights at the end of 35 years (or up to 40 years in certain situations).

Another important change which the bill would make in existing law would be the repeal of the present "jukebox" exemption. Under existing law (17 U.S.C. 1(e)), the rendition of a musical composition by a coin-operated machine, sometimes called a jukebox, is not deemed a public performance for profit subjecting the performance to the payment of a royalty, unless an admission fee is charged 52-380-66-pt. 2-81

in the place where such rendition occurs. The bill (sec. 114) would repeal this exemption and make the owners of such machines subject to the payment of royalties whenever musical compositions are played on the machines.

An additional change which the legislation would make in existing law would be to include sound recordings within the categories of copyrightable works (sec. 102).

In general, the Department of Justice favors the revision of the Copyright Act as proposed in the bill. Whether the provisions extending copyright protection to sound recordings, increasing the duration of copyrights, and repealing the "jukebox" exemption should be enacted, involve questions of policy concerning which the Department prefers to make no recommendation. There are certain provisions of the legislation, however, which we consider objectionable.

Section 4 of the present law (17 U.S.C. 4) uses the language of article I, section 8, clause 8 of the Constitution by providing that "works for which copyright may be secured *** shall include all the writings of an author." Section 5 of the present law (17 U.S.C. 5), which sets forth 13 classes of copyrightable works, provides that those specified classes "shall not be held to limit the subject matter of copyright as defined in section 4." In spite of these provisions the courts have held that certain works are not copyrightable even though they would appear to be a "writing of an author" because they are not specifically set forth in one of the classes of section 5.

It is understood that the drafters of the legislation determined to omit the omnibus provision of section 4 in the general revision and to reformulate the categories of copyrightable works in sufficiently broad terms to include all the classes specifically set forth in the present statute. While the language of section 4 of the present law is omitted, section 102 of the bill does not limit coverage to the enumerated categories. Rather, this section in exemplifying works of authorship prefaces the categories set forth by the word "include" which is defined in section 101 as "illustrative and not limitative." Thus, section 102 of the bil, like the present law, provides an omnibus provision plus a list of classes of copyrightable works. To modify the language of the present act without changing it in substance will in all likelihood cause confusion rather than clarify the situation. It is recommended that the present omnibus provision in section 102"Works of authorship include the following categories * **"-be deleted and that if an omnibus provision is found to be necessary, the language of the Constitution-"all writings of an author"--be used.

Section 201(d) (2) of the bill provides for transfer of a portion of the exclusive rights in a copyright and provides further that the owner of such portion of the rights shall be entitled to all of the protection and remedies accorded to the copyright owner. This would represent a change in case law regarding transfers since the courts have held that a copyright is an indivisible unit and a partial transferee or licensee cannot sue for an infringement of a right transferred to him without joining the owner of the residual rights as a party to the suit.

It is believed that section 201(d) (2), as presently worded, would create many problems under 28 U.S.C. 1498(b), which provides for suits by a copyright owner against the United States in the Court of Claims for the recovery of reasonable and entire compensation for the "eminent domain taking" of the copyright by the United States. This right is similar to that accorded to patent owners under 28 U.S.C. 1498 (a). To date, no suit has been filed under 28 U.S.C. 1498(b).

By analogy to patents, which gives the exclusive right to prevent others from making, using and selling, it has been held that suits against the United States under 28 U.S.C. 1498(a) must be by "the owner" and a mere licensee is not an "owner." In the leading case of Waterman v. Mackenzie (138 U.S. 252, 255-257), the Court listed only three types of owners; namely, the person who, at the time of the alleged infringement, held legal title to the entire patent. or an undivided share of the entire patent, or the entire patent for a specified part of the United States. The transfer of anything less was held to be a license and the licensee could sue only through the licensor.

In the congressional proceedings on the original act of June 25, 1910, which became 28 U.S.C. 1498, it was stated that the measure was intended to waive sovereign immunity as to, and provide a remedy for, only the owners of patents, and also that the bill was not intended to permit suits by licensees under the patents (H. Rept. No. 1288, 61st Cong.; Congressional Record, June 22, 1910, pp. 8755-8785).

In contrast, if section 201 (d) (2) should be enacted in its present form, a transferee of only one of the rights provided by the copyright law could sue

the United States in the Court of Claims while a licensee of only one of the rights under a patent could not. It is therefore suggested that section 201 (d) (2) be modified by deleting the last sentence of said subsection and substituting the following:

"Except in suits against the United States, the owner of any particular exclusive right is entitled, to the extent of that right, to all of the protection and remedies accorded to the copyright owner by this title. Suits against the United States can be brought only by the owner of the entire copyright, the owner of an undivided share of the entire copyright, or the owner of the exclusive right under the entire copyright for a specified part of the United States."

Section 203 of the bill would permit the author or his heirs to terminate the original transfer of his rights at any time during a period of 5 years beginning at the end of 35 years from the date of execution of the transfer (up to 40 years in certain situations). Termination is effected by serving a written notice on the transferee at least 2 years but not more than 10 years before the effective date of termination. However, section 203(b)(2) and parallel section 304 (c) (5) (B) (relating to transfers of copyrights subsisting on the effective date of the legislation), provide that an agreement to transfer rights subsequent to the termination of a prior transfer will not be effective unless made after the effective date of that termination or unless made to the original transferee. We believe the transferee should not be in a preferred position to enter into an agreement for transfer prior to termination of the original transfer. We feel that all potential transferees should have an equal opportunity to enter into such an agreement. It is therefore suggested that subparagraph (2) of section 203(b) and subparagraph (B) of section 304 (c) (5) be deleted.

Under the present act (17 U.S.C. 21) omission of notice on published copies of a work ordinarily places the work in the public domain. However, if such notice is accidentally omitted from a particular copy or copies, copyright is not lost; but innocent infringers who are misled by the accidental omission are not liable for infringement. Under section 404 (a) of the bill omission of notice from a relatively small number of copies of a work will not invalidate the copyright whether or not such omission was accidental. Moreover, the omission of notice will not invalidate the copyright in a work if registration for the work is made within 5 years after the publication without notice and a reasonable effort is made to add notice to all copies distributed to the public. As under the present law, innocent infringers who are misled by the omission of notice would not be liable for infringement (sec. 404 (b)).

We feel that, in the public interest, a copyright should be protected from invalidation only when the failure to provide notice was the result of an accident or mistake, and a small number of copies were distributed to the public. To permit, as proposed in section 404(a) (2), a copyright owner to publish an entire printing of his work without notice and still enforce the copyright would tend to negate the purpose of notice. The fact that innocent infringers would incur no liability would still subject such persons to proving their innocence even where the act of omission regarding notice was deliberate. We also feel that it would be advisable that the words "particular copy or copies", contained in the present statute, be used instead of the words "relatively small number" to designate the limits within which notice may be omitted without loss of copyright. It is therefore suggested that section 404 (a) be deleted and the following substituted therefor:

"(a) EFFECT OF OMISSION ON COPYRIGHT.-The omission of the copyright notice prescribed in sections 401 and 402 from copies or phonorecords publicly distributed by the authority of the copyright owner by accident or mistake shall not invalidate the copyright where the accidental or mistaken omission is from a particular copy or copies or a particular phonorecord or phonorecords distributed to the public."

The first sentence of section 410 of the bill is in accord with section 13 of the act (17 U.S.C. 13) in that it provides that no action for infringement of a copyright shall be instituted until registration of the copyright claim is made. The balance of section 410. however, differs from existing law in that it provides that if the required papers for registration have been filed in the Copyright Office and registration has been refused, the applicant may institute an action for infringement. In such case, the Register may, at his option, become a party to the action with respect to the issue of registrability of the copyright claimed.