MEMORANDUM STATEMENT BY THE COPYRIGHT COMMITTEE OF THE Before THE COMMITTEE ON THE JUDICIARY HOUSE OF REPRESENTATIVES Subcommittee No. 3 89th Congress, 1st Session INDEX PAGE INTRODUCTORY' 1 A. The Scope of Our Copyright Activities Domestically and Internationally 1 3 B. Our Participation in the Revision Effort C. The "Works for Hire” and “Recapture” Problems 1. Authorship of works for hire 2. Recapture D. Our Position as to the Legislation I. THE INDUSTRY'S POSITION AND ITS EXPECTATIONS AS TO COPYRIGHT A. The Producer as a Copyright User and Adapter B. As Distributors under Copyright: Method 1. Mass rentals .... 2. Varying license or rental fees 3. Only rentals and never sales C. New Technologies in Distribution 457 8 10 10 11 11 11 12 12 D. The Companion Industry in Audio-visual 16mm. Documentary Films 13 1. Protection against plagiarism 2. Protection against duping (a) Computerized storage and retrieval (b) Ephemeral recordings (c) Free copying by libraries 3. A performing right .... (a) Adequate definition of a public performing right (b) Protection of the performing right against abuses by licensees 13 13 14 14 14 14 14 15 15 16 16 (ii) Curative action under the copyright statute 17 (2) Unauthorized performances by bootleg prints ... A. Automatic Copyright from Creation under a Single Federal System 20 B. Duration (Proposed Length of Term) 21 21 (1) Bicycling, switching, subrenting and holding over (i) Great prevalence of exhibition violations in the 1930's ៨ ន ន ន ន ន ន ន ន ន ន C. A Motion Picture Performing Right D. A Distribution Right by Way of Leasing, Rental and Loan E. Fair Use F. Divisibility of Copyright and Its Enforcement G. Registration and Recordation Hardships Ameliorized H. Transfers of Exclusive Rights by Writing ... I. Mandatory Deposits Not a Condition Upon Copyright J. Compromise re Definition of Works for Hire and Authorship in 1. The proposal by screen writers and composers to change the K. Ameliorating Rigidities of the Present Notice System L. Civil Remedies: C. Section 106-Definition of "perform" and "exhibit" III. RESPECTS IN WHICH AMENDMENTS OR CLARIFICATION OF H.R. 4347 A. Section 101-Clarifying the Definition of "Derivative Works" 2. Derivative works (individually and in combination) B. Section 101-Definition of "Joint Works" D. Section 106(b) (3) (A)-Definition of "public performance" 1. Teaching Film Custodians, Inc. PAGE 3. Derivative works (and derivative intangible utilizations under 31 34 E. Section 109(1)—Exemption of Performances in Face-to-Face Teaching Activities 36 37 37 .... F. Section 109(5)—Reservations re Exempting Non-commercial CATV Further Transmissions 39 G. Section 109(7)-Reservations re Exempting Certain Public Recep tions on Home-type Apparatus ... H. Section 110-Objection to Ephemeral Recordings 1. Ephemeral copies of our copyrighted films 40 40 41 2. Ephemeral recordings in violation of our exclusive motion picture rights to literary works ... 42 44 44 .... 45 3. The unwarranted proposals of educational interests I. Section 201 (b)-Works Made for Hire (Written Agreement) J. Section 201(d)-Transfer of Ownership (why not federal foreclosure?) K. Section 202-Ownership of Copyright Distinct from Material Object ... L. Section 205(e)-Eliminate Hiatus Period in Respect of Recording Priority Conflicts M. Section 205 (f)—Recording Priority Should Affect Non-exclusive Licenses N. Section 203-Recapture of Future Created Copyrights 45 46 Section 304 (c)-Recapture in Transfers of Existing Copyrights .... 46 O. Section 302(b)—Duration of Copyright in Joint Works (last survivor) P. Section 401(a)-Notice of Copyright (eliminate "elsewhere") Q. Section 404(b)-Effect of Omission of Notice on Innocent Infringers (eliminate "actual" notice) 48 48 49 R. Section 404 (c)-Removal (or Omission) of Copyright Notice 49 49 T. Section 504 (c) (2)-Reducing Minimum Statutory Damages to $100 51 U. Section 602-Infringing Importation (library exemption requires modification) ... 52 53 1. The exemption in Section 602 is too broad V. Section 704-Retention and Disposition of Deposited Articles (modifications required) .. 1. Published works 2. Unpublished works. CONCLUSION 56 57 5555 MEMORANDUM STATEMENT BY THE COPYRIGHT COMMITTEE OF THE Before THE COMMITTEE ON THE JUDICIARY 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 ten years or so, producers and distributors have made available from their libraries some ten 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 in filmed or video taped form directly for television, a number of which are finding television markets abroad. Producers further make available these pictures, reduced in size to 16 mm. from the standard theatrical 35mm. width, to the Army, Navy, Air Force, Veterans' Administration, and Red Cross, for distribution to their installations 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. Hundreds of millions of dollars are spent annually in such film production and distribution. Payroll alone for production employees amounts to $260,000,000 in Hollywood, $25,000,000 elsewhere, and $60,000,000 for distribution employees. These pictures are not only an important factor in our domestic economy, where the public spends for movie theatre admission close to a billion and a half dollars annually. They are a major cultural and financial export of the United States. Approximately half of 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 repatriate over two hundred fifty million dollars annually from film rentals abroad toward closing the dollar gap,—and it is fortunate for our companies that we 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 the expanding leisure time and entertainment dollars of the public.* *According to the last available estimates published by the 1965 International Motion Picture Almanac: some 13,000 permanent four-wall and 4,800 drive-in theatres are operating in the U. S., for which the box office gross from an average weekly attendance of about 46,000,000 is some $1,420,000,000 annually (p. 56A). The average feature production cost in 1964 is put at $1,500,000 (p. 60A). It should be noted, however, that many features have a negative cost of $2,000,000 to $5,000,000 and specials such as AROUND THE WORLD IN EIGHTY DAYS, THE TEN COMMANdments, Ben HUR, SPARTACUS, MUTINY On the Bounty, West SIDE STORY, MY FAIR LADY, and CLEOPATRA, may range in negative cost from $10,000,000 to more than triple that amount. Furthermore, to negative cost there must be added a very substantial expense for 300 to 400 prints in 35mm., 100 to 200 prints in 16mm., advertising, exploitation, and distribution costs. A headline story in Variety for April 28, 1965, reports an informed "guestimate" by an executive of the Motion Picture Export Association of $250,000,000 of foreign film rentals being returned to the U. S., the remainder of approximately some $115,000,000 being spent abroad to pay thousands of personnel, and various taxes and levies (pp. 1, 70). According to the 1964 Film Daily Year Book of Motion Pictures: capital investment in Studios was $142,000,000, in Distribution $24,000,000, and in Theatres $2,500,000,000; some 29,000 people are employed in production, 10,000 in U. S. distribution, 14,500 overseas, with a payroll of $260,000,000 for Hollywood production employees, $25,000,000 for production employees elsewhere, and $60,000,000 for distribution employees; that while foreign playing time for U. S. pictures varies from small amounts up to 90% in certain countries, it averages about 55%; that some $365,000,000 is derived in the U. S. of a worldwide film rental gross of $685,000,000 for American pictures, although it is estimated that our member companies derive somewhat over half of their gross rentals from abroad (pp. 107-109). Further, according to this Year Book, the net box office gross, exclusive of admission taxes, is some $1,420,000,000 annually at U. S. movie theatres, which employ some 137,000 persons on a payroll of $319,000,000 |