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authorized edition if that terminates its compulsory license to issue the work, or prevents it from obtaining a compulsory reproduction license at a low royalty? Even if the author or publisher can find a distributor, can their authorized edition meet the second requirement; can it be sold at a "price reasonably related to that normally charged” for comparable works, if the comparable works are sold at a narrow mark-up, or at cost, or below cost, by a state-owned or subsidized publisher, or acquired cheaply (or free) from a foreign state under the "outside printing” interpretation?

Fourth, the architects note that a compulsory license cannot be granted until the owner's authorization has been requested and denied. But what choices face the author or publisher who receives a request for authorization to translate or reproduce a work? As noted, he cannot afford to rush a translation into print each time. He can accept, reject, or bargain for better terms than the applicant offers. If the royalty offered him is unsatisfactory, his chances of increasing it by bargaining are as slight as his bargaining power. He is under the gun. If he rejects the royalty offered him, the applicant will receive a compulsory license, with the royalty rate fixed by authorities in the developing country. And with this alternative, it is unlikely that those requesting his authorization will offer him generous terms.

No minimum royalty is specified in the 1971 UCC. It requires only that compensation be "consistent with standards of royalties normally operating in the case of licenses freely negotiated between persons in the two countries concerned.” If the author is not satisfied with the rate fixed by the authorities of the developing country, under this broad mandate, he could challenge it only in the courts of the developing country. In fact, all objections to the issuance of licenses woud have to be made there. That requires a considerable investment for every license, with not too promising a chance of success. The 1971 UCC provides no other forum for authors or publishers aggrieved by their treatment in developing countries.

Even allowing for a substantial discounting of these possible dangers, a compulsory licensing system is a dismal prospect for the "world of authors” in developed and developing countries. It becomes more dismal if several developing countries can issue compulsory licenses for the same work, use on translator to translate if, and have the translation printed in quantity in one plant in another country; or have a large quantity of copies run off in the plant under reproduction licenses issued by all of them. Mass production is possible. And compulsory licensing becomes an even more attractive alternative to voluntary arrangements between the author and developing countries that want to use his work. It also offers some developed countries an inexpensive means of extending aid to unuderdeveloped countries, i.e. printing cheap, mass paperback editions of books by authors from other developed countries. Under the "outside printing" interpretation, each developing country will decide whether its own printing facilities "are incapable for economic reasons of reproducing the copies" of foreign works for which it issues compulsory licenses.

As the chairman of the UCC conference suggested, compulsory licensing should not be the ordinary means of providing for publication in developing countries. It should be the rare exception, used only where voluntary negotiations cannot secure for a developing country the right to publish a book it truly needs for educational purposes, and then with fair compensation for the author. Authors are entitled to ask for a rigorous analysis of the complsory licensing system are entitled to ask for a rigorous analysis of the compulsory licensing system created at both Paris conferences, in the texts and by the interpretations, to determine whether it is likely to produce only a few compulsory licenses or to encourage their use as a fundamental means of acquiring translation and pub. lishing rights. For if the latter result develops, authors will, in effect, be compelled to subsidize “developing" countries, including some well able to pay normal royalties. This is a sacrifice not asked of manufacturers of soft drinks, industrial equipment, automobiles or other products—including those purchased by developing countries for the construction or operation of schools. Nor is it a sacrifice likely to be asked of translators who will translate under compulsory licenses, or publishers who will be granted those licenses in developing countries. If subsidies are required to aid education in developing countries, they would more appropriately come from the governments of developed countries, including funds to pay royalties on copies translated or reproduced in developing countries under voluntary licenses.

l'ltimately the Senate will have to decide if the United States ratifies the 1971 UCC. If it does not, the United States would remain a party to the 1952 UCC, and the new compulsory licensing provisions would not apply to American works. Moreover, the Paris Act of the Berne Convention would not become effective. Developing countries might leave Berne or the UCC. They would then be free to institute compulsory licensing systems of their own devising, or deny any protection to foreign works. But their works would not be entitled, under the Conventions, to protection in other countries. Retaliation in the long run, if not the short, might persuade them to remain in the UCC or rejoin it.

Ratification would freeze a compulsory license system into both Berne and UCC for decades to come, available to a majority of the members of the U.N. for an unpredictable period of time. When, for example, will Brazil or Yugoslavia or India decide they have become developed countries? If Brazil or Yugosla via or Israel are still developing countries, how long will it take for less developed developing countries to become developed? These are some of the questions left unanswered by the Paris Conferences. And in the shadow of these questions, a careful analysis of the effects and consequences of the two new conventions is imperative, before the Senate decides what action the United States should take.

Mr. BRENNAN. The Educational Media Producers Council. The witnesses are Mr. Otterman, David Engler, and Robert Frase.



Mr. OTTERMAN. Mr. Chairman, my name is Lloyd Otterman and I am chairman of the Educational Media Producers Council (EMPC) and vice president of BFA Educational Media. I am appearing here today on behalf of EMPC and with me are David Engler, chairman of the EMPC Copyright Committee and Robert W. Frase, economist and consultant on copyright to EMPC.

We have submitted formal testimony to this subcommittee. I ask now that it be included into the record.

Senator BURDICK. Without objection, it will be included. Mr. OTTERMAN. I will be highlighting those formal remarks in an effort to meet the time constraints we have here today.

We are here to give you our views on S. 1361, and specifically on the issues involved in the educational use of copyrighted audiovisual materials. We support the bill as introduced and oppose amendments which would weaken the protection provided in the bill to those materials.

Let me sketch briefly the economics of producing audiovisual materials for education. This background will be helpful in understanding the importance of appropriate copyright protection in order to insure the continued development of high quality materials for educational use.

EMPC has some 70 members who produce audiovisual materials for use in schools and libraries—materials such as motion pictures, filmstrips, slides, transparencies, and sound recording. We estimate that our members produce 80 percent of these educational audiovisual materials.

In 1972 total sales of educational audiovisual materials amounted to $215 million, produced by some 200 companies; thus the industry is clearly one of active competition among quite small firms.

These materials are designed for instructional purposes, and have no market among consumers in general or for general entertainment.

Because of the way in which audiovisual materials are used in the educational process, the number of copies produced is quite limited. As compared with textbooks, for example, which are generally provided one to a student, one or two copies of a 16-millimeter educational film may serve an entire school system of moderate size; and a single copy of a filmstrip will serve an entire school. A typical audiovisual product will customarily sell in the hundreds or low thousands over 5 to 10 years, as compared with tens or hundreds of thousands of textbooks. Thus the initial investment in editorial work and production, which costs as much for one copy as for thousands, is spread over a relatively limited number of copies. In addition to the substantial initial investments necessary to the production of quality materials there must be added carrying costs for the considerable period of time over which sales are made. The combination of these factors-small editions and sales over an extended period—means that unauthorized duplication of copies has a much greater impact on the economic viability of these products than on some other types of educational materials.

The U.S. Office of Education has granted millions of dollars over the years to educational research laboratories for developing more effective teaching methods and materials. Many good products were developed, but far too few were disseminated to the educational community. Why? Because policies were not developed which allowed companies with marketing expertise to distribute the materials under the protection of copyright. However, recently, USOE revised its policy and provided copyright protection. Now the educational community receives the benefit of the Federal research and development effort.

I think this points out very clearly the need to provide incentives for the production of materials and the need to protect the rights of the copyright holders. The federally funded materials, which under the noncopyright policy were developed and not marketed are now being used by students--because of the incentives given producers to manufacture and distribute the materials. We note that S. 1361 recognizes these realities.

We believe that S. 1361 is a good bill and will provide the necessary incentives to the continued production of quality audiovisual materials for use in the educational system.

We commend the subcommittee in particular for its proposals with respect to fair use and here we have specific reference to section 107 of the bill.

We are pleased that the principal professional organizations of educators directly concerned with the use of audiovisual materials in the educational process, composed of 8,000 members directly concerned with it, has also recently come out in support of section 107 of the bill and in opposition to the so-called educational exemption.

I have here their formal testimony submitted to me this morning. I am reading from page 7, paragraph 2,

Although the AECT's position differs from that of the Ad Hoc Committee on the need for general education exemption, we continue to remain a member of that group.

The statement issued by the executive committee of the Association for Educational Communications and Technology, which is an affiliate of the National Education Association, given on May 31, 1973, is contained in attachment A. I ask now that that statement be placed in the record at this point.

Senator BURDICK. Without objection. [The statement referred to follows:]

(Attachment A)


The members of the Association for Educational Communications and Technology (AECT) believe that technology is an integral part of the teachinglearning process and helps to maximize the outcomes of interaction between teacher and pupil.

Regulations governing United States Copyright were originally developed to promote the public welfare and encourage authorship by giving authors certain controls over their work. It follows that revisions in Title 17 of the United States Code (Copyrights) should maintain the balance providing for the compensation of authors and insuring that information remains available to the public. Some of the revisions proposed in S. 1361 lose sight of this balance between user and producer.

AECT endorses the criteria to be used in the determination of "fair use" as contained in Section 107 of the proposed bill :

Section 107.-Limitations on exclusive rights: Fair use ... the fair use of a copyrighted work, including such use by reproduction in copies or phonorecords or by any other means specified by [Section 106], for purposes such as criticism, comment, news reporting, teaching, scholarship, or research, is not an infringement of copyright. In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include:

(1) The purpose and character of the use;
(2) The nature of the copyrighted work ;

(3) The amount and substantiality of the portion used in relation to the copyrighted work as a whole; and

(4) The effect of the use upon the potential market for or value of the copyrighted work. Further, we endorse the concepts regarding the intent of these criteria as expanded in the legislative history of the bill as it existed prior to and without regard to the original opinion in the case of Williams and Wilkins v. U.S., for that opinion substantially narrows the scope of "fair use" and irreparably weakens that doctrine.

However, we propose that the concept of "fair use" should apply equally to the classroom teacher and media professional-including specialists in audiovisual and library resources. Media personnel are becoming increasingly important members of educational planning teams and must have the assurance that they may assist classroom teachers in the selection of daily instructional materials as well as with long range curriculum development. Classroom teachers do not always operate "individually and at [their] own volition.” The fact that the media professional makes use of advance planning and has knowledge aforethought of the materials he prepares for the teacher should not invalidate the application of the "fair use" principle.

Concerning the use of copyrighted works in conjunction with television, AECT proposes that "fair use," as it has been outlined above, should apply to educational/instructional broadcast or closed-circuit transmission in a nonprofit educational institution, but not to commercial broadcasting.

Once the doctrine of "fair use" has been established in the revised law, negotiations should be conducted between the proprietor and user prior to any use of copyrighted materials that goes beyond that doctrine. We believe that the enactment of the "fair use" concept into law prior to negotiations will guard against the erosion of that concept. Generally, a reasonable fee should be paid for uses that go beyond "fair use," but such fee arrangement should not delay or impede the use of the materials. Producers are urged to give free access (no-cost contracts) whenever possible.

We agree with the Ad Hoc Committee of Educational Organizations and Institutions on Copyright Law Revision that duration of copyright should provide for an initial period of twenty-eight years, followed by a renewal period of forty-eight years, whereas the proposed bill sets duration at the “life of the author plus fifty years.” It seems reasonable that provision should be made to permit those materials which the copyright holder has no interest in protecting after the initial period to pass into the public domain.

Regarding the input of copyrighted materials into computers or other storage devices by non-profit educational institutions, we agree with the Ad Hoc Committee that the bill should clearly state that until the proposed National Commission on New Technological Uses of Copyrighted Works has completed its study, such input should not be considered infringement. The proposed bill states only that "... [Section 117] does not afford to the owner of copyright in a work any greater or lesser rights with respect to the use of the work in conjunction with any similar device, machine, or process .

A new copyright law that both uses and producers can view as equitable depends upon the mutual understanding of each other's needs and the ability to effectively work out the differences. We will participate in the continuing dialogue with the Educational Media Producers Council and similar interest groups to establish mutually acceptable guidelines regarding the boundaries of "fair use,” and reasonable fees to be paid for uses beyond "fair use." This dialogue will be espeically important in the area of storage, retrieval, and/or transmission of materials during the time period between the enactment of the law and the issuance of the report of the proposed National Commission on New Technological Uses of Copyrighted Works.

We feel that the above modifications of S. 1361 are needed to insure that the revised law assists rather than hinders teachers and media specialists in their work.

Mr. OTTERMAN. Some of the statements made by the AECT which we wish to share with you follow:

AECT endorses the criteria to be used in the detremination of "fair use" as contained in Section 107 of the proposed bill. And I am quoting from their statement here.

Once the doctrine of "fair use" has been established in the revised law, negotiations should be conducted between the proprietor and user prior to any use of copyrighted materials that goes beyond that doctrine.

A new copyright law that both users and producers can view as equitable depends upon the mutual understanding of each other's needs and the ability to effectively work out the differences. We will participate in the continuing dialogue with the Educational Media Producers Council and similar interest groups to establish mutually acceptable guidelines regarding the boundaries of "fair use" and reasonable fees to be paid for uses beyond "fair use."

EMPC has not only been conducting a dialog with AECT but has taken the initiative in setting up a series of meetings with other educational organizations-regionally and nationally—to discuss mutual problems relating to copyright. We believe that these discussions have been helpful not only in clarifying general principles but in dealing with specific problems as well. On our part we pledge to continue these discussions—both before and after any revision of the copyright law.

At the time that this testimony was prepared we were unclearin light of the positions taken by AECT and other groups (such as the Music Educators National Conference and the National Music Council)—as to whether a broad educational exemption, to be added to the bill as it now stands, would be proposed by one or more organizations. Well we heard the ad hoc committee testimony this afternoon. Their language, in our view, provides far more than a limited exemption. Among other things it would authorize use for noncommercial teaching scholarship and research not only of brief excerpts from copyrighted works but also of the whole of short literary, pictorial and graphic works.

The concept of brief excerpts—which are not substantial in length in proportion to their source is very difficult to pin down as applied to educational A-V materials. A half hour educational film; for ex

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