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 Yugoslavia 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.

STATEMENT OF LLOYD OTTERMAN, CHAIRMAN OF THE EDUCATIONAL MEDIA PRODUCERS COUNCIL AND VICE PRESIDENT OF BFA EDUCATIONAL MEDIA; ACCOMPANIED BY DAVID ENGLER, CHAIRMAN, COPYRIGHT COMMITTEE; AND ROBERT FRASE, CONSULTANT

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)

COPYRIGHT LAW REVISION: A POSITION PAPER

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

ample, may be built around an exceedingly difficult photographic sequence which may take months of work to capture, but may in the final product only take up a minute or two of time of the film. To permit this minute or two to be reproduced freely under the proposed exemption would very likely destroy the economic availability of such a film.

Further, the concept of exempting use of the whole of short, literary, pictorial and graphic works presents difficulties equally great in relation to audiovisual materials. For example, is a short filmstrip a short work? If so, it would very largely destroy the entire market for short filmstrips.

We trust that this subcommittee will not accept the idea of an educational exemption, if such an exemption should continue to be pressed by one or more organizations. The position taken by AECT indicates that as far as educational audiovisual materials are concerned, such an exemption has no educational rationale. To the extent that school systems wish to reproduce educational audiovisual materials in whole or in part beyond the limits of fair use, our members stand ready to discuss licensing arrangements which will permit authorized reproduction. Modern methods of reproduction for many types of audiovisual materials are such as to make such reproduction in whole or in part attractive to some school systems and our members have already entered into such licensing arrangements. In fact, only recently on June 18-19, 1973, we sponsored jointly with the Information Industry Association a conference in Washington on the licensing of copyrighted materials.

In summary, let us repeat that we think that S. 1361 is a good and workable bill, from the point of view of both the creators and the users of educational audiovisual materiais.

We appreciate this opportunity to appear before your subcommittee. My colleagues and I will be glad to elaborate on any points in our testimony which the members of the subcommittee may wish to explore further.

Senator BURDICK. Thank you very much for your statement.

Mr. ENGLER. Mr. Chairman, I wonder if I might take a moment to respond to a question that Senator McClellan raised a little while ago when he wondered what the publishers might think of the ad hoc committee's contention that the proposed educational exemption would help the growth of the audiovisual materials industry?

I would like to respond by first pointing out that the 10.8 percent annual growth cited by Dr. Wigran is indeed a healthy growth rate and is one that we enjoy because we have copyright protection. We think it vital to the public interest that any revision of the copyright law maintain that protection. We are convinced that the ad hoc committee's proposed educational exemption would deal a severe blow to this young and growing industry.

I might point out that this small industry's total revenue of $214 million represents less than one-half of one percent of the total dollars spent on education in this Nation. And I might also point out that among the 200-odd companies in this industry there are only a handful on the Fortune 500 list. The overwhelming majority are small businesses that do not have the resources to sustain the potential impact of the sweeping exemptions called for by the ad hoc committee.

We are convinced that such an exemption would inevitably lead to a serious reduction in the quality and quantity and variety of audiovisual materials available to students and teachers.