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STATEMENT OF MR. PAUL G. ZURKOWSKI, PRESIDENT, INFORMA

TION INDUSTRY ASSOCIATION BY MR. J. THOMAS FRANKLIN, CHAIRMAN, PROPRIETARY RIGHTS COMMITTEE, AND MR. CHARLES LIEB, ADVISORY MEMBER, PROPRIETARY RIGHTS COMMITTEE

Mr. ZURKOWSKI. While the others are joining me I will introduce them.

Tom Franklin is the Chairman of our Proprietary Rights Committee. Mr. Franklin is Counsel to International Data Corporation, Newtonville, Massachusetts. Charles Lieb is an advisory member on our Proprietary Rights Committee and is a member of the New York Law firm of Paskus, Gordon & Hyman.

We welcome this opportunity to testify, we have submitted a statement that covers both the library photocopying exemption and the educational exemption and I ask that it be included in the record.

Senator BURDICK. Without objection.

Mr. ZURKOWSKI. First, I would like to second the remarks of Ambassador Keating. As you will note in our statement, we share many of the same ideas and concerns. The Information Industry is a new industry. It is made up of companies that are engaged in applying the new technologies to the creation and dissemination of information.

Our member companies are engaged in addressing the kinds of problems that Chairman McClellan and you make reference to in terms of finding a funding mechanism to facilitate the application of these technologies to the dissemination of information.

I could provide example after example of detailed negotiations between producers and users of information who are working out those details within the framework of copyright.

Senator BURDICK. Excuse me, but I will be perfectly frank, I would like to get all of the light I could on this subject because I know it is a difficult one, I know in the smaller libraries as it stands now I don't see how they could possibly set up a system they could properly fund to take care of these small amounts. I don't see how it is possible in a library in, say, Williston.

Mr. ZURKOWSKI. That is my home country too, Senator. I'm from Wisconsin and know the kinds of libraries and the kinds of situations you refer to. I grew up in a town of 700 and I can't imagine that the Palmyra Public Library will ever have the economic resources to apply this power, but I'm afraid that both the library and the educational exemption in trying to facilitate a flow of information then these technologies are in danger of throwing the baby out with the wash water.

The Information Industry is a young industry and it is just beginning to have its impact. It does perform extensive pre-processing efforts in anticipation of the needs of users.

If you take an in-depth view of the work of an information industry company, you can see how its efforts relate to the creative efforts of an author. It starts with the user. It spends time with the user at his place of work. It identifies where the user is when he needs information, it then tailors the product to that need. It gathers information. It develops a program by which to process it within the computer. It keypunches it and introduces it into the computer. It develops a program to bring it out of the computer to create a product that is human usable.

It also then has to educate users to the use of this product.

Several points emerge from that list. Each of these steps are expensive and complex. Many of the products of such efforts qualify for copyright protection as works of authorship. The economic viability of these products, if they are to be created at all, depends on each user paying his fair share of the fully amortized costs of creating and delivering the product. It is on that basis that we have to object to the library photocopying exemption.

It is not a photocopying exemption; it is a single copy exemption. It would put libraries, and major libraries in particular, into competition with the private companies doing similar work whether that be in providing microfilm collections, in providing data bases in machinable form, or in providing specialized services of many other kinds.

The availability of free information on an on-demand basis would compete rather decisively and would have a disastrous impact on the industry.

Copyright has been the mechanism through which libraries and publishers have worked out their relationsip. If you take that mechanism away by adopting this amendment, there won't be a forum within which to work out these details. So, we recommend that, if this thing is to be given serious consideration, it should be referred to the commission to be established by Title Two. That commission will have the opportunity to develop the hard facts, the hard economic data that has been absent in these hearings as to the justification for such an exemption, and would provide a forum within which the contending interests would have a chance to constantly interact with each other.

Going on to the educational exemptions, we raise in our statement several questions about that both of an economic and a technical nature. Mr. Sackett previously mentioned the fact that the educational exemption would grant an exemption for input and that it would no longer be an infringement to put copyrighted material into a computer for educational and other purposes. This not only conflicts with Section 117 of the bill, which says that status quo shall be preserved pending the outcome of the Title II Commission studies, but would enable the educational institutions to put anything into a computerized data base.

Such traditional library materials as the Readers Guide to Periodical Literature, something that is created, typeset & published today by the H.W. Wilson Company, could be put into a computer data base by the libraries under a fair interpretation of this language. The result would be that information of all kinds would be in the file. It would be argued because the printout of the specific answer sought is small, it would create a whole different system of information dissemination depending on government funding rather than the investment of private risk capital.

If you take both the educational exemption and the library exemption together, you have an opportunity under the education exemption to put into the computer almost anything and then a right under the library exemption to make a single copy of it on demand. The combination of the two proposals would create quite a business operation for libraries and drain off a great deal of business from traditional publishers through inter-library basis as well as from information companies specializing in such business.

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There are many implications of both of these amendments both nationally and internationally. Former Register of Copyrights, George Carey, has addressed the implications of copyright as input in a speech he gave last October to the American Society for Information Science.

In the recent discussions with the Russians about their adherence to the Universal Copyright Convention, they indicated they were watching the outcome of the Williams and Wilkins decision in order to assess their own position and what they would pay for the use of copyrighted American materials. Some of our member companies derive as much as 50% of their income from foreign sales. With exemptions such as those proposed here, U.S. companies would face great difficulty in obtaining fair returns from abroad where the degree of protection offered here is likely to be matched in kind.

I refer you to our prepared statement for a fuller discussion of the matters raised here only superficially. I now defer to Messers Franklin and Lieb for any additional comment they may wish to make.

Mr. LIEB. Senator, may I answer the question, or attempt to answer the question you raised ?

I would like to answer the question if I could about the library in North Dakota. I don't think the position that has been presented today by any of the cooperating and supporting groups, the Authors League or the Association of American Publishers or any of the others, in any way affects the right of the librarian in Williston to do exactly what she is doing now. The issues, I think, when they are refined down to the discussions which we have had today, are three. One is the copying of articles in scientific journals. Here organizations like the American Chemical Society and a for-profit company like Williams and Wilkins, say that if large research libraries, like the National Library of Medicine and the National Institutes of Health, which were involved in the Williams and Wilkins case, continue to do large-scale wholesale copying, they will be unable to continue the publication of their journals.

I do not think that the librarian in Williston is going to be terribly concerned about that. If on rare occasions she needs a copy of the article, the making of that copy whether it is a technical violation or not will be a matter of indifference, and really one article is not important in the whole overall view.

The second thing is the photocopying of books. Everybody is in agreement now that there should be no library photocopying of whole works other than articles unless they are not available, unless they are out of print, and that really is the provision of section 108, which the libraries are basically in agreement with.

So, again the librarian in Williston is not affected and indeed is helped by that provision because, if there is a book that she is asked for by one of her patrons and it is out of print and she determines that by looking at the books in print list, she will be able to get it.

Senator BURDICK. But suppose it is available in New York City ? Would she then have to mail for it?

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Mr. LIEB. We are talking of a whole book, Senator. If the book is Johns' History of the Napoleonic Wars, sold by Random House for $15 with 800 pages with photographs, she certainly shouldn't be requested by the patron to make a photocopy of that book if Random House has that book available for sale.

Senator BURDICK. Suppose the student wants page 50 of the Napoleonic Wars. Would she have to write to New York?

Mr. LIEB. No, sir. I think that unintentionally there was a misunderstanding about that here this morning. Nobody is suggesting that the student in Williston can't go in and say, please give me a copy of page 50 of that book on snakes, or give me a copy of three pages of Johns' book on the Napoleonic War, because this kind of copying everybody concedes is fair use copying.

Senator BURDICK. Suppose it is page 50 of a chemical journal ?

Mr. LIEB. Well, I can't speak for the Chemical Society, but I would say that, if it is a single page in a 10 or 20 or 30 page article, I would think that the Chemical Society would say that that page may be copied under the principles of fair use.

Senator BURDICK. This morning they said no, though. Mr. LIEB. No, they didn't. They were talking about the copying of whole articles.

And the third aspect of what we are talking about, again coming down to the librarian in Williston, is the claim that the classroom teacher needs some sort of exemption so as to enable him to teach.

We have urged the teacher associations to sit down with us and attempt to lay out as detailed as necessary a set of guidelines and working rules so that the average teacher can determine safely what he can and what he cannot copy. So, my answer to your question is that your librarian will not be affected injuriously at all by the position taken by the copyright groups, and will be helped insofar as books out of print are concerned by section 108 as your subcommittee has prepared it.

Senator BURDICK. But it won't be helpful for the books in print?

Mr. LIEB. Well, if a book is in print, if it is available, it should be purchased or borrowed but not copied, sir.

Senator BURDICK. Yes, but this young man comes in there and he just wants page 50—and I will go back to my example and the librarian goes to his digest and says, oh, but you can get that at X company in New York.

Mr. LIEB. Senator, that is not so. That is a false issue. If he goes in and says, I want page 50, there is nobody in this room today who would say that he can't have it. That is not the issue before you.

The issue before you is, can an entire journal article, a scientific article, be photocopied? That is the first issue. And the second issue is, can a substantial portion of a book in excess of fair use be photocopied ? Nobody is talking about small libraries.

Senator BURDICK. Well, someone here today—and I have been running back and forth to vote—but someone said, you can't make single copies.

Mr. FRANKLIN. To try to wrap this up, if I could, there is a whole lot of valuable information that has been brought forth here today on the doctrine of fair use.

The point that the Information Industry Association wishes to stress most strongly, and I think the point that most of the opponents of the NEA amendment feel very strongly on, is that the fair use doctrine today, whatever its precise limitations may be, should not be extended by the engraftment on S. 1361, which represents many years of compromise, of a special ad hoc amendment as proposed by NEA.

It involves very complex and difficult economic factors including your high school student in Williston question, Senator. You must have the economic data necessary in order to properly evaluate the tradeoffs involved in the NEA amendment and they simply have not been presented to this committee.

For that reason alone I think this committee should not feel authorized to propose such an amendment to the bill. There is a lot of work to be done on determining what will be the economic impact of the NEA amendment. The proponents have failed to establish what effect their amendment would have. That work is presently assigned by the provisions of the title II to the National Commission and should be left there.

Senator BURDICK. As far as work is concerned, we have been working for 4 years on this, or is it three?

Mr. BRENNAN. Perhaps longer than that.

[The statement of Paul G. Zurkowski in full follows:] TESTIMONY OF PAUL G. ZURKOWSKI, PRESIDENT AND EXECUTIVE DIRECTOR, INFOR

MATION INDUSTRY ASSOCIATION My name is Paul G. Zurkowski. I am President and Executive Director of the Information Industry Association, 4720 Montgomery Lane. Bethesda, Maryland, 20014, (301) 6544150. I am the first Executive Director of the Association that is now little more than four years old. It has over 60 member firms engaged in a wide variety of commercial information activities. A list of members is attached. Immediately prior to this employment, I served for about five years as legislative assistant to Congressman Bob Kastenmeier, of Wisconsin.

My involvement with the information industry flows directly from that service with Mr. Kastenmeier during the years the Revision Bill was under consideration in the House. My personal interest has always been in the communication of information--documented ideas. Service on Mr. Kastenmeier's staff served to edncate me about the important role copyright plays as the basic funding mechanism by which the creative and business activities required to obtain dissemination of information is paid for.

Copyright is a populist monopoly: it assures access for everyone to the ideas of the creative few. It enriches our lives, facilitates our life-long education, and assures the equal availability of information. I left my happy home with Mr. Kasienmeier because I saw the need for a funding mechanism of equal effectiveness in the information technology arena. The practical day-to-day experience of the information industry in creating and marketing information through the application of computers, microfilm and other technologies, new and old, alone or in combination, is that copyright is as valid for this industry as it is for industries which market information as books or journals. Perhaps even more so.

The basic function of this industry is in many respects the other side of the coin of traditional publishing. It is rooted in the abundance of information available to everyone in every discipline. As a general proposition it can be said that information companies identify particular information headaches of very specialized groups of people and seek to pre-process the information of interest to that group in such a way as to facilitate its use.

Another way of describing the mission of the industry is to use the word Relerance.

The activities of member firms include, but are not limited to, the following:

(1) Topical publications—providing up-to-date information on all facets of a given special interest area, including law, regulations and/or tariffs topically arranged and cross referenced for easy access ;

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