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(2) Current awareness publications, such as indexes, collected tables of contents, abstracts, citation lists, reports on pending legislation, etc.;

(3) Catalogs, including mail-order catalogs, parts lists, price lists, and tables of interchangeable parts;

(4) Directories, including those clasified by activity, address, etc.; (5) Encyclopedias, directories, thesauri, finding lists and references, aids;

(6) Files searches, including computer searches of machine-readable files at the computer site or by remote access terminals;

(7) Standing order services ranging from computer search of current publi. cations through news clipping services offering delivery of information on specific interest profile topics;

(8) Manuals for operation and repair of equipment; (9) Serial reports, such as court decisions, board rulings, financial reports ;

(10) Periodic publication of related material, such as journals in hard copy or microform, and voice recordings of talks on related topics ;

(11) Face-to-face meetings, such as symposia, conferences and conventions ;

(12) Exhibits and demonstrations for educational, promotional or merchan. dising purposes; and

(13) Tours of plants, facilities, monuments, museums, etc.

Although a variety of communications media are employed, all the above activities have in common the anticipation of the need for and the preprocessing of relevant information. They all involve the expenditure of time, money, and human effort in organizing information materials to meet anticipated needs. They all have a common objective-that of producing economically competitive information products relevant to the addressee's interest, regardless of the media involved.

Many member activities relate to the preparation of what could be classed as "library materials"-materials in printed form for industrial, institutional, agency, business, shop, academic or personal collections. Others reorganize related reference materials for better access. Such products and services require frequent re-organization and amendment to keep them current. Efforts to keep files up-to-date are currently duplicated and re-duplicated in industrial, institutional and personal reference collections. Technologies for economical, rapid, remote access to centrally up-dated information files reduce the need to maintain separatelocal files. It also reduces the number of copies needed for local files. Costs other than communications charges are involved. The development of such technologies have wide application to society's information problems.

Our basic purpose for appearing here today is to underscore the significance of copyright and to emphasize the need to maintain the integrity of copyright as a funding mechanism for this process. Private risk capital will be applied to this process, and society will have the benefit of continuing advances in the application of these varied technologies, only so long as the investors in this process have a reasonable expectation of receiving a reasonable return on their investment. The only alternative to the investment of private risk capital and the reliance on competition in the marketplace, not only the commercial marketplace, but the marketplace of ideas, is the reliance on the investment of state capital, and its attendant preemption of areas open to competition

Since the Information Industry Association did not exist at the time of the 1967 House Passage and Senate Hearings, we have not previously participated in the revision hearings process. We are, in effect, a new face and one which may not be readily recognized. We feel therefore it is important for us to provide you with detailed information about the activities of the industry.

Information companies create information, refine information, organize in. formation, develop access tools for getting at information. All of these activities add value to information. They make it easier for you to find the information you want. By preparing the tools for you to do this effectively and efficiently they save you time and money. The information industry in authoring these products suhstitutes the "sweat of its brow" for yours.

The whole information industry process is itself comparable to an individual author's efforts in creating a work. By taking an "exploded” view of the work of information industry company you can see how the efforts it makes relates to the creative efforts of an author.

The steps involved in creating and marketing an information product:

(1) Start with the user. Identify his information problem or need. Spend time with him in his work environment to identify how he uses information, where he is when he needs information, whether he has an immediate need or a need than can be filled subsequently in time.

(2) Gather information from a wide variety of sources and experiences. (3) Review it, analyze it, organize it, eliminate irrelevancies. (4) Design a formula for putting it into machine readable form. (5) Process it into a machine readable form

(6) Design a formula for manipulating the information within the machine to produce the specifically desired end product.

(7) Develop the graphic arts embodiment of that end product, and in other respects design and produce a “human-useable” product.

(8) Educate users to the advantages of the product and in other ways market the product to the group of users for whom the product is designed and developed.

Several points emerge from that list:

(a) Each of these steps, starting with the time spent identifying user needs and continuing through each step of the process to the delivery of the product to the user, is complex and costly.

(b) Many of the products of such efforts qualify for copyright protection as works of authorship.

(c) By virtue of their special design and highly refined specialized markets, they are extremely sensitive to any attrition in the size of their expected market whether through photocopying or other replication methods for by-passing copyright protection. The economic viability of such products, whether they are to be created at all, depends pretty much on each user paying his fair share of the fully amortized cost of creating and delivering the product.

SINGLE COPY LIBRARY PHOTOCOPYING Before addressing ourselves to the question of the single-copy exemption sought by the libraries, let me state at the outset that the information industry and libraries have many things in common. We are part of the same piece of cloth. Both groups are essentially populist in outlook. We seek to make information as widely available as possible. A major distinction between us is our cost-accounting methods. The industry must operate on a fully allocated cost-accounting basis whereas libraries can and do evaluate services on an incremental cost basis.

The information industry itself represents an attempt by some far-sighted members of the publishing community augmented by people who come at this field from the information technology side to restructure the publishing business to accommodate its skills, and resources to the imperatives of information technologies.

The library community, likewise, is undergoing a major restructuring. Interlibrary cooperation, the "mother” library concept, the emergence of some forms of charges for “inter-library" loans and for special research projects are illustrations of ways in which the library community is being restructured to accommodate itself to the fact, costs, and advantages of information technologies. A Presidential Commission on Libraries and Information Science only recently has been estabilshed to provide assistance and national perspective to this effort. This restructuring process has been accelerated and aggravated by the serious funding problems facing the library community. We have high regard for the efforts libraries have made and are continuing to make. We also feel libraries have an even greater future as community information centers with immense implications for the educational and cultural as well as economic well-being of us all.

We empathize with the library community and recognize and respect the deeply held motivations which give rise to its request for this single copy exemption. We must, however, oppose the amendment.

Such an exemption would put libraries in the reprint business in direct competition with the information industry. It would give the library an unfair advantage to market reprint materials from its holdings. (Whether it sold these materials or gave them away free, or for the cost of the copying the result would be the same.) It would ironically enable libraries to do so with the products of publishers and information companies without the ultimate users paying a fair share of the costs of the creation and distribution of the information. What looks desirable on an incremental cost analysis to libraries multiplied nationally is a disaster on a fully allocated cost basis for the industry. Such a free information source would lead to more limited circulation of much higher priced products. The paying user will be required in this way to subsidize the non-paying user.

Would there be any basis for a micropublisher to create and market a completo

collection of materials in microfilm if a “mother" library could freely copy individual pieces of the collection for its users or the users of its subsidiary libraries?

How would special report information companies which create specialized studies for 75 to 100 customers or less stay in business if some or all of these customers could go to a library and obtain individual copies free of copyright?

How does the information company which authors a machine readable data base market its product when libraries would be able to market access to the same data base free of copyright? A search of such a data base provides a printout of single articles within the proposed library photocopying language, yet that is in most cases the only way a product of the data base will be generated and used inside or out of a library.

Based on our experience we urge that the library exemption contained in Section 108 be limited to archival copying only. Any additional exemption directly undermines the integrity of the copyright concept and denies the basic principle behind copyright that science and the useful arts will be benefited by providing the author a limited monopoly by which to market the product of his creativity. The library amendment, honoring only the copyright claims of the producers of motion pictures, subjects to the single copy exemption all other categories of information products, whether they be sound recordings, machine readable files or microfilm, in addition to inkprint products such as books and journais. One might just as easily abolish copyright altogether.

Copyright has been the mechanism by which libraries and their suppliers have established working relations. Before you decide to abolish this element in the relationship between libraries and their suppliers, and that is what you would do if you enacted the language sought by libraries, we recommend you defer this language to the Title II National Commission on New Technological Uses of Copyrighted Works.

The library single copy exemption does impact directly on new technological uses of copyrighted works, and adopting the amendment would deprive the Commission of the benefit of continued efforts to develop sound funding mechanisms through the day-to-day interaction in the real world of suppliers and libraries. To the information industry, libraries are established distribution nodes in a national information distribution network serving users. This network has been established working within the framework of copyright and, until it can be shown a better way exists, the basis for that working relationship should be maintained.

We respectfully urge that you defer action on the amendment pending the results of the study of the National Commission to be established by Title II of this bill.

PROPOSED EDUCATION EXEMPTION
We oppose this amendment on economic and technical grounds.

We have a high regard for the educational community as well as the library community. We do, however, have to object to the proposal since it would not only adversely effect the industry but it would have a pervasive effect on many others and on the development of the information service structure of the United States as a whole. Economically, it would

(a) Exempt input from copyright protection.

(b) Raise pressures to stretch the Fair Use exemption to cover "small" output.

(c) Put no limit on what could be put into an education computer.
(d) Create unintended and unfair competition for information industry.
(e) Ignore and undermine the business practice of licensing use.

(f) Restructure information services so as to eliminate stimulas and creative force of risk capital and competition. (a) By implication this amendment acknowledges that to input copyrighted materials into a computer system is an infringement.

The amendment, by exempting input, would strip the author of control over his documented ideas. Without input infringement protection not only can his ideas be used, but they can be re-documented and distorted as to source, meaning and conteat.

A search of a data base may produce the fact that there is nothing in the file to print out. That, of itself, is often of great value. That is one of the purposes of investing in the creation of a comprehensive data base. Information that no one has done what you want to do has value. The amendment denies this and would destroy the economic value of that aspect of the author's work.

To search a data base is to "use" the whole file, not just the answer you find. This search capability is a value the amendment denies as well.

(b) The small printouts resulting from most computer searches would by their size alone it will be argued constitute "fair use" of the information. Having inserted in the computer The Encyclopedia Britannica, brief extracts could be printed out. Notwithstanding the fact that that is the only way to use encyclopedia information, many would seek to treat it as fair use. Since there is no provision for any payment system in the proposal, this apparently is the intended result.

(c) Under the language of the proposal "entire works" of any kind could be reproduced for machine processing.

The Reader's Guide to Periodical Literature, for example, could be keypunched and installed in a computer system. Encyclopedias and all the other products of the information and publishing industry would be equally exposed to such treatment. Without anything but "fair use" limits on copying and use (how do you apply fair use to the use of a whole file in making a computer search?) and with complete freedom to put entire works into a computer the protection offered by copyright would be minimal.

(d) The result would be the creation of unfair competition for the information industry. Does the educational activity have an iron-willed discipline and a policing procedure by which to assure that its computer information service serves only bonafide students? Many universities now engage in the marketing of information, not only in their city and state, but across the nation. They do so from a tax exempt haven and often without fully allocating to each user the costs of creating and delivering the information. This amendment would create great pressure to market machine readable versions in competition with inkprint and other privately published media. An Association of Scientific Information Dissemination Centers has been created to facilitate the growth of these activities.

(e) In practice few, if any, data bases are marketed exclusively through the author's computer facility. Copyright at input merely provides the author a basis for a licensing agreement by which the users of other computer facilities gain access to his documented ideas. The user is protected in that the integrity of the information and its documentation are subject to continuing contractual relations. This licensing process facilitates the widest possible sharing in the cost of creating these services. The amendment would not only free a large segment of users from paying its fair share of these costs, but it would also encourage education to engage in the economic replication of already existing and privately funded capabilities.

(f) Competition in the information marketplace in an age of information abundance is essential to competition in the marketplace of ideas. The stress on exemptions would have the effect of eliminating competition in many areas because the basis for private creation and investment, a minimal proprietory position, would be eliminated for many. The result would be a diminished, rather than enhanced, competitive climate in the marketplace of ideas. The information service structure of the U.S. would have to rely primarily on education and government capital resources for its development. The elimination of risk capital in this effort would seriously retard development in this area in the U.S. On technical grounds the amendment would-

(a) expand its intended objectives by virtue of the proliferation of nonprofit uses today.

(b) conflict with the intended purposes of Section 117.

(c) provide only for a method of recording “retrieval" and no for requiring its use, nor for recording "use” itself as distinguished from "retrieval".

(a) make rules otherwise applicable, presumably including "fair use" and the library single copy exemption.

(e) preempt much of the work of the National Commission on New Technological Uses of Copyrighted Works. (a) The proliferation of non-profit uses, particularly in information, today are legend. Gorernment funding of research in information systems work, for example, is essentially limited to grants to non-profit organizations. This has led to the development of a whole generation of organizations performing this research on a non-profit basis. Separate non-profit groups have grown up to do similar research in education. Public Interest law firms are incorporated in many cases on a nonprofit basis. We raise these questions not to challenge the purposes of these groups but to suggest that the amendment is unduly broad as drafted and would serve, if enacted, to stimulate even further the development of subsidy-based activities.

(b) The amendment conflicts with the purpose of Section 117 to maintain the status quo in the law vis a vis copyright at input. The significance of such a development can be seen clearly through a reading of a paper by former Register of Copyrights, George 0. Cary, presented at the 1972 meeting of the American Society for Information Science. It appears at pages 169–174 in The Proceedings of the ASIS Annual Meeting, Vol. 9, 1972, ASIS, Washington, D.C. commend it to the attention of the Committee and the Congress.

(c) A method of recording retrieval, as provided for in the amendment, does not require that it be used any more than the seat belt statutes do. Furthermore, retrieval, as noted above, is not a complete measure of the uses made of a copyrighted work in computer form.

(d) The reference to other rules applicable under law apparently refers to "fair use" rules. How reasonable that is for modern information products where the ultimate users should each pay their fair share of the costs is a matter that has not been fully developed and one on which this industry has not yet formulated a position. It is a matter which should be referred to the National Commission

Furthermore, when it is contemplated that this proposal would be coupled with the library single-copy exemption, there appears to be no copyright protection left.

(e) The proposal if adopted would preempt not only much of the work of the National Commission, but it would also deprive it of the benefit of day-to-day experience developed as suppliers and users seek to work out within existing copyright concepts workable relations for the dissemination of information through these technologies.

This exemption is, in effect, based on the assumption that enough is known today about the effect of the technologies on copyright and the dissemination of copyrighted materials. It may very well be true that this committee could, if it assigned this matter top priority, come to an appropriate determination based on what is known today. That record has not been established here today or in previous hearings. As in other copyright areas, legislation can be based on an extended record of practices developed between conflicting interests. What you are asked to do by this amendment is to enact into law the position of one of the parties and to ignore the practices and positions of the others. We feel it is premature to decide now upon such a major innovation in American Copyright law and that the amendments, both the Library Single-Copy amendment and the Education Exemption should be referred to the Title II National Commission.

As we have argued with the Library exemption, the education exemption in the clearest language is subject matter clearly within the jurisdiction of the National Commission. We respectfully urge that the Commission be established and assigned the fact-gathering function essential to sound legislation. As we have earlier stated, we are ready and willing to be of assistance in working with the Commission in this major undertaking.

CONCLUSION We wish to draw the Committees attention to the significance of these two amendments in an international sense. What protection U.S. Law provides information will have an effect on how the information products of our technologybased system are treated abroad. Some of our members derive as much as 50% of their revenues from foreign sales, from foreign users seeking to acquire information about the many aspects of the operations of our technologies, etc. The USSR, only recently having joined the Universal Copyright Convention, has also adopted a provision of its copyright law to provide for copyright-free reproduction of printed works for “non-profit scientific, dadactic and educational purposes." Information companies will have little to debate in seeking to receive fair compensation from foreign users for their services if U.S. Law embodies similar provisions.

The domestic effect of the amendments we have described obviously have far-reaching implications internationally, particularly since the U.S. is not only a major producer of copyrighted materials, but it is also a world leader in the development of information technology applications to their distribution. The U.S. must carefully consider major innovations in applying copyright rules to these new media.

We thank you for this opportunity to share our views with you.

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