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for profit.

performing rights organization that if they are paying for their musical accompaniment and for the stadium and for whatever other material they need to put on that performance; then it is a performance

Senator McCLELLAN. Now, let me see if I can get this so I can understand this, at least. Billy Graham comes to Washington, D.C., goes out here in the stadium and puts on a series of meetings, at which they sing religious hymns, hymns that are copyrighted. It is performed and it is all recorded.

Now, does he have to pay any copyright fee? Does any fee attach?

Mr. CIANCIMINO. We would contend that a fee would attach in that situation.

Senator McCLELLAN. If it does attach; then you also contend that if a recording of that is subsequently sent to a broadcasting station and it uses it, that a further fee would attach.

Mr. CIANCIMINO. That would be a mechanical reproduction fee. Senator McCLELLAN. That would be a mechanical reproduction fee? Mr. CIANCIMINO. That's right.

Senator McCLELLAN. Now, if a cable system picks it up somewhere, would it be entitled to another copyright fee for that?

Mr. CIANCIMINO. Let me use the example-
Senator McCLELLAN. I am asking. You are contending this.

Now, I want to know what this all means. Do you contend then that the cable system would also have to pay another copyright fee?

Mr. CIANCIMINO. That would be true, and if a broadcaster picked it up and broadcast it, they would also pay a performance fee; anyone who performs the work for profit, whether it be the original singer or whether it be the broadcaster or the cable operator.

Senator McCLELLAN. But, first, as I understand you, Billy Graham, or whoever gave the performance when they sang this song that is copyrighted; first, he would owe a copyright fee to the author of that music.

Is that right?

Mr. CIANCIMINO. Yes. Mr. Chairman, in order to be clear on the matter, whether or not be himself would pay the fee, that would not necessarily be so. Many times the stadium within which

Senator McCLELLAN. Would it be so, or would it not?
Mr. CIANCIMINO. It would not be so.
Senator McCLELLAN. Why?

Mr. CIANCIMINO. The stadium in which he is performing would carry with it a blanket performance license to perform any works that he would present within its confines.

Senator MCCLELLAN. Suppose they're holding it out in the cow pasture?

Mr. CIANCIMINO. Then he would pay a fee.

Senator McCLELLAN. Then he would owe a fee. If they held it in a church, then he would owe a fee.

Mr. CIANCIMINO. If it were for profit, yes.

Senator McCLELLAN. Unless the church secured a blanket license depending on the songs that were sung, would he owe a fee?

Mr. CIANCIMINO. It would be a question of whether or not it would be for profit, if it were done in a church.

Senator McCLELLAN. So that could be three copyright fees; first, the original service; second, the broadcaster of it again, or the re

broadcast of it again by some other station; and third, by the cable system that picked it up and distributed it to a community.

Mr. CIANCIMINO. That is correct, and it is not at all unusual, nor is it terribly surprising. This happens quite often in today's music world.

Take for example, your football games, which have half time entertainment. The band performing that music secures a license or the stadium in which it is played has a license. If it is picked up by a network and broadcast over the facilities of the airways, then that network or the station receiving it has to have a license.

Senator McCLELLAN. I am not arguing. I am just trying for the moment to get the facts.

Mr. CIANCIMINO. Yes.
Senator McCLELLAN. Are you now undertaking to collect such fees?
Mr. CIANCIMINO. Yes, we are.
Senator McCLELLAN. Have you met with any success?

Mr. CIANCIMINO. I am directing my remarks, Mr. Chairman, specifically to the 112(c) issue, which is the right to mechanically reproduce. And we have licensed many of the program producers of religious programs.

Senator MCCLELLAN. I am just trying to find out if the exemption provided for or proposed rather in this bill if it pretty much ratifies a practice that has been followed or if we are changing what has been the practice heretofore by this proposed legislation.

Mr. CIANCIMINO. I would submit, Mr. Chairman, that it would be a radical change. It would be an erosion of a right that has existed since 1909.

And secondly, it would affect an actual trade practice where we do license the program producers of religious programs that syndicate these programs, and in many instances to 200 and 300 stations. So that there would be an actual impact on the trade industry practice today, and it would deny to the creator of religious copyrights a source of income, which does exist today.

Senator McCLELLAN. Well, I think I have seen instances-I am sure I have—where I saw Billy Graham live, his service live, and thereafter, I have seen rebroadcasts at other times. I have seen rebroadcasts of services in which, as we say, religious hymns were sung. And I am sure they were copyrighted.

Now, have you been able to collect anything on those rebroadcasts so far?

Mr. CIANCIMINO. From the station, Mr. Chairman?
Senator McCLELLAN. Yes.

Mr. CIANCIMINO. Yes. The station is covered, again, by a blanket performance license. And there is case law that has held that a program, a sustaining program whether it be of a religious nature or of a civic nature, does contribute overall to the commercial quality of the station; and therefore, any sustaining program of that type, a religious program, would be considered

Senatoi MCCLELLAN. Well, you are losing money now. And where would be the change if you are now collecting from them?

Mr. CIANCIMINO. I think, Mr. Chairman, there may be some confusion between the performing rights and the mechanical reproduction rights, or the right to record. The performing right area would remain unaffected. The broadcasters would still be responsible for the performance of these programs. The arenas would still be responsible for the performance of this kind of music.

The changes would be in the right to mechanically reproduce the work by program producers, somebody who puts together a program of a religious nature or of a nonreligious nature, but uses religious music in that program. As of now, they must pay a mechanical reproduction fee. 112(c) would say no, there would be an exemption, and that producers can make 4,000 copies of that program even if it be not of a religious nature, but containing religious music and can distribute 4,000 copies free without the author, composer, or publisher of that music receiving any royalties whatsoever.

And this is what we feel is unjust.

Senator McCLELLAN. That is what I am trying to do. Just get the facts in the record. I wasn't trying to argue with you.

Mr. CIANCIMINO. No. I'm just trying to clarify the rights, Mr. Chairman. In one area, it would remain unaffected, in the performing rights area. But it would affect the mechanical reproduction rights area.

Senator McCLELLAN. Thank you very much.
[The prepared statement of Mr. Ciancimino follows:]

PREPARED STATEMENT OF ALBERT F. CIANCIMINO, COUNSEL FOR SESAC, INC. Mr. Chairman, members of the Committee, in the relatively short time allotted, I shall try to summarize the reasons supporting our position that Section 112(c) of $ 1361 should be totally deleted.

LEGISLATIVE HISTORY With regard to the legislative history of S 112(c), it first appears on the scene as late as February 8, 1971 with the introduction of S 644 by the Chairman of this Sub-Committee. It was not included in any prior legislation nor was it the subject of any study by the Copyright Office nor any other governmental or nongovernmental body, nor to my knowledge was such a provision ever contemplated by any legislative or administrative body until shortly before February 8, 1971.

The announcement from the Copyright Office relating to the introduction of S 644 in the 92nd Congress in 1971 describes the differences between S 644 in the 92nd Congress, and S 543 in the 91st Congress as “technical amendments and a few minor additions of substantive detail.” One of the "few minor additions of substantive detail" was the insertion in Section 112 of the new Sub-Section (c), which has now been carried over to the current S 1361,

Just about every significant section of S 1361 has been the subject of intense study and analysis. Not so with 112(c). Lo and behold, in 1971 without any prior notice or knowledge on the part of those representing the interests of copyright proprietors of music, it sprang into existence and became part of the copyright revision bill. Prior to today, there has never been any testimony at any prior hearings concerning the merits or pit-falls of this Sub-Section. I therefore urge this Sub-Committee to weigh carefully the following reasons why 112(c) should not be enacted into law.

NO PRIOR PRECEDENT IN MECHANICAL RIGHTS AREA

Section 112(c) would exempt from infringement the making by a non-profit organization of no more than one copy or phono-record of broadcast programs containing non-dramatic musical works of a religious nature for use in a single broadcast by a licensed broadcaster. In short, it places a limitation upon the copyright proprietor's right to mechanically reproduce the work, which to my knowledge, does not appear in prior case law or statute. There is no precedent for limiting the creator's rights in the area of mechanical reproduction of his work just because of the type of work he creates.

The current copyright law in Section 1(e) clearly grants to the copyright proprietor the exclusive right to make "... any form of record in which the thought of an author may be recorded and from whieh it may be read or reproduced.” To the extent that Section 1(e) may limit this broad and exclusive grant, it does so in terms of securing the “... copyright controlling the parts of instruments serving to reproduce mechanically the musical work ...", and, finally, Section 1(e) refers to extending to the copyright proprietor copyright “. . . control to such mechanical reproductions ..." Several things are immediately clear from this language. Firstly, there was no intention on the part of Congress at the time Section 1(e) was enacted to in any way limit the copyright proprietor's right in the form of recording because of the type of work which the copyright proprietor creates, e.g., a religious work.

Secondly, there was no intention on the part of Congress to limit the author's rights to certain kinds of recording, since the statute states "any form of recording" and these are not words of limitation but rather words of all inclusiveness. It would clearly refer to not only phono-record, but also any type of magnetic tape or other reproduction of the musical composition. To the extent therefore that the National Religious Broadcasters has circulated a non-legal position which states in part that “The Copyright Law of 1909 on which SESAC's claims are based, does not refer at all to magnetic tapes since these did not come into existence until much later,” we submit that such a non-legal position is both misleading and inaccurate.

RIGHT TO MECHANICALLY REPRODUCE AS DISTINGUISHED FROM OTHER RIGHTS Proponents of 112(c) have also asserted that they are paying twice for the same copyrighted music, since the copyright proprietor receives performance fees as well as mechanical reproduction fees. It is clearly stated in Copyright Law that the right to mechanically reproduce is a distinctly separate right from the other rights granted copyright owners (M. Witmark & Sons v. Jensen, 80 F. Supp. 843 D.C. Minn. 1948). The issuance of a performance rights license does not therefore, in and of itself, grant to the licensee the right to mechanically reproduce (Foreign & Domestic Music Corp. v. Licht 196 R. 2nd 627, 2nd Cir. 1952). Conversely, a license to mechanically reproduce does not carry with it the right to perform the work (Famous Music Corp. v. Melz 28 F. Supp. 767 WD La. 1939).

Further, the mechanical reproduction license is issued to and the fee paid by the program producer. The performance of the program comes within the scope of the broadcaster's performance license agreement and is paid for by the broadcaster. It is therefore somewhat misleading for the proponents of 112(c) to allege that they are paying twice for the same music.

POTENTIAL LITIGATION With regard to the structure of 112(c) itself, we submit that it is unclear, ambiguous, and will, if enacted, be the cause of extended litigation, Section 112(c) exempts a work of a religious nature. The term "work of a religious nature" is of extraordinary breadth. There is no definition in the statute of such a term and indeed it may very well be impossible to come up with a definition. Must a song refer to God or a supernatural being to be of a religious nature? Can a composition extolling the virtues of nature be considered a religious composition? A theme which simply fosters the concept of clean living and moral value, can this be a work of a religious nature? It would seem that whether a musical work is of a religious nature in many instances will be, not in the eyes of the beholder, but most certainly, in the ears of the listener.

Further, sub-section (c) refers to a “musical work of a religious nature or of a 8ound recording ...". It would therefore appear to apply to any sound recording which meets the subsequent conditions of the section regardless of whether or not the musical work is of a religious nature. Again, the lack of prior study and analysis is evident. I am rather certain that this Sub-Committee does not intend to apply 112(c) to all musical compositions regardless of nature. This I hare gathered from the announcement of the copyright office and introductory remarks of the Chairman when $ 614 was introduced in 1971, which referred to works of a religious nature.

Finally, there is no definition of the term “transmitting organization”. There are definitions of "transmission program” and “transmit” but not for a “transmitting organization".

SECOND-CLASS CITIZEN The above are criticisms of the structure of 112(c) which I hope will become immaterial when this Sub-Committee has fully evaluated the issues involved, and has deleted 112(c) in its entirety. There is absolutely no justification for this 112(c) exemption from copyright infringement which in effect treats the creator of religious works as a second-class citizen. One who creates a religious copyright and desires to live from the profits gained therefrom has the same expenses as one who creates a non-religious copyright. He must pay the same amount for a loaf of bread or a bottle of milk. Why then the distinction in allowing the author of a non-religious work a broader earning base then the creator of a religious copyright? Why allow a program producer to distribute 4,000 copies of taped programs to broadcasters throughout the country without payment being made to those creators whose religious music is being used ?

With Public Law No. 93–140, this Congress in 1971 has expanded the area of copyright protection as it relates to the right to reproduce sound recordings when it passed what is commonly referred to as the Anti-Piracy legislation. The protection accrues to the benefit of the company that owns the physical sound recording itself and guards against its unauthorized duplication. It covers all sound recordin and not just sound recordings of works of a non-religious nature. It does seem somewhat incongruous and unjust to extend such a right to a person other than the author in sound recordings of a religious nature while at the same time enacting 112(c) which would limit the author's right to mechanically reproduce the work if it be of a religious nature. We agree with the anti-piracy legislation. In fact, as Chairman of Committee 301 of the American Bar Association, I had the pleasure of sponsoring a resolution which was ultimately passed by the ABA in favor of such an extension of copyright. I can only hope that this Sub-Committee will recognize the contradiction and inconsistency of 112(c) which would limit, dilute and erode the copyright proprietor's rights. Again, why, should the author of a religious work be treated as a secondclass citizen?

ENDORSEMENTS

As a member of Committee 304 of the ABA, I would like to advise the SubCommittee that Committee 304 has passed the following resolution which it will submit to the ABA at its annual meeting in Washington next week :

Resolve, That the section of Patent, Trademark and Copyright Law opposes in principle any statutory limitation which would exempt from infringement the making by a non-profit organization of recordings of broadcast programs containing non-dramatic musical works of a religious nature for use in a single broadcast by a licensed broadcaster.

"Specifically, the Section of Patent, Trademark and Copyright Law opposes in its entirety Section 112(c) of S 1361, McClellan, 93rd Congress, First Session."

As part of the discussion on this resolution, the Committee felt that in order to continue to foster and nourish writers of gospel, religious and sacred works, Congress should not create a barrier to such creators' earnings in the area of mechanical reproduction rights. I am pleased to report that on Tuesday, July 17, 1973 in Chicago, the above resolution was approved by the Counsel of the Patent, Trademark and Copyright Law Section subject to ratification by the Section at the annual meeting. Once approved by Counsel it is fair to say that it is virtually assured of passage as an ABA resolution next week.

Mr. Chairman, I would like to submit as part of my written statement letters from 23 outstanding publishers of gospel and sacred music asking this SubCommittee to delete Section 112(c). I would also like to take a few moments at this time to read the following brief letters endorsing our position.

In conclusion, I ask this Sub-Committee to consider and weigh the practical necessities for such an exemption against the far-ranging and negative effects which it will have, not only on trade industry practice as it currently exists, but on the unwarranted dilution of the rights originally granted to the copyright proprietor by Congress in 1909. Only by allowing the copyright proprietor of religious works equal rights and an equal opportunity to earn a living, will we continue to enjoy the kind of music which has contributed to and hopefully will continue to contribute to the moral fiber of our great country. Thank you,

SESAC, INC.

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