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The Office is also directed to conduct a study of the feasibility of resale royalties and alternatives thereto in consultation with the National Endowment for the Arts and other appropriate agencies of the United

"

States Government, interested groups in the private sector, and foreign governments. Legislative provision should be made for the funding of these studies and the budgetary impact reported in the legislative history. We will be happy to provide cost estimates.

I hope my comments will assist the Subcommittee in its deliberations. The Copyright Office remains available for any further inquiries or requests for assistance you may have.

COPYRIGHT MORAL RIGHTS: WORK MADE FOR HIRE (S. 1253) AND MORAL RIGHTS IN PUBLISHING, PHOTOGRAPHY, AND GRAPHIC ARTS

WEDNESDAY, SEPTEMBER 20, 1989

U.S. SENATE,

COMMITTEE ON THE JUDICIARY,

SUBCOMMITTEE ON PATENTS, COPYRIGHTS AND TRADEMARKS,

Washington, DC. The subcommittee met, pursuant to recess, at 10 a.m., in room 226, Dirksen Senate Office Building, Hon. Dennis DeConcini (chairman of the subcommittee) presiding.

Also present: Senator Hatch.

OPENING STATEMENT OF HON. DENNIS DeCONCINI, A U.S.
SENATOR FROM THE STATE OF ARIZONA

Senator DECONCINI. The Subcommittee on Patents, Copyrights and Trademarks will come to order.

I am pleased once again today to convene the hearings by this subcommittee on a subject of vital importance to the copyright community. Today's hearing is the second in a series of three hearings on moral rights and the copyright laws. The specific issue today is moral rights in the publishing industry.

In addition to the general subject of moral rights we will also discuss the specific topic of work for hire and Senator Thad Cochran's bill, S. 1253, to further refine its application to the copyright law. During last year's consideration of the Berne Convention implementing legislation, Senator Cochran proposed to offer an amendment incorporating his legislation amending the work for hire provision of the Copyright Act. Senator Hatch and I asked him at the time to postpone offering that amendment, and promised him that we would schedule a hearing on the issue in this subcommittee promptly during the session of this Congress. Senator Cochran graciously consented to our request and has worked closely with our staff so that we could put together the hearing today.

We agreed to schedule a hearing after the Supreme Court had decided Community for Creative Non-Violence versus Reid, and to permit the parties affected by that decision to have enough time to analyze and understand it. I am hopeful that today's discussion will help the subcommittee understand better the effects of that decision on the publishing industry.

I would like to thank Senator Cochran for his hard work and leadership in this area. He has shown great perseverance and devotion to the problem that artists face when dealing with publishers

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of books, newspapers, and magazines. I believe that the bill that he has offered this year is more narrowly written than previous legislation on the subject matter. I am undecided as to whether any changes need to be made in the work for hire area, but I do look forward to working with Senator Cochran and others who have expressed interest as the subcommittee explores this issue and the significance that it may have. I congratulate you, Senator Cochran. The work for hire provision of the Copyright Act determines the ownership of copyright of a work which is produced by an artist for use by another. If the work qualifies as a work for hire work, the Copyright Act considers the copyright owner to be the party for whom the work was produced.

There are two categories of work for hire in the act. The first is works prepared in an employer-employee relationship. The second category covers nine specific categories of work which are specifically ordered or commissioned under an express written work for hire agreement.

The Supreme Court decision in CCNV versus Reid narrows the circumstances in which a work is considered to be a work for hire. S. 1523 attempts to answer several questions about the provisions unanswered by the Supreme Court in its decision. Among these are the proper definition of the term "employee," and what kind of agreement satisfies the act's requirement of an express written or signed instrument.

These are complicated and contentious issues. As is usual in copyright issues, there is a great deal of mistrust and suspicion between the parties, and some misunderstanding. I have found, however, that the two sides in these disputes need each other in order to succeed.

I hope that today's hearing, with the distinguished and knowledgeable group of witnesses, will provide an opportunity to understand and find some accommodation on these particular issues. I look forward to the discussions and to working with Senator Cochran and Senator Hatch and others regarding this legislation to see what we can do if legislation is necessary, and what we can do to create a better environment and atmosphere.

With that I yield to my friend from Utah, Senator Hatch.

OPENING STATEMENT OF HON. ORRIN G. HATCH, A U.S. SENATOR FROM THE STATE OF UTAH

Senator HATCH. Thank you, Mr. Chairman. I am happy to be here today. I welcome all of the distinguished witnesses who are going to testify here today, and especially Senator Cochran.

I think this is an important hearing. I believe that the principal purpose of our copyright law should be to achieve and secure and maintain the rights of artists, writers, and other creative individuals. If we don't do that, we really won't be accomplishing the constitutional mandate that we have to accomplish in this society.

The purpose of the act is not to protect those who would seek a profit from the efforts of those creative artists. When the copyright law succeeds in the goal that I've suggested, it seems to me that everybody benefits, because the artists are given the necessary in

centives and the freedom to create those great works of art which enhance all of our lives.

Therefore I am really happy to have the opportunity of being at today's hearing and listening to all of the witnesses, and to examine again the adequacy of the Copyright Act's protection of the rights of all creators who may be engaged in work for hire endeavors, as well as to examine the specific problems and concerns of writers, publishers, and graphic artists on the question of moral rights for writers and artists.

As to the proposed bill, to alter the statutory definition of works made for hire, S. 1253, this bill raises a principal concern to me. That principal concern is the same that I have expressed before. Would the proposed change in the law increase or decrease the opportunities available for creative artists?

While I have an open mind as to the advisability of this legislation, I have to add that in my opinion the proponents of this bill must address the impact of the Supreme Court's recent decision in Reid versus CCNV. The holding in that case appears to have given the advocate of a tighter definition of "work made for hire" the victory, that their particular bill was seeking to achieve. Moreover, by specifically rejecting the formal salaried employee alternative, which was also advanced in the Reid case, the Supreme Court has given to us a cogent explication of the reasons why the common law agency approach, which Reid adopted, is to be preferred.

I am also concerned, as I am with most Supreme Court decisions, that we not act hastily to counteract the effect until that effect can be seen in the marketplace. On the other hand, if I can be shown how we can better protect artists and creative people, I will be happy to do whatever it takes to get that done.

I intend to consider carefully, first, the need for this legislation, and second, the efficacy of this bill to meet the needs of the creative community. Bearing both of these considerations in mind, I look forward to listening to our witnesses today and I look forward to working on this with you, Mr. Chairman. Before we get through I hope we can do what is best for all concerned, but most of all for those who really deserve the right of copyright protection.

[The prepared statement of Senator Hatch follow:]

OPENING STATEMENT OF SEN. ORRIN G. HATCH

SEPTEMBER 20, 1989

Thank you, Mr. Chairman, for holding this hearing today. I believe that the principal purpose of the copyright law should be to secure and maintain the rights of artists, writers and other creative individuals. The purpose of the Act is not to protect those who would seek to profit from the efforts of those creative artists. When the copyright law succeeds in this goal, we all benefit, as artists are then given the necessary incentive, and freedom, to create those great works of art which enhance all of our lives. Therefore, I am glad to have the opportunity, which today's hearing presents, to examine again the adequacy of the Copyright Act's protection of the rights of all creators who may be engaged in work-for-hire endeavors as well as to examine the specific concerns of writers, publishers, and graphic artists on the question of moral rights for writers and artists.

I am interested in preserving a copyright law that stimulates and encourages artists. For that reason, I am generally opposed to the imposition of "moral rights" concepts by federal statute rather than through the bargaining of the parties to a transaction.