Senator D'AMATO. Thank you, Mr. Chairman.

Senator DECONCINI. Congressman, do you care to make any statement?

Mr. PARRIS. I have just one very brief question, Senator.

I would like to pursue what Senator D'Amato was driving at, as I understand it. If I could be presumptuous enough to summarize your statement, you express legitimate concerns about fair compensation on these other questions, but you do support the concept that is implicit here-to separate those issues from the question of the consumer use of owned equipment for personal use-and do support strongly the adoption of this legislation at this time as an initial step. Is that correct?

Mr. WAZ. That is correct. I would say that is essentially correct. Mr. PARRIS. Thank you.

Senator DECONCINI. Thank you very much, Mr. Waz. We appreciate your testimony. You have been very helpful to us.

Mr. WAZ. Thank you.

Senator DECONCINI. At this time in the record I would like to submit a letter dated November 25, 1981, from Senator Mathias to Senator Thurmond, supporting the legislation, with some caveats. It will appear in the record, without objection, at this point. [Material follows:]

U.S. SENATE,

COMMITTEE ON THE JUDICIARY, Washington, D.C., November 25, 1981.

Hon. STROM THURMOND,

Chairman, Senate Judiciary Committee,
U.S. Senate, Washington, D.C.

DEAR STROM: My long-time interest in intellectual property is well known to you. While I am in sympathy with the general thrust of Senator DeConcini's bill to permit home recording for private use, I feel strongly that rights in intellectual property should be protected. To that end, I have drafted an amendment to S. 1758 that would provide some protection to those whose creative property is recorded, and assure that the home recording privilege does not unfairly abuse the rights of property owners. I will circulate my amendment later this week.

As you know, I will not be able to attend the first hearing on November 30, but I did want to make the Committee aware of my interest in this matter and my intention to introduce an amendment to S. 1758 that I consider necessary and appropriate. I understand that we will have an opportunity to hear additional testimony on this very important issue early next year, and I look forward to working with you to hammer out a bill that is fair to all concerned.

With best wishes,
Sincerely,

CHARLES MCC. MATHIAS, Jr.,
U.S. Senator.

Senator DECONCINI. Our next witness will be Mr. Friedman. Senator D'Amato, would you like to introduce your constituent? We appreciate having him here.

Senator D'AMATO. Thank you very much, Mr. Chairman. It is my distinct privilege to present to the committee Prof. Leon Friedman, who is a distinguished professor of law at Hofstra University, where he is one of the leading experts in constitutional law.

It is indeed a great pleasure to have you here, and we welcome you and thank you for having taken of your time, Professor Friedman, to prepare your testimony and give it to this committee. Mr. FRIEDMAN. Thank you, Senator D'Amato. Senator DECONCINI. Thank you, Senator.

STATEMENT OF LEON FRIEDMAN, PROFESSOR OF LAW,
HOFSTRA UNIVERSITY LAW SCHOOL

Mr. FRIEDMAN. Mr. Chairman, I do have a statement which I would like to have inserted in the record.

Senator DECONCINI. Without objection, that will be included in the record.

Mr. FRIEDMAN. I will be very brief. I will just try to summarize what my statement says.

I believe that S. 1758 is both an appropriate remedy for Congress to take at this point and that it is a desirable response to the ninth circuit decision in Universal City Studios.

I think it is appropriate for Congress to act at this point, because basically what both the district court and the court of appeals did was try to guess at what Congress' intention was in enacting the 1976 revisions.

Practically nothing is said in the legislative history about videotape recording. There was some brief legislative history that was outlined by the district court judge, Judge Ferguson, when he talked about the 1971 amendments relating to section 1(f) of the old law. But if you look through the legislative history and look through the statute itself, you will find that there is simply no discussion of the new technology in videotape recording.

Both the district court judge and the court of appeals had to guess at what Congress had in mind. Did they intend to have this videotape recording as an act of infringement? Did they intend that the fair use doctrine would cover this home recording?

Their guess and the guess of the district court and the guess of the court of appeals can only be supplemented by a guess of the U.S. Supreme Court if they go up on appeal. But if they are simply dealing with the same legislative history, which is practically nonexistent under the 1976 law, it seems to me entirely appropriate for Congress to come in and say, "Here's what we really intended, or here's what we really want out of this situation."

The court decisions are not a constitutional interpretation of the copyright clause of the Constitution. They are trying to guess at what the operative statute means in respect to an entirely new technology involving billions of dollars, involving millions of consumers at home trying to deal with this technology, and there simply is not an adequate legislative base for dealing with this problem.

It seems to me that Congress can come in at any time-after the district court decision, before it came down, after the court of appeals has issued its opinion-and say, "Here's what we really have in mind. Here are the kind of exemptions we think really should exist in the law."

If you will look at the existing statute, you will see that Congress has already stepped in in a variety of situations and said, "As far as infringement is concerned, we want this to be totally exempt." Under section 110 of the law they list nine exemptions. If you will look at the very heading of section 110, you will see that it says, "Notwithstanding the provisions of section 106"-section 106 was the basis of the court of appeals decision-"the following are not infringements of copyright." Then they add nine areas-certain

kinds of educational use, certain kinds of use of music in a religious ceremony, certain kinds of transmissions for educational or governmental use. There are nine separate areas where, notwithstanding the broad grant of right of copyright owners under section 106, Congress said it does not want the following uses to be considered infringement of copyright.

There are a whole group of other areas-section 112 dealing with cable, section 118 dealing with other kinds of uses-in which they have determined that they want certain kinds of compulsory licenses to be issued.

The whole section 115 on compulsory licenses for records was an example of Congress stepping in and saying,

These would otherwise be an example of an infringement. We do not want it to be an infringement because of other purposes served by these uses, and either we want a low amount of money to be paid or no amount of money to be paid for this particular kind of use.

I think the closest analogy is in section 504(c)(2) statutory damage provisions, where they say as to librarians and people who work in archives or schools,

If they make excessive photocopying, photocopying that they think would be fair use but a court later determines is not fair use, we do not want them to pay even the $100 statutory minimum provided by the statute.

So we have a whole series of examples in the statute already where Congress has exempted certain uses as infringements or said, "We don't want damages to be paid at all, or if damages or royalties are to be paid they have to be paid at an absolute minimum amount." So S. 1758 just fits right in to what is already found in the statute and indicates where Congress intended it does not want certain acts to be considered infringements.

I think it is also appropriate, because there is simply a total lack of statutory materials dealing with this issue under the existing law.

Now, is it desirable to pass this legislation? Is it desirable to exempt home video recording from the reach of the copyright law? I think it is an entirely desirable response by Congress to the ninth circuit decision, and I think for two related reasons.

One is that, no matter how you measure it, you are going to have to go into the home to determine who, or how, or why, or how often this recording takes place. The court of appeals made no attempt at all to come in to fashion a remedy. They remanded it back to the district court, and they indicated that the district court judge should look at statutory damages.

The statutory damage vehicle says it is either between $100 and $10,000 per act of infringement, and apparently that is to be paid either by the consumer each time he records or by Sony as the contributory infringer, but it is per act of infringement.

If we talk about the hundreds or even thousands of acts of infringement, the act of infringement being the recording and the replay at a later time and whether Sony stands in the shoes of the consumer or the consumer has to pay it itself, there is simply an enormous, totally unforeseen liability in this sort of area.

One way or another, Congress has to do something. The existing damage provision is totally inadequate for dealing with this mass,

these thousands of infringements or potentially millions of infringements when you think of how many people own this equipment, that we have here.

Congress has to step in one way or another to provide for the mechanism. The current mechanism is too clumsy and too cumbersome to deal with this kind of a situation. Of the various mechanisms that are available, it seems to me, largely because of the privacy issue that we are concerned about, that the mechanism they should come in and say is, "No infringement. We do not consider this an act of infringement. It fits exactly into the sort of provision already in the law, one dealing with home recording of records off the air and the other the whole series of provisions we find in 110 and 504(c)(2)."

It seems to me that if a librarian should be let off scot free for making too many photocopies of a copyrighted document, the consumer making it for his own home use should absolutely be let off scot free for making that kind of use for his own personal pleasure. For those reasons, I think that S. 1758 is within Congress power. It is an appropriate use of Congress power, and it is a desirable use of Congress power.

Senator DECONCINI. Professor, thank you very much.

As a matter of fact, looking at the court cases, certainly it is clear to me, and I believe that is what you are saying too, the courts are almost begging Congress to do something here.

I notice in the opinion of the district court, the court said that the courts recognize that the resolution of these issues is preeminently a problem for Congress and possible intermediate solutions are also the pragmatic kind legislatures, not courts, can and should fashion.

Then of course the ninth circuit, as you pointed out, said that exemptions from the normal workings of the copyright scheme involve a public policy determination. These are permanently decisions for Congress and not the courts. So it falls right in line with your testimony that Congress has to do something, whatever it is. We need to act.

My question to you is this. Probably we ought to be acting in far greater depth, too, in other areas, but this bill is before us because of this decision. Would you recommend that the appropriate committees look at this whole area of copyright and what technological advances have posed to the problems of this act and the parties involved in it?

Mr. FRIEDMAN. Absolutely. It is not unusual for Congress to take two bites of the apple. I was involved in a whole issue about the Nixon papers where first Congress dealt with the immediate problem in front of them when Richard Nixon was running off with all his tapes and papers, and they said, "No, just a second; we don't want you to do that; we want control of those tapes and papers.' They passed a law in 1974 to control that. Then they passed a more general law dealing with Presidential Papers for all Presidents thereafter, the Presidential Records Act of 1978.

So Congress has often faced the situation where there is an immediate problem which they have to resolve right at the time, because otherwise some bad thing will happen, but it just leaves open a more general dealing with this kind of an issue, which requires a

little more time, a little more consideration, and I think that certainly is the kind of response that the ninth circuit decision requires.

Senator DECONCINI. One last question, just out of curiosity for myself. I would like to have your views. Would you explain to us as a professor of law what you believe the ultimate purpose behind the copyright laws were? What is your legal perception of what was behind that?

Mr. FRIEDMAN. The constitutional provision says that Congress has the power to pass laws to give to authors and scientists for a limited time the benefit of their writings and inventions. So ultimately the copyright law is there to give to the author of a creative work some economic benefit from his labor for a limited time.

Senator DECONCINI. How is that best effectuated in your opinion? What is the best way to do just that?

Mr. FRIEDMAN. The copyright law has provided an elaborate mechanism for protecting the authors or the creators of any of these works. They do get the benefit of their contracts with producers when their show goes on television. They write a book, and that becomes a movie. They will get the benefit of the dollars from the movie producer.

I will say this: The movie producers are not running to give authors a share of the video cassette market. So the idea that the authors would share in this is simply not the case. We just saw that there were a couple of strikes in which both the writers and directors got only a minimal share of this market.

There has not been a mechanism for giving anything to the author, the original creator of this. Of course the directors do share in that; they do make their own creative contribution, but they are getting their money from deals with the networks, and the idea that they must reap a huge benefit-a much greater benefit-out of the exploitation of the video cassette recorder does not follow at all from the constitutional requirement.

It seems to me this would be a huge windfall for the producers in this area, the markets that actually create the movies, and not contemplated by the law at all.

As to the way in which this could be enforced, with huge amounts of money going either from the consumer or from Sony, the contributory infringer, as the court said, it seems to me the authors are getting their share from the initial production of the film and it is not fair for the producer to whom they sold their right to get this huge windfall that the ninth circuit case contemplates.

Senator DECONCINI. Thank you very much, Professor Friedman. We appreciate having you here.

Senator D'Amato, do you have any questions?

Senator D'AMATO. Mr. Chairman, I think it is important for the record to note that neither the chairman, Senator DeConcini, nor Senator D'Amato attended Hofstra Law School.

Professor, there have been those who have said that this legislation is premature, that indeed before Congress acts we should wait until the Supreme Court reviews this matter. Would you care to comment in respect to those who allege that this is precipitousthat S. 1758 should not be advanced until the Supreme Court has acted?