who were later found to be infringers are exempt from even the $100 minimum. (Since no profits are involved and it is difficult to determine actual damages, presumably such persons are totally exempt from any damage award). Thus there already exists in the statute precisely the type of exemption contemplated by S.1758. Reasons for the Proposed Bill As for the wisdom or desirability of the bill, I believe it is an entirely reasonable response to the new technology. In some ways it fits precisely within the already existing exemption in Section 110(5) which exempts any "communication of a transmission embodying a performance or display of a work by the public reception of the transmission on a single receiving apparatus of a kind commonly used in private homes..." In other words the reception of the TV signal is not a performance of the work, nor should a single recording of it for private home use. I think it is undesirable for the Ninth Circuit decision in the copyright law is totally unsuited to meet a finding of infringement in this type of situation. Privacy: The Ninth Circuit decision finds that the recording of a copyrighted work by a videotape recorder is an infringement. Unlike the situation where a person buys a cassette of a film in a store and pays a royalty on the purchase, the decision requires a consumer to pay for what he does at home. No matter how ingenious a remedy can be worked out, it is still necessary to determine what programs a consumer records to allocate damages or royalties. This is an entirely undesirable extention of government intrusion into the home even for the best of reasons. Remedy: The existing law simply cannot cope with the remedy now required after the Ninth Circuit decision. In theory each consumer must pay a minimum of $100 for each act of recording of each copyrighted show under Section 504(c)(2). Or Sony must pay that amount on their behalf and charge consumers additional amounts to cover that cost. Obviously that is an absurd measure. But the law has nothing else available to it. To say the courts may fashion a remedy is no answer. The courts can only fashion a remedy within existing law which has the $100 minimum per act of infringement. must step into the situation one way or another. Congress Either it must reject the decision or give a court other alternate damage remedies to cover this unusual situation. But it cannot stand idly by. Senator DECONCINI. IS Senator Denton here? Senator D'AMATO. I do not believe he is. He is on the Floor. Senator DECONCINI. Our next panel of witnesses consists of Mr. Jack Wayman, senior vice president of Consumer Electronic Group; Mr. Joseph Lagore, president of Sony Consumer Products Co.; and Mr. Julius Kretzer, who will be introduced by Senator Denton. Also, I have a statement from Senator Heflin welcoming you here, Mr. Kretzer. Mr. Wayman is accompanied by Mr. Day. Is that correct? Senator DECONCINI. Very good. Mr. Wayman, would you please proceed? Mr. WAYMAN. If we may, could we have Mr. Lagore go first? Senator DECONCINI. Surely. Mr. Lagore, please go right ahead. STATEMENT OF JOSEPH LAGORE, PRESIDENT, SONY CONSUMER PRODUCTS CO., ACCOMPANIED BY DEAN DUNLAVEY, COUNSEL; IRA GOMBERG, GENERAL COUNSEL; AND WILLIAM BAKER, VICE PRESIDENT, COMMUNICATIONS Mr. LAGORE. Mr. Chairman, my name is Joseph Lagore, president of Sony Consumer Products Co., a division of Sony Corp. of America. I have been in the consumer electronics industry for more than 20 years, and for the past several years I have been responsible for marketing the Sony Betamax machine as well as other Sony products. With me today is Mr. Dean Dunlavey, an attorney with Gibson, Dunn, Crutcher of Los Angeles. Also with me are Ira Gomberg, our general counsel, and Mr. William Baker, our vice president of communications. Sony is very pleased to have this chance to testify here before this committee. The proposed legislation you are considering is, in our opinion, of great importance. It is important not only to our industry, but it is also very important, we believe, to consumers, small businessmen across the country, and to many others who benefit either directly or indirectly from the availability of this technology. Additionally, the controversy that provides the basis for this proposed legislation raises questions affecting the privacy of all citizens of this country. Our paramount concerns are these: One, the court ruling intrudes on the privacy of the American. citizen in his own home. The hundreds of editorials, columns, cartoons, and other media comment supportive of the consumer's position in this matter have focused on this important aspect. This book beside me has that information [indicating book]. Two, what we are talking about here is videotaping for private, noncommercial use of programing broadcast over public airwaves. There are more than 1,000 publicly licensed television stations in existence today, and in excess of 1,500 more are planned for the immediate future. These stations provide literally millions of hours of programing, offering consumers a very wide choice. Under Federal law, these stations are required to serve the public interest, convenience, and necessity, and their broadcasts are for the use of the general public. Privacy: The Ninth Circuit decision finds that the recording of a copyrighted work by a videotape recorder is an infringement. Unlike the situation where a person buys a cassette of a film in a store and pays a royalty on the purchase, the decision requires a consumer to pay for what he does at home. No matter how ingenious a remedy can be worked out, it is still necessary to determine what programs a consumer records to allocate damages or royalties. This is an entirely undesirable extention of government intrusion into the home even for the best of reasons. Remedy: The existing law simply cannot cope with the remedy now required after the Ninth Circuit decision. In theory each consumer must pay a minimum of $100 for each act of recording of each copyrighted show under Section 504(c)(2). Or Sony must pay that amount on their behalf and charge consumers additional amounts to cover that cost. Obviously that is an absurd measure. But the law has nothing else available to it. To say the courts may fashion a remedy is no answer. The courts can only fashion a remedy within existing law which has the $100 minimum per act of infringement. Congress must step into the situation one way or another. Either it must reject the decision or give a court other alternate damage remedies to cover this unusual situation. But it cannot stand idly by. Senator DECONCINI. IS Senator Denton here? Senator D'AMATO. I do not believe he is. He is on the Floor. Senator DECONCINI. Our next panel of witnesses consists of Mr. Jack Wayman, senior vice president of Consumer Electronic Group; Mr. Joseph Lagore, president of Sony Consumer Products Co.; and Mr. Julius Kretzer, who will be introduced by Senator Denton. Also, I have a statement from Senator Heflin welcoming you here, Mr. Kretzer. Mr. Wayman is accompanied by Mr. Day. Is that correct? Senator DECONCINI. Very good. Mr. Wayman, would you please proceed? Mr. WAYMAN. If we may, could we have Mr. Lagore go first? Senator DECONCINI. Surely. Mr. Lagore, please go right ahead. STATEMENT OF JOSEPH LAGORE, PRESIDENT, SONY CONSUMER PRODUCTS CO., ACCOMPANIED BY DEAN DUNLAVEY, COUNSEL; IRA GOMBERG, GENERAL COUNSEL; AND WILLIAM BAKER, VICE PRESIDENT, COMMUNICATIONS Mr. LAGORE. Mr. Chairman, my name is Joseph Lagore, president of Sony Consumer Products Co., a division of Sony Corp. of America. I have been in the consumer electronics industry for more than 20 years, and for the past several years I have been responsible for marketing the Sony Betamax machine as well as other Sony products. With me today is Mr. Dean Dunlavey, an attorney with Gibson, Dunn, Crutcher of Los Angeles. Also with me are Ira Gomberg, our general counsel, and Mr. William Baker, our vice president of communications. Sony is very pleased to have this chance to testify here before. this committee. The proposed legislation you are considering is, in our opinion, of great importance. It is important not only to our industry, but it is also very important, we believe, to consumers, small businessmen across the country, and to many others who benefit either directly or indirectly from the availability of this technology. Additionally, the controversy that provides the basis for this proposed legislation raises questions affecting the privacy of all citizens of this country. Our paramount concerns are these: One, the court ruling intrudes on the privacy of the American citizen in his own home. The hundreds of editorials, columns, cartoons, and other media comment supportive of the consumer's position in this matter have focused on this important aspect. This book beside me has that information [indicating book]. Two, what we are talking about here is videotaping for private, noncommercial use of programing broadcast over public airwaves. There are more than 1,000 publicly licensed television stations in existence today, and in excess of 1,500 more are planned for the immediate future. These stations provide literally millions of hours of programing, offering consumers a very wide choice. Under Federal law, these stations are required to serve the public interest, convenience, and necessity, and their broadcasts are for the use of the general public. |