and review functions contemplated by the proposed arbitral mechanism. Thus there is no constitutional necessity to alter the present statutory scheme of appointment in order to validly vest the proposed arbitral functions in the Register.

Mr. HUGHES. Mr. Oman, welcome.

STATEMENT OF RALPH OMAN, REGISTER OF COPYRIGHTS, LIBRARY OF CONGRESS, ACCOMPANIED BY DOROTHY SCHRADER, GENERAL COUNSEL

Mr. OMAN. Thank you, Mr. Chairman and members of the subcommittee.

On CRT reform let me just make two brief points. First, we could live with any of the solutions that are on the table, and we would be happy to help you make those solutions work, whichever one you choose to implement; and, second, we don't think any of the solutions on the table require that the Register of Copyrights be a Presidential appointee.

Let me make one technical point with regard to CRT reform. While the Office could shoulder the responsibilities of the CRT, I would like to urge you to clarify the bill to permit the Copyright Office to deduct all of its administrative costs associated with the supervision and review of the arbitral panels. The bill allows the arbitral panels to deduct their costs but makes no provisions for the deduction of pre- or post-arbitral cost, which is the cost that the Copyright Office would incur, and we would hope that that change might be made.

Now let me talk just briefly about the registration system. The bill leaves only one strong inducement to registration, and that is the prima facie presumption of copyright validity. This incentive is important, but I think we have to admit that it has not been sufficient to induce registration in other countries. In Canada, for instance, our neighbor, they have a system that relies on the inducement of the value of the certificate, and they had only 8,000 registrations last year in total.

Even though I have no hard evidence, Mr. Chairman, I predict that registrations will drop and the Library will see fewer copyright deposits through registration. The Librarian has given you many examples of works that would be put in jeopardy. Let me give another concrete example. A few years ago, when Texas was celebrating is sesquicentennial, a famous Congressman from Texas called to inquire if we could locate the first State song of Texas. Teams of experts had scoured the libraries and archives of the State of Texas and had come up empty handed. The Library of Congress found it in 20 minutes because the song had come in as a copyright deposit 60 years ago. It was the only copy in existence as far as we know.

With your indulgence, I have a few other samples, that might be of interest to the subcommittee, of works that came in under copyright. I will be glad to provide a list of others for the record if you have an interest.

One of the works recently acquired since I was Register were the unpublished letters of J.D. Salinger, the famous recluse. Those letters would not be in the collection of the Library of Congress had it not been for the requirement to register as a precondition to suit. There were five famous photos by Andy Warhol that we have in our collections that we wouldn't otherwise have. We have an architectural drawing by Frank Lloyd Wright, a handsome model of the American Embassy in Tokyo that served as a model for the Impe

rial Hotel in Tokyo, which is one of the most famous architectural landmarks in the world, the lobby of which is preserved in the museum in Nagoya. We also have the first American cartoon strip, the Yellow Dugan Kid, which was filed with the Copyright Office in 1896. We have a huge collection of photographs from the SpanishAmerican War, including Teddy Roosevelt and the Rough Riders in the Battle of San Juan Hill, and the African-American troops, the 19th U.S. Volunteer Infantry, that served in the Spanish-American War.

These are the types of deposits that come in under existing law, particularly the photographs, that would be unpublished and that we couldn't demand under the section 407 deposit provision of the law. Mandatory deposit-speaking of which-is not and cannot be made a full substitute for registration deposit, even though the people in my office who work in that division of the Library do a tremendous job with very limited resources. Our best guess is that registrations overall will decline substantially.

see a certain irony in our timing. Next week our copyright records will go on line to 20 million users over the Internet. Our records have tremendous value not only to the copyright industries but to academic researchers and writers as well, particularly the information about unpublished materials which the Copyright Office alone can provide, and the reduction of that value if our records become incomplete or spotty due to voluntary registration should be factored into the evaluation of the costs of this legislation.

It would be a loss if our extraordinary system of records, one with a 123-year history, is diminished because of the unique and understandable problems of the visual artists and photographers. We can help them in other ways, and I should point out, Mr. Chairman, that we have already bent over backward in our efforts to help them to vindicate their rights in court. I have a list of special procedures that we have implemented to make life easier for the small entrepreneur, the business person who doesn't have the time, inclination, or money, to comply with an onerous registration system. I would be happy to provide this to the subcommittee. If it could be made a permanent part of the record, I would be grateful. Mr. HUGHES. Without objection, it will be so received. [The list follows:]

outreach to inform small businesses copyright basics and how to register. Activities in this area are substantial.

breaks creates difficult policy choices because many "breaks" shifts costs to other fee payers or the taxpayer. In addition, the integrity of the public record can not be compromised. Nevertheless, the Copyright office has been sensitive to the needs of business, both large and small alike, and has been accommodating wherever possible. Examples include:

Blanket exemptions from mandatory deposit of certain categories of items not needed for the collections.

For software - special deposit rules allowing trade secret material to be deleted.

For dynamic data bases, special deposit rules simplifying timely registration.

For "secure tests" special rules minimizing the deposit. For many categories of authorship, the deposit requirement has been reduced to one copy.

Special group registration procedures have been established for serials and daily newspapers. These are costeffective only when the acquisitions needs of the Library are taken into account.

Artists can register groups of unpublished works as unpublished collections.

Special deposit rules have recently been established for photographers.

Deposit regulation has special relief provision which is liberally applied.

Motion picture agreement permits the return of the deposit of the copyright owner, subject to recall.

Mr. HUGHES. Also I have a series of letters I would admit at this point commenting on the legislation, without objection.

[See app. 15.]

Mr. OMAN. We shouldn't, in our opinion, risk the overall fabric of our entire system because of these few pockets of problems, which we recognize. I have heard no broad-based clamoring for change. Let's stick with the tried and true legislative rule that those who advocate change should carry forward the burden of showing that that change is necessary.

In addition to the impact on the Library's collection, title I impacts the judicial system and has important litigation costs. The Judicial Conference is on record as noting that the elimination of registration as a prerequisite to suit for copyright infringement means increased difficulty in trying copyright cases. Increased difficulty means increased taxpayer costs for judicial administration, more cases, more complex cases, more judges, more space, and greater litigation costs overall, especially for defendants.

Whatever the merits of the photographers' concerns and the visual artists' concerns, which the Copyright Office, as I said, has tried to address through flexible registration deposit practices, the registration incentives of existing law should not be changed without a thorough study. I think you should talk to the judges, Mr. Chairman.

Yesterday, some of the richest corporations in the country came before your subcommittee wearing artists' rags, or at least the turtleneck shirts and earth shoes of the computer programmers. They invoked the image of a struggling basement entrepreneur in support of their effort to deep-six section 411(a). In fact, Mr. Chairman, the bill could increase the power of the powerful. The U.S. Copyright Office's registration system generally, and section 411(a) specifically, are the best protection the small entrepreneur defendant has against a deep-pocket corporation that sues them. If you drop section 411(a), the corporation can sue the entrepreneur for infringement on a flimsy claim without risking a Copyright Office rejection, and often the entrepreneur will have no choice but to knuckle under rather than face expensive litigation in court.

We wouldn't be debating section 411(a) today if the giant software companies were only concerned with the burdens of registration on the small entrepreneur. They want the right to march into court without having to vet their claim through the Copyright Office and risk a rejection. We are talking about tough, close legal questions on the threshold of the law. The courts value our judgments because we are the expert agency. They want us to focus the issues. They want us to put the claim to copyright into its legal and historic perspective, and they want us to reject claims as necessary. We do that for them, and they don't want us to stop as far as I know.

As the subcommittee with jurisdiction over both intellectual property and the administration of justice, I think it would be a useful exercise to run this proposal by the courts. If the judges want plaintiffs to file suits without any input from the Copyright Office, please let me know. We are very conscientious about our job and very scrupulous about the limitations on our authority. We are not petty-fogging bureaucrats who enjoy making people jump