Olan Mills, Inc. (and I suspect most responsible businesses) will provide the Library of Congress with any copies of works that it wants. But we should not be required to flood it with hundreds of thousands of portraits of no general interest to anyone. Nor should we be mired in paperwork intended to facilitate such a wasteful exercise. I am a businessman, not a politician. As a businessman, I know that one key to an efficient and competitive business is the identification and elimination of procedures that serve no useful purpose, or whose utility is outweighed by their cost. This is a difficult process. As practices grow up, they put down deep roots. Like farmers, we have to do some weeding from time to time.

Unless

My message to you today is that advance registration and deposit requirements pose huge practical problems for my business and, I gather, for other similar businesses. someone can demonstrate equally compelling benefits that is for you to judge we support repeal of Sections 411(c) and 412.

Thank you.

and

Mr. HUGHES. In your opinion, Mr. Mills, can the current system be effectively changed to permit you to adequately enforce your rights?

Mr. MILLS. As I said, our feeling is that the repeal of those two sections would give us the best opportunity to deter infringement. Mr. HUGHES. Do you have any other suggestions besides that? Mr. MILLS. No, sir. We are doing only a partial job of deterring the infringers now.

Mr. HUGHES. Mr. Foster, what kind of practical benefits will H.R. 897 have to your members if it is enacted?

Mr. FOSTER. Most of our members are, as I stated before, very small businesses, and they don't really have the wherewithal or the moneys to do all of the registration and to be able to go to court with no real assurance of getting statutory damages and getting legal fees. So it will be a real benefit to them from that standpoint. Most photographers do not and cannot register their work. They go unregistered, and then they find out later they should have.

Mr. HUGHES. Do you have any other practical suggestions on how we can deal with your particular problems in the context of existing law, aside from repeal of these sections?

Mr. FOSTER. I believe that most of the photographers are interested in working as photographers and they want the laws there to protect them and to assure them of their rights, and I believe that if sections 411(a) and 412 are repealed that it would help in that manner. I haven't seen all of the suggestions. If there are other suggestions, we would be happy to consider them.

PPA is willing to work in any way that it can to offer any advice and help in any way to help this bill go through.

Mr. HUGHES. OK. Well, thank you. I don't have any further questions. We appreciate your testimony. You have been very helpful to the panel today.

Our final panel consists of Mr. Paul Basista, executive director of the Graphic Artists Guild and Mr. Paul Warren, Intellectual Property Committee, Newsletter Publishers Association. Mr. Basista has been the executive director of the Graphic Artists Guild since 1987. The guild represents nearly 3,000 professional creators. Mr. Warren is the senior editor and executive publisher of Warren Publishing, which publishes some 13 newsletters in the telecommunications field, and I alluded to his work in a letter that he received from the Copyright Office earlier in today's hearings. The Newsletter Publishers Association is a trade association representing publishers of approximately 2,000 newsletters and other specialized information services.

We welcome you here today. We appreciate your willingness to testify. We have your formal statements, which will be made a part of the record in full, and I would like you to summarize your testimony.

Mr. Basista, welcome.

STATEMENT OF PAUL BASISTA, EXECUTIVE DIRECTOR, GRAPHIC ARTISTS GUILD, INC.

Mr. BASISTA. Thank you, Mr. Chairman.

My name is Paul Basista. I am the national executive director of the Graphic Artists Guild, and on behalf of its leaders and mem

bers I thank you for the opportunity to voice our support of H.R. 897, the Copyright Reform Act of 1993.

Now that you have heard about photographers from different points of view, I think you should know that they are not alone. The Graphic Artists Guild is the country's foremost advocacy organization representing the broadest spectrum of professional graphic artists working in all disciplines, including illustration, graphic design, surface and textile design, computer arts, cartooning, photography, and others. They work in all the markets engaged in the visual communication industries, including advertising, book and magazine publishing, the corporate market, and the consumer markets. Their work touches our lives every hour of the day.

Of the approximately 2,800 guild members in 8 chapters across the country, 90 percent of them are freelancers working as independent businesses. All of them rely on their copyrights for their livelihood.

In its 26 years, the guild has proven itself to be an effective leader, protecting and advancing the legitimate interests of all the professionals in the visual communications industry, and we strongly support H.R. 897 because it will empower creators to effectively protect their rights.

Individual authors need better remedies to protect their rights, and apparently the Copyright Office agrees with this point of view. When testifying before this very subcommittee on April 5, 1990, the Register of Copyrights, Mr. Ralph Oman said, "Individual authors emphasize the clearest link to carrying out the constitutional purpose to encourage authorship, part of which is to discourage infringement that harms authors." He reasoned that—and here is another quote by him-"Congress indicates that attorney's fees are closely associated with penalizing wrongdoing," and that deterrent, if available, would-and here is another quote "give the individual author additional leverage, making legal resources more equally available according to the merits of the case."

Unfortunately, the practical effect of current law is to penalize the victims of theft while rewarding the thieves. Specifically, because the vast majority of creators do not timely register the copyright to their work, they are barred from the strongest deterrents to infringement-those which threaten the infringer with having to pay attorneys' fees and/or statutory damages.

According to data that we have compiled, approximately 78 percent of all graphic artists never register their copyrights, and in those disciplines which work mainly on commission, like illustration, it rises to over 82 percent. Overall, approximately 16 percent register their work only some of the time while only 6 percent of the graphic artist population diligently register their work. Ironically, approximately 32 percent of these individual authors have had their works reproduced without their permission.

These figures reflect the industry as of 1990, the same year that the Register expressed such sensitivity to the individual creators' situation, and were incorporated into the survey process that resulted in the seventh edition of the "Graphic Artists Guild Handbook, Pricing and Ethical Guidelines." This book has nearly 52,000 copies in print, and it is the industry's most widely accepted business reference used by creators and their clients. I am happy to

make a copy of this book available to you, Mr. Chairman and the other members of the subcommittee.

The fact of the matter is that the requirement to register is such an extreme administrative and financial burden that the vast majority of professionals just don't do it, despite the so-called incentives designed to encourage the registration process. This fact is underscored by the meager number of registrations that are processed by the Office of the Register compared to the number of works that are created.

Graphic artists run high-volume, short-deadline businesses. While devoting the bulk of their time to producing their creative work, they must also be their own marketing and advertising department, their own legal department, and their own accounting department. Registering copyrights is an administrative burden that most artists cannot devote their valuable time to, and in many cases artwork is not returned by the client in time to register within the 3-month window of opportunity following the publication of the work. Because the artists do not have access to the work in time to timely register it, he or she is denied the protection that Congress intended.

Many jobs are initially commissioned for relatively small fees. A quarter-page illustration, for example, commissioned for one-time use in a magazine could conceivably sell for $300. The registration fee alone reflects an additional 7 percent tax on gross income. Once you factor in the time to complete the paperwork and the expense in preparing the appropriate deposit copies, that tax could conceivably jump to 30 percent of gross income. This is a burden that no business can endure.

Compounding the problem for individual creators is that infringements are on the rise and the victims of infringement are left with no recourse to rectify the harm they have experienced.

A typical case is that of guild member Mona Kiely, who executed a small job for her client, the National Taxpayers Union. Unknown to her or to her client, the mailing house that printed the job misappropriated her work and sold it later to a third party. Because she had not registered the work, she was prevented from pursuing this case.

Furthermore, as the new technologies develop, it is becoming easier and easier to infringe upon works. In fact, sellers of new technologies even encourage the scanning and alteration of visual material. For example, DAK Industries ran a full-page ad advertising a computer scanner in its catalog that was headlined "Rip-off Artist."

As it becomes easier for works to be stolen, copyright owners must have the ability to protect their creative material. The ramifications of the current situation are severe for individual authors. Without the deterrents, artists are ripe for exploitation. Without the possibility of attorney's fees or statutory damages, individual creators are effectively prevented from pursuing an infringement case, because in most cases actual damages involved are negligible relative to the costs of litigating a claim.

The Copyright Office understands this to be true. In his testimony to you in 1990, Mr. Oman concluded-and once again I quote "Individual authors almost always have fewer available

funds and without a clear right to attorney's fees may be afraid to enforce their rights, leaving them unprotected for practical pur

poses.

Individual creators have a right to expect that the copyright laws should protect their work. In fact, this just is not the case. Only by repealing the requirement to register the copyright to a creative work for individual authors to be eligible to receive attorney's fees and statutory damages will we be able to discourage infringement and effectively penalize wrongdoing. The best way to achieve that end is to enact H.R. 897.

We urge you to take the necessary steps to repeal the requirements to require to register a work in order to have access to all the leverage available to deter infringements.

Mr. Chairman, thank you. I would be happy to answer any questions you may have.

Mr. HUGHES. Thank you very much.

[The prepared statement of Mr. Basista follows:]