1. Statement of Robert C. Waggoner on Behalf of the International Association of Broadcast Monitors, Before the Administration, Committee on the Judiciary, United States 2. Sony Corp. of America v. Universal City Studios, Inc., 8. 2 M. Nimmer & D. Nimmer, Nimmer on Copyright § 8.03 [F] 10. 17 U.S.C.A. § 407 (e) (West 1977 & Supp. 1992). 11. 12. 13. 14. 15. 16. Cable News Network, Inc. v. Video Monitoring Servs. of America. Inc., 940 F.2d 1471 (11th Cir.), vacated and reh'g granted, 949 F.2d 378 (11th Cir. 1991), appeal dismissed, 959 F.2d 188 (11th Cir. 1992) (per curiam) (en banc). Sony, 464 U.S. at 448, 463, 104 S. Ct. at 792, 799. 464 U.S. at 455 n. 40, 104 S. Ct. at 795 n. 40. See Universal City Studios, Inc. v. Sony Corp. of America, 1981), rev'd, 464 U.S. 417, 104 See Statement of Robert C. Waggoner, supra at note 1. See, e.g., Georgia Television Co. v. TV News Clips of Senator DECONCINI. Thank you, Mr. Nimmer. Mr. Oman testified that an opportunity was given to the parties in this dispute to get together and have a conference perhaps to discuss some industry guidelines. Did Turner Broadcasting get an invitation, did you accept? Mr. NIMMER. Mr. Chairman, I have represented CNN I believe ever since S. 1805 was introduced, and we were expecting and welcoming the opportunity to participate with the Copyright Office in any joint panel. To date, no actual invitation has arisen Senator DECONCINI. I'm under the impression that Turner Broadcasting did receive an invitation. You're unaware of that? Mr. NIMMER. That's correct, Mr. Chairman. I believe I can state quite definitively that we have not yet been given the opportunity Senator DECONCINI. And you would be glad to do that? Mr. NIMMER. Absolutely, Mr. Chairman. Senator DECONCINI. Can you speak on behalf of any of the other broadcasters? Mr. NIMMER. I cannot formally represent that they will come, but I certainly will convey the invitation back to them. Senator DECONCINI. Do you represent any other broadcasters besides Turner? Mr. NIMMER. No, only the association, Mr. Chairman. Senator DECONCINI. OK. I take it that you believe, by your testimony, that a licensing scheme could be set up that would allow the quick dissemination of news to monitoring services? Mr. NIMMER. Yes, there are several examples currently. I believe that Mr. Cohen's company has already been licensed by NBC to provide video monitoring of that network. My client, CNN, has licensed several rivals and is available to license others on a nonexclusive basis. Senator DECONCINI. Have you turned anybody down, your client, do you know? A monitoring service or Mr. NIMMER. I believe that CNN has been unable to reach the appropriate licensing rate with certain entities; with other entities, it has reached the appropriate licensing rate. It has not had a policy, to my knowledge, of refusing, as a blanket matter, to engage in negotiations with any video monitor. Senator DECONCINI. So you negotiate from your company'swhat you're telling me is your company takes-somebody walks in the door who is a monitoring service and you say, "Yes, we'll talk to you," and "What do you offer?" and "This is what we offer," and if you can agree, you agree, and in some cases you cannot. Mr. NIMMER. That's correct, Mr. Chairman. In addition, CNN has licensed a computer network service to provide access to transcripts of all CNN broadcasts, which goes a long way toward answering the question as to how individuals will obtain access to a given show. They can merely key in an appropriate word to a computer network and obtain the relevant information. Senator DECONCINI. So in essence, if you are a subscriber to the computer network, you can monitor for yourself. Is that correct? Mr. NIMMER. Yes, Mr. Chairman. Senator DECONCINI. And only CNN. In other words, if I subscribe to that, I can take it for my use, or if I'm the Mercx Co. and want to monitor anything on pharmaceuticals or something, I can subscribe to that and call up on the computer everything that CNN does. Am I still prohibited from that to turn around and sell it under your interpretation of the law? Mr. NIMMER. Well, access to the transcript would be tantamount to access to the AP news wire which is offered, which is a copyrighted service offered through various computer on-line information networks. There would be a prohibition on wholesale reproduction and thereafter commercial distribution of the AP news story, on the one hand, or of the CNN transcript, on the other hand. This is a developing market that we're dealing with. CNN has recently entered into the license Senator DECONCINI. So it's only for the use of the customer who subscribes to your service? Mr. NIMMER. Of course, the information is available to all, but the actual expression, the transcript itself, the paragraphs that constitute the text that was read by the anchor at CNN, those do constitute proprietary materials. Senator DECONCINI. So you're saying that any commercialization by the subscriber would be in violation of what you think your company's intellectual property right is? Mr. NIMMER. That's correct, as distinct from reporting the facts contained in the newscast. Senator DECONCINI. Yes. So if they took it and editorialized or used it without using, say, Lynn Russell on the p.m. "CNN Headline News" but used some of the news that she gave that evening from that, then it wouldn't be, but if they use her and reproduced exactly what you sent to that person and commercialized it, then that's where the distinction is. Is that correct? Mr. NIMMER. Yes, Mr. Chairman. Senator DECONCINI. Thank you. Thank you very much, Mr. Nimmer. We appreciate your testimony. Mr. NIMMER. Thank you, Mr. Chairman. Senator DECONCINI. I kind of have a feeling you're all going to get an invitation from the Register of Copyrights, and I'm grateful for his willingness to stay for the hearings, particularly Mr. Oman, and your willingness to continue to work on that. I do have an opening statement by Senator Hatch, who was unable to be here for it, and it will appear at the appropriate place in the record. [The prepared statement of Senator Hatch was submitted for the record at this point.] PREPARED STATEMENT OF SENATOR ORRIN G. HATCH Thank you, Mr. Chairman, for holding today's hearing on S. 1805, a bill I have introduced to clarify the state of the law with respect to the fair use of copyrighted materials. Specifically, my bill amends section 107 of title 17, United States Code, to clarify that the monitoring of news reporting can qualify as a fair use exception to the otherwise exclusive rights of a copyright owner when such news monitoring meets the fourfactor test of section 107. S. 1805 does not create a blanket license to copy news programs nor does it lessen in any way the strict obstacle course posed by the current four-factor test of section 107. It simply provides that video news monitoring be considered an activity similar to scholarly research, to criticism, or to news reporting itself, in other words, an activity that should be entitled to rely on the fair use exception. Mr. Chairman, broadcast monitors have for some time been challenged in the courts by broadcasters and cable operators who claim that their services infringe the copyright in the news that program producers are entitled to. In their defense, broadcast monitors have relied on the fair use doctrine of the Copyright Act, to prove that monitoring activities are not an infringement of copyright. I believe that, when correctly applied to broadcast monitors, the copyright law and the fair use doctrine can be read to protect their services from claims of infringement. Because the courts have been inconsistent in their resolution of this issue, it is appropriate for Congress to resolve the question, and I believe it is correct for congress to resolve the question, as my bill does, on the side of greater public access to the news. - Article I, section 8 of the U.S. Constitution grants Congress the authority to "promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries." Congress gave exclusive rights to authors as an incentive for them to create new works for the public good. These rights, however, can create a tension with other rights and interests of the public as embodied in the first Amendment in the broad dissemination of works of public significance. Congress and the courts have developed, enacted, and applied the fair use doctrine to harmonize these disparate interests. The fair use doctrine is not, therefore, only a statutory exception to the exclusive rights afforded by the Copyright Act. Rather, it is a necessary bulwark of our constitutional scheme, protecting the public's interest in access to information as a balance to the exclusive rights of copyright owners. When it enacted the Copyright Act of 1976, Congress decided that it was important to codify the longstanding common law doctrine of fair use. See 17 U.S.C. S 107. Section 107 states that it is not a copyright infringement to make certain uses of copyrighted material, where the use if for an important public purpose, such as "criticism, comment, news reporting, teaching, scholarship or research." In the legislative history accompanying the Act, $ 107 was described as codifying "one of the most important and well-established limitations on the exclusive rights of copyright owners." (H.R. Rept. 1476, 94th Cong., 2d Sess., at 65 (1976). After indicating the types of uses that qualify for fair use consideration, $ 107 sets out the factors a court should consider in determining whether a particular use of copyrighted material is a fair use. Those factors are: First, the purpose and character of the use, including whether such use is of a commercial nature or is for non-profit educational purpose; Second, the nature of the copyrighted work; Third, the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and Fourth, the effect of the use upon the potential market for or value of the copyrighted work. ་་ The legislative history of the Copyright Act makes clear that while "the bill endorses the purpose and general scope of the judicial doctrine of fair use, there is not disposition to freeze the doctrine in the statute, especially during a period of rapid technological change." (H.R. Rept. supra, at 96. Thus, Congress intended that the fair use doctrine be flexible enough to protect new technological uses of copyrighted works. Important, productive and beneficial uses such as broadcast monitoring were not foreseeable when the Copyright Act was enacted. - Video clipping companies that provide news monitoring services would seem to fall squarely within the core range of activities protected by the fair use doctrine. In fact, the ultimate purposes of monitoring are precisely those defined in the first sentence of $ 107, that is, they advance "criticism, comment, teaching, scholarship, and research. Therefore, I have concluded that news monitoring is exactly the type of activity that has traditionally been the subject of common fair use protections and the kind of activity that Congress intended to protect in its 1976 codification of the fair use doctrine. Thus, when a video news compilation satisfies the four-factor analysis of $ 107, there should be no question of copyright infringement. Broadcast monitors play an integral role in the broad dissemination of news and other public affairs programs. Recognizing this fact, most broadcasters have excellent working relations with monitors that serve their communities. Indeed, many refer viewer requests for clips of recent broadcasts to monitors. In this way broadcasters and broadcast monitors together ensure that the demand for both immediate news by local audiences and for retrieval of footage by a national audience is wholly satisfied. The Supreme Court has correctly interpreted the fair use doctrine to mean that courts should not "inhibit access to ideas without any countervailing benefit." Sony Corp. v. Universal City Studios, 464 U.S. 417, at 450-51 1984). Because monitoring |