The report further explained, in its discussion of the definitions of "perform," "display," "publicly," and "transmit" that the bill was intended to define such uses as "performances". The report said:

"Under the definitions of "perform," "display," "publicly," and "transmit" now in section 101, the concepts of public performance and public display cover not only the initial rendition or showing, but also any further act by which that rendition or showing is transmitted or communicated to the public. Thus, for example: a singer is performing when he sings a song; a broadcasting network is performing when it transmits his performance (whether simultaneously or from records); a local broadcaster is performing when it transmits the network broadcast; a community antenna service is performing when it retransmits the broadcast to its subscribers; and any individual is performing whenever he plays a phonorecord embodying the performance or communicates the performance by turning on a receiving set. Although any act by which the initial performance or display is transmitted, repeated, or made to recur would itself be a "performance" or "display" under the bill, it would not be actionable as an infringement unless it were done "publicly," as defined in section 101. Certain other performances and displays, in addition to those that are "private," are exempted or given qualified copyright control under sections 107 through 116." (at p. 27)

In 1973, in the normal course of its licensing activity, ASCAP offered to license George Aiken, who owned several fast-food restaurants in Pittsburgh, and who used radio broadcasts over several loudspeakers as background music in his establishments. Mr. Aiken repeatedly refused the Society's license, and ASCAP brought suit against Mr. Aiken in the name of its members whose compositions had been performed, on two counts of copyright infringement. After trial, the District Court found for the copyright proprietors, Twentieth Century Music Corp. v. Aiken, 356 F.Supp. 271 (W.D.Pa. 1973). However, the Third Circuit reversed the trial court's judgment, 500 F.2d 127 (1974), and, on June 17, 1975, the Supreme Court affirmed the Third Circuit's decision, 420 U.S. 921, 43 U.S.L.W. 4799, by a vote of 6-2-1 (Justice Blackmun concurring in result only, and Chief Justice Burger and Justice Douglas dissenting).

The Court principally relied upon its previous decisions in Fortnightly Corp. v. United Artists, 392 U.S. 390 (1968) and Teleprompter Corp. v. CBS, 415 U.S. 394 (1974). Those cases held that cable television systems did not "perform" under the 1909 Copyright Act because they more closely resembled the passive viewing audience than the active broadcaster. The Court analogized between the acts of such CATV systems and those of Aiken, notwithstanding many differences between the two uses. As you know, however, cable television does "perform" under H.R. 2223. Therefore, the main rationale of the Aiken case would not exist under the copyright revisions bill-even using the Court's logic, without relying on the express language of § 110(5), Aiken would "perform” because a CATV system would “perform."

In addition, the Court felt that holding that Aiken "performed" would result in an unenforceable and inequitable result. On the unenforceability of such a decision, the Court said:

"One has only to consider the countless business establishments in this country with radio or television sets on their premises-bars and beauty shops, cafeterias and car washes, dentists' offices and drive-ins-to realize the total futility of any even-handed effort on the part of copyright holders to license even a substantial percentage of them." (43 U.S.L.W. at 4802).

However, while the Court, in a footnote, alluded to ASCAP's policy of not requiring a license from establishments using only a single, home-type receiver, it did not take into account the fact that most establishments of the type mentioned do use only that type of receiver. Those establishments would be exempt from liability under § 110(5) of H.R. 2223 for the same reason that ASCAP had licensed only those establishments (such as commercial finance offices, banks, and restaurants) which went to the expense of installing multiple loudspeaker systems for the use of radio broadcasts as background music. And, while there has always been discussion (as in the Court's opinion) of the omnipresence of music in business establishments, most of those establishments either subscribe to background music services (ASCAP licenses extend to approximately 100,000 such establishments) or use single-speaker radio receivers.

As Chief Justice Burger said in his dissent, Aiken "took the transmission and used that transmission for commercial entertainment in his own profit enterprise, through a multispeaker audio-system specifically designed for his business purposes." The rendition in a small establishment over a single, home-type receiver

is a remote and minimal use. But renditions over loudspeaker systems represent significant commercial uses of radio broadcasts as background music, serving as the functional equivalent of a record or tape player, background music services, or, indeed, of a live orchestra. Those uses should be paid for.

The majority, however, thought that a ruling in favor of the copyright proprietors would be inequitable, because even if Aiken took an ASCAP license, he would not be free of liability for the performance of compositions not in the ASCAP repertory. The Court overlooked the fact that an entrepreneur in Aiken's position would seek to secure a license from each of the three major performance right organizations, ASCAP, BMI and SESAC. Having done so, like virtually every other commercial user of music in this country, he would be secure in performing copyrighted musical compositions.

The Court also felt that a decision in favor of the copyright proprietors would authorize the sale of an untold number of licenses for what is basically a single public rendition of a copyrighted work. But, we submit, it is the proper purpose of the copyright law to enable authors, composers and publishers to be paid for all commercial uses of their works. There is no doubt that Aiken and others like him profit from the renditions at their establishments. Copyright proprietors whose works are so used should also be paid.

It is interesting to note that the Court's decision in Aiken establishes a rule of law which is contrary to that in existence in virtually every Western country. It is the general rule abroad that a commercial establishment using a radio receiver and loudspeakers (even the single, home-type radio or television set) "performs" copyrighted compositions. It has often been said, in arguments directed against the so-called "jukebox exemption" in the 1909 Copyright Act, that it is anomalous to deprive authors and composers of payment for use of their works in this country when such uses are almost universally recompensed in other countries. It would be equally anomalous to perpetuate the rule of Aiken in the copyright revision bill.

As Chief Justice Burger said in his dissent "the issue presented can only be resolved appropriately by Congress." ASCAP therefore wishes to go on record as favoring the provisions of Section 110(5) of H.R. 2223, and urges your Subcommittee to retain those provisions. We also ask that this letter be made part of the record, and respectfully request that the reasons we have advanced for the enactment of these provisions be incorporated in the Subcommittee's report to the end that all commercial establishments using music in this way will be "performing" within the meaning of the Copyright Law. Respectfully,

BERNARD KORMAN.

Re H.R. 2223.

AMERICAN SOCIETY OF COMPOSERS, AUTHORS AND PUBLISHERS,

Hon. ROBERT W. KASTENMEIER,
House of Representatives,

Washington, D.C.

October 30, 1975.

DEAR CONGRESSMAN KASTEN MEIER: I understand the Register of Copyrights testified yesterday on the so-called ballroom amendment. You may recall that I wrote to you on August 6, 1975 setting forth the reasons for ASCAP's opposition to any such amendment. A copy of my letter is enclosed.

In reviewing my letter I find I did not include a statement as to the amount of money involved. Based on amounts now being paid to ASCAP by establishments performing live music, composers, authors and publishers would lose between $7 million and $8 million per year.

That conclusion is based on my belief that, as a practical matter, nearly all of the fees now being collected would be lost because it would simply not be possible to license musicians for the reasons I indicated on August 6th.

If the amendment were adopted and a very expensive campaign were undertaken to license musicians, and if that campaign were to be successful, the cost of licensing would be enormously increased so that the musicians would in fact have to pay very much higher fees than the owners now pay in order for the creators to receive the amounts they now receive. It is my experience, based on 25 years of dealing with owners of establishments, that efforts to license musicians would not be successful and that the final result would be loss of this very significant source of income.

Indeed, this matter is of very great importance to composers and authors and if the Subcommittee believes there is any merit to the ballroom operators' suggestion, I believe that the proper course is to withhold action on the suggestion as a proposed amendment to the general revision bill and to have the measure introduced as a separate bill so that it can receive the attention so far-reaching a proposal deserves.

I am convinced that a full record would establish that the present licensing practice is in the public interest and should not be changed.

Respectfully,

Enclosure.

Re Copyright Revision Legislation (H.R. 2223).

Hon. ROBERT W. KASTEN MEIER,

House of Representatives

Washington, D.C.

BERNARD KORMAN.

AUGUST 6, 1975.

DEAR CONGRESSMAN KASTEN MEIER: I understand that some months ago, a suggestion was advanced that H.R. 2223 should be amended to exempt ballroom operators from copyright liability in those cases where the bands are engaged as "independent contractors", and impose liability solely upon the musicians.

ASCAP would strongly oppose any such amendment for a number of reasons. First, we think the many cases holding the proprietor of a dance hall or similar establishment liable for copyright infringement are sound. Performances of musical compositions by a band or orchestra occur only when a proprietor believes they will attract patrons and so enhance his revenues. This is true whether the band members are engaged as employees or under agreements designed to make them "independent contractors". Many cases impose liability whether or not the proprietor had knowledge of the compositions to be played or exercised any control over their selection. The cases are reviewed in Shapiro, Bernstein & Co. v. H. L. Green Company, 316 F.2d 304 (2d Cir. 1963). The leading cases are: Dreamland Ball Room v. Shapiro, Bernstein & Co., 36 F.2d 354 (7th Cir. 1929); M. Witmark & Sons v. Pastime Amusement Co., 298 Fed. 470 (E.D.S.C. 1924) aff'd 2 F.2d 1020 (4th Cir. 1924);

Bourne v. Fouche, 238 F.Supp. 745 (E.D.S.C. 1965);

M. Witmark & Sons v. Tremont Social & Athletic Club, 188 F.Supp. 787 (D.Mass.1960);

Shapiro, Bernstein & Co., Inc. v. Veltin, 47 F.Supp. 648 (W.D.La. 1942); and Harms v. Cohen, 279 Fed. 276 (E.D.Pa. 1921).

Indeed, in the Veltin case, the proprietor had stipulated in his contracts with orchestra leaders that no ASCAP music be played, and had even gone so far as to post signs in his establishment objecting to the performance of ASCAP music. Nevertheless, he was held liable.

Exemption of the ballroom operators from copyright liability and imposition of liability solely on the band would necessitate drastic and very expensive changes in the way musical performances are licensed. In many instances, it would become virtually impossible for the author, composer, and publisher of a copyrighted work to secure any payment for the performance of his music. ASCAP and other performing right licensing organizations license on an annual or, in many cases, a seasonal basis. It is possible to do so because the same owner can be dealt with on a year to year basis. The bands employed, on the other hand, are often itinerant or even "pick-up" groups, constantly re-forming with new personnel, who often play in one location for only a short period and then move on to another or disband. Finding and licensing them would be much more difficult and, of course, much more expensive than the present system.

ASCAP bases its license fees for performances in establishments such as ballrooms, taverns, and restaurants on objective factors, including seating capacity, type and frequency of musical entertainment, admission, cover, or similar charge, and drink prices. Because these factors, which constitute the establishment's "operating policy", are fairly constant and can be easily determined in the event of change ASCAP is able to keep its costs of licensing down, and consequently maintain low license fees. The enclosed form of agreement shows the factors and the rates which start at only $70 per year.

Under the proposed amendment, as it has been described to me, it would be necessary for ASCAP to license the bands. It would be very difficult to locate

and keep track of the constant movement of all the different bands across the country. Similarly, it would be necessary to determine the operating policy of each establishment when a given band played, and base a license fee on the policy during the period of the band's engagement. The higher cost of licensing on this basis would have to be passed along in higher license fees.

Licensing musicians would also create difficulties with the musicians' union, the American Federation of Musicians (AFM). Article 25, Section 16 of the AFM By-Laws (1973) provides:

"Leaders and members of the Federation are prohibited from assuming any responsibility for the payment of license fees for any composition they play and from assuming or attempting to assume any liability whatsoever for royalties, fees, damage suits, or any other claims arising out of the playing of copyright compositions."

I think the question really comes down to who is most responsible for the performance and who derives the principal benefit. Certainly, the band members derive some benefit-they are paid to play. That payment, from the owner of the establishment, is usually an amount less than the increased revenues to the owner resulting from use of music. The proof of this is found in the frequent practice of "testing" use of music: if business picks up, it is kept; if it does not pick up and does not earn more than the cost of the music-it is discontinued. In this sense, the use of music is "for profit" or it is not used at all.

Accordingly, the owner of the establishment decides whether music will be performed at all and, if it is, obtains a more significant return than the musicians. Therefore we think it is fair that the owner should pay for the right to perform the music.

With best wishes for a pleasant summer,
Respectfully,

Enclosure.

BERNARD KORMAN.

H.R. 2223-COPYRIGHT LAW REVISION

A Position Paper-Association of American Publishers

The Association of American Publishers supports, with certain minor exceptions, H.R. 2223 as it was introduced. We believe it represents an equitable compromise between the needs of those who create copyrighted intellectual properties and those who use them. The AAP has testified or submitted written statements on those provisions of the Copyright Revision Bill which fall within its sphere of interest. What follows is a concise overview of these positions. We hope this will be of assistance to the Subcommittee as it begins its markup of the bill.

SECTION 107-FAIR USE

The AAP believes that this section is a helpful statement of the principles of Fair Use. It is generally recognized that an attempt to define those specific actions which may or may not constitute Fair Use would involve impossible complications, and would also risk making the legislation so rigid that it would rapidly become outdated by technological advances.

SECTION 108-LIBRARY PHOTOCOPYING

The AAP supports the copying privileges extended to libraries by Section 108. However, we are opposed to any further encroachments on the rights of authors and other copyright owners, and we are opposed in particular to the elimination of Section 108(g). Much of the copying now done by libraries would be permitted under the principles of Fair Use set out in Section 107. In addition, a good deal of library copying over and above the permissible limits of Fair Use would be allowed under the provisions of Section 108. The advantages of these provisions are set forth in a candid report of the American Library Association Copyright Committee, dated July 1974: "We now have provisions (under Section 108) permitting photocopying of archival material, copying of material for preservation, freedom of liability for copying done by users on coin-operated machines on library premises, and the highly important provision permitting the making of single copies for normal interlibrary loan work (italic added). On the other hand, we have not been able as yet to reach agreement on 'systematic', a term used to describe copying in a system or network where one library agrees to discontinue its subscription to a journal and depend on another library in a

network to supply photocopies of articles from this journal when needed (italic added). Copyright proprietors, rightly or wrongly, believe such systems or networks constitute a potential threat to their rights and want to prohibit such copying by them without some sort of license."

There is a good deal of evidence that libraries are already engaged in "systematic" photocopying, as indicated by the following excerpt from a special May 1975 bulletin from the Center for Research Libraries. Inviting member libraries to request articles from the Center, the bulletin stated: "All requests the Center cannot fill from its own collection will be forwarded immediately via teletype to the British Library Lending Division in Boston Spa" for photocopying. The bulletin went on to say: "The expansive comprehensive coverage offered under this new program is expected to benefit the members in two ways. First, by giving them simpler and faster access, on interlibrary loan, to more materials they cannot immediately supply from their own collection. Second, by giving them more freedom and flexibility in allocating their acquisitions expenditures for journals to improve service and accessibility."

It should be stressed that publishers are not in any way opposed to the wider dissemination of materials which is the aim of such programs. We do insist that systematic photocopying requires prior permission and agreed compensation.

Librarians profess to some difficulty in understanding the term "systematic copying" as used in Section 108 (g) (2). In the words of the Senate report, however, this term is readily distinguishable from copying done pursuant to "isolated single, spontaneous requests such as take place in normal library procedures." Systematic copying, on the other hand, "occurs when a library makes copies of materials available to users, either directly or through other libraries, under formal or informal arrangements whose purpose or effect is to have the reproducing library serve as the prime source of such materials."

Section 108 (g) also excludes from uncompensated library copying privileges the related reproduction or distribution of "multiple" copies. Systematic copying and multiple copying are general concepts; both are illustrated by examples in the Senate Committee report (which closely follows the discussion of Fair Use in the 1967 House Committee report), and neither is accorded more emphasis than a number of other familiar statutory or common law doctrines. The libraries do not claim an inability to understand the multiple copying concept; the systematic copying concept is no less understandable.

What is missing, of course, is agreement among librarians and publishers to flesh out the necessarily general language of the proposed statute-not only to formulate reasonably detailed "Fair Use" photocopying guidelines for the assistance of library patrons and employees, but also to establish workable clearance and licensing procedures for photocopying beyond "Fair Use." The AAP, together with other proprietary groups, has long sought and worked for such an agreement. Had agreement been reached, the controversy over Section 108(g) would not now exist.

Further with regard to the library photocopying conflict, the AAP fully supports the newly established Commission on New Technological Uses of Copyrighted Works. We believe, however, that it would be a serious mistake if the Congress sought to avoid coming to its own finite conclusions on key copyright issues on the grounds that such questions could logically be handed over to the Commission for decision. In our judgment, such a course would represent a serious abdication of Congressional responsibility, and would increase rather than decrease the ensuing confusion. The Commission will have to debate and resolve a great many difficult questions with respect to future technology. But the Commission's work will proceed on a far more hopeful basis if the Congress accepts responsibility for establishing workable guidelines with regard to present technology. In our judgment, Congressional endorsement of the existing language of Section 107 and Section 108 is the essential legislative requirement.

EDUCATIONAL EXEMPTION

The Ad Hoc Committee on Copyright Law Revision and the National Education Association are seeking a specific exemption for "not-for-profit" educational copying to be inserted into the revision bills. In the past both the House and the Senate Committees have rejected this proposal. House Report No. 83 of the 90th Congress cited valid reasons why this proposed exemption is not acceptable. In this regard the report said: "Because photocopying and other