[House Hearing, 108 Congress]
[From the U.S. Government Publishing Office]



                OPERATIONS OF THE U.S. COPYRIGHT OFFICE

=======================================================================

                                HEARING

                               BEFORE THE

                 SUBCOMMITTEE ON COURTS, THE INTERNET,
                       AND INTELLECTUAL PROPERTY

                                 OF THE

                       COMMITTEE ON THE JUDICIARY
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED EIGHTH CONGRESS

                             SECOND SESSION

                               __________

                              JUNE 3, 2004

                               __________

                             Serial No. 80

                               __________

         Printed for the use of the Committee on the Judiciary


    Available via the World Wide Web: http://www.house.gov/judiciary


                                 ______

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                       COMMITTEE ON THE JUDICIARY

            F. JAMES SENSENBRENNER, Jr., Wisconsin, Chairman
HENRY J. HYDE, Illinois              JOHN CONYERS, Jr., Michigan
HOWARD COBLE, North Carolina         HOWARD L. BERMAN, California
LAMAR SMITH, Texas                   RICK BOUCHER, Virginia
ELTON GALLEGLY, California           JERROLD NADLER, New York
BOB GOODLATTE, Virginia              ROBERT C. SCOTT, Virginia
STEVE CHABOT, Ohio                   MELVIN L. WATT, North Carolina
WILLIAM L. JENKINS, Tennessee        ZOE LOFGREN, California
CHRIS CANNON, Utah                   SHEILA JACKSON LEE, Texas
SPENCER BACHUS, Alabama              MAXINE WATERS, California
JOHN N. HOSTETTLER, Indiana          MARTIN T. MEEHAN, Massachusetts
MARK GREEN, Wisconsin                WILLIAM D. DELAHUNT, Massachusetts
RIC KELLER, Florida                  ROBERT WEXLER, Florida
MELISSA A. HART, Pennsylvania        TAMMY BALDWIN, Wisconsin
JEFF FLAKE, Arizona                  ANTHONY D. WEINER, New York
MIKE PENCE, Indiana                  ADAM B. SCHIFF, California
J. RANDY FORBES, Virginia            LINDA T. SANCHEZ, California
STEVE KING, Iowa
JOHN R. CARTER, Texas
TOM FEENEY, Florida
MARSHA BLACKBURN, Tennessee

             Philip G. Kiko, Chief of Staff-General Counsel
               Perry H. Apelbaum, Minority Chief Counsel
                                 ------                                

    Subcommittee on Courts, the Internet, and Intellectual Property

                      LAMAR SMITH, Texas, Chairman

HENRY J. HYDE, Illinois              HOWARD L. BERMAN, California
ELTON GALLEGLY, California           JOHN CONYERS, Jr., Michigan
BOB GOODLATTE, Virginia              RICK BOUCHER, Virginia
WILLIAM L. JENKINS, Tennessee        ZOE LOFGREN, California
SPENCER BACHUS, Alabama              MAXINE WATERS, California
MARK GREEN, Wisconsin                MARTIN T. MEEHAN, Massachusetts
RIC KELLER, Florida                  WILLIAM D. DELAHUNT, Massachusetts
MELISSA A. HART, Pennsylvania        ROBERT WEXLER, Florida
MIKE PENCE, Indiana                  TAMMY BALDWIN, Wisconsin
J. RANDY FORBES, Virginia            ANTHONY D. WEINER, New York
JOHN R. CARTER, Texas

                     Blaine Merritt, Chief Counsel

                         David Whitney, Counsel

                          Joe Keeley, Counsel

                     Alec French, Minority Counsel


                            C O N T E N T S

                              ----------                              

                              JUNE 3, 2004

                           OPENING STATEMENT

                                                                   Page
The Honorable Lamar Smith, a Representative in Congress From the 
  State of Texas, and Chairman, Subcommittee on Courts, the 
  Internet, and Intellectual Property............................     1
The Honorable Howard Coble, a Representative in Congress From the 
  State of North Carolina, and Chairman, Subcommittee on Crime, 
  Terrorism, and Homeland Security...............................     1
The Honorable Howard L. Berman, a Representative in Congress From 
  the State of California, and Ranking Member, Subcommittee on 
  Courts, the Internet, and Intellectual Property................     2

                               WITNESSES

The Honorable Marybeth Peters, Register of Copyrights, Copyright 
  Office of the United States, The Library of Congress, 
  accompanied by David O. Carson, General Counsel, Jule L. 
  Sigall, Associate Register for Policy and International 
  Affairs, and Julia Huff, Business Process Reengineering Manager 
  and Acting Chief Operating Officer
  Oral Testimony.................................................     3
  Prepared Statement.............................................     4

                                APPENDIX
               Material Submitted for the Hearing Record

Prepared statement of the Honorable Howard L. Berman, a 
  Representative in Congress From the State of California, and 
  Ranking Member, Subcommittee on Courts, the Internet, and 
  Intellectual Property..........................................    19
Prepared statement of the Honorable John Conyers, Jr., a 
  Representative in Congress From the State of Michigan, and 
  Ranking Member, Committee on the Judiciary.....................    20

 
                           OPERATIONS OF THE 
                         U.S. COPYRIGHT OFFICE

                              ----------                              


                         THURSDAY, JUNE 3, 2004

                  House of Representatives,
              Subcommittee on Courts, the Internet,
                         and Intellectual Property,
                                Committee on the Judiciary,
                                                    Washington, DC.
    The Subcommittee met, pursuant to call, at 1:10 p.m., in 
Room 2141, Rayburn House Office Building, Hon. Lamar Smith 
(Chair of the Subcommittee) Presiding.
    Mr. Smith. The Subcommittee on Courts, the Internet, and 
Intellectual Property will come to order.
    And without objection, we will recognize the former 
Chairman of this Subcommittee, the Honorable Howard Coble, for 
any remarks he may want to make.
    Mr. Coble. Mr. Chairman, I will be very brief.
    Mr. Berman just told me you all were meeting, and I said, I 
have to say hey to my favorite Register.
    And Lamar, I told Howard, this is not to say that I don't 
like my present Subcommittee, but I do evermore miss this one.
    It is real good to be back. Good to see you and Howard 
again.
    And Register, always good to see you.
    Mr. Smith. Thank you, Howard.
    As is known by probably everybody in the room, I am going 
to recognize myself for an opening statement, then the 
gentleman from California. Then, we will look forward to seeing 
what our witness has to say.
    Today's hearing focuses on the operations of the U.S. 
Copyright Office. The Copyright Office is a division in the 
Library of Congress. It performs several functions aside from 
its primary responsibility to examine and register copyright 
claims. These other functions include maintaining records 
regarding transfers and terminations of copyright, 
administering Copyright Arbitration Royalty Panels, providing 
information to the public about Copyright Law and registration 
procedures and providing technical assistance to Congress.
    The Copyright Office receives most of its funding from fees 
and the balance from appropriations. The Subcommittee will 
learn how this money is allocated among its various functions 
of that Office. Also the Subcommittee will be interested in the 
progress of the Office in becoming user-friendly.
    Almost 4 years ago, the Register embarked on a multi-year 
reengineering program to improve the efficiency and 
effectiveness of its public services. In addition to its other 
administrative responsibilities that are statutorily defined, 
the Office is evaluating the demand for its services, 
particularly if offered online, in identifying new processes 
for performing its work.
    Finally, the Office's fiscal year 2005 budget submission 
contains a request for more than $59 million to construct a 
copyright deposit facility in Fort Meade, Maryland. This 
project will ensure that copyright deposits not selected for 
the Library's Washington collection are stored in a 
preservation-friendly environment. The Subcommittee will 
receive its status report on this facility as well.
    Of course, this list of topics is by no means exhaustive, 
but it does point out the importance of the Copyright Office.
    The Ranking Member, the gentleman from California, Mr. 
Berman is recognized for his opening statement.
    Mr. Berman. Thank you very much, Mr. Chairman, and I am 
pleased to join you for this oversight hearing on the U.S. 
Copyright Office.
    I anticipate this hearing will reconfirm my perceptions of 
the U.S. Copyright Office as a highly effective, well-run 
agency. I have the utmost respect for the Register and her able 
staff. They are a valued resource to me on copyright policy 
issues. They ably perform a wide variety of functions on a 
comparatively limited budget.
    I want to briefly touch on three issues raised in the 
Register's written testimony. First, the Copyright Office is 
engaged in an effort to re-engineer its information technology 
infrastructure. As part of that project, the Office is 
exploring the feasibility of converting analog copyright 
records, which cover 1790 through 1977, into a digital and 
easily accessible form. I fully support this effort, encourage 
the Copyright Office to expansively study the feasibility of 
making all registration ownership and transfer of rights 
records electronically available to the public and encourage 
the Office to explore the feasibility of ensuring that such 
records are accurate and updated.
    I note with approval the Register's testimony on the 
triennial rulemaking she recently completed with regard to the 
anti-circumvention provisions of the Digital Millennium 
Copyright Act. The Copyright Office has twice now exhaustively 
examined concerns that the DMCA would impair noninfringing uses 
of copyrighted works and has found the vast majority of these 
concerns to be utterly unsubstantiated. In the four narrow 
circumstances in which the Copyright Office found concerns to 
be justified, the Copyright Office adopted specific exemptions. 
Thus, the triennial rulemaking demonstrates that the DMCA is 
working as intended. It is stimulating the dissemination 
availability of copyrighted works without any appreciable 
negative effect on noninfringing uses.
    And finally, as the Register notes, even should the Senate 
pass the CARP reform legislation which passed the House earlier 
this year, its effective implementation still depends on the 
appropriation of necessary funds. Members of the Subcommittee 
and the full Committee and all interested parties need to start 
working together to ensure that, once the legislation is 
enacted, CARP reform will be funded in an adequate and timely 
manner.
    Thank you, Mr. Chairman. I yield back.
    Mr. Smith. Thank you, Mr. Berman.
    Our only witness today is the honorable Marybeth Peters, 
the Register of Copyrights for the United States. She has also 
served as acting general counsel and chief of both the 
Examining and Information and Reference Divisions within the 
Copyright Office.
    Ms. Peters is the author of the General Guide to the 
Copyright Act of 1976 and has lectured extensively on Copyright 
Law. She received her undergraduate degree from Rhode Island 
College and her law degree with honors from George Washington 
University Law Center.
    We welcome you, Ms. Peters, to the hearing today, and I 
note, either from your testimony or from our memo, that you 
haven't appeared since 19--I mean since 2001. So we are eager 
to hear from you and get an update on the Copyright Office.
    Let me say that I also noticed your testimony ran to 24 
pages. And without objection, the entire testimony will be made 
a part of the record.
    We probably, though, will limit you maybe to a little bit 
more than 5 minutes. But if you will keep within bounds, and 
then we will get to our questions.
    And please proceed.

    STATEMENT OF THE HONORABLE MARYBETH PETERS, REGISTER OF 
       COPYRIGHTS, COPYRIGHT OFFICE OF THE UNITED STATES

    Ms. Peters. Mr. Chairman, Congressman Berman, I am pleased 
to have the opportunity to report to you on the state of the 
Copyright Office. Because my full written testimony, as you 
said, has been submitted for the record, I will limit my 
remarks to one operational and one policy issue.
    For the record, I am accompanied by my colleagues, David 
Carson, general counsel of the Copyright Office, Jule L. 
Sigall, associate register for policy and international 
affairs, and Julia Huff, who is our business process 
reengineering manager but who is also acting chief operating 
officer.
    There are approximately 520 employees in the Copyright 
Office and as you noted, they provide--they perform a wide 
variety of tasks. Our major operational processes have been in 
place for decades. For almost 4 years, we have been engaged in 
a major reengineering program of these processes. Full 
implementation is scheduled for 2006. At that time, most of our 
services will be online. They certainly will be more efficient 
and timely.
    Much work has been done. Much more work remains. For more 
than two-thirds of our staff, significant elements of their 
jobs will change. New application forms are being designed. 
Significant changes in our regulations will be needed. New 
practices will have to be developed.
    This year, we are focusing on three fronts: One, our 
information technology systems; two, reorganizing the Office in 
line with the newly designed processes; three, redesigning our 
facilities, our space, which will require the Office to move 
out of its present space into rental space for at least 6 
months.
    The key challenge over the next 2 years will be to 
coordinate all of our efforts so that we will be fully ready to 
switch over to the new systems in 2006 while, at the same time, 
we continue to register claims, record documents, administer 
the statutory licenses, acquire works for the use of the 
Library of Congress and perform our policy and legal work. 
Obviously, this is a massive undertaking, but one I believe we 
are up to. Although I am in my 39th year with the Library, I 
intend to remain on the job until the task is completed.
    In the policy and legal areas, our work continues to grow. 
Digital technology regularly raises challenges that must be 
carefully identified and considered. For example, at present, 
we are struggling with, what are the best practices? What 
should they be with respect to registration and deposit of 
websites which change constantly and are available only online 
and with regulations concerning the scope of the section 115 
compulsory license with respect to digital phonorecord 
deliveries?
    As Mr. Berman mentioned, in October, we completed our 
second 1201(a)(1) triennial rulemaking. And as you know, this 
is a major undertaking, but all the fears and concerns that 
were raised about our digital future were not borne out. I 
believe the evidence presented throughout this lengthy 
proceeding shows that the use of technological measures that 
control access to copyrighted works has not negatively affected 
fair use or other exceptions of the law.
    The digital marketplace is providing the public with access 
to an ever-increasing array of copyrighted works in ways that 
were never before possible. A few problems, as Mr. Berman 
noted, were presented, and exemptions tailored to alleviate 
these problems were granted to four narrow classes of works. No 
party seeking an exemption sought review of the determination, 
no doubt because there was no evidence of present or likely 
adverse effect. So my experience leads me to conclude that the 
1201(a)(1) rulemaking does serve a useful purpose, and I am 
optimistic about the digital future.
    The Copyright Office is committed to excellence in all that 
it does. We believe that attitude is everything. Our staff is 
simply outstanding. I personally feel extremely privileged to 
have the opportunity to work with such dedicated people on such 
a wonderful mission, promoting creativity by administering, 
sustaining an effective copyright system.
    Finally, I thank you, Mr. Coble, Mr. Smith and Mr. Berman 
as well as your dedicated staffs for your consistent and 
generous support of our work. We consider service to you a most 
important part of our mission. And my colleagues and I look 
forward to continuing to work with you. Thank you.
    [The prepared statement of Ms. Peters follows:]

                 Prepared Statement of Marybeth Peters

    Mr. Chairman, Representative Berman, Members of the Subcommittee, I 
am pleased to have the opportunity to report to you on the state of the 
U.S. Copyright Office and our work in fulfilling the Office's mission 
to promote creativity by administering and sustaining an effective 
national copyright system.
    I will review the Office's current operations, how we are 
transforming these operations for the future through our Reengineering 
Program, and the policy and legal work the Office is undertaking.

                             I. OPERATIONS

Improvements in Processing Times
    In 2001, when I last reported to the subcommittee in an oversight 
hearing, I noted that we were experiencing significant processing 
delays in our public services. Today, I can report much progress in 
this area. Since that last hearing, the time it takes between receipt 
of a work for copyright registration and issuance of a registration 
certificate has been cut by more than half--from an average of more 
than 6 months to about 90 days. The time required to record documents 
submitted to the Office has been reduced by almost two-thirds--from 20 
weeks to 7. Requests for copies of works for the Library of Congress 
under the mandatory deposit provisions of the Copyright Act have been 
reduced from a high of nearly 2,500 requests awaiting action to a 
current level of just over 100.
    We achieved these results even with the major disruption caused by 
the October 2001 anthrax incidents and a lengthy suspension of U.S. 
Postal service mail. When mail service resumed after the suspension, we 
received 9 months of held mail in a 4-month period--all the while 
continuing to receive new incoming mail.
    That we were able to make this progress is a tribute to the 
Copyright Office staff and its commitment to providing exemplary public 
service.

Registration and Recordation
    During FY 2003, the Copyright Office received 607,492 claims to 
copyright covering more than a million works. Of these, we registered 
534,122 claims and created cataloging records for 543,105 
registrations. We also recorded 16,103 documents covering approximately 
300,000 titles of works. The majority of documents involve transfers of 
rights from one copyright owner to another. Other recorded documents 
include security interests, contracts between authors and publishers, 
and notices of termination of grants of rights. Documents are indexed 
under the names of the parties involved and by titles of works.
Works for the Collections of the Library of Congress
    Copyright deposits, through both registration and mandatory 
deposit, remain an important source of works for the Library of 
Congress. Last year, the Copyright Office transferred almost one 
million copies of works to the Library of Congress for its collections. 
The estimated value of these works was nearly $34 million.

Licensing Activities
    As part of our responsibilities for administering the copyright 
law's statutory licenses, we administered six Copyright Arbitration 
Royalty Panel proceedings last fiscal year. Four of the proceedings 
involved adjustments to the rate structures previously adopted for use 
of sound recordings in digital transmissions; one set rates for use of 
certain nondramatic works by noncommercial broadcasters. None of these 
proceedings required the Office to convene an arbitration panel to 
consider the adjustments. In each case, industry representatives were 
able to negotiate a settlement agreement which was adopted by the 
Librarian after giving the public an opportunity to comment. The 
Office, however, did convene one arbitration panel to consider the 
distribution of cable royalty fees.
    We continued to encourage the use of electronic funds transfer, 
including the Treasury Department's ``Pay.gov'' Internet-based 
remittance collection system, in the payment of royalties. The 
percentage of remittances made via EFT is now about 95 percent. Of the 
funds available, more than $65 million in copyright royalties were 
distributed. The Licensing Division deducts its full operating costs 
from the royalty fees.

Public Information and Education
    In FY 2003, the Office responded to 371,446 in-person, telephone, 
and e-mail requests for information. Last year was the third 
consecutive year that email inquiries to our Public Information Section 
doubled. The Office web site received 16 million hits, a 23 percent 
increase. We inaugurated new Spanish-language web pages on our site; 
they include basic information on copyright and application forms and 
instructions on how to register a work.
    The Office also provides access to and copies of its records. 
Additionally, under certain conditions it provides copies of works that 
have been submitted for registration. Upon request, the Office will 
search its records and provide search reports of its findings. Last 
year we searched 11,066 titles and prepared 719 search reports. Nine 
thousand people used our onsite Copyright Catalog.
    In addition, Copyright Office staff gave presentations at scores of 
educational conferences and symposia in both the United States and 
abroad on copyright matters. For example, in March we conducted our 
third annual ``Copyright Office Comes to California'' program in 
association with the Intellectual Property Law Section of the 
California State Bar, which provides two day-long conferences, one in 
Los Angeles and one in San Francisco, covering the activities of the 
Office, registration procedures, and current legal and policy issues 
related to copyright. The program has been very successful, which 
prompted us to hold the first annual ``Copyright Office Comes to New 
York'' program with the Intellectual Property Law Section of the New 
York State Bar Association held in New York City in April. That program 
was also very well received.
    We developed a new official seal and an updated logo for the 
Office, which became effective on January 1, 2004.

Increasing Public Access to Historical Records
    The Office's registration and recordation records made after 1977 
are in electronic form and available through our website. To ascertain 
the copyright status or current ownership of a work the public often 
needs the pre-1978 records. We have initiated a feasibility study to 
conduct an alternative business assessment for converting the analog 
copyright records (1790 through 1977) to digital form and providing 
electronic access to those records to facilitate copyright research, 
particularly rights clearance activities. We also hope to determine 
technical approaches for integrating the resultant digital records with 
post-1977 records that are already in digital form, and potentially, 
the costs and feasibility of delivering a digital application that 
provides retrieval access to all copyright records from 1790 to the 
present.
    This is not a simple task. For example, there are an estimated 45 
million catalog cards representing some 16.4 million works. However, 
creation of digital forms of these records will meet a compelling 
preservation need and will provide public access to a valuable body of 
data. The study, expected to take 12 months, should be completed next 
February.

Mail Situation
    The mail situation continues to affect our operations. The recent 
ricin scare in the Senate, as you know, stopped U.S. Postal Service 
mail delivery for weeks. This, of course, affects our ability to 
maintain a consistent workflow and timely services.
    In addition to this disruption on operations, irradiation continues 
to damage some materials submitted for registration or mandatory 
deposit. While only about 2 percent of works or applications submitted 
are damaged to the extent that they cannot be processed or examined, 
that still requires us to ask thousands of submitters for replacements.

                 II. REENGINEERING OUR PUBLIC SERVICES

    I am also pleased to report that we are maintaining steady progress 
in our Reengineering Program and plan for full implementation of our 
new processes in Fiscal Year 2006. This effort is developing the 
Copyright Office of the future--it will mean more efficient and timely 
public services, with more of these services, including registration, 
available online.
    We embarked on this effort in September 2000. Our objectives are to 
provide Copyright Office services online, ensure prompt availability of 
new copyright records, provide better tracking of individual items in 
the workflow, and increase acquisition of digital works for the Library 
of Congress collections. Over the past three years we identified and 
reengineered seven new processes for performing our work: register 
claims, record documents, acquire deposits, answer requests, receive 
mail, maintain accounts, and administer statutory licenses. Our current 
processes have been in place for almost half a century and processing 
time for a registration can take several months with handling by as 
many as 24 staff members. In the future, a registration will be 
completed in two to three weeks with only two or three people handling 
the case. All of the new processes will use new technology and online 
workflow management. More than half of our staff participated in the 
work for redesign and implementation of these principal processes.
    In order for the new processes to be implemented, extensive change 
is required on three fronts: information technology (IT), organization, 
and facilities.
    On the IT front, a contract was awarded last August to SRA 
International, Inc. to build a new integrated IT systems infrastructure 
which will support our new processes and public services. SRA began 
work in September. Since then we have:

        1  defined the systems architecture;

        2.  refined the selected software environment; and

        3.  completed the preliminary design of user screens and the 
        system's data model.

    We plan to implement the first of several pilots of the system in 
November 2004.
    On the organization front, the Office has completed much of the 
work of reviewing and revising the more than 135 position descriptions 
for the jobs that will change as a result of the new processes. A 
reorganization proposal will be finalized this summer. After the 
Library approves the reorganization, we will bargain impact with the 
labor organizations. After analyzing the skill sets that will be 
required for the new job roles, we developed a comprehensive training 
plan and have initiated hiring of a Training Officer to implement the 
plan.
    On the facilities front, the Office completed essential steps to 
redesign the existing facilities to accommodate the new processes. We 
have completed a facilities project plan, a program report identifying 
facilities and requirements across the Office, adjacency and blocking 
diagrams, and have begun detailed design work for each division. The 
space plans, along with interior architectural construction documents, 
will be completed and delivered to the Architect of the Capitol by the 
end of June.
    The key challenge over the next two years is to coordinate our 
execution across these three reengineering fronts of IT, organization, 
and facilities. Since our processes are changing so dramatically, our 
Office structure in each of these areas will change dramatically as 
well--to the point that our new processes cannot begin without full 
implementation of each front.
    At the same time we are making this dramatic transition to our new 
processes, we need to make sure that we continue to provide our 
services to the public--including registration, recordation, licensing 
activities, and acquisition of copyrighted works for the Library's 
collections. We realize that the most significant impact on our public 
services, in terms of the Office's transition, will be in the area of 
facilities redesign. As such, we need to complete our facilities work 
as quickly as possible. We determined that under the fastest 
construction schedule, this redesign would take at least six months. We 
then concluded that, in order to keep providing our services to the 
public, the best option is to move off site into rental space during 
the construction period, which is scheduled to begin October 2005 and 
end in April 2006. At that time we will move back into the Madison 
Building and begin using the new processes supported by new technology 
systems.

                 III. POLICY, REGULATORY AND LEGAL WORK

    As the primary source of copyright expertise in the federal 
government, the Copyright Office continues to work closely on copyright 
issues with Members and committees, executive branch agencies and the 
federal judiciary. Our work in the policy and legal arena is growing. 
As this committee knows, digital technology regularly raises challenges 
to copyright law that must be carefully identified and deliberately 
considered. Internationally, we are participating as part of U.S. 
delegations to a growing number of free trade agreements being 
negotiated around the world, each of which contains important 
intellectual property provisions. The committee is very familiar with 
the Office's work on legislative issues this Congress. We have also 
been and continue to be active on the regulatory front, especially 
involving the statutory licences such as those found in sections 114 
and 115 of the Copyright Act. These regulatory activities have drawn 
the attention of the committee in recent hearings and, I understand, a 
hearing to be held in the near future. Therefore, I will focus on some 
of the international and legal work that we have recently undertaken 
and in which we are now involved.
International Activities
    The Copyright Office=s international activities advance the 
economic health of the United States by promoting development and 
adherence of effective copyright systems, which ensure compensation to 
American creators, thereby encouraging creation and dissemination of 
works throughout the world.
    The Office works particularly closely with the United States Trade 
Representative (USTR), the United States Patent and Trademark Office 
(USPTO) and other parts of the Department of Commerce, and the 
Department of State, providing expertise in negotiations for 
international intellectual property agreements and assisting other 
countries in developing their own copyright laws.
    The United States has prepared and submitted to the World 
Intellectual Property Organization (WIPO) a proposed treaty text on the 
protection of broadcasting organizations. The U.S. drafting team 
consisted of Copyright Office attorneys and attorneys from the USPTO. 
The U.S. proposal has been considered at meetings of the WIPO Standing 
Committee on Copyright and Related Rights.
    Our staff also participated in delegations led by USTR in 
negotiations of Free Trade Agreements with several countries, including 
Chile, Singapore, Australia, Morocco, and a group of Central American 
countries. These agreements contain comprehensive intellectual property 
provisions, including copyright. Our staff is also participating in the 
Intellectual Property Negotiating Group of the Free Trade Area of the 
Americas and was instrumental in preparations, including the redrafting 
of U.S. treaty proposals.
    The Copyright Office also participated in the meetings of the WIPO 
Intergovernmental Committee on Intellectual Property and Genetic 
Resources, Traditional Knowledge and Folklore, and in the annual 
meeting of the WIPO Advisory Committee on Enforcement and the annual 
meeting of the Assemblies of WIPO Member States.
    We also actively participated in numerous additional bilateral 
negotiations and consultations during fiscal 2003, including those held 
with Australia, Bahrain, the Dominican Republic, Egypt, Germany, Hong 
Kong (People=s Republic of China), Japan, Korea, Malaysia, Mexico, New 
Zealand, Pakistan, Paraguay, People=s Republic of China, the 
Philippines, Poland, Republic of China (Taiwan), Russia, Spain, Sri 
Lanka, Thailand, Ukraine, and Vietnam, on issues ranging from 
enforcement to revision of copyright laws.
    For the USTR, Copyright Office staff provided assistance to nations 
such as Algeria, Bosnia, Cambodia, Cape Verde, Nepal, Russia, Saudi 
Arabia, Serbia, Sudan, Ukraine, and Vietnam in their World Trade 
Organization accession processes. They also responded to WTO Trade 
Policy Review queries regarding U.S. copyright law and policy.
    The Office participates in the interagency Special 301 review 
process, which evaluates the adequacy and effectiveness of intellectual 
property protection and enforcement throughout the world. This annual 
process, established under U.S. trade law, is one of the tools used by 
the U.S. government to improve global protection for U.S. authors, 
inventors, and other holders of intellectual property rights.
    Although the Copyright Office is not a law enforcement agency and 
has no direct role in law enforcement liaison, many of the Office=s 
obligations and responsibilities intersect with activities in the law 
enforcement arena. The Office works with the Department of Justice, the 
Federal Bureau of Investigation and the Bureau of Customs and Border 
Protection to provide information and documentation pertaining to 
specific copyright claims that are the subject of those agencies= 
investigations. In the past year, the Office advised and assisted the 
Bureau of Customs and Border Protection in resolving issues and 
developing new procedures related to border enforcement.
    The Copyright Office conducts or participates in a range of 
intellectual property training to assist countries to comply with 
international agreements and enforce their provisions. Such training is 
in the areas of: awareness of international standards and the U.S. 
legal and regulatory environment; substantive legal training in U.S. 
copyright law; legal reform; and statutory drafting assistance.
    The Office also conducted symposia as part of its International 
Copyright Institute (ICI). The ICI is designed to further international 
understanding and support of strong copyright protection, including the 
development of effective copyright laws and enforcement overseas. In 
March we hosted a delegation of 14 officials from China led by a deputy 
director general of the National Copyright Administration of China. The 
delegation included officials from various Chinese provinces who have 
authority in the area of copyright enforcement, as well as judges who 
hear copyright cases. Frequently we work with WIPO. In May, the Office 
in cooperation with WIPO hosted a group of government officials from a 
number of nations for an AInternational Symposium on Emerging Issues In 
Copyright And Related Rights For Developing Countries And Countries In 
Transition.@

1201 Rulemaking
    Last October we completed the second Section 1201 rulemaking to 
determine whether any particular classes of copyrighted works should be 
exempted from the protection afforded by the prohibition on 
circumventing technological protection measures that control access to 
such works. We started the process a year out, in October 2002. We 
received 51 comments, with proposals for 83 exemptions, in response to 
our Notice of Inquiry. There were 338 reply comments supporting or 
opposing those proposed exemptions. We held four days of hearings in 
Washington and two in Los Angeles. Forty-four witnesses representing 
over 60 groups testified at these hearings. As a result of this 
process, four such classes of works were exempted.
    I believe it is important to address some of the criticisms of the 
Copyright Office's triennial rulemaking that were made at a recent 
hearing before another Committee. It has been alleged that section 1201 
provides a draconian mechanism to protect the interests of copyright 
owners in a way that adversely affects the legitimate interests of 
consumers. These claims overlook the purpose, process and results of 
the 1201 rulemaking. The voluminous record \1\ of the two rulemakings 
conducted by the Copyright Office over the last six years stands in 
stark contrast to these claims. The record of the rulemaking reveals a 
thriving marketplace that is operating largely as Congress anticipated. 
Abundant ``use-facilitating'' business models now provide the public 
with a staggering array of digital choices--choices that are, in most 
cases, in addition to the traditional forms of distribution available 
to consumers. To say that the balance of copyright has shifted to the 
detriment of the public ignores this empirical evidence about the 
marketplace as a whole.
---------------------------------------------------------------------------
    \1\ http www.copyright.gov/1201/
---------------------------------------------------------------------------
    Our most recent section 1201 rulemaking fully and carefully 
considered evidence of present and likely future impediments to 
noninfringing uses, and we concluded that the record warranted a 
finding that the prohibition against circumvention shall not apply to 
persons who engage in noninfringing uses of four relatively narrow 
classes of copyrighted works. It has been suggested that since only 
four exceptions were recommended, the rulemaking has not fulfilled its 
promise, either quantitatively or qualitatively. I believe this view is 
inconsistent with the purpose of the rulemaking proceeding and the DMCA 
itself.
    In enacting the DMCA, it is clear that Congress expected the 
development of the digital information marketplace to benefit the 
public without the necessity of regulatory intervention. Rather, the 
rulemaking proceeding was created as a ``fail-safe'' mechanism.\2\ As 
the Section-by-Section Analysis published by this Committee stated at 
the time, ``In any particular 3-year period, it may be determined that 
the conditions for the exemptions do not exist. Such an outcome would 
reflect that the digital information marketplace is developing in the 
manner which is most likely to occur, with the availability of 
copyrighted materials for lawful uses being enhanced, not diminished, 
by the implementation of technological measures and the establishment 
of carefully targeted legal prohibitions against acts of 
circumvention.'' \3\ The drafters of Section 1201 did not expect the 
rulemaking proceeding to result in numerous and broad exemptions. For 
example, the Commerce Committee explained that the rulemaking 
proceeding ``would monitor developments in the marketplace for 
copyrighted materials, and allow the enforceability of the prohibition 
against the act of circumvention to be selectively waived, for limited 
time periods, if necessary to prevent a diminution in the availability 
[of works].'' \4\ In addition, the Commerce Committee noted that any 
such exemption should be ``fully considered and fairly decided on the 
basis of real marketplace developments.'' \5\
---------------------------------------------------------------------------
    \2\ H.R. Rep. No.105-551 Part 2, at 36 (July 22, 1998).
    \3\ House Committee on the Judiciary, 105th Cong., Section-By-
Section Analysis of H.R. 2281 as Passed by the United States House of 
Representatives on August 4, 1998, at 8 (August 4, 1998) (``House 
Manager's Report'').
    \4\ Id. (emphasis added).
    \5\ Id.
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    The body of evidence established in the first two rulemakings does 
not support the view that fair use, or other noninfringing uses, have 
been constrained in the marketplace. While fears and concerns for the 
future were plentiful, the evidence of present or likely adverse 
effects was quite limited. In many ways, the evidence elicited in the 
second rulemaking tended to prove that the digital marketplace has been 
developing in a manner which has enhanced public access to copyrighted 
works. The fears of copyright owner abuse of section 1201 have not 
become a reality in any significant respect. Where real problems were 
presented, and where existing statutory exceptions would not resolve 
those problems, we defined exempted classes of works in ways tailored 
to alleviate the problem. The fact that there were few exemptions is 
not a sign of the failure of the rulemaking. Rather, it is a sign of 
the success of a digital marketplace that is providing the public with 
access to an ever-increasing array of copyrighted works in ways that
    were never before possible. As Congress anticipated, the strongest 
check on overzealous protection by copyright owners is the marketplace 
itself. While I have no way of knowing what the future will hold, there 
is reason for optimism.
    Even though technological change in the digital marketplace has 
created significant benefits to the public in terms of new and varied 
means of access and use of copyrighted works, some people seem to 
believe that any limitation on access or use is an abridgement of the 
public's rights. For instance, at a recent hearing before another 
Committee, some witnesses argued that the fact that DVDs cannot be 
copied is a limitation on the consumer's so-called ``fair use right'' 
to make a back-up copy. They have asserted that when section 1201 is 
invoked to prevent the marketing of software that circumvents access 
controls to enable people to make ``back-up'' copies of motion pictures 
on DVDs, it deprives people of the ability to engage in fair use. 
Proponents of that point of view sought an exemption in the Section 
1201 rulemaking last year. However, they utterly failed to make their 
case either legally or factually, offering no legal support for the 
proposition that the making of a ``back-up'' copy of a motion picture 
on a DVD is a noninfringing use \6\ and failing to demonstrate that 
DVDs are so susceptible to damage and deterioration that a convincing 
case could be made that the practice of making preventive backup copies 
of audiovisual works on DVDs should be noninfringing.\7\
---------------------------------------------------------------------------
    \6\ Recommendation of the Register of Copyrights, pp.106-108 
(October 27, 2003) (``The proponents of an exemption bear the burden of 
proving that their intended use is a noninfringing one. No proponent 
has offered a fair use analysis or supporting authority which would 
allow the Register to consider such a basis for the exemption, and the 
Register is skeptical of the merits of such an argument.'').
    \7\ Id. at 106.
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    At the same hearing, proponents of a right to make ``back-up'' 
copies of DVDs asserted that my DMCA Section 104 Report, which I 
delivered to Congress in August, 2001, supports the position that the 
making of a back up of a motion picture is a fair use. In fact, the 
Section 104 Report came to no such conclusion.\8\
---------------------------------------------------------------------------
    \8\ In the Section 104 Report, I presented recommendations on 
whether amendment of 17 U.S.C. Sec. 117, the provision permitting the 
making of a back-up copy of a computer program, was advisable. I 
concluded that there was a fundamental mismatch between the law and 
accepted, prudent practices among most system administrators and other 
users regarding the back up procedures for works residing on a 
computer. An entire industry of hardware, software and media 
manufacturers had developed in the marketplace to accommodate the 
legitimate needs of users, which were otherwise unmet in the 
marketplace, i.e., one could not easily replace the contents of one's 
hard drive. Although I recommended an expansion of Sec. 117 to include 
works of digital media that are subject to accidental erasure, damage 
or destruction in the ordinary course of use, the context of the 
discussion related to works, other than computer programs, that are 
stored on computers. As I stated in the Report, ``the exception would 
be limited primarily to backups made from copies of a hard drive, 
floppy disk, or other magnetic medium.'' Id. at 160 n. 471. I did not 
and do not believe that such an exemption should extend to making 
backups of DVDs or CDs, given the lack of demonstrated fragility in 
``the ordinary course of use.''
---------------------------------------------------------------------------
    I also think it is necessary to respond, once again, to the 
criticisms raised concerning that required showing of proof in the 
rulemaking. It has been repeatedly stated--most recently in a hearing 
last month before another Committee--that the Copyright Office raised 
the burden of proof for proponents of exempted classes in a manner that 
is contrary to the plain language of the statute, thereby eliminating 
the possibility of an exemption for most proposals. As I stated in my 
Recommendation to the Librarian of Congress, this claim is 
unfounded.\9\ I concluded in 2000 and again in 2003 that a 
determination to exempt a class of works from the prohibition on 
circumvention must be based on a showing that the prohibition has a 
substantial adverse effect on noninfringing uses of a particular class 
of works. However, the term ``substantial'' was not used to heighten 
the burden, but to clarify that adverse effects must have substance to 
be considered. By way of guidance, our initial notice of inquiry in the 
rulemaking informed the public that insubstantial effects, whether de 
minimis or the result of inconvenience, do not represent a sufficient 
basis for an exemption.\10\ The use of the term ``substantial'' simply 
imposes the requirement found throughout the legislative history, which 
is variously stated as ``substantial adverse impact,'' \11\ ``distinct, 
verifiable, and measurable impacts,'' \12\ and more than ``de minimis 
impacts.'' \13\ As is apparent from the dictionary definition of 
``substantial'' and the Supreme Court's treatment of the term (e.g., in 
its articulation of the substantial evidence rule), requiring that 
one's proof be ``substantial'' simply means that it must have 
substance. The requirement of substance rather than speculation was not 
a deviation from the statute and fully coincides not only with 
Congressional intent but also with simple common sense.
---------------------------------------------------------------------------
    \9\ Recommendation of the Register of Copyrights, pp.16-20 (October 
27, 2003).
    \10\ Notice of Inquiry, 67 F.R. 63578, 63580 (October 15, 2002).
    \11\ See House Manager's Report, at 6.
    \12\ See, e.g., H.R. Rep. No.105-551 Part 2, at 37 (July 22, 1998).
    \13\ See id.
---------------------------------------------------------------------------
    The fact that I found that only four narrow classes of works 
qualified for exemption from the prohibition on circumvention is not 
evidence of a failed rulemaking proceeding; rather, that fact is due to 
the failure of proponents of other classes of works to come forward 
with any showing of a substantial adverse impact on noninfringing uses. 
But you do not have to take my word for it. The entire record of the 
rulemaking is available on-line,\14\ and I have yet to see any 
criticism of the results of the rulemaking that has shown that we 
overlooked or disregarded any evidence of substantial adverse impacts 
on noninfringing uses. The extensive record developed in the rulemaking 
is devoid of evidence to support the claims made by the critics of the 
DMCA.
---------------------------------------------------------------------------
    \14\  http://www.copyright.gov/1201/
---------------------------------------------------------------------------
    The limited number and scope of exemptions in the section 1201 
rulemaking is a testament to the availability of access and use of 
digital works in the marketplace. Although I had reservations about the 
rulemaking when we embarked upon the process in 2000, I have come to 
believe that it serves a useful purpose. As Congress intended, it gives 
us the opportunity to monitor developments in the marketplace to 
determine whether copyright owners are using the legal protections 
offered by the DMCA in ways that will enhance or hinder the 
availability of their works to the public. I assume that copyright 
owners recognize that if they apply access controls in ways that 
prevent people from making noninfringing uses of certain types of 
works, they run the risk that the rulemaking will be used to deprive 
them of the protection of the anticircumvention provisions for those 
works. I would like to think that one of the reasons we identified only 
four narrow classes of works is that copyright owners, mindful of the 
triennial rulemaking, have by and large refrained from using access 
controls in a heavy-handed manner. Of course, the Copyright Office will 
continue to fully and carefully monitor developments in the digital 
market for copyrighted works in future triennial proceedings.

Litigation
    In the past 18 months, we have worked closely with the Solicitor 
General and the Department of Justice on a number of important cases, 
providing advice on issues of copyright law and policy and assisting in 
the preparation of documents. We advised and assisted the Solicitor 
General in a number of cases pending in the Supreme Court, the courts 
of appeals and district courts, including Eldred v. Ashcroft, which 
upheld the constitutionality of the Sonny Bono Copyright Term Extension 
Act, as well as a number of cases involving challenges to the Digital 
Millennium Copyright Act and cases involving issues such as 
copyrightability of parts numbers and model laws.

Sonny Bono Copyright Term Extension Act: Unfinished Business
    A key component of the Sonny Bono Copyright Term Extension Act, 
which extended copyright terms by twenty years, was an exception to 
help ensure public access to works in the last twenty years of their 
copyright term. During consideration of the issue, the Chairman of this 
Subcommittee asked the Office to facilitate negotiations between 
libraries, educational institutions and copyright owners with a goal of 
reaching agreement on the scope of a possible exemption. There were 
numerous meetings over a span of many months. Although there was some 
disagreement on the language of the exemption, there was no 
disagreement that the exemption would apply to all types of works.
    The exemption, which became 17 U.S.C. 108(h), essentially permits a 
nonprofit library, educational institution or archive to reproduce or 
distribute copies of a work, including in digital format, and to 
display or perform a work during the last twenty years of the copyright 
term as long as that work is not commercially available. Unfortunately, 
the terms of section 108(i) make this exception inapplicable to motion 
pictures, musical works and pictorial, graphic and sculptural works. I 
am hopeful that this error will be remedied and would be pleased to 
work with the Subcommittee to correct it.

                        IV. FY05 BUDGET REQUEST

    Given the attention the Fiscal Year 2005 budget process is 
receiving, I will briefly review the Office's request. We are very 
appreciative of this committee's support of our budget requests in 
recent years.
    For FY 2005, the Copyright Office is seeking a total budget of 
$53,518,000 for the BASIC, Licensing and CARP appropriations. The 
budget request is funded from $19,369,000 in net appropriations and 
$34,149,000 in offsetting collections authority. Besides mandatories 
and price level increases for each appropriation, we are seeking 
approval of two specific requests: $3,660,000 in new offsetting 
collections authority and spending authority (no new net 
appropriations) to be used to redesign our office space, which is 
required to support our reengineered business processes; and $59.2 
million for a Copyright Deposit Facility at Ft. Meade. As the Ft. Meade 
facility is important to our ability to fulfill our responsibilities 
under the Copyright Act, I wanted to provide the committee with a 
fuller description of this request.

Ft. Meade Copyright Deposit Facility
    The Copyright Deposit Facility at Ft. Meade will, for the first 
time, ensure that copyright deposits of registered works not selected 
by the Library are stored for certain periods in environmental 
conditions that allow us to meet our legal requirements to retain, and 
be able to produce copies of, these works.
    The imperative for the Copyright Deposit Facility at Ft. Meade is 
to fulfill the requirement under the Copyright Act for the Office to 
provide for long-term preservation of copyright deposits. The Copyright 
Office is required by statute to retain unpublished copyright deposits 
for the full term of copyright, which is the life of the author plus 70 
years, and to retain published deposits for the longest period 
considered practicable and desirable by the Register. A retention 
period of 120 years has been established to fulfill this legal 
requirement for unpublished deposits, and I have concluded that a 
retention period of 20 years should be established for the published 
deposits.
    Deposits serve as evidence of what was registered; they reflect the 
nature and in most cases the extent of the material that has been 
registered. The Office retrieves approximately 2,500 works from its 
offsite storage each year. Copies of copyright deposits, certified by 
the Copyright Office, are used in a variety of legal proceedings. If we 
continue to hold deposits under the conditions that have been in place 
since then, some works will deteriorate to such an extent that we would 
not be able to either ascertain the full work or make a copy.
    The Office currently stores about 50,000 cubic feet of deposits at 
the Landover Center Annex, a GSA leased facility. In addition, the 
Office stores more than 85,000 cubic feet of deposits at a commercial 
records management storage facility in Sterling, Virginia run by Iron 
Mountain.
    The legal deposits consist of a variety of formats and types, 
including: paper in varying quality and size such as books, 
architectural drawings, sheet music, and computer code printouts; 
magnetic tape (both audio and video); photographs; CD-ROMs, CDs, and 
LPs; and fabric.
    The current storage space, both at the leased facility and the 
commercial records storage facility, fails to provide the appropriate 
environmental conditions necessary to ensure the longevity of the 
deposit materials. The storage space at the Landover Annex is subject 
to wide temperature variances, high humidity levels and water leaks. 
The commercial records storage facility is also subject to seasonal 
temperature fluctuations and uncontrolled humidity levels.
    Continued storage under present substandard environmental 
conditions will accelerate the aging of the deposit material and reduce 
the useful life span by 75 percent, i.e., deterioration that would 
ordinarily occur in 100 years occurs in 25 years. These conditions 
place legal deposits at risk in the long term. This is particularly 
applicable to the video and audio magnetic tapes in storage which are 
especially sensitive to environmental conditions. In addition, the 
current storage space at the Landover Annex and the commercial records 
storage facility does not meet the NARA fire protection requirements 
for storage of long-term records which must be in place by FY 2009.
    In September 2002, a task group was formed to prepare design 
specifications and construction documents. The group comprised 
representatives from the Copyright Office, Library of Congress support 
divisions, the AOC, and an outside architectural firm. Last August, 
this group completed facility design and construction documents.
    The Ft. Meade facility would be a highly secured, environmentally 
controlled, high-density storage building with sufficient space for 
retaining current and future deposits. It would be in full compliance 
with the NARA regulations for records storage facilities, and would 
bring together all copyright deposits in a single location, improving 
retrieval time and our service to the public.
    The Ft. Meade facility will allow for 245,000 cubic feet of 
storage. When the building is ready for occupancy in FY 2007, we would 
immediately occupy about two-thirds of that space. Currently, the 
Copyright Office is adding an average of 3,500 cubic feet of deposits 
of published works and records and 3,500 cubic feet of deposits of 
unpublished works annually. Although it is difficult to estimate the 
volume of copyright deposits that we will receive in the future, we 
project that the facility would provide adequate storage space at least 
through 2020.
    We consulted with the Library's Preservation Directorate to 
determine the climate control requirements to ensure that the useful 
life of the legal deposits would be sufficient to meet the legally 
mandated retention periods. Because published and unpublished deposits 
retention periods are different, the necessary environmental 
requirements are different as well. Published deposits need to be 
stored in a temperature of 68 degrees Fahrenheit (F), and 45 percent 
relative humidity (RH). Unpublished deposits must be stored in a 
climate-controlled area maintained at 50 degrees F and 30 percent RH.
    We have briefed the Appropriations Committees staff on our current 
storage problems and our need for this facility. The staff has asked us 
to ascertain whether there are acceptable alternative storage options. 
Our staff visited three alternative facilities and they are being 
evaluated based on our requirements in the areas of environmental 
conditions, security and retrieval of deposits. We will provide our 
analysis shortly.

CARP Reform Legislation
    I also note the budget impacts of H.R. 1417, the proposed Copyright 
Royalty and Distribution Reform Act of 2004, which has passed the House 
and is awaiting action in the Senate. The current system authorizes the 
Copyright Office to deduct CARP administrative costs from royalty fees 
collected by the Office. H.R. 1417 provides that these costs be paid 
for out of appropriated funds so that copyright owners, who are 
entitled to the royalty fees collected by the Copyright Office, will 
receive all the royalties collected under the statutory licenses to 
which they are entitled, and so that no one with a stake in the outcome 
of rate-setting proceedings will be unable to participate due to a 
requirement that they bear the high costs of such proceedings. If the 
legislation is enacted, the Copyright Office will be need to request an 
estimated $1 million in additional net appropriations to cover these 
new funding requirements. It is possible that, depending on the timing 
of enactment of H.R. 1417, it will be difficult if not impossible to 
secure that funding for Fiscal Year 2005. If that is the case, it may 
be necessary to defer the effective date of the provision providing for 
public funding of the new system until Fiscal Year 2006. I hope that I 
can count on your support with respect to these funding issues.

                             V. CONCLUSION

    The Copyright Office has a full agenda before it in terms of our 
policy work, in carrying out our responsibilities under the Copyright 
Act, and in reengineering our work processes for even better public 
service in the future. We aim to be forward-looking and committed to 
exemplary service. I thank the staff of the Copyright Office for the 
accomplishment reflected in this testimony.
    I also express my gratitude to this committee for its consistent 
support of the Office's work. We consider service to this committee a 
most important part of our mission, and look forward to continuing to 
work with the Members of the Committee and your very able staff.

    Mr. Smith. Thank you, Ms. Peters.
    A couple of questions, and I am going to key off your 
written testimony before I comment on something you just 
mentioned in your oral testimony. And I thought--and it was 
actually the first paragraph of your written testimony which I 
thought was very interesting and I did not hear you mention a 
minute ago. That is, you said that the time it takes between 
receipt of a work for copyright registration and issuance of a 
registration certificate has been cut in half, I think, from 6 
months to 90 days. You didn't explain why that happened or how 
that happened or what is instructive about that great progress.
    Ms. Peters. Dedicated staff. The truth is, we built up a 
large number of backlogs, and through a very organized effort 
that involved the staff trying to solve the problems, we 
basically cut down the number of claims that we had on hand. We 
built up large correspondence. Again, it was the leaders of the 
Office and the staff that figured out a way to resolve that 
and, at the same time, to look at new ways to reduce it. So I 
am very, very fortunate to have a very, very talented, 
dedicated staff who want to provide the best possible public 
service.
    Mr. Smith. Fair enough.
    In 2003, fiscal year 2003, the Copyright Office received 
over 600,000 claims to copyright. How does that compare to 
previous years? I wanted just a sense of trajectory here.
    Ms. Peters. It is interesting. A claim actually can 
represent one or more works.
    Mr. Smith. Right. So for instance, the 600,000 represented 
a million works.
    Ms. Peters. Actually, yeah. So, the number is more or 
less--has been even for a number of years. More and more people 
are using the group registrations, so we have not had an 
increase. But it maybe is a little bit less this year, but for 
the last few years, it has been pretty steady.
    Mr. Smith. So roughly the same. In a way, that maybe helped 
you cut the time because you were working with a given workload 
that was not increasing, perhaps.
    This is a little bit of a loaded question, but you all--the 
Copyright Office has worked well with the Patent and Trademark 
Office for a number of years. And yet the PTO seems to need to 
increase its responsiveness and efficiency, and perhaps you set 
an example for them. What suggestions do you have for PTO?
    Mr. Berman. Put the Patent Office under congressional 
control.
    Mr. Smith. And other than a dedicated staff.
    Ms. Peters. No. Actually, you know, the truth is that the 
functions and the size----
    Mr. Smith. I am sorry.
    Ms. Peters. The functions of the Patent and Trademark 
Office are very different than the Copyright Office. And I 
think that, way before my time, the leaders of the Copyright 
Office have always been dedicated to public service.
    One of the things that I think helps us is I have been in 
my job for almost 10 years, and most of the people who work for 
me have, too. So there is stability in leadership. There is the 
same management team. I think it helps us with the fact that we 
are in the Library of Congress, which probably is more 
dedicated to looking at digital issues in making information 
available to the public than most other places.
    One of the things that we do is, no matter what we are 
doing, any project, we involve every stakeholder in trying to 
solve that. And that includes the public as well as the labor 
unions as well as anybody who is going to either be part of our 
process or a beneficiary of our process. I don't know that I 
would have suggestions for them. They are so much larger and 
more complex. And I am really excited about our reengineering.
    But we are still in the planning and initial implementing 
stage, so I am going to wait until 2006 and see whether or not 
we have useful suggestions, because the proof will be in the 
pudding on how our methods work.
    Mr. Smith. Okay. Well, I promise we won't wait as long as 
we have this time to have you back to find out those good 
suggestions.
    Now, you mentioned a while ago and said in your oral 
testimony that the 1201 rulemaking does serve a useful purpose. 
And as you are aware, there is another Committee that has had a 
hearing on that general subject fairly recently. And during 
that hearing, there was some mention that the act of producing 
a backup copy of a DVD was fair use under the Copyright Law. 
Would you disagree or agree with that?
    Ms. Peters. I would disagree.
    Mr. Smith. Observation and why?
    Ms. Peters. I would disagree for many reasons. First of 
all, I know of no authority, not in the law itself or in case 
law with regard to making backup copies of DVDs, which is what 
they were actually focusing on in that hearing. And in fact, 
321 Studios, which was the proponent of the backup copy, sought 
an exemption and basically did not produce any evidence, legal 
or otherwise, that there was a right or there was a problem.
    It is true that under section 117 of the Copyright Law, 
with regard to computer programs, there is the ability to make 
a backup copy. And it is true that, in a study that we did, 
known as the section 104 study, that we noted that, with 
respect to works that are stored on computers, that many people 
back up those copies. And we recommended that the law recognize 
that when you are in an electronic environment and not a hard-
copy environment, that prudent people tend to back up what they 
have on their computer. But we went out of our way to say that, 
with regard to physical copies, DVDs, CDs, that there was no 
issue with regard to losing the data, and that you didn't need 
backup copies.
    Mr. Smith. Okay. Thank you, Ms. Peters.
    The gentleman from California, Mr. Berman.
    Mr. Berman. Just following up on that, thank you, Mr. 
Chairman.
    But if fair use allowed a backup copy, why did we need to 
pass section 117 regarding computer programs and backup copies?
    Ms. Peters. I think maybe at the time you were--there was 
an implementation of the recommendations of CONTU, and it was 
clarifying that computer programs were covered and what the 
scope of protection would be and maybe it wasn't quite so 
clear. It was added in 1980.
    A lot has happened from 1980 to today, and even in our 
study, we said that, looking at it today, I don't think we 
would have come to that conclusion in 1980, that we thought 
that fair use would apply, but it is determined on a case-by-
case basis. So any time, you know, that you really want to make 
sure that they can make a backup copy, all of the time, I would 
think legislation is a preferable way of approaching it.
    Mr. Berman. But the bill that that Committee is holding a 
hearing on that affects Copyright Law, H.R. 107, is there 
anything in that bill that restricts the circumvention to 
enable one backup copy?
    Ms. Peters. At the moment, I don't remember.
    David?
    No. My able counsel says no.
    Mr. Berman. That is the answer I was thinking was the case.
    Ms. Peters. I was thinking, but I wasn't sure.
    Mr. Berman. Okay. A couple of other questions. The Chairman 
got me off track.
    I want to ask you about transfer of rights. I mean, a huge 
amount of--I think a majority of the 16,000-plus documents 
received by the Copyright Office involved transfer of rights 
from one copyright owner to another. It seems like these 
documents would be useful to prospective licensees who might 
want to clear rights to use the copyrighted works that are 
covered by such documents.
    In your IT reengineering project, are you looking into the 
feasibility of making these documents accessible online? Is 
there any legal requirement that copyright owners file such 
transfer-of-rights documents? If not, what is their current 
incentive for doing so? Why are they doing it if they aren't 
required to? And is there any way that Congress, consistent 
with the Berne Convention, could create a requirement or 
increase the incentive for filing transfer-of-rights documents?
    Ms. Peters. I will start with the easiest one first. I 
think requiring documents to be recorded in the Copyright 
Office would violate Berne. And in fact, there was a provision 
in the law that said that you really had to record a document 
if, in fact, you were relying on that document or your 
ownership with regard to suits that you were bringing in court. 
That was eliminated when we joined Berne.
    People record documents because there is a provision that 
says that, if a document is recorded before a certain date, 
then it is entitled--and the work is registered--it is entitled 
to constructive notice. So there are many people who believe 
that the constructive notice provision is an important one, 
that everybody is going to be held to know what the facts of 
that document are.
    Many people today record documents because the records of 
those documents, at least the current ones, are online so you 
actually can do a search today to try to determine whether or 
not there has been a transfer and who the current owner is.
    You are absolutely right that because there is no mandatory 
requirement, it is an incomplete database. And a database 
actually is worth much more when it is complete because can you 
never rely on that one database. There must be some additional 
incentives that could be built in.
    With respect to putting the documents online, we do, in 
fact, image the documents. They are available on CDs and people 
can come in and look at them. Before, it was microfilm. And we 
are looking at whether or not--and we probably would make those 
documents available for people to search online.
    What is interesting, we met with all of the stakeholders 
who file documents and who search documents. And the filers, 
the ones who submit them, did not express much interest in 
submitting them electronically. But we will work on that. Our 
process is, even if they submit it on paper, we are going to 
image it as soon as it hits the Office, and it will be 
processed electronically.
    Mr. Berman. Mr. Chairman, I have two more questions. They 
should be fairly short.
    Mr. Smith. The gentleman from California continues to be 
recognized, and we will turn off the clock for you.
    Mr. Berman. All right. Thank you.
    The courts, I am told, are requiring registration 
certificates as a predicate to filing an infringement lawsuit. 
It takes usually 6 months to get a certificate from--of 
registration--from the Copyright Office. Even with an expedited 
registration process, that requirement could cause major 
litigation problems if the Copyright Office isn't able to keep 
up with the volume of expedition requests. Do you think we need 
a change in the Copyright Act? Or is it possible to institute a 
smoother, faster system for expedited filing?
    Ms. Peters. Well, let me start with that. As far as I am 
aware, the expedited system that we have generally works. We 
guarantee it in a matter of days.
    With respect to the Incredible Hulk, where they said they 
needed it the same day, we issued it the same day. And we are 
willing to do that. Obviously----
    Mr. Berman. So that, basically, if you are going to have to 
do this for litigation purposes, you can get it pretty quickly.
    Ms. Peters. Absolutely. So, you know, eventually, in our 
system, we hope to be able to issue certificates in less than 2 
weeks, maybe even less than that. But as far as I am concerned, 
you know, if people come to us and tell us they have a problem, 
we will do everything in our power to make sure that they get a 
certificate when they need it.
    Mr. Berman. Okay. My last question. Your testimony mentions 
that section 108(i) appears to deny libraries, educational 
institutions and archives the ability to rely on section 108(h) 
to protect them from copyright liability when they engage in 
certain preservation, scholarship and research activities 
relating to motion pictures, musical works and some other 
works. I am concerned that this problem may impair preservation 
in scholarship efforts that involve orphan films and music that 
have been contemplating legislation to fix this problem. Do you 
think it would be fair and correct to characterize such 
legislation as a technical fix?
    Ms. Peters. I would like to tell you yes. Clearly, the 
intent at the time was to include all classes of works.
    For me, the issue about being technical is that, since 
1998, they haven't had that exemption. So if you are willing to 
consider it technical, because that was the intent at the time, 
I am happy to say it is technical.
    Mr. Berman. I think it is technical if the three of us 
would agree.
    Ms. Peters. Well, then, I certainly agree.
    Mr. Berman. Okay. Mr. Chairman, I yield back.
    Mr. Smith. Thank you, Mr. Berman.
    Ms. Peters, thank you again for your testimony. As you 
know, we will be in touch with you and to stay in touch and 
appreciate your good suggestions along the way.
    With that, we stand adjourned.
    [Whereupon, at 1:40 p.m., the Subcommittee was adjourned.]


                            A P P E N D I X

                              ----------                              


               Material Submitted for the Hearing Record

Prepared Statement of the Honorable Howard L. Berman, a Representative 
     in Congress From the State of California, and Ranking Member, 
    Subcommittee on Courts, the Internet, and Intellectual Property

    Mr. Chairman:
    I am pleased to join you for this oversight hearing on the U.S. 
Copyright Office. Oversight of agencies under our jurisdiction is a key 
responsibility of this Subcommittee.
    I anticipate that this hearing will re-confirm my perceptions of 
the U.S. Copyright Office. Namely, that it is a highly effective, well-
run agency.
    I have the utmost respect for the Register and her able staff. They 
are a valued resource to me on copyright policy issues. They ably 
perform a wide variety of functions on a comparatively limited budget. 
They are to be commended for their record of service to this Congress, 
American creators, users of the Library of Congress, and the United 
States public at large.
    Because the Register may not be able to address these in her oral 
testimony today, I want to briefly touch on three issues raised in the 
her written testimony.
    First, the Copyright Office is engaged in an effort to reengineer 
its Information Technology infrastructure. I understand that, as part 
of this project, the Copyright Office is exploring the feasibility of 
converting analog copyright records, which cover 1790 through 1977, 
into a digital and easily accessible form. I fully support this effort, 
and encourage the Copyright Office to expansively study the feasibility 
of making all registration, ownership, and transfer of rights records 
electronically available to the public. I also encourage the Copyright 
Office to explore the feasibility of ensuring that such records are 
accurate and up-to-date. I believe the Copyright Office could perform 
an invaluable and unique role in facilitating rights clearance 
activities if it became the repository of accurate, up-to-date, 
relatively complete, and electronically accessible copyright records. I 
want to work with the Copyright Office to remove any legal, financial, 
or other obstacles that prevent accomplishment of this goal.
    Secondly, I note with approval the Register's testimony on the 
triennial rulemaking she recently completed with regard to the anti-
circumvention provisions of the Digital Millennium Copyright Act. The 
Copyright Office has twice now exhaustively examined concerns that the 
DMCA would impair non-infringing uses of copyrighted works. It has 
found the vast majority of these concerns to be utterly 
unsubstantiated. In the four narrow circumstances in which the 
Copyright Office found concerns to be justified, the Copyright Office 
adopted specific exemptions. Thus, the triennial rulemaking 
demonstrates that the DMCA is working as intended: it is stimulating 
the dissemination and availability of copyrighted works without any 
appreciable negative effect on non-infringing uses.
    Third, the Register notes that, even should the Senate pass the 
CARP reform legislation, which earlier this year passed the House, its 
effective implementation still depends on appropriation of necessary 
funds. Members of this Subcommittee and the full Committee, and all 
interested parties, need to start working together to ensure that, once 
the legislation is enacted, CARP reform will be funded in an adequate 
and timely manner.
    Thank you, Mr. Chairman, and I yield back the balance of my time.

Prepared Statement of the Honorable John Conyers, Jr., a Representative 
 in Congress From the State of Michigan, and Ranking Member, Committee 
                            on the Judiciary

    I would like to commend the Copyright Office for its tremendous 
efforts over the past few years to enforce the copyright laws. The 
lines in copyright used to be in black and white, but the advent of 
technology has turned them gray.
    While the Internet provides limitless opportunities for the spread 
of information, it also allows the unlimited copying and distribution 
of copyrighted works without the payment of royalties. And thanks to 
services like Napster and KaZaA, the public has become addicted to 
obtaining music and other content for free off the Internet and may not 
easily give up that privilege. Despite this pressure to let content 
roam free, the Copyright Office has done a remarkable job in the past 
few years of studying this issue.
    The Office also is playing an instrumental role in helping Congress 
ensure that the copyright laws apply equally to private citizens and 
the States. Sovereign immunity can no longer be used as an excuse for 
infringement.
    The Office was instrumental in passage of legislation reforming the 
Copyright Arbitration Royalty Panels. We learned in hearings and in 
meetings that the CARP's were too costly and inefficient. The Office 
helped us draft and move a bill to revamp them into government-funded 
Copyright Royalty Judges that should make the system smoother for 
copyright owners and users.
    On a final note, thanks in part to this Subcommittee and the 
explosion of technology, the Copyright Office's workload has increased 
dramatically. I hope we can all work with congressional appropriators 
to give the Office the additional resources it needs to continue 
serving its customers in a timely and professional manner.

                                 
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