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



                        FAMILY MOVIE ACT OF 2004

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

                                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

                                   ON

                               H.R. 4586

                               __________

                             JUNE 17, 2004

                               __________

                             Serial No. 94

                               __________

         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 17, 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 L. Berman, a Representative in Congress From 
  the State of California, and Ranking Member, Subcommittee on 
  Courts, the Internet, and Intellectual Property................     2
The Honorable Ric Keller, a Representative in Congress From the 
  State of Florida...............................................     4
The Honorable Zoe Lofgren Keller, a Representative in Congress 
  From the State of California...................................     5

                               WITNESSES

The Honorable Marybeth Peters, Register of Copyrights, Copyright 
  Office of the United States, The Library of Congress
  Oral Testimony.................................................     6
  Prepared Statement.............................................     8
Mr. Amitai Etzioni, Founder and Director, The Institute for 
  Communitarian Policy Studies, George Washington University
  Oral Testimony.................................................    14
  Prepared Statement.............................................    16
Mr. Jack Valenti, President and Chief Executive Officer, Motion 
  Picture Association of America (MPAA)
  Oral Testimony.................................................    67
  Prepared Statement.............................................    68
Ms. Penny Young Nance, President, Kids First Coalition
  Oral Testimony.................................................    70
  Prepared Statement.............................................    72

                                APPENDIX
               Material Submitted for the Hearing Record

Letter from the Honorable Marybeth Peters, Register of 
  Copyrights, Copyright Office of the United States, The Library 
  of Congress, clarifying answers to questions asked at the 
  hearing and in a letter dated June 25, 2004, from Rep. Lamar 
  Smith..........................................................    89
Response of The Honorable Marybeth Peters, Register of 
  Copyrights, Copyright Office of the United States, The Library 
  of Congress, to post-hearing questions from Rep. Howard Berman.    91
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..........................................    92
Prepared Statement of the Honorable John Conyers, Jr., a 
  Representative in Congress From the State of Michigan, and 
  Ranking Member, Committee on the Judiciary.....................    93

 
                        FAMILY MOVIE ACT OF 2004

                              ----------                              


                        THURSDAY, JUNE 17, 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 10:07 a.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.
    I will recognize myself for an opening statement, and the 
recognize other Members who wish to give opening statements as 
well.
    Let me say to you all the I don't know quite how to explain 
why only one room in the Rayburn Building has had their air 
conditioning system broken, but apparently we do not have air 
conditioning in this room, and of course, anybody who wants to, 
can feel free to take off their jacket if it makes them more 
comfortable. Like I say, to me, I thought it was a unified air 
conditioning system, and why one room is lacking, I do not 
know.
    Let me recognize myself for an opening statement.
    Today we will hear testimony on legislation that is of 
vital importance to families across America. It helps ensure 
that mothers and fathers can provide a wholesome home 
environment for their children. A generation ago there was not 
nearly the amount of sex, violence and profanity on television 
and in movies that there is today. But I still remember how my 
own parents dealt with it. They had a small box with a switch 
on it, that they manually clicked to mute the television's 
audio if they felt it was inappropriate, or they would get up 
and turn the television off for a moment or two.
    These days I don't think anyone would even consider buying 
a DVD player that doesn't come with a remote control that can 
be used for the same purpose. Yet, there are some who would 
deny parents the right to protect their children from sex, 
violence and offensive language on television.
    Raising children may be the toughest job in the world. 
Parents need all the help they can get, and they should be able 
to determine what their children see on the screen. Yes, we 
parents might mute dialogue that others deem crucial, or we 
might fast forward over scenes that others consider essential, 
but that's irrelevant. Parents should be able to mute of skip 
over anything they want if they feel it's in the interest of 
their children. And as a practical matter, parents cannot 
monitor their children's viewing habits all the time. They need 
an assist.
    Companies developing electronic tools to help parents are 
spending money paying lawyers rather than providing services to 
families.
    It is time for this Committee to act and let parents decide 
what their children watch. Remote control technology is not 
some form of evil. If you look at a DVD or a VCR before and 
after technology has been used to mute or fast forward over 
offensive material, there would be absolutely no difference in 
the product. It has been spliced, diced, mutilated or altered. 
The director's work is still intact. No unauthorized copies 
have been distributed. No copyright has been violated.
    I want to emphasize that the legislation allows the use of 
technology only for private home viewing. There is no sale of 
DVD or VCR tapes. No commercialization is involved. Surely a 
parent can decide in the privacy of their own home what their 
child can watch on television.
    I am pleased to see that the Register of Copyrights agrees 
that what some companies are doing today is legal under 
existing law. While she may feel that this makes additional 
legislation unnecessary, I believe that the financial burden of 
the ongoing litigation that has been imposed on companies like 
ClearPlay, that are operating legally, does make legislation 
necessary. Moreover, there is no certainty that all courts will 
agree, so the only way to protect the right of parents is in 
fact to pass legislation.
    Let me also point that this issue has been simmering for 18 
months since the first lawsuits were filed. I had hoped that 
the parties would reach a negotiated solution, but none has 
been forthcoming yet.
    Yesterday I introduced H.R. 4586 to resolve this issue by 
ensuring that parents who skip over mute--skip over or mute 
content do not face liability under existing copyright or 
trademark law. Apparently legislation is necessary to end the 
unnecessary litigation. The Chairman of the Judiciary Committee 
and I are prepared to move this legislation on a stand-alone 
basis, whereby attaching it to another legislative vehicle to 
protect the right of parents to shield their children from 
violence, sex and profanity.
    That concludes my opening statement, and the gentleman from 
California, Mr. Berman, the Ranking Member is recognized for 
his.
    Mr. Berman. Thank you, Mr. Chairman. Before I give my 
opening statement, I just want to point out the irony of 
proposing legislation that the Register of Copyrights says will 
legalize that which is already legal in order to save one 
company some litigation expense, and the parallel of that. 
Perhaps we can just do away with the judicial system, leave the 
court clerks so that the lawsuits can be filed, and Congress 
decides how we think the litigation should come out, and then 
propose and pass legislation to produce that outcome.
    I'm opposed to the legislation before us today. Maybe this 
hearing will convert me, but I doubt it. I have too many 
concerns about the nature and implications of this bill. Clever 
redrafting might address some of those concerns, but nothing 
can address my concerns about its basic premise.
    While I believe that parents should be able to protect 
their children from exposure to media they find offensive, I 
don't believe the legislation before us today will advance this 
goal. In some ways it may have the opposite effect. This 
legislation sends the wrong message to parents, namely that 
technology can fulfill parental responsibilities. In our modern 
world parents cannot control what their kids see and hear every 
minute of the day. Parents must, as Professor Heins testified 
on May 20th at our earlier hearing on this subject, parents 
must equip their children for exposure to offensive media, not 
just turn on the TV or movie filter and leave the room. 
Technology should not become an excuse for avoiding the hard 
work of parenting.
    To be clear, I don't oppose the ClearPlay technology 
itself. Rather, I'm opposed to legislation that benefits one 
particular business over its competitors and abrogates the 
rights of copyright owners and trademark holders in the 
process. The marketplace is the proper forum for resolving this 
business dispute, not Congress. Congress should focus on 
encouraging the relevant copyright owners and trademark holders 
to work out a licensing deal for ClearPlay technology, not roil 
the waters with legislation that verges on a bill of attainder.
    Unfortunately, the legislative activity on this issue 
appears to have already hampered the industry negotiations. I 
understand that following the May 20th hearing, ClearPlay 
presented new demands that represented a significant departure 
from its previous position in the negotiations. In other words, 
the positions of the parties, which had been fairly close 
before the May 20th hearing, are getting farther apart as the 
prospects for legislation improve.
    Since neither ClearPlay nor any of its competitors have 
been found liable for copyright or trademark infringement, this 
legislation addresses a hypothetical problem. While a Federal 
District Court has before it a case raising these issues--a 
case I might add initiated by one of the technology companies, 
not by one of the copyright holders--it has not yet issued even 
a preliminary ruling. Furthermore, the Register of Copyright 
will apparently testify that ClearPlay is likely to succeed. In 
other words, there is no problem for Congress to correct. While 
legislation addressing hypothetical problems, like the law 
protecting fast food restaurants against obesity liability, is 
all the rage these days. It is not a trend with which I agree.
    Most importantly, Congress should not give companies the 
right to alter, distort and mutilate creative works, or sell 
otherwise infringing products that do functionally the same 
thing. Such legislation is an affront to the artistic freedom 
of creators and violates fundamental copyright and trademark 
principles. Where the underlying issue, the distinction of 
proponents of this bill, is this technology doesn't alter or 
mutilate the fixed product, it just filters out the material 
that the manufacturer of the technology wants to filter out, 
that that's a distinction which--that should fundamentally make 
a difference, doesn't make real sense to me.
    The sanitization of movies allowed by this legislation may 
result in the cutting of critically important scenes. The 
legislation legalizes the decision of a ClearPlay competitor to 
edit the nude scenes from Schindler's List, scenes critical to 
conveying the debasement and dehumanization suffered by 
concentration camp prisoners. A close reading of the bill 
reveals that it will also legalize editing that makes movies 
more offensive, more violent and more sexual.
    Just as the legislation allows nudity to be edited out, it 
allows everything but nudity to be edited out. For instance, 
the legislation allows some enterprising pornographer to offer 
a filter that edits the movie Caligula down to its few highly 
pornographic scenes and endlessly loops these scenes in slow 
motion. The legislation would also appear to legalize filters 
that make imperceptible the clothes of all actors in a movie. 
Do the bill sponsors really want to legalize all-nude versions 
of Oklahoma and Superman? The types of edits legalized by this 
bill are limited only by editorial imagination. Anti-tobacco 
groups could offer a filter that strips all movies of scenes 
depicting tobacco use. Racists might strip Jungle Fever of 
scenes showing interracial romance, perhaps leaving only those 
scenes depicting interracial conflict. Holocaust revisionists 
could strip World War II documentaries of concentration camp 
footage. Fahrenheit 9/11 could be filtered free of scenes 
linking the houses of Bush and Fahd.
    Since the bill also applies to television programming, a 
number of troubling consequences may result. Digital video 
recorder services like TiVo, which enable their subscribers to 
digitally record TV shows for time-shifting purposes, might 
offer filters geared to those programs. This is not farfetched. 
At least one DVR service has already tried to filter out all 
commercials. In the future they might offer filters that 
cleanse news stories of offensive content, for instance, by 
editing out comments critical of a beloved politician. In fact, 
under the bill, the DVR service could unilaterally engage these 
filters without the permission of the TV viewer, and thus might 
choose to filter out stories helpful to a corporate competitor 
or critical of a corporate parent.
    I know these outcomes are opposite to the intent of the 
bill's sponsors, but they are the unavoidable outcomes 
nonetheless, and these are just a few of the problems that are 
apparent after just a couple of days of looking at this issue.
    I hope the Subcommittee will not rush to legislate in this 
area and will allow the marketplace to address the legitimate 
concerns of parents.
    I yield back, Mr. Chairman.
    Mr. Smith. Thank you, Mr. Berman. I actually like several 
of your ideas, particularly the one about editing criticism of 
popular politicians, but we can save that for another time.
    Are there any other opening statements by Members? The 
gentleman from Florida is recognized for an opening statement.
    Mr. Keller. Thank you, Mr. Chairman. First and foremost, I 
want to thank all the witnesses for taking time out of your 
busy schedules to be here.
    Just as Berman started to make sense, he trashed my 
Personal Responsibility in Food Consumption Act that banned 
lawsuits against fast food restaurants, which I may add passed 
the Congress by a two-thirds vote, and supported by 9 out of 10 
of the American public. If ClearPlay technology had existed and 
had silenced Berman's remarks on that issue, he almost could 
have had my vote, I suspected.
    But this is an interesting issue that puts me directly in 
the cross-hairs of two competing interests from the area that I 
represent, Orlando, Florida, which is a very family-oriented 
youthful community that prides itself on the number one family 
vacation destination of the world, but is also home to 
companies such as Disney and Universal, which do have 
substantial movie-making interests, and so I feel a little bit 
like a fur sales at an animal rights convention on this issue. 
[Laughter.]
    And in light of the fact that this issue puts me squarely 
in the cross-hairs of two very friendly groups to me, I 
appreciate the Chairman holding multiple hearings on this 
issue. I was just thinking this morning I don't have enough 
stress in my life, so it's good to keep dealing with this over 
and over.
    I stand here today--and I had to get that full disclosure 
out of the way in the interest of straight talk--though as 
someone who is very open-minded on this issue, and appreciates 
very much the witnesses coming here. I certainly, on the one 
hand, understand directors and movie companies not wanting to 
have scenes which they believe are critical to them, edited 
out, that they may think change the focus of the movie. I also 
very much appreciate the technology used by companies like 
ClearPlay that takes movies and makes them all family friendly. 
I think it is am amazing technology. I think that the Nobel 
prize should go to people who give our community amazing 
technology that changes our lives like the George Foreman Grill 
and stadium seating in movie theaters and----[Laughter.]
    --technology that makes things family friendly.
    So I really appreciate both sides of this issue and look 
forward to getting better educated on them, and thank the 
witnesses again for coming here today.
    Mr. Chairman, I will yield back.
    Mr. Smith. Thank you, Mr. Keller.
    Are there other Members who wish to make opening 
statements? The gentlewoman from California, Ms. Lofgren.
    Ms. Lofgren. Mr. Chairman, I won't make an extensive 
statement. I am looking forward to hearing as much of the 
testimony as I can, and I also wanted to mention how pleased I 
am to see Mr. Valenti, since he has announced his retirement, 
and I think it is enormously gracious of him to come by even 
though he is going on to brighter fields to share his views on 
this, certainly along with the other witnesses, but thank you 
very much, Jack.
    Mr. Valenti. Thank you, Ms. Lofgren.
    Mr. Smith. We will proceed, and I will introduce our first 
witness today who is the Honorable Marybeth Peters, the 
Register of Copyrights for the United States. 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.
    Our next witness is Dr. Amitai Etzioni, who was named the 
first University Professor at the George Washington University, 
where he is the Director of the Institute of Communitarian 
Policy Studies. From 1987 to 1989 he served as the Thomas Henry 
Carroll Ford Foundation Professor at the Harvard Business 
School. Dr. Etzioni is the author of 24 books.
    The next witness is Jack Valenti, who has served as the 
President and Chief Executive Officer of the Motion Picture 
Association of America for the past 38 years. Born in Houston, 
Texas, Mr. Valenti was the youngest high school graduate in the 
city, and became a highly decorated serviceman while serving in 
the Army Air Corps in World War II. He has a BA from the 
University of Houston and an MBA from Harvard.
    Our last witness is Penny Nance, who is President of the 
Kids First Coalition, a nonprofit organization that works to 
educate Congress, State and local officials, and the media on a 
variety of issues relating to children. Kids First Coalition 
works to promote and encourage traditional families, as well as 
to help those in crisis pregnancies.
    Welcome to you all. As you know, we have your written 
statements. We ask that you limit your testimony to 5 minutes, 
and without objection the complete testimonies of all witnesses 
will be made a part of the record.
    Ms. Peters, before we begin with you, I'd like to take a 
minute to recognize Jack Valenti.
    Jack, this may or may not be your last time to testify 
before a congressional Committee. I hope it's not your last, 
but if it is, I just want to thank you for your service to our 
country, for your service to your profession, whom you have 
served so well, as I mentioned a while ago, for 38 years. You 
have brought to the task intelligence, wit, integrity, 
credibility and even charm. Those are examples for all of us to 
follow, and we hope that even though you may go on to other 
endeavors, that certainly your example will continue with us to 
emulate.
    I'm tempted to quote--I think it was Bob Hope who said 
``Thanks for the memories.'' And we certainly, if you do retire 
in the near future, we'll remember all of those good memories 
and we will remember them for a long time to come. So we 
appreciate your being here.
    Ms. Peters, we'll begin with you.

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

    Ms. Peters. Mr. Chairman, Representative Berman, Members of 
the Subcommittee, I am pleased to appear before you to discuss 
H.R. 4586, the ``Family Home Movie Act of 2004.''
    Litigation addressing whether the manufacture and 
distribution of software that automatically mutes certain 
sounds and skips past certain images in a motion picture when a 
consumer plays a DVD of the motion picture in the privacy of 
his own home is pending in Federal Court in Colorado. Although 
I'm reluctant to express a view on that pending litigation, 
it's necessary for me to do that in order to address the issues 
related to the merits of the bill.
    The Family Movie Act would provide that it is not a 
copyright infringement for the lawful possessor of an 
authorized copy of a motion picture to make imperceptible 
limited portions of audio or video content of the motion 
picture in the private home viewing of an individual. It would 
further provide that the use of technology to make such audio 
or video content imperceptible is not an infringement.
    As I understand the technology, it involves software that 
instructs a DVD to mute limited portions of the audio content 
or to fast forward past limited portions of the audio-visual 
content of a motion picture in order to avoid exposing the 
viewer to language or images that the viewer might find 
offensive. To qualify for the exception no fixed copies of the 
altered version of the motion picture may be made.
    I understand there's a scrivener's error that will be 
protected--that will be corrected, rather, in the version that 
was introduced yesterday. The requirement that no fixed copy of 
the altered version may be made is supposed to apply to both 
the act of making the content imperceptible and the use of 
technology. The way it's worded in the bill that was introduced 
yesterday, it would apply only to the use of technology and not 
to the conduct.
    The conduct that takes place in the context of individuals 
and families making private performances of movies in their 
homes. The legislation basically says that this applies only to 
private home viewing, and it would have defined, as the version 
I saw was, ``private home viewing'' as: viewing in a household 
by means of consumer equipment or services that are operated by 
an individual in that household and that serve only that 
household. My written testimony describes the bill as 
permitting private home viewing and as containing that 
definition.
    The bill, as actually introduced, doesn't use that term, 
but the concept of private home viewing remains in the bill, 
which now uses that definition to describe the context in which 
the conduct is permitted.
    I believe that both the conduct and the technology should 
be lawful, but I also believe that such conduct is already 
lawful.
    For that reason and for others, I oppose enactment of this 
legislation. Should this conduct be permitted? For me it's a 
close call. We can all agree that someone watching a movie on a 
DVD has the right to press the mute button and to fast forward 
to avoid hearing or seeing parts of the movie. On balance I 
believe that a technology that basically automates that process 
for the consumer serves a beneficial purpose.
    I do, however, have a number of reservations which I 
elaborate on in my written testimony. I will mention only one 
this morning. Permitting a product that results in altered 
performances of a motion picture certainly raises questions 
about whether the moral rights of the directors have been 
violated. Because this alteration consists of only bypassing 
limited portions of the motion picture in context with a 
private performance, where that altered performance is desired 
by the person watching the movie, I think there is no violation 
of moral rights.
    But that is not to say that the creator of the motion 
picture does not have a legitimate artistic reason to complain, 
and I'm very sympathetic to those complaints.
    In any event, it seems clear to me that under existing law 
this conduct and these products are lawful. I believe that in 
order to violate the right to prepare derivative works, that 
the derivative work must be fixed, that is, an actual copy of 
the derivative work must exist. According to my understanding 
of the technology, there is no fixation of a derivative work, 
and if that's true, there can be no infringement.
    I admit that my reading of the statute is at odds with what 
the 1965 Report of the Register basically recommended, and with 
the legislative history. However, I can't get to where they 
wanted to be with the language of the statute. I believe that 
fixation is required.
    I do, however, with regard to new technology, see that 
looking at the derivative work right and what it should be and 
what its scope should be in light of new technology is 
something that we probably should in fact be doing, and I 
basically hope that we have an opportunity to do that.
    Because I see that my time has run out, let me just quickly 
say that with regard to why I oppose it, I don't see a need for 
it. I think the law is already clear. Second, I see little risk 
that the law will find that this conduct is unlawful, and I'm 
not in favor of enacting legislation to fix a nonexistent 
problem. I'd rather take this opportunity to look at what new 
technology may cause with regard to real life problems.
    I'd like to end by saying that I have a concern that 
basically with where we are, the pendency of this legislation 
will make the settlement in the Colorado litigation less 
likely, and enactment certainly will remove all incentive for 
the companies to work together to work out a negotiated 
settlement.
    If you enact this legislation, please include a sunset 
provision that will expire in two or 3 years. That will provide 
continuing incentives for motion picture companies and 
companies that produce these products to negotiate and come up 
with arrangements that provide both family friendly versions of 
movies to the public and give directors and motion picture 
studios more control over how their works are presented to the 
public. If the negotiations don't work, then you can always 
renew the Act.
    [The prepared statement of Ms. Peters follows:]

                 Prepared Statement of Marybeth Peters

    Mr. Chairman, Representative Berman and Members of the 
Subcommittee, thank you for inviting me to appear before the 
Subcommittee to discuss H.R. 4586, ``The Family Movie Act.''
    The Family Movie Act would make it lawful for a person who is 
watching a motion picture on a DVD in the privacy of his or her own 
home to use software that filters out certain types of content that the 
person would prefer not to see or hear. As you pointed out at a hearing 
last month, Mr. Chairman, such software can be used by parents to 
assist them in preventing their children from seeing or hearing 
objectionable content by muting the sound or fast forwarding past 
objectionable material. What material is to be filtered out is 
determined by the provider of the software, but such software can 
include options that give the user the ability to select categories of 
material that the user prefers not to see or hear.
    I do not believe that such legislation should be enacted--and 
certainly not at this time. As you know, litigation addressing whether 
the manufacture and distribution of such software violates the 
copyright law and the Lanham Act is currently pending in the United 
States District Court for the District of Colorado. A summary judgment 
motion is pending. The court has not yet ruled on the merits. Nor has a 
preliminary injunction been issued--or even sought. At the moment, 
providers of such software are free to sell it and consumers are free 
to use it. If the court ultimately rules that the making or 
distribution of the software is unlawful--a ruling that I believe is 
unlikely--the time may then be opportune to consider legislation. But 
meanwhile, there is every reason to believe that the proposed Family 
Movie Act is a solution to a problem that does not exist.
    It is difficult to address the merits of this legislation without 
addressing the merits of the litigation in Colorado--something that I 
would prefer not to do, in part because the litigation remains at a 
very early stage. The Copyright Office generally expresses its views on 
individual copyright cases only in those cases that involve important 
questions of copyright law and policy and in which an erroneous ruling 
would create precedent harmful to the appropriate balance between the 
rights of copyright owners and the needs of users of copyrighted works. 
For example, I have spoken out on issues relating to copyright 
infringement on peer-to-peer networks while litigation involving those 
issues has been pending because I believe that mass infringement on 
such networks poses an unprecedented threat to creators and copyright 
owners. In contrast, I do not believe that the litigation relating to 
the subject matter of this legislation implicates such issues, and I 
have no desire to be drawn into the Colorado litigation.
    Nevertheless, I cannot avoid offering some views on the current 
state of the law, because my recommendation against the enactment of 
the Family Movie Act is based in part on my conclusion that the conduct 
that it is intended to permit is already lawful under existing law.

                         POLICY CONSIDERATIONS

    Let me start with a proposition that I believe everybody can agree 
on. I do not believe anybody would seriously argue that an individual 
who is watching a movie in his or her living room should be forbidden 
to press the mute button on a remote control in order to block out 
language that he or she believes is offensive. Nor should someone be 
forbidden to fast-forward past a scene that he or she does not wish to 
see. And certainly parents have the right to press the mute and fast-
forward buttons to avoid exposing their children to material that they 
believe is inappropriate.
    Does that mean that parents should be able to purchase a product 
that makes those decisions for them--that automatically mutes certain 
sounds and skips past certain images that the provider of that product 
believes parents would not want their children to hear or see? What if 
the parent is able to determine what categories of material (e.g., 
profanity, nudity, violence) should be blocked, and is willing to trust 
the provider of the filtering product to make the ultimate judgments 
about what material in a particular movie falls into the selected 
categories?
    It is very tempting to say that consumers should be able to 
purchase such products, and that providers of such products should be 
permitted to develop and market them. But I have to say that I am 
hesitant to endorse that proposition.
    First of all, I cannot accept the proposition that not to permit 
parents to use such products means that they are somehow forced to 
expose their children (or themselves) to unwanted depictions of 
violence, sex and profanity. There is an obvious choice--one which any 
parent can and should make: don't let your children watch a movie 
unless you approve of the content of the entire movie. Parents who have 
not prescreened a movie and made their own judgments can take guidance 
from the ratings that appear on almost all commercially released DVDs. 
Not only do those ratings label movies by particular classes denoting 
the age groups for which a particular movie is appropriate (e.g., G, 
PG, PG-13, R), but those ratings now also give parents additional 
advice about the content of a particular motion picture (e.g., ``PG-13 
. . . Sexual Content, Thematic Material & Language'' (from ``The 
Stepford Wives'') or ``PG-13 . . . Non-stop Creature Action Violence 
and Frightening Images, and for Sensuality'' (from ``Van Helsing'')). 
It is appropriate that parents and other consumers should be given 
sufficient information to make a judgment whether a particular motion 
picture is suitable for their children or themselves to view. And there 
are many third-party services that supplement the information provided 
by the movie studios. For example, the ``Weekend'' section of the 
Washington Post contains a ``Family Filmgoer'' column that briefly 
summarizes current motion pictures and offers more detailed commentary 
on the suitability of each movie for children of various age groups. 
For example, last week's column made the following observations as part 
of its commentary on the current motion picture, Saved!:

        [H]igh schoolers may find it both humorous and intriguing. A 
        little too adult for middle-schoolers, the movie contains a 
        strongly implied sexual situation and rather romanticizes the 
        idea of being an 18-year-old unwed mother. Other elements 
        include profanity, sexual slang, homophobic talk, drunkenness, 
        smoking and a jokey reference to bombing abortion clinics.

    It seems that if a parent doesn't want a child to see offensive 
portions of a particular movie that's available on DVD, or if a person 
doesn't want to watch such portions himself, there is a simple choice: 
don't buy or rent the movie. In fact, those of us who are truly 
offended by some of the content found in many movies might ask 
ourselves whether we are doing ourselves or society any favors by 
buying or renting those movies. I have always had great faith in the 
marketplace, and I believe that if enough people simply refuse to spend 
their money on movies that contain offensive material, the incentives 
for motion picture studios to produce them will diminish.
    I also have to wonder how effective such filtering products are. A 
review of one such product in the New York Times observed:

        The funny thing is, you have to wonder if ClearPlay's opponents 
        have ever even tried it. If they did, they would discover 
        ClearPlay is not objectionable just because it butchers the 
        moviemakers' vision. The much bigger problem is that it does 
        not fulfill its mission: to make otherwise offensive movies 
        appropriate for the whole family.

        For starters, its editors are wildly inconsistent. They duly 
        mute every ''Oh my God,'' ''You bastard,'' and ''We're gonna 
        have a helluva time'' (meaning sex). But they leave intact 
        various examples of crude teen slang and a term for the male 
        anatomy.

        In ''Pirates of the Caribbean,'' ''God-forsaken island'' is 
        bleeped, but ''heathen gods'' slips through. (So much for the 
        promise to remove references to ''God or a deity.'')

        Similarly, in ''Terminator 3,'' the software skips over the 
        Terminator--a cyborg, mind you--bloodlessly opening his abdomen 
        to make a repair. Yet you're still shown a hook carving bloody 
        gouges into the palms of a ''Matrix Reloaded'' character.\1\
---------------------------------------------------------------------------
    \1\ David Pogue, ``STATE OF THE ART; Add `Cut' and `Bleep' To a 
DVD's Options,'' New York Times, May 27, 2004, page G1.

    Again, perhaps it's just better to avoid getting the offending 
movie in the first place.
    Moreover, I have serious reservations about enacting legislation 
that permits persons other than the creators or authorized distributors 
of a motion picture to make a profit by selling adaptations of somebody 
else's motion picture. It's one thing to say that an individual, in the 
privacy of his or her home, should be able to filter out undesired 
scenes or dialog from his or her private home viewing of a movie. It's 
another matter to say that a for-profit company should be able to 
commercially market a product that alters a director's artistic vision.
    That brings me to an objection that is more firmly rooted in 
fundamental principles of copyright, which recognize that authors have 
moral rights. To be sure, the state of the law with respect to moral 
rights is relatively undeveloped in the United States, and a recent 
ill-considered decision by our Supreme Court has weakened the 
protection for moral rights that our laws offer.\2\ Moreover, I am not 
suggesting that enactment of the proposed legislation would violate our 
obligations under the Berne Convention to protect moral rights.\3\ In 
fact, I do not believe that the Berne Convention's provision on moral 
rights forbids permitting the making and marketing of products that 
permit individual consumers to block certain undesired audio or video 
content from their private home viewing of motion pictures. But beyond 
our treaty obligations, the principles underlying moral rights are 
important. The right of integrity--the author's right to prevent, in 
the words of Article 6bis of the Berne Convention--the ``distortion, 
mutilation, or any other modification of, or other derogatory action in 
relation to [his or her] work, which would be prejudicial to his honor 
or reputation''--is a reflection of an important principle. As one 
leading commentator has put it:
---------------------------------------------------------------------------
    \2\ Dastar Corp. v. Twentieth Century Fox Film Corp., 539 U.S. __, 
123 S.Ct. 2041 (2003). While the Dastar decision is not the subject of 
this hearing, I believe that the subcommittee should examine whether 
section 43(a) of the Lanham Act should be amended to reflect what was 
the longstanding understanding prior to Dastar--that section 43(a) is 
an important means for protecting the moral rights of attribution and 
integrity. Although I will comment no further on Dastar at this 
hearing, and although I will not comment on the portion of the proposed 
legislation that would provide an exemption from liability under the 
Lanham Act, it is worth noting that in the wake of Dastar (and, for 
that matter, even under pre-Dastar law), there may be little reason to 
be concerned that the conduct proposed to be covered by the proposed 
Family Movie Act would violate the Lanham Act in any event.
    \3\ Berne Convention for the Protection of Literary and Artistic 
Works, Art. 6bis.

        Any author, whether he writes, paints, or composes, embodies 
        some part of himself--his thoughts, ideas, sentiments and 
        feelings--in his work, and this gives rise to an interest as 
        deserving of protection as any of the other personal interests 
        protected by the institutions of positive law, such as 
        reputation, bodily integrity, and confidences. The interest in 
        question here relates to the way in which the author presents 
        his work to the world, and the way in which his identification 
        with the work is maintained.\4\
---------------------------------------------------------------------------
    \4\ Sam Ricketson, The Berne Convention: 1886-1986 456 (1987).

    I can well understand how motion picture directors may be offended 
when a product with which they have no connection and over which they 
have no control creates an altered presentation of their artistic 
creations by removing some of the directors' creative expression. This 
is more than a matter of personal preference or offense; it finds its 
roots in the principle underlying moral rights: that a creative work is 
the offspring of its author, who has every right to object to what he 
or she perceives as a mutilation of his or her work.
    Although I acknowledge that there is some tension between 
principles of moral rights and the products we are discussing today, I 
believe that this narrowly-defined activity does not violate moral 
rights, for several reasons: (1) it takes place in the context of a 
private performance of a motion picture in which the alteration of the 
original motion picture is not fixed in a tangible medium of 
expression; (2) it consists only of omissions of limited portions of 
the sounds and/or images in the motion picture, rather than the 
addition of material or alteration of material in the motion picture; 
and (3) it is desired and implemented by the individual who is viewing 
the private performance, who is perfectly aware that there are 
omissions of material and that the director and studio did not consent 
to those omissions. But that is not to say that the creator of the 
motion picture does not have a legitimate artistic reason to complain--
and I am very sympathetic to such complaints.
    Nevertheless, despite my misgivings, I believe that on balance 
parents and other consumers should be able to purchase products that 
allow them to mute and skip past audio and visual content of motion 
pictures that they believe is objectionable. While the artistic 
integrity as well as the continuity of the motion picture may suffer, 
the person viewing the edited performance is fully aware that he or she 
is viewing a performance of less than the entire motion picture because 
that was his or her preference. Because only a private performance is 
involved, the only changes consist of deletions, and no copies of an 
edited version of the motion picture are made or further communicated, 
I do not believe the director or copyright owner should have the power 
to stop the marketing and use of software that renders such a 
performance.
    One reason why I am reasonably comfortable with this conclusion is 
that, although the producer and marketer of the software is presumably 
making a profit from its sale, it is difficult to imagine any economic 
harm to the copyright owner. The software is designed to be used in 
conjunction with an authentic DVD of the motion picture. In fact, 
arguably some people who would not have purchased or rented a 
particular movie if they did not have the ability to skip past portions 
that they believe are objectionable will purchase or rent it if they 
can obtain the software for that particular movie.

                        ANALYSIS OF CURRENT LAW

    Despite my conclusion that on balance, the conduct that is 
addressed by the Family Movie Act should not be prohibited, I do not 
believe that legislation needed because it seems reasonably clear that 
such conduct is not prohibited under existing law. The exclusive rights 
of the copyright owner that might arguably be implicated are the 
reproduction, distribution, public performance and derivative work 
rights, but on examination, it seems clear that there is no 
infringement of any of those rights.\5\
---------------------------------------------------------------------------
    \5\ This brief legal analysis is based on my admittedly sketchy 
understanding of how the products that are the subject of the proposed 
legislation work. If, for example, these products actually caused 
copies to be made of any or all of a motion picture, my analysis might 
well be different.
---------------------------------------------------------------------------
    There is no infringement of the reproduction right because no 
unauthorized copies of the motion pictures are made. Rather, an 
authorized copy of the motion picture, distributed on a DVD, is played 
in the same manner as it would be played on any conventional DVD 
player, but with some of the audio and video content of the motion 
picture in effect deleted from that private performance because it is 
muted or bypassed. The distribution right is not infringed because no 
copies of the motion picture are distributed, apart from the 
authorized, unedited DVD that the consumer has purchased or rented. The 
public performance right is not infringed because the motion picture is 
played in the privacy of the viewer's home, a quintessential private 
performance.\6\
---------------------------------------------------------------------------
    \6\ Of course, it is possible to use the filtering products to 
alter a performance of the motion picture in a public setting, 
resulting in an infringing public performance. But as I understand it, 
that is not the typical use, nor are the products that are the subject 
of this legislation marketed for such use. Moreover, if there were a 
public performance, it would be an act of infringement not because the 
performance was altered, but simply because the motion picture was 
performed in public without the authorization of the copyright owner.
---------------------------------------------------------------------------
    Not surprisingly, the motion picture studios have not asserted 
claims of infringement of the reproduction, distribution and public 
performance rights. Rather, they have alleged infringement of the right 
to prepare derivative works. The analysis of that claim is a little 
more complex, but ultimately the result is the same: I believe that the 
arguments that such products infringe the derivative work right are 
weak.
    The fundamental flaw in the claim of infringement of the derivative 
work right is that the only possible manifestation of a derivative work 
is in the private performance itself. It is true that the home viewer 
who uses one of these products to remove some of the movie's audio and/
or visual content is seeing an altered version of the film. Such a 
version might appear to be an adaptation, or, in copyright parlance, a 
``derivative work.'' But that is not my reading of the law. Section 
106(2) of the Copyright Act gives the copyright owner the exclusive 
right to ``prepare derivative works based upon the copyrighted work.'' 
The question is, can you have a derivative work when no copy (or 
``fixation'') of the derivative work exists? Is an altered private 
performance of a motion picture a derivative work when it leaves the 
copy of the motion picture intact and does not create a copy of the 
altered version?
    A review of the legislative history of the 1976 Copyright Act might 
lead one to the conclusion that the derivative work right can be 
infringed simply by causing an altered performance of a work. The 
reports of both the House and Senate Judiciary Committees on the 1976 
Act state:

        Preparation of derivative works.--The exclusive right to 
        prepare derivative works, specified separately in clause (2) of 
        section 106, overlaps the exclusive right of reproduction to 
        some extent. It is broader than that right, however, in the 
        sense that reproduction requires fixation in copies or 
        phonorecords, whereas the preparation of a derivative work, 
        such as a ballet, pantomime, or improvised performance, may be 
        an infringement even though nothing is ever fixed in tangible 
        form.

H.R. Rep. No. 94-1476, at 64 (1976); S. Rep. No. 94-473, at 58 (1976). 
I believe that when the House and Senate Reports spoke of derivative 
works, such as ballets, pantomimes, and improvisations, that are not 
fixed in tangible form, they were referring to public performances of 
works in altered form. There are strong policy reasons for recognizing 
a derivative work right when a work is performed publicly in an altered 
form, even if the alteration never exists apart from the performance. 
Certain types of works, such as the works mentioned in the legislative 
history, are exploited primarily by means of public performance rather 
than by sale of copies, and to require fixation of the derivative work 
in order to have infringement of the derivative work right could defeat 
the very purpose of recognizing a derivative work right.
    However, while it may have been the intent of Congress not to make 
infringement of the derivative work right turn on whether the 
derivative work has been fixed, I do not find that intent expressed in 
the language of the statute. The exclusive right is a right to 
``prepare derivative works based upon the copyrighted work.'' The 
question then becomes, what is a derivative work? Must a derivative 
work be fixed in a tangible medium of expression? Certainly in order to 
qualify for copyright protection, a derivative work--like any work--
must be fixed in a tangible medium of expression. 17 U.S.C. 
Sec. 102(a). But is there a fixation requirement for infringement of 
the derivative work right?
    Although one might expect the extensive list of definitions in 
Sec. 101 of the Copyright Act to include a definition of as fundamental 
a term as ``work,'' no such definition is exists. However, Sec. 101 
does tell us when a work is ``created:''

        A work is ``created'' when it is fixed in a copy or phonorecord 
        for the first time where; where a work is prepared over a 
        period of time, the portion of it that has been fixed at any 
        particular time constitutes the work as of that time, and where 
        the work has been prepared in different versions, each version 
        constitutes a separate work.

    If a work is created when it is fixed in a copy or phonorecord for 
the first time, it is difficult to imagine that the work exists prior 
to that time. Thus, the Copyright Act seems to have the functional 
equivalent of a partial definition of a work; while it may not tell us 
everything that we need to know in order to recognize a ``work,'' it 
does tell us that a work must be fixed in a copy or phonorecord. And if 
it is a work in progress, then at any point in time, the ``work'' 
consists of that which has already been fixed.
    Because a plain reading of the statute leads to the conclusion that 
in order to have an infringement of the derivative work right, the 
derivative work must be fixed, I find it difficult to conclude that 
there is an infringement of the derivative work right when software 
instructs a DVD player to mute certain sounds or skip past certain 
images in a motion picture being played on the DVD. The putative 
derivative work is never fixed. Moreover, if, as I understand to be the 
case, the software itself consists of instructions to mute the 
soundtrack at a point a certain number of minutes and seconds into the 
performance of the movie, or to skip past the part of the movie that 
begins at a point a certain number of minutes and seconds into the 
performance of the movie and ends certain number of seconds later, I 
find it difficult to characterize that software as a derivative work, 
since none of the underlying work is actually incorporated into the 
software.
    There are other products in the marketplace that serve a similar 
function, but which are infringing and should not be permitted. For 
example, I understand that some products on the market consist of 
videotapes of motion pictures that have had allegedly offensive scenes 
physically removed from the videotape. In such cases, there is--and 
ought to be--a violation of the derivative work right: permanent copies 
of edited versions of the copyrighted motion pictures are made and 
distributed. They can also be redistributed, competing in the 
marketplace with legitimate copies and perhaps ending up in the hands 
of recipients who aren't even aware that they are edited versions. But 
it is not the intent of the proposed Family Movie Act to make those 
products lawful.

                    IS THERE A NEED FOR LEGISLATION?

    Because I believe that under existing law, the conduct that is 
addressed by this legislation is already lawful, and because I believe 
it is likely that the district court in Colorado will come to the same 
conclusion, I do not believe there is any reason to enact legislation 
that would make lawful that which already is lawful.
    I could understand the possible need for legislation if there were 
substantial doubt as to the outcome of the litigation, or if there was 
a pressing need to settle the issue once and for all by Congressional 
action due to an urgent need to permit conduct which people could not 
engage in unless the legislation were enacted. But no injunction has 
been entered. The defendants are still producing their products. 
Indeed, I understand that recently a major consumer electronics 
equipment manufacturer has begun to distribute a DVD player that has 
such software preloaded--compelling evidence that the pending 
litigation has not had a chilling effect. And, given my ambivalence 
about the desirability of permitting the conduct at issue here, I 
cannot endorse the notion that there is a pressing need to resolve the 
issue here and now.
    In fact, the issues raised at this hearing persuade me that we need 
to reexamine the derivative work right in order to determine whether 
the approach taken in 1976 still works in the 21st Century, when 
technological changes may well be making fixation an obsolete concept 
for purposes of determining when the derivative work right has been 
violated. While the technology that we have been discussing today is 
fairly benign, it is not difficult to imagine technologies that, 
without creating a fixation of a new derivative work, result in 
performances that do not simply edit out limited portions of the work 
that many viewers would find offensive, but either add new material or 
result in a rendition of the copyrighted work that so changes the 
character or message of that work that it constitutes an assault on the 
integrity of the work. The marketing and use of such technologies 
should not be tolerated, and I strongly believe that any legislation 
that affirmatively permits the use and marketing of the technologies we 
are discussing today should also expressly prohibit the use and 
marketing of technologies that result in performances of those more 
harmful alterations of a work.
    Rather than enact narrow legislation that would create a safe 
harbor for the technologies that simply mute and skip content, a safe 
harbor that--as I have already explained--we do not urgently need, I 
believe we should take a little more time and give a little more 
thought to the extent to which the derivative work right should require 
fixation as a prerequisite for infringement. As I have already noted, 
Congress's original, but apparently unrealized, intent was that there 
need not be a fixation of the work in order to infringe the derivative 
work right. We should take a fresh look at that judgment and ask under 
what circumstances, if any, fixation should be a requirement. For 
example, I believe that fixation should not be required in order to 
infringe the derivative work right in cases where there is a derivative 
public performance--e.g., of a play, or a ballet, the types of 
performances that were addressed in that part of the legislative 
history that stated that there ``may be an infringement even though 
nothing is ever fixed in tangible form.'' Whether fixation should be a 
requirement in order to infringe the derivative work right where there 
is a only private performance may require a more nuanced approach, 
looking at the nature of the alteration from the original work. The 
result of such a study might be an amendment could be in the form of a 
new definition of ``to prepare derivative works based upon the 
copyrighted work'' to be added to section 101.
    Assuming that you do decide to enact legislation now, I will now 
turn to the specific legislative text that has been proposed.

                          THE FAMILY MOVIE ACT

    The Family Movie Act would amend section 110 of the Copyright Act 
to provide that it is not an infringement of copyright for the owner or 
lawful possessor of an authorized copy of a motion picture to make 
limited portions of audio or video content of the motion picture 
imperceptible in the course of private home viewing of the motion 
picture. It further provides that the use of technology to make such 
audio or video content imperceptible is not an infringement. In order 
to qualify for the exemption, no fixed copy of the altered (i.e., 
edited) version of the motion picture may be made.
    ``Private home viewing'' would be defined as viewing for private 
use in a household, by means of consumer equipment or services that are 
operated by an individual in that household and that serves only that 
household. This definition is adapted from the definition of ``private 
home viewing'' found in section 119 of the copyright law, the statutory 
license for secondary transmissions of television broadcast signals by 
satellite carriers.
    The legislation would codify what I believe is existing law: A 
consumer would be permitted to use technology, such as the software 
that we have been discussing, that automatically mutes parts of the 
soundtrack of a motion picture or fast-forwards past a part of the 
audiovisual content of the motion picture when the consumer is playing 
a lawfully acquired copy of the motion picture in the privacy of his or 
her own home. Not only would the consumer's use of that technology be 
noninfringing, but the manufacture and sale of that technology would 
also be noninfringing, to the extent that it enables the muting or 
fast-forwarding.
    The legislation would also provide that it is not a violation of 
the Lanham Act to engage in such conduct, but that to qualify for this 
immunity the manufacturer of the technology must provide a clear and 
conspicuous notice that the performance of the motion picture is 
altered from the performance intended by the director or copyright 
holder.
    Mr. Chairman, as I have already stated, I do not believe that this 
legislation is necessary or desirable at this time. But if the 
subcommittee disagrees, then I believe that the language that you have 
drafted is a reasonable means of accomplishing your goals.

    Mr. Smith. Thank you, Ms. Peters.
    Dr. Etzioni.

    STATEMENT OF AMITAI ETZIONI, FOUNDER AND DIRECTOR, THE 
 INSTITUTE FOR COMMUNITARIAN POLICY STUDIES, GEORGE WASHINGTON 
                           UNIVERSITY

    Mr. Etzioni. Mr. Chairman, Members of the Committee, I 
greatly appreciate the opportunity to testify, and I strongly 
favor this bill. My main problem is, Mr. Chairman, that most of 
what I was going to say you already said, so let me try not to 
repeat too much of your well taken points.
    I studied this matter for more than 40 years, not the new 
technology, but the need the protect our children from violent 
and vile material, first at Columbia University, then the year 
I served in the Carter White House, and most recently we 
prepared a special issue of the Chicago Kent Law Review to 
examine the first amendment issues, which allegedly are 
involved here, including the Heins argument that even minors at 
age 1 or 2 have full court first amendment rights, and nobody 
can protect them from any vile or violent material. Otherwise, 
their first amendment rights are, we are told, being abridged.
    The data is unmistakable, violence--and one of the merits 
of this bill, it covers not just pornography but also violence. 
Violence causes enormous harm to children. Our culture is awash 
in video games, movies, music which encourages violence, and by 
any sort of scientific measure, it's made children more 
predisposed to violent acts themselves, to drug abuse, to 
misbehaving in school. I don't want to take all the time to 
make--to list 1100 studies which show the harm done to 
children, especially by violence.
    The argument that we cannot distinguish creative violence, 
which is essential to the story, from gratuitous violence, is 
completely unsustainable. Courts and other people have found 
very clear criteria to distinguish violence which adds nothing 
to the story, is just added to the movie so it will sell better 
in countries that don't speak English or for other gratuitous 
reason.
    The only word I would like to add the your opening 
statement is parents don't only have a right, they have a duty 
to shape the educational environment of their children. That's 
what parenting is all about. So the notion--especially about 
young children, age up to 12--that parents would--that they 
should leave them exposed to whatever the media puts in there, 
and that they're not allowed any help against it, I find 
undermining parents' ability to shape the educational 
environment of their children.
    I ch0ose--I have five sons. I cho0se the books they read, 
when they're young, when they once reach 12 or later, they make 
their own choices. I cho0se the school to send them to. I go to 
my board meetings of the school to participate in shaping what 
the school teaches them. And in the end, these are just minor 
forces countering the flood, which will not stop. So if we do 
not allow this technology to work, all we're going to do, we're 
going to leave all the other sources of media, video games and 
such, which reach our children, in place. And we're not allowed 
one of the few tools which allow parents to somewhat, help them 
somewhat in defending their children.
    The same fallacious arguments have been raised against 
other technologies. We were told when the V-chip was 
introduced, that it's going to be the end of the world. When 
ratings were introduced to the movies we were told that that's 
going to be end of creative skills. The evidence simply shows 
that no harm was done to the creative industry, but you 
slightly help parents to protect their children.
    I see no, nothing wrong if TiVo or anybody else would, as a 
next step, make it easier to acquire edited versions, exactly 
as defined, for use in the private home, and maybe one day the 
industry will get around to issue us age-appropriate products, 
to allow us to buy videotapes and DVDs which are marked, 
``These have been cleaned up for children 12 and younger,'' 
``Those are suitable for adolescents,'' and ``Those are 
suitable for everybody else.''
    Let me say in summary, I'm strongly in favor of the bill as 
drafted.
    Let me add as a footnote, if I may, as a Jew, I very much 
regret you drawing the Holocaust into this, Mr. Berman.
    [The prepared statement of Mr. Etzioni follows:]

                  Prepared Statement of Amitai Etzioni



    Mr. Smith. Thank you, Dr. Etzioni.
    Mr. Valenti?

   STATEMENT OF JACK VALENTI, PRESIDENT AND CHIEF EXECUTIVE 
         OFFICER, MOTION PICTURE ASSOCIATION OF AMERICA

    Mr. Valenti. Thank you, Mr. Chairman. First I really want 
to thank you. I was deeply moved by what you said, and I'm 
grateful to you and Congresswoman Lofgren as well. These are 
trying times for me right now.
    But this Committee has been the great protector of 
intellectual property, which I need not point out to this 
Committee, is America's greatest trade export, producing great 
surplus balances of payment while we're bleeding from trade 
deficits.
    I want to thank you, Mr. Chairman, the Ranking Member, Mr. 
Berman, for 4077, H.R. 4077, which is I think one of the best 
measures that's come out of this Committee, and I hope it 
becomes law. Thank you for that.
    And finally, Mr. Chairman, before I begin my pathetically 
ineloquent comments, I come before you with great reluctance. 
You've been a great champion and a great friend, and I find 
myself quite hesitant in trying to take issue with you on 
anything, so I hope you'll allow me to do this, because I 
really believe in what I'm about to say, but I do regret very 
much that we're on different sides on this. Please forgive me.
    What I want to say here is simple and straightforward, and 
it's this, that it rests on two very impressive premises. And 
one of them is that the right to make derivative works, whether 
fixed or nonfixed, from a copyrighted work, is under law, under 
copyright law, a fundamental right that is exclusively the 
right of the copyright owner. And to change it, to diminish it, 
to shrink it, I think is not in the long-range interest of this 
country. And the second is, my second premise is, it is the 
marketplace, not the Congress, that ought to deal with these 
commercial disputes, and that's what they are. And before I 
finish here, I will tell you I think we're on our way to having 
it done in the proper way.
    Now, what this law tells us, I think with great clarity is, 
as I've said, that only the copyright owner has the right to 
determine who changes, produces a derivative work from his 
copyrighted work. Now, this movie filtering bill, I think would 
so seriously erode that, that allows somebody making money off 
of skipping scenes or dialogue, which disfigures the original 
vision of the creator who spent a year or two working on this 
movie, and it cost $100 million to make, and somebody somewhere 
in a back room--we don't know who they are--really makes these 
kind of cuts. And Ms. Peters, in her comments, points out that 
even that is awkwardly done, and it doesn't even get the job 
done. So there's some kind of a misfigurement going on. It's 
not what the creator had in mind.
    I fought for 38 years to both defend the first amendment 
and to make sure that artistic integrity could be preserved in 
this country. I think it is valuable, and I think in any way to 
dishonor it, is not good for this country.
    Now, let me go on to what I think is important. I don't 
have any objection, nor do I think the creative people have, in 
people's homes to do what they choose to do with the 
technology, fast forwarding and all the stuff that they do, 
nothing wrong with that. But somebody, for profit, to come in 
and make these judgments, and then to display it and deploy it 
to the known western world is not right, it is just not right.
    One objection is this, our objection is, I think for the 
Congress to give political and legal cover to companies who do 
this, by offering a disfigured version of a movie without 
regard to the creative vision of the director and approval of 
the studio just doesn't make any sense.
    That brings me to my second issue, my second premise. I 
would hope that this Committee would allow the parties to 
negotiate. Now, you know this has been going on for some time, 
Mr. Chairman, and you rightly said it's a long time. But I am 
not part of these negotiations because antitrust law prevents 
the MPAA from getting involved. So I can only tell you what I 
have been told and do in part believe. And that is that these 
negotiations are complex, multi-faceted, multi-tiered, and that 
these are negotiations that take both sides to agree. Now, what 
has happened is, that I've been told that the prospect of 
having victory handed to them, without having to go through 
these negotiations, is causing on the other side a diminishing 
incentive to negotiate.
    I don't blame ClearPlay. Frankly, if I was in their shoes, 
I'd be doing exactly what they're doing, talk, talk, talk, but 
don't make a deal. Let Congress do it for you. You get 
everything free. Why negotiate? And I think that's pretty smart 
tactics on their part.
    And therefore, Mr. Chairman, I think you should know that 
the studios, I am told, also are negotiating with another 
company providing the same services, called Trilogy. And 
Trilogy has sent a letter to this Committee saying, ``We 
believe the marketplace ought to decide this, as it has to 
do.'' This is a business agreement that Congress has no 
expertise in.
    Now, I want to finish by saying--before that red light is 
going on, and dismays me considerably, I might add----
[Laughter.]
    But I want to finish as I began, Mr. Chairman. I endorse 
your objectives, and that is to have more family friendly 
movies in choices for America, and we're doing that. All you 
have to do is go down and look at the top grossing pictures 
every week, and you will see increasingly at the top of the 
list the G and the PG rated films. Now, the reason why they're 
there is because they're a complete narrative. Other pictures 
are not a complete narrative, because if ClearPlay has its way, 
you will see something in there that will not only dismay you, 
it will puzzle you, because the conversation, the dialogue, the 
scenes that have been taken out, which rips apart the journey 
of the dramatic narrative. So I think with great passion, Mr. 
Chairman, I believe if you could go back and say, ``Negotiate 
now, it's going to be business negotiations, not a 
congressional law to do this,'' it will get done.
    Thank you.
    [The prepared statement of Mr. Valenti follows:]

                   Prepared Statement of Jack Valenti

    Chairman Smith, Mr. Berman, distinguished Members of the 
Subcommittee:
    This Committee stands in the vanguard of the protectors of 
copyright and intellectual property in this country. You, Chairman 
Smith and you, Ranking Member Berman, both introduced H.R. 4077, which 
can be justly hailed as a valuable and important measure that protects 
copyrighted works. All those who work and create in the intellectual 
property community--America's greatest trade export--have deep 
gratitude for your championing of copyright. Which is why it is with 
deeply profound reluctance that I must testify in opposition to the 
movie filtering bill called the ``Family Movie Act.''
    My brief here is simple and straightforward. It rests on two 
impressive premises. The first is that the right to make ``derivative 
works'' from a copyrighted work is, under copyright law, a fundamental 
property right belonging exclusively to the copyright owner, and should 
be preserved else copyright begins to decay. The second is that the 
marketplace, not Congress, is the best place to resolve the type of 
commercial dispute that gives rise to this legislation.
    The law tells us, with great clarity, that the owner of a 
copyrighted work--and only that owner--has the authority to decide if 
someone else may produce a product derived from that copyrighted work. 
The title deed of this valuable principle has solid congressional 
roots. It is enshrined in Section 106 of the Copyright Act. It means 
that no one may usurp your right to prepare and sell, for example, an 
abridged version of your book, song, or movie because they think that 
some members of the public might pay for a version that eliminates 
certain parts of that creation.
    The movie filtering bill would seriously erode that core right by 
legalizing businesses that sell technology, for a profit, which can 
``skip and mute'' scenes or dialogue to create an abridged version of a 
movie, as long as no ``fixed copy'' of the altered version is created. 
Of course, we understand that the purpose of the bill is to come to the 
aid of commercial services that, without permission of the owners of 
the copyright, use this technology to create so-called ``family 
friendly'' versions of movies. These versions delete scenes or mute 
dialogue that the service's employees deem too violent, too coarse, too 
suggestive, or otherwise may be objectionable to some members of the 
American public.
    But the legislation is in no way cabined to permit only such 
services to flourish, and, consistent with the First Amendment, 
probably could not. Anyone could use this statute to go into business 
to sell abridged versions of movies for any purpose: to skip every part 
of the movie except the violent scenes; to remove any reference to, 
say, interracial dating; or simply to offer a one-hour version of a 
classic movie like ``Saving Private Ryan,'' eliminating all the parts 
somebody thought were nonessential. And while this legislation is 
confined to movies, is there any principled difference between 
businesses that make their money offering edited versions of someone 
else's movies and those that would offer edited music or books 
distributed in digital form?
    The inroads into copyright law allowed by this bill could have 
other unhappy consequences. Failure to adequately protect the exclusive 
right of copyright owners to authorize the making of derivative works 
and the rights of authors would violate U.S. obligations under the 
Berne Copyright Convention. Moreover, a breach of the obligation 
relating to derivative works would be actionable under the WTO TRIPS 
provisions.
    The future of our creative industry, and its spectacular 
nourishment of the U.S. economy, depends on the ability of U.S. trade 
negotiators to persuade other nations to respect our copyrights by 
strictly complying with their international obligations under the Berne 
Convention and the WIPO Copyright Treaty. I ask you to consider this 
indisputable truth: if the Congress enacts a law that is inconsistent 
with our international obligations, our ability to insist that our 
trading partners comply with their obligations to us is severely 
undermined.
    It is obviously in our companies' interests to produce movies that 
appeal to a large number of people of all ages, call them `family 
friendly' or however you describe them. And we do not, of course, 
object to people in their homes for our own personal tastes fast 
forwarding through scenes they might not want to watch, or might not 
want their children to watch. Our objection is simply to Congress 
providing legal cover to companies that want to make a profit by 
offering an edited, abridged version of a movie without regard for the 
wishes of the director who created the movie or the studio that owns 
the copyright to the movie.
    That brings me to my second point: I ask you to allow the parties 
and the market to sort this out without any legislation. Is that not a 
sensible, reasonable suggestion?
    As you know, Mr. Chairman, there is pending litigation in the court 
that will decide the dispute between the parties. This litigation 
includes the commercial concerns that sell a variety of kinds of 
``movie filters,'' the movie studios that own the copyrights, and the 
directors who created the movies being abridged. More importantly, 
there are also ongoing productive negotiations between individual 
studios and the editing services to try to resolve this dispute through 
licensing agreements acceptable to all sides. The essence of this 
solution would involve the studios, in consultation with the directors, 
creating ``airplane-like'' versions of popular movies. The commercial 
editing services would use these versions as templates from which to 
prepare their alternative versions.
    These negotiations are complex, multi-issued, and multi-sided. 
These are not negotiations that the antitrust laws permit to be carried 
out by the MPAA, operating as an association. Instead, each studio must 
discuss the terms and conditions of any licensing agreements 
individually with each of the film filtering firms. I am, therefore, 
not privy to the exact details of the negotiations between the 
individual studios and the filtering companies. I do understand that 
substantial progress has been made, and there is hope for a light at 
the end of the tunnel.
    However, I am also hearing that the prospect of having victory 
handed to them by legislation may have dampened the enthusiasm of one 
side to come to fair terms. It is self-evident that if a party believes 
that it will obtain everything that it wants for free, there is less 
incentive to bargain in good faith.
    I hold out great hope that agreements can be hammered out that 
would result in acceptable commercial and artistic choices for 
everyone. Any settlement agreed to among the parties is far more likely 
to accommodate all the interests concerned than any legislative 
solution imposed upon them. This is a decision that needs to be 
developed in the marketplace between commercial firms, and is 
unsuitable to being judged and decided by legislation.
    I know that this has taken time. But give us the chance we need to 
attempt to work this out. We all know that the threat of potential 
legislation will continue to hang in the air. We just ask that a clear 
message be sent to all sides: ``Work this out as business groups do 
every day, by negotiation, not by legislative threat.''
    Mr. Chairman, I have no quarrel with your objective: to increase 
choices for families who want to watch our movies. We want the same. 
But, with much passion, we believe that goal has to be achieved through 
business agreements that make sense in the marketplace. Pushing this 
legislation through now will not, I fear, be seen in the fullness of 
time as a boost for America's parents, but as a unnecessary blow to the 
first principles of copyright.
    Thank you, Mr. Chairman, and your colleagues on the Committee.

    Mr. Smith. Thank you, Mr. Valenti.
    Ms. Nance.

          STATEMENT OF PENNY YOUNG NANCE, PRESIDENT, 
                      KIDS FIRST COALITION

    Ms. Nance. Thank you, Mr. Chairman and Members of the 
Committee, and it it's not fair that I have to go after the 
charming and eloquent Mr. Valenti, but I'll try my best.
    My name is Penny Young Nance, and I'm the President of the 
Kids First Coalition. We're a nonprofit educational and 
advocacy group that I founded with the goal of protecting 
children and advancing pro-family legislation. I sit before you 
not only as a pro-family advocate, but also as a very concerned 
mother of two young children.
    Today I'm here to represent members of my organization, 
mostly moms who downgraded professional careers to stay home 
full time, or like I do, part time with their children, as well 
as countless parents across the country that seek to protect 
their children from graphic sexual images and violence which 
unmistakably damage our children.
    The Kaiser Family Foundation reports that 95 percent of 
children, ages 0 to 6, live in a home where there's a VCR or a 
DVD player. They say that on average these kids watch just the 
VCR or DVD player--this is not totaling in television time--40 
minutes a day. And of course, we all know that not everything 
viewed by these children is age appropriate. Recent studies by 
the American Psychological Association and the American Academy 
of Child and Adolescent Psychiatry, both say that the major 
effects of seeing violence on TV or movies are children may 
become less sensitive to the pain and suffering of others, 
children may be more fearful of the world around them, or even 
worse, children may become more likely to behave in aggressive 
or hurtful ways toward others.
    On the issue of a child's exposure to viewing graphic sex, 
Donna Rice Hughes' group, Enough is Enough, has found that kids 
exposed to the viewing of graphic sex scenes begin to view sex 
without responsibility as acceptable and even desirable. And no 
big surprise, in the long range with this kind of view 
inculcated in their little hearts, often leads to damaging 
behavior and STDs and early teen pregnancies. It's a problem. 
Even without the science, which overwhelmingly concurs, 
parental instinct and basic common sense tell us to shield our 
kids from graphic sex and violence on TVs and movies.
    I'm not an expert on copyright issues, and nor does my 
organization take any kind of a position, except to say that 
stealing is wrong, and parents need to teach their children to 
respect other people's property. On the other hand, I don't 
believe that the entertainment industry should try to keep 
helpful technology, such as ClearPlay, from parents.
    As a parent I welcome all technology that gives parents 
options to protect their kids, and I even challenge the 
entertainment industry to work with technology leaders, 
families and parents groups, to develop even more market-based 
approaches.
    Ultimately I think this will help the industry by opening 
up new markets, and I'll give you an example of how from my own 
experience. As I mentioned earlier, I'm the mother of two young 
children, and my son loves Spiderman. I was shopping recently 
in Target, with about, you know, 200 other women just like me, 
walking through the aisle, and I came across a kiosk with the 
Spiderman DVD. In fact I have it here today. Now, at that time 
I did not purchase it. I paused in front of the kiosk. I toyed 
with buying it. I wanted to get it for him because he loves it 
so much. He's so interested in super heroes, and I wanted to 
buy it. But ultimately I walked away. I didn't purchase it 
because it's too violent for him, it's too dark. He could not 
see it.
    Fast forward a week or two. I went out and purchased a DVD 
player with the ClearPlay technology. I also purchased at the 
same time the Spiderman DVD, and I brought it home, I hooked it 
up, with some help from my husband, actually. [Laughter.]
    I was able to choose to filter, out of 14 different 
categories, that I could choose from and decide what was 
appropriate for my children and what was not.
    I have included in my testimony all of the categories, but 
the main areas were violence, language, sex and nudity, and 
even drug use. Using all of the filters I screened the DVD, and 
now I feel comfortable with allowing my children to view at 
least part of it. I mean it's a dark movie, so a little bit 
goes a long way, but now they can see it, and I bought it 
because now I am confident.
    Without ClearPlay I would not have purchased the DVD. What 
a great tool to help me to protect my kids. And I hear this, 
you know, from moms as I do call-in, you know, talk radio 
shows, callers call in. Just from my own experience as a soccer 
mom, one of the top concerns of American women is how do we 
protect our children from being inundated with scenes of 
graphic violence and sex and language. How do we protect our 
kids?
    So we are thrilled to have any kind of new technology that 
helps us. We can't put them in a bubble. They live in the world 
that we live in. There's lot of images every day that they're 
inundated with.
    Now, not all movies are appropriate for kids, and again, 
parents still have to use discretion, but it's just great to 
have one more tool. New technology is so valuable to us as a 
country, but with it comes challenges and responsibilities. I 
always tell parents that they must be the first line of defense 
and remain vigilant against all threats. ClearPlay or any other 
technology is simply a tool and not a substitute for parental 
oversight. If there's a question, I still watch the movie first 
to make sure the material is age appropriate even with the 
filtering system. Even as adults it's important to be cognizant 
of what we feed our minds. There are certainly DVDs I'll feel 
more comfortable buying now or renting for my husband and I 
with the use of ClearPlay.
    There's a biblical proverb that says: As a man thinks in 
his heart, so is he. And the secular version is: garbage in, 
garbage out. So it's good for all of us.
    In closing, the Kids First Coalition is grateful for new 
technologies like ClearPlay that support parents and protect 
kids.
    Thank you for allowing me to testify before you today with 
just such a great group of people here.
    [The prepared statement of Ms. Nance follows:]
                Prepared Statement of Penny Young Nance
    Hello, my name is Penny Nance and I am the President of Kids First 
Coalition, which is a non-profit educational and advocacy group I 
founded with the goal of protecting children and advancing pro-family 
legislation. I sit before you not only as a pro-family advocate but 
also a very concerned mother of two young children.
    Today, I am here to represent the members of my organization, 
(mostly moms who have downgraded professional careers to raise kids) as 
well as the countless parents in this country who seek to protect their 
children from graphic sexual images and violence which unmistakably 
damage children.
    The Kaiser Family Foundation contends that about 95% of American 
children ages 0-6 live in homes with a VCR or DVD player. They say that 
these kids watch a DVD or video about 40 minutes per day. We of course 
all know that not everything viewed by these kids is age appropriate.
    Recent studies by the American Psychological Association and the 
American Academy of Child and Adolescent Psychiatry both say that the 
major effects of seeing violence on TV or movies are:

          Children may become less sensitive to the pain and 
        suffering of others

          Children may be more fearful of the world around them

          Children may be more likely to behave in aggressive 
        or harmful ways toward others

    On the issue of a child's exposure to the viewing of graphic sex, 
Donna Rice Hughes' organization Enough is Enough has found that kids 
exposed to the viewing of graphic sex scenes begin to view sex without 
responsibility as acceptable and desirable. No big surprise, these 
attitudes can often lead to teen pregnancy and sexually transmitted 
diseases.
    Even without the science, which overwhelmingly concurs, parental 
instinct and basic common sense tell us to shield our kids from graphic 
sex and violence on TV and movies.
    I am not an expert on copyright issues nor does my organization 
take a position except to say that stealing is wrong and parents need 
to teach children to respect other people's property. On the other 
hand, I do not believe that the entertainment industry should try to 
keep helpful technology such as ClearPlay from parents. As a parent I 
welcome all technologies that give parents options to protect their 
kids. I even challenge the entertainment industry to work with 
technology leaders, families and parents groups to develop even more 
market based solutions. Ultimately, I think this will help the industry 
by opening up new markets. I will give you an example of how.
    As I mentioned earlier, I am the mother of two young children. My 
son loves Spiderman. A couple of weeks ago I was shopping in Target and 
I paused in front of the Spiderman DVD. I toyed with buying the DVD but 
I decided against it because it is just too violent for him. Last week, 
I bought a new DVD player with ClearPlay and a Spiderman DVD. After 
hooking up the new DVD player I was able to specifically choose to 
filter out fourteen categories of material and then password protect my 
choices. I have included all the categories with my written testimony 
but the main areas were violence, language, sex and nudity and illicit 
drug use.
    Using all the filters, I screened the DVD and now I feel 
comfortable allowing my children to view at least part of the movie. 
Without ClearPlay, I would have not purchased the DVD. What a great 
tool to help me protect my kids. Of course even with this new 
technology, not all movies are appropriate for kids. Again, parents 
still need to use discretion but its great to have one more tool.
    New technology is so valuable to us as a country, but with it comes 
new challenges and responsibilities. I always tell parents that they 
must be the first line of defense and remain vigilant against all 
threats. ClearPlay or any other technology is simply a tool not a 
substitute for parental oversight. If there is a question, I still 
watch the movie first to make sure the material is age appropriate even 
with the filter system. Even as adults it's important to be cognizant 
of what we feed our minds. There are certainly DVD's I will feel more 
comfortable buying or renting for my husband and I with the use of 
ClearPlay. There is a biblical proverb that says, ``as a man thinks in 
his heart so is he.'' The secular version of that saying is garbage in 
garbage out.
    In closing, the Kids First Coalition is grateful for new 
technologies like Clear Play that support parents and protect kids. 
Thank you for allowing me to testify before you today.
                               __________

                       ClearPlay Filter Settings

There are 14 different ClearPlay Filter settings. Each of these 
settings can be turned on or off. This allows for over 16,000 potential 
user configurations.

 1.  Strong Action Violence: Filters excessive or repeated violence, 
including fantasy violence.

          Strong Fantasy/Creature Violence

          Sustained/Repetitive Violent Actions

          Crude Comic Violence

 2.  Gory/Brutal Violence: Filters brutal and graphic violent scenes.

          Fierce, Brutal Violence

          Graphic/Bloody Violence

          Rape/Rape Scene

          Torture

 3.  Disturbing Images: Filters gruesome and other disturbing images.

          Macabre Images, Dead/Decomposing Bodies

          Bloody/Horror Imagery

          Gruesome/Disturbing Imagery

 4.  Sensual Content: Filters highly suggestive and provocative 
situations and dialogue.

          Highly Sensual Dialogue and Situations

          Highly Provocative and Revealing Clothing

          Highly Provocative Innuendo

 5.  Crude Sexual Content: Filters crude sexual language and gestures.

          Overt Crude Sexual Language

          Overt Crude Sexual Actions or Gestures

          Crude Sexual Slang or Idiomatic Expressions

 6.  Nudity: Filters nudity, including partial and risque art nudity.

          Rear Nudity

          Topless/Front Nudity

          Partial Nudity/Veiled Nudity

          Nude Photos/Art

 7.  Explicit Sexual Situation: Filters explicit sexual dialogue, sound 
and activity.

          Sex Scenes

          Sex Related Sounds

          Sexually Explicit Actions/Images/Dialogue

 8.  Vain Reference to Deity: Filters vain or irreverent references to 
God or a deity.

 9.  Crude Language and Humor: Filters crude language and bodily humor.

          Crude Scatological Word/Sound

          Crude Scatological Image

10.  Ethnic and Social Slurs: Filters ethnically or socially offensive 
insults.

          Racial Slurs

          Social Slurs

11.  Cursing: Filters profane uses of hell and damn.

12.  Strong Profanity: Filters swearing and strong profanities.

13.  Graphic Vulgarity: Filters harsh and vulgar words and phrases.

14.  Explicit Drug Use: Filters vivid scenes of illegal drug use.

          Drugs being used in a vivid/graphic manner.

    Mr. Smith. Thank you.
    Ms. Peters, let me direct my first question to you. You 
said in your written testimony, ``I believe that, on balance, 
parents and other consumers should be able to purchase products 
that allow them to mute and skip past audio and visual content 
of motion pictures that they believe is objectionable.'' And 
you said that, ``It seems reasonably clear that such conduct is 
not prohibited under existing law.'' And in your oral testimony 
a few minutes ago, you were less than, say, absolute in your 
feeling that this is legal. You mentioned authorities, in fact, 
on the other side.
    My question for you is, yes, we do have a court case in 
Colorado; we know how you think it is going to rule. But we 
really do not know how other courts across the country might 
rule, and there is such a thing as forum shopping. You have 
Members of Congress, including at least one individual here 
today, who is opposed. So there is opposition. There are other 
individuals, including panelists, who feel that copyright law 
is being infringed.
    Why, then, shouldn't we inject some certainty into the 
equation and pass legislation so that there is not this 
uncertainty and so that you have more confidence in your 
statement as well?
    Ms. Peters. I do have confidence in my statement. 
Obviously, people see things differently, and I have spent the 
better part of the last 2 weeks asking many academics and 
people in the copyright industries how they perceived this 
issue.
    I believe very strongly that the view I expressed is, in 
fact, the correct view, and I think that is the view that the 
court is going to reach. So----
    Mr. Smith. Well, I hope you are right, but you cannot 
guarantee that any court where a suit is brought----
    Ms. Peters. I can never guarantee any court will ever do 
anything that I think is right.
    Mr. Smith. And that is my point. I think that is a good 
reason for the legislation, but thank you.
    Dr. Etzioni and Ms. Nance, both of you all came to the same 
conclusion, though from different perspectives. Dr. Etzioni's 
was more of an analytical approach. Ms. Nance, you are the only 
mother present, and that was a personal approach. But your 
conclusion was that children are harmed. More specifically--Dr. 
Etzioni, let's begin with you--how are children harmed by this 
culture issue of violence?
    Mr. Etzioni. Well, you choose the social science measure, 
if it is more a predisposition to crime, more likely to act out 
aggressively in school, doing less well on academic tests. You 
choose the measurement, and there is a strong correlation, like 
also to science studies. We could spend a week arguing about 
chi squares and such. But at the end of the day, every time--
there have been done what we call mega-reviews that has 
summarized the study of the 1,100 relevant studies--we come to 
the same conclusion. There is a strong correlation between 
exposure and antisocial behavior.
    I would very briefly mention one study because it is 
particularly telling. There were three Canadian villages who 
were behind a mountain at an earlier age before we had cable 
and all that. And, therefore, they could not get a TV signal. 
Then, finally, they were ``blessed'' and they got TV signal. 
There was a significant rise in crime in the months and year 
that followed, but all the other villages stayed at the same 
level. This is just one of the many studies.
    Mr. Chairman, if you will allow me one other comment, as to 
the notion which was just explored that the bill may be in some 
way redundant, let me say it is very important for Congress to 
express its values even if it is redundant, especially given 
that previous bills which dealt not directly with this 
technology but this issue, like CIPA and COPA, did not cover 
violence. Their only concern is pornography, which the evidence 
is there, but not nearly as compelling as violence. So I 
congratulate you on helping us have a technology which will 
also protect our children from violence.
    Mr. Smith. Okay. Thank you, Dr. Etzioni.
    Ms. Nance?
    Ms. Nance. Well, Mr. Chairman, many of you will remember, 
some of you have small children, but children are basically 
sponges. They absorb so much more than we do. They are taught 
by so many different sources than just parents. We as parents 
wish that we were the only place that they took information 
from, but that's not the case. And we know from just, you know, 
our daily interactions with our kids that they're very affected 
by what they view, what they watch.
    I read something that Parents Television Council put out 
not too long ago about some interviews and a study they had 
done with teachers, and they noticed--these parents--or, excuse 
me, these teachers had noticed on the playground that on Monday 
morning, or whatever day it was, that the kids were 
particularly violent--fighting, kicking. You know, it seemed 
like this one day of the week they had more problems than any 
other time.
    They started digging and trying to decide, you know, what 
was the problem, what was happening. They discovered that on 
this particular night before school they were watching WWF 
Smackdown, which is Worldwide Wrestling Federation Smackdown. 
It was the violent images were affecting their behavior 
directly the next day.
    That's not shocking. Moms know that. And my own child, you 
know, we don't even have cable in our house. That's how careful 
I am. My child was watching a show on Saturday morning, and I 
noticed--you know, she's only 7, but she was using very sort of 
teenager slang to me and being slightly disrespectful. And I 
suddenly put two and two together. She was imitating what she 
was hearing these older kids say.
    What they watch affects them deeply.
    Mr. Smith. Thank you, Ms. Nance.
    Without objection, I'm going to recognize myself for an 
additional 30 seconds, and that's to ask Mr. Valenti a 
question. Mr. Valenti, your testimony expressed some concern 
about the commercialization of these movies that might have 
been filtered. I am hoping to reassure you, in our legislation 
we explicitly say that it is for private home viewing, we use 
one phrase, and private use as well. We do not endorse nor 
contemplate the sale or commercialization of movies that have 
been filtered. We're talking about private home, individual 
parent and child-parent relationship. Is that reassuring to you 
that we're keeping it within those confines?
    Mr. Valenti. I wish I could say yes, but the answer is no, 
because ClearPlay is a commercial company. It's selling this, 
and I guess it hopes to increase its sales exponentially over 
the years. So----
    Mr. Smith. But, actually, the sales of movies might 
increase as well if families were reassured by the content not 
being offensive.
    Mr. Valenti. I'm not going to quarrel with that because the 
family must purchase, so it's not a question of loss of 
revenue. But I think of something just as valuable. It's the 
loss of creative integrity; it's the loss of dramatic 
narrative. It's somebody, as I said earlier, that works a year, 
2, 3 years on a project, a movie, and then have it disfigured 
in a way that is contrary and despoiling of the creative vision 
of not only the director and his creative team but the 
copyright owner as well.
    Mr. Smith. Okay. As you said, this is one of the few times 
where we disagree, but I thank you for your comment.
    Mr. Valenti. Thank you.
    Mr. Smith. My time has expired, and the gentleman from 
California is recognized.
    Mr. Berman. Thank you very much, Mr. Chairman.
    First, I want to differentiate--I want to just not take 
exception, but your conclusion about my position, the notion 
that I would have an informed opinion about whether ClearPlay's 
technology violates copyright law gives me a level of credit 
for knowledge that I do not deserve. I have no idea--I mean, 
I'm interested in the different arguments. I think we have a 
court that's going to make that decision. I am interested in 
the Register's opinion of the issue, and I'd like to ask Ms. 
Peters just a couple of questions.
    The bill essentially says copyright law isn't violated in 
the making of limited portions of audio or video content of a 
motion picture impresentable--imperceptible by or for the owner 
of an authorized copy of that motion picture. So that would be 
Ms. Nance in her home, the owner of an authorized copy, showing 
it in her home using this filtering technology to make the 
scenes that she wants to help keep her child from seeing 
imperceptible.
    If the maker of the film in selling the DVD or the 
videocassette or the digital transmission makes as a matter of 
contract law a limitation that says you are not authorized to 
filter out frames that you don't like, under this bill as 
written now would the owner of this copy be allowed to use this 
filtering technology?
    Ms. Peters. My understanding, at least at present, is that 
where there are exceptions in copyright law, they do not trump 
contractual provisions.
    Mr. Berman. That's right.
    Ms. Peters. And, therefore, the issue is whether or not 
it's a contract of adhesion that would not be basically upheld. 
So--but my guess is that the answer would be that the contract, 
if it wasn't a contract of adhesion, would have to be honored.
    There's a separate issue with regard to enforcement, 
because the truth of the matter is that would only apply to the 
purchaser of the DVD, not to ClearPlay.
    Mr. Berman. So the irony is that if it is not a contract of 
adhesion, if it's clear and done in a way to make sure that it 
avoids that particular problem, your view of existing law would 
give the parent freer reign under the present system than this 
bill, if enacted as it's presently written, would provide for 
the case where a contract would trump.
    Ms. Peters. Maybe yes.\1\
---------------------------------------------------------------------------
    \1\ See letter dated July 6, 2004, in the Appendix, p. 89, from the 
Honorable Marybeth Peters, for clarification of answer to question 
posed by Subcommittee Member.
---------------------------------------------------------------------------
    Mr. Berman. All right. Dr. Etzioni talks about--and, I 
mean, I think this is a very important issue, this question 
of--I don't know the answer to it. I hear his study of the 
three Canadian villages. I also am told that no place in the 
world is the level of violence in videos greater than in Japan, 
a country with a substantially lower rate of violent crimes 
than the United States. I mean--I mean, people agree or 
disagree, and I truly, just like I can't--I wouldn't pretend to 
know just how copyright law should be interpreted. I wouldn't 
pretend to fundamentally know what the answer to this question 
is, but I think it's certainly a legitimate area. But I would 
like to ask Dr. Etzioni how--what he thinks of somebody who 
developed a filtering technology that took any of his many 
articles or 24 books and, without his consent, eliminated a 
variety of different positions in those books, and then through 
that filtering technology allowed people to read something very 
different than he wrote or consented to.
    Mr. Etzioni. On the first point, Congressman Berman, 
without going into Japan and Indonesia and all the other 
variations----
    Mr. Berman. Canada is okay but Japan is not?
    Mr. Etzioni. No, I am happy to go country by country, but I 
want to suggest a shortcut. If you're willing to rest the case 
on any panel of social science--the National Academy of 
Science, the American Association of Psychiatry--you choose the 
panel who reviewed these data, and you're willing to abide not 
by my or somebody else's summary but by the six panels of 
experts, this bill will be welcomed by all of them because 
there have been endless reviews of the literature. And you're 
right, there's a study here that shows that when they're all 
put together, they leave no doubt.
    Mr. Berman. All right. Well, I think there's a case to be 
made, and that's why we have ratings, and Mr. Valenti is 
responsible for that rating system. That's why we generally 
agree that parents should keep their kids from seeing certain 
things, certain movies, reading--certain video games, certain 
books at a particular point in life.
    What about my second question?
    Mr. Etzioni. Right. Anytime you find in any of my books 
anything which would be offensive or hurtful or harmful to 
children, please tear out that page. And I'll provide the 
scissors. There is no question that we're not talking about 
disfiguring anything. That movie is the same. It is not changed 
one iota after children be protected from its scenes.
    There is no parent alive who will think that everything we 
allow adults to view should be also exposed to minor children.
    Mr. Berman. But the bill----
    Mr. Smith. The gentleman is recognized for an additional 
minute.
    Mr. Berman. Thank you. The bill you are embracing, I mean, 
you made a comment--and I congratulate you, Mr. Chairman, for 
not just including--allowing filtering out of pornographic 
scenes but of violent scenes. This bill doesn't talk about 
pornography and violence. It talks about filtering anything 
that the designer of the software wants to provide a filter for 
and then the parent chooses, including some of the scenes that 
you resent that I referenced. That's your right. But the bill 
is totally neutral on the issue of what things ClearPlay can 
design filters for, not pornography and violence but anything. 
You can design it to enhance the level of violence by 
eliminating the non-violent scenes and the non-pornographic 
scenes. You can distort this any way you want as you improve 
this technology.
    Mr. Etzioni. Your distortion is my protection of my 
children. But I'm delighted to hear that it can be used for 
other purposes. If I'm a devout religious person and there's a 
movie which my children are asked to view for school next week, 
and I believe that most of it is of great merit but there is 
some scene that offends my religion, I'd very much like to have 
a technology to protect them from it up to a certain age, say 
up to age 12, we can argue. And so the fact that it allows 
additional filtering is extremely welcome.
    Mr. Smith. Thank you, Mr. Berman.
    The gentleman from California, Mr. Keller, is recognized 
for his questions.
    Mr. Keller. Thank you, Mr. Chairman. From Florida, but I 
appreciate that.
    Mr. Smith. What did I say?
    Mr. Keller. You said California.
    Mr. Smith. I'm sorry. I know better. The gentleman from 
Florida. One of those States on the ocean, right.
    Mr. Keller. A lot of people confuse me for Arnold 
Schwarzenegger with our physiques. It happens all the time. 
[Laughter.]
    Listening to this--and I swear on my life that I'm 
objective here and in the middle--it seems to me that there may 
have been a major strategic error in the directors adding 
ClearPlay to the suit. That's just what it seems like to me, 
and I'll tell you why, and I certainly think there's some merit 
to the suit and I can understand why it was filed. There are 
companies out there who break encryption codes, and they change 
words and they blur nudity and they reproduce edited versions 
of a DVD on another DVD. That seems to me a crystal-clear 
violation of copyright law, and I can understand why that suit 
was brought.
    But adding ClearPlay, which doesn't do any of that--and 
they merely sell the consumer a filter which the consumer 
chooses to buy or not buy, and then goes to Blockbuster and 
puts that in and skips over certain objectionable words or 
scenes, and then sends back to Blockbuster the movie in the 
exact same condition--is all that ClearPlay does here.
    And when I hear that, well, we shouldn't act and just let 
the parties negotiate, I can certainly understand that, you 
know, you have the Register of Copyright Office saying 
ClearPlay is not doing anything wrong and that's all they're 
doing, yet this company has been in a suit for 2 years, had to 
spend over $1 million. Summary judgment has been pending for 6 
months, and we know after that that at the end of it, whoever 
loses is going to go up on appeal, and there's going to be 
millions and millions of more dollars. And that's a lot to ask 
a small company who most folks think are not doing much wrong.
    Again, I'm not trashing the suit. There's a good reason for 
the suit with these other folks. But I'm wondering--let me 
start with Mr. Valenti--if that's essentially the case, is 
there any hurt at all to the financial bottom line of the movie 
companies based on the technology filters that ClearPlay is 
selling?
    Mr. Valenti. I don't know about what financial losses or 
gains are there because this is a new technology. I don't think 
it--it's had only a minuscule entry into the marketplace to 
this hour.
    Mr. Keller. Okay, because from what I hear, there are 
different objections raised by your side, and I say ``your 
side,'' the studios and directors collectively. The financial 
one doesn't seem to have much merit to me at this point. The 
one that seems to carry weight is, hey, I'm Steven Spielberg, 
and I directed this ``Jaws'' movie, and I don't want you taking 
out this scene with Jaws coming onboard, and that's a critical 
part of the movie. That makes some sense to me, and I'm 
sympathetic to that. But the financial side, I haven't seen the 
testimony in two hearings to support that.
    Ms. Peters, did I characterize your testimony about 
accurately there?
    Ms. Peters. Yes, you did.
    Mr. Keller. Okay. And you're the one who said what you 
said, but yet you still feel we should wait because what 
they're not doing is not illegal in your view. Can you 
understand in light of the resources of this little company 
being depleted, which it looks like, at least in some people's 
mind, like they're not doing anything wrong but they may not 
have years and years to go, you know, paying over $1 million a 
pop to defend this litigation.
    Ms. Peters. I understand, I do understand that concern. But 
that's true for all small companies and start-up businesses. So 
the question is: You as policymakers, at what point do you step 
in to put an end to the problem? For me, it's very difficult 
here because the court has not even ruled on--at this moment, I 
understand that there may be a cloud and there may be the 
appeal hanging. But there is no injunction out there stopping 
them from doing this.
    I think the law--that it will come out that it will deny 
summary judgment because they have not embodied any of the 
audiovisual content of the motion picture. It's software that 
operates to bring about a certain result. But it doesn't 
violate the derivative work right as it exists today. And as I 
said, my big fear about legislation is unintended consequences. 
I have no problem with this particular scenario. I do have 
problems with a lot of the scenarios that Mr. Berman suggested. 
And I do very strongly believe in the integrity of the final 
product that is the result of the creators being totally 
distorted. And I'm worried as a--working in a library, about 
what is history. So I have real reluctance to go jumping in 
with legislation now.
    Now, maybe you can craft a bill that is narrow enough. I do 
think that technology is going to cause huge issues for the 
future, and I think one of them is going to be on whether or 
not you need fixation in order to have a violation of the 
derivative work right. And I would like the Copyright Office to 
look into that.
    Mr. Keller. Okay. Thank you.
    Mr. Chairman, I yield back.
    Mr. Smith. Thank you, Mr. Keller.
    The gentlewoman from California, Ms. Waters, is recognized 
for questions.
    Ms. Waters. Thank you very much, Mr. Chairman.
    I'd like to thank our panelists for being here today, and I 
would like to just reiterate probably what has been said over 
and over again, that we're all very much concerned about our 
children and what they have access to and the impact that 
movies have on our children. And no matter what our approaches 
are, we all share that same very basic concern.
    Mr. Chairman and Members, I'm very concerned at this point 
about whether or not the hearings that we're holding are timely 
or whether or not this hearing or the possibility of 
legislation like this bill can be used as a club to influence 
settlement negotiations between the movie studios and ClearPlay 
in the Federal court litigation pending.
    Mr. Valenti, you referred to this, you alluded to this, I 
think, in your statement. Could you expand on this a bit and 
help me to understand whether or not what we're doing at this 
particular time makes good sense in light of what is going on 
right now with the litigation?
    Mr. Valenti. Congresswoman Waters, the negotiations have 
been going on for some time. It's very difficult to negotiate 
when one side believes, as I said in my testimony, that 
legislation is going to favor them and if they just hold on and 
not make any final negotiations, they will get everything they 
want because of legislation.
    Keep in mind also the Directors Guild has made two 
proposals, I have been told, to ClearPlay. At this point, 
ClearPlay has not made any proposals. As a matter of fact, I 
have been told--and, again, I can't certify this--that they 
have stiffened their position.
    I believe that the Directors Guild have said that they 
would have license--they would agree to licensing agreements by 
the copyright owners if they took the airline version of a 
film, which has been edited by the director or with his 
consultation so that he approves of what has been done to that 
movie so it doesn't destroy the dramatic narrative. That's what 
this is about. This can be done.
    Our companies, the seven member companies, are not against 
the proposition of licensing to ClearPlay. It's doing it on a 
basis that both sides will agree to. I believe if ClearPlay 
understood that this legislation was going to wait for another 
year, or whatever, I think there would be an end to this 
negotiation, and an end that both sides would accept. I truly 
believe that.
    Ms. Waters. Thank you, Mr. Valenti, for expanding on that 
discussion that you initiated in your testimony. And I'd like 
to direct my remarks now to my colleagues and to our Chairman.
    I have come to understand, despite the fact that I'm viewed 
as a liberal or a progressive, that Government can't solve 
everything and there are times when Government should just hold 
and allow those who are involved in negotiations, certainly in 
litigation, to see what they can get done. I would hope that I 
am not--no one is attempting to use me or this Committee or 
this Congress to threaten or intimidate or to be leveraged in 
an effort to have their way. And I would hope that we would be 
wise enough to allow the negotiations to continue and to say to 
both parties, you better go solve it, that it is not in the 
best interest of any of us for the Congress to jump in and try 
to determine the outcome.
    There are a lot of issues at stake here, certainly issues 
about freedom of speech, issues about how we basically decide 
what is the proper direction in protecting our children, and 
whether or not in this atmosphere and environment that we're in 
now, where all kind of rights are being threatened, whether or 
not we take advantage of this atmosphere at election time and 
all of that to look as if we are better than others because we 
care more about the children than others. I think it's time for 
us all to cool out and let the negotiations go forward.
    Thank you, Mr. Chairman.
    Mr. Smith. Thank you, Ms. Waters.
    The gentleman from Virginia, Mr. Forbes, is recognized for 
questions.
    Mr. Forbes. Thank you, Mr. Chairman, and let me just echo 
my appreciation to all the members of the panel and the Members 
of this Committee for both their questions and comments, and 
then to tell you a ``but,'' and the ``but'' is I think most of 
it is irrelevant, and let me just tell you why. I've never seen 
a subject that probably has more red herrings than this one 
does in my life, and let me just lay them out because, like Mr. 
Keller, I am legitimately trying to get to the fundamental 
issues that we have here.
    On the one side, there are those who will say the 
legislation might put pressure on one side to settle or to do 
something they otherwise would not do. Yet we also have one 
side saying that the cost ligation and the delay in the 
litigation may force one company out of business and put 
pressure on them to settle.
    I hear today testimony that this is not a net loss of 
revenue; it's about creative integrity. I don't think there's 
anybody in here that believes this issue is about ``Schindler's 
List.'' You know, even in protecting children, that's important 
and I agree with the testimony that's there. But I think at the 
core of this legislation are certain fundamental rights in our 
copyright law. One of them we always support is financial 
protection for the creators of works. We want to do that, but 
that's not the issue here. And I think the core issue here is 
more what my rights are as a consumer once I have purchased a 
product.
    You know, let's go back to a book, because I am 
legitimately trying to find this out. If I purchase a book, 
there is no one in here, no author in here that's going to come 
in and tell me that I don't have the right to go through that 
book and block out phrases that I don't want to see.
    Now, most of us in here, you're like me, whether it's now 
I'm in Congress or before when I was practicing law, I'm going 
to have staff that go through and--that I hire to go through 
and block out those phrases if I don't want to read them or I 
don't want to see them. Technology has moved us another step. 
Most of the time now, instead of holding a book in my hand, I 
have a computer disk that I put into the computer, and I may 
block out phrases.
    But let me flip it around the other way. Suppose instead of 
blocking out phrases, my question is that I only want to read 
certain things. Let me give you an example. I just got back 
from Normandy and read a number of books on Normandy. And I 
might want to only read about the 29th Division at Normandy. 
Nobody in here tells me that if I want to read Steven Ambrose's 
book about D-Day that I've got to read the whole book. I can 
just say to my staff member or anybody else, ``I only want to 
read the sections about the 29th Division.'' Give me 20 books, 
have a computer program that picks out for me everything about 
the 29th Division. That's all I want to see. I don't care--you 
know, the author may tell me, ``You've got to read the whole 
thing, the whole book to get the whole flavor of what I wanted 
to communicate.'' But I think my right as a consumer is that I 
don't have to do that. I can just say, ``No, I want to read 
about the 29th Division.''
    And so I guess my wrestling with this is it looks like to 
me that's the core of this issue. It is whether or not as a 
consumer in my home I can buy a product that doesn't, as Mr. 
Keller says, transform or change the original creative right, 
but does the author of that work have the creative integrity, 
ability, right to mandate that I've got to read everything in 
there? It may not be that I have objections to it because of 
religious reasons or anything else. I might just not have the 
time. But I ought to have the ability--or the interest. But I 
ought to have the ability, it would seem to me, to be able to 
say I don't want to see this and I want to see something else.
    And so my question to the panel is: Why shouldn't I have 
that fundamental core right as a consumer to either say give me 
all of the 29th Division clips from a movie that I want to find 
or, reverse, take out all the sexual items in that movie? Why 
don't I as a consumer have that right? And that's what this 
legislation to me is all about. That's the fundamental----
    Mr. Berman. Would the gentleman yield for a question?
    Mr. Forbes. Sure.
    Mr. Berman. I think you're absolutely right. But should a 
company be able to market without the consent of Steven Ambrose 
or the authors of those other 29 books a technology that sells 
excerpts of great books on the 29th Division?
    Mr. Forbes. Well, and I'm glad you said that. The answer 
would be, no, they couldn't market a book that has the excerpts 
because you would be changing and creating a new product. But I 
believe very much, just as I could hire my staff--and, Mr. 
Chairman, my time is out.
    Mr. Smith. Without objection, the gentleman is recognized 
for an additional minute.
    Mr. Forbes. But just as I could hire my staff to come in 
and say, ``I want you to find everything on the 29th 
Division,'' I believe they could give me a computer program or 
technology that I could plug in that wouldn't change the 
original works of art, but it would find for me clips about the 
29th Division or, the reverse, take out things that I didn't 
want to see. It's not changing, and that's the real essence of 
this legislation. We're not talking about changing that work 
and putting a different work. We're talking about a technology 
that has outstripped where we were before, that basically says 
this is a way that I can find the scenes or the phrases that I 
want, or I can not have to read the other ones that I don't 
want to read. I don't see the difference between the two and--
--
    Mr. Berman. Well, would the gentleman yield for one more 
question?
    Mr. Forbes. If the Chairman will give me the time, I'll 
yield.
    Mr. Smith. You've still got the time, Mr. Forbes.
    Mr. Berman. It is a way to read portions of 29 books 
without buying them when you get that computer program.
    Mr. Forbes. Well, you're talking about two different 
things. If you're talking about stealing copyrighted material, 
that's a whole different issue. What I'm talking about here is 
when I have legitimately purchased the material and I walk in--
and that's what we're talking about. We're not talking about 
anybody who's stealing one of these movies. They think they 
should be prosecuted. We're talking about an individual who 
legitimately purchases the movie and walks in but doesn't way 
to see everything in it or perhaps wants to find certain--
suppose--suppose I'm a critic, suppose I just want to see 
certain scenes and see how they were. Why shouldn't I be able 
to buy technology that's going to just give me those things?
    Mr. Berman. Would the gentleman yield?
    Mr. Smith. The gentleman's time has expired.
    Mr. Forbes. Thank you.
    Mr. Smith. The gentleman, the other gentleman from 
Virginia, Mr. Goodlatte, is recognizes for his questions.
    Mr. Goodlatte. Well, thank you, Mr. Chairman. I have a 
statement I'd ask be made a part of the record, and I want to 
thank you first for holding this hearing and for your 
leadership in attempting to resolve this issue, because I think 
it is an issue well worth resolving, both for the motion 
picture industry and for consumers.
    I also want to thank you for assembling an incredibly 
impressive panel. Marybeth Peters is well known to this 
Committee. Dr. Etzioni has been around almost as long as Jack 
Valenti. [Laughter.]
    I read his sociology books when I was in college 30-plus 
years ago. And Ms. Nance and her organization are an important 
group that have worked with the entertainment industry on a 
number of occasions to promote kid-friendly entertainment, and 
I think that's a valuable asset, both for, again, families and 
the entertainment industry.
    And, finally, Jack Valenti. I have on a number of occasions 
enjoyed at Disney-MGM Studio in Florida the Great Movie Ride or 
Great American Movie Ride. No one--no one--has had a greater 
movie ride than Jack Valenti. And I thank you for what you've 
done for decades to promote a great industry, and the corollary 
to that has been your championing of intellectual property 
rights. And the work not only in this country but around the 
world to protect them has been very important, not just for the 
movie industry but for establishing the principle that 
intangible property is every bit as important as tangible 
personal property when we protect those rights. So I certainly 
understand your perspective.
    I also, though, very much understand that parent, because I 
have been in that situation with a child who knows about that 
latest, absolutely most popular movie that's out there and just 
demands day after day to see it, and you say, Well, you know, I 
know there's some stuff in there that I'd really not like to 
have my 7-year-old, my 10-year-old, or even my 12-year-old see 
that movie. But if I had the technology to be able to say you 
can see all of it except for these parts, even if it is not the 
perfect work--and I agree with you, it's not the perfect work 
when you take those out--that's a concern.
    I also have a concern, on the other hand, dealing with what 
impact this on the Digital Millennium Copyright Act and the use 
of encryption that the industry has used to protect these 
materials. I was very involved in writing that Act. I know that 
one of the underpinnings of that Act is the prohibition against 
circumvention of copy protection technologies. Some have argued 
that these anti-circumvention measures should be weakened, but 
I believe that these measures are crucial tools to help content 
owners protect their intellectual property from piracy and 
unauthorized copies.
    So as we work our way through this, I'd like to know, 
because I'm concerned that if movie editing technologies are 
using copy--devices to crack copy protection codes to break 
into a DVD, even to edit out certain offensive materials, that 
creates some concerns on my part and a slippery slope. While 
this legislation does not expressly allow the use of anti-
circumvention technologies, it also does not expressly prohibit 
it. And I'd like to know both what the implications of that are 
and from each of you whether that would improve the legislation 
if there was a provision in there that would expressly prohibit 
editing tools that circumvent copy protection technologies.
    We will start with Mr. Valenti.
    Mr. Valenti. Copy protection technology, Mr. Goodlatte, is 
at the forefront of how we enter the Digital Age. If we are not 
able to protect our movies in the Digital Age, we don't own 
anything. And, therefore, it is literally in the vanguard--and 
you, I must thank you, because you have been a champion of 
protection. Any piece of legislation that allows someone else 
to circumvent the encryption violates the DMCA. And I think 
that would be a terrible remedy to offer in any bill.
    Now, do I think this bill ought to have a specific bar 
against decryption, circumvent encryption? I sure do, but that 
doesn't mean that I support the bill.
    I think the essence here--and if I may spring from the 
rostrum of your question----
    Mr. Goodlatte. As long as you allow me time to let the 
other three answer the question.
    Mr. Valenti. Because the short answer is absolutely, we 
cannot allow anyone to circumvent encryption. That is going to 
be our technological salvation in the years to come, and 
without it, the whole world is going to be swarming all over 
our material.
    But to leap from that rostrum to Congressman Forbes--and I 
understand where you're coming from. I understand where 
Congressman Goodlatte is. I am a father of three children, and 
I was very stern, my wife and I, when our kids were growing up. 
Even though I invented the rating system, I also observed it. 
And there were certain movies I wouldn't allow my children to 
see. I don't believe children ought to be able to see every 
movie they want to see. I think every now and then, to coin a 
phrase, ``Just say no,'' which is what a lot of parents do. If 
parents have a casual regard for what their children see, then 
there's no way you're going to salvage that child's future 
conduct.
    So I share everything you say, Congressman Forbes. I am 
with you on that.
    Mr. Smith. The gentleman from Virginia is recognized for an 
additional minute so the witnesses can respond.
    Mr. Goodlatte. Thank you, Mr. Valenti.
    Ms. Nance?
    Ms. Nance. Well, I don't know that I have a comment 
necessarily on encryption, but, you know, I just want to--I 
just want to sort of point out here, this is the DVD that I 
bought. It's mine. I plugged it in, I used it. It didn't change 
it. It's exactly the same as I bought it. Even if I wanted to 
change it, it's mine once I own it. I shouldn't be stealing it. 
It belongs to me.
    A couple of other things is there has to be a market for 
something for you to sell it. And while there's a huge market 
out there for parents to protect their kids from violence, 
graphic sex, nudity, profanity, there probably isn't much of a 
market to do all these other things that you're concerned 
about. And I understand, I can appreciate where you're coming--
--
    Mr. Goodlatte. Let me take back my time because I 
appreciate that, but indeed there is a huge market to do all 
these other things were concerned about. It's called KaZaA, 
Napster----
    Ms. Nance. Those are stealing, though.
    Mr. Goodlatte. Right. And we want to make absolutely sure 
that we don't do anything that would put us----
    Ms. Nance. I agree.
    Mr. Goodlatte.--on a slope toward telling the intellectual 
property community as a whole, including the motion picture 
industry, that we're going to have a situation where they begun 
the process of eroding their ability to protect their 
intellectual property----
    Ms. Nance. I completely agree with you. I've fought these 
peer-to-peer sites tooth and nail over pornography.
    Mr. Goodlatte. Ms. Peters?
    Ms. Peters. I'm an extremely strong supporter of 
technologies that are used by copyright owners to protect their 
works. As I understand the technology here, it does not 
implicate the anti-circumvention provisions.
    Mr. Goodlatte. That is good. So, in other words, if we were 
to put a provision in here to say that other people attempting 
to do other things could not invade the language of the DMCA, 
you would, A, agree with that and, B, feel that it would not be 
harming companies like ClearPlay to kind of do what they're 
doing.
    Ms. Peters. That's right.\2\
---------------------------------------------------------------------------
    \2\ See letter dated July 6, 2004, in the Appendix, p. 89, from the 
Honorable Marybeth Peters, for clarification of answer to question 
posed by Subcommittee Member.
---------------------------------------------------------------------------
    Mr. Goodlatte. Dr. Etzioni?
    Mr. Etzioni. Thanks for not giving a number to my age. 
[Laughter.]
    I see no reason these two concerns cannot be reconciled by 
allowing invasion for this purpose and not for sale or any 
other purpose, not setting a precedent for other violations.
    Let me just add one sentence. Several times we heard about 
the right of the creator of those works as if one right is an 
absolute and trumps all other rights. Ninety-five percent of 
what we do in ethics and much of what we do in law is try to 
deal with conflicting rights. In this case, it's the right of 
parents to bring up decent citizens against the right of a 
creator of a work to insist that children will see all of it 
and not part of it.
    Mr. Goodlatte. Thank you for your forbearance, Mr. 
Chairman.
    Mr. Smith. Thank you, Mr. Goodlatte.
    Let me say to the panelists that several Members have 
questions they would like to submit to you in writing. 
Particularly Mr. Berman I know has some questions. And if you 
all can respond to those within 2 weeks, we'd appreciate it.
    Further, the gentleman from California is recognized for a 
minute for some observations.
    Mr. Berman. I simply didn't want to be the only person on 
this Subcommittee not to comment on Mr. Valenti's, Jack's 
appearance here. I myself, given the time between I first heard 
of his interest in moving on from MPAA to now, I've assumed 
that this will not be the last time you would be appearing 
before our--if the past is prologue, we will see you again. But 
I hope particularly that you will understand and know the 
admiration and warmth I feel for you and what you've 
contributed to the industry, to the protection of intellectual 
property, and to my own personal abilities as a legislator 
here, as well as to the country from your service.
    Mr. Valenti. Thank you.
    Mr. Smith. Thank you, Mr. Berman, and I thank all the 
Members for their attendance, and I thank the witnesses for 
their very, very informative and good testimony today. And we 
stand adjourned.
    [Whereupon, at 11:35 a.m., the Subcommittee was adjourned.]
                            A P P E N D I X

                              ----------                              


               Material Submitted for the Hearing Record

               Letter from the Honorable Marybeth Peters



        Responses of Marybeth Peters to Post-Hearing Questions 
                        from Rep. Howard Berman

1. You state that you would prefer not to address the merits of the 
litigation in Colorado, and have no desire to be drawn into it. 
Further, you admit to a sketchy understanding of the workings of the 
products that are the subject of the litigation. Unfortunately, some 
litigant is almost sure to argue to the court that your testimony 
represents a definitive opinion on the appropriate outcome of the 
Colorado litigation. Do you think you know enough about the facts of 
the case, the ClearPlay technology, and the other technologies involved 
to definitively state whether the Colorado court should find them 
infringing or non-infringing?

Answer: I do not pretend to know everything there is to know about the 
    ClearPlay technology, or even to know what is in the record of the 
    Colorado litigation; therefore, I have no views on how the court 
    should rule on the facts of that particular lawsuit. In my 
    testimony, I stated that the conduct that is described in the 
    proposed Family Movie Act is not infringing under current law. If 
    ClearPlay's technology does something other than that which is 
    described in the legislation, then the court might well conclude 
    that it is an infringer.

2. In your written testimony, you describe as ``fairly benign'' the 
filtering technology we have been discussing, and state your 
``conclusion that on balance, the conduct that is addressed by the 
Family Movie Act should not be prohibited.'' However, the filtering 
technology covered by the bill may skip everything but the violence in 
Gangs of New York, or may cut all references to the Holocaust from a 
World War II documentary. Do you believe such filtering technology is 
``fairly benign'' when put to these uses? If not, why do you believe 
that, on balance, such filtering technology should be legal?

Answer: When I characterized the technology involved in one the this 
    legislation as ``fairly benign,'' I probably should have referred 
    to the particular application of that technology that the 
    legislation is intended to address, rather than to the technology 
    itself. I do not believe that all of the uses permitted by the bill 
    would be benign, and I certainly do not believe that the conduct 
    you have described is benign. Certainly a technology that permits 
    deletion of portions of a motion picture could be used in ways that 
    no reasonable person could condone. That is one of the reasons why 
    I oppose the legislation. However, I am not persuaded that use of 
    such technology in such a fashion is unlawful under current law, 
    and I would hesitate to say that it should be unlawful, since I do 
    not believe the law should ordinarily discriminate among 
    applications of technology based on the message that the person 
    using the technology wishes to convey.

3. You say one reason you are comfortable with the conclusion that 
movie filtering technology should be legal is because ``it is difficult 
to imagine any economic harm to the copyright owner.'' I don't have the 
same difficulty. If there is a market for movie filters, that means 
consumers are willing to pay something above and beyond the cost of a 
DVD for a sanitized version of the movie. Isn't the copyright holder, 
who has the exclusive right to reproduce and distribute sanitized 
versions, suffering economic harm when a filtering company captures 
that additional revenue?

Answer: Not unless that revenue is revenue that the copyright holder 
    would have a reasonable expectation of capturing, and it does not 
    appear that the motion picture studios currently have any intention 
    to exploit the market for ``sanitized'' versions of their motion 
    pictures. If motion picture studios do begin to offer such 
    versions, then the case could well be made that the offering of 
    filtering products is causing economic harm to the copyright 
    owners. That is one of the reasons why I believe that if the Family 
    Movie Act is enacted, it should include a sunset provision so that 
    Congress can reevaluate the need for the legislation in a few 
    years. One of the factors that Congress should evaluate at the time 
    would be whether motion picture studios have begun to offer or 
    license such versions of their motion pictures. Also, keep in mind 
    that my interpretation of both current law and the bill preserves 
    the copyright owner's exclusive rights over fixed copies of altered 
    works, and the distribution of such copies may be a more convenient 
    and successful business model for the consumer to obtain and enjoy 
    such versions than the marketing of filtering software.

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 must express my opposition to the legislation before us today. 
Perhaps this hearing will convert me, but I doubt it. I have too many 
concerns about the nature and implications of this bill. Clever 
redrafting might address some of these concerns, but nothing can 
address my concerns about its basic premise.
    While I believe parents should be able to protect their children 
from exposure to media they find offensive, I don't believe the 
legislation before us today will advance this goal. In some ways, it 
may have the opposite effect.
    This legislation sends the wrong message to parents; namely, that 
technology can fulfill parental responsibilities. In our modern world, 
parents cannot control what their kids see and hear every minute of the 
day. Parents must, as Professor Heins testified on May 20, equip their 
children for exposure to offensive media, not just turn on the TV or 
movie filter and leave the room. Technology should not become an excuse 
for avoiding the hard work of parenting.
    To be clear, I don't oppose the ClearPlay technology itself. 
Rather, I am opposed to legislation that benefits one particular 
business over its competitors, and abrogates the rights of copyright 
owners and trademark holders in the process. The marketplace is the 
proper forum for resolving this business dispute, not Congress. 
Congress should focus on encouraging the relevant copyright owners and 
trademark holders to work out a licensing deal for ClearPlay 
technology, not roil the waters with legislation that verges on a bill 
of attainder.
    Unfortunately, the legislative activity on this issue appears to 
have already hampered the industry negotiations. I understand that, 
following the May 20 hearing, ClearPlay presented new demands that 
represented a significant departure from its previous position in the 
negotiations. In other words, the positions of the parties, which had 
been fairly close before the May 20 hearing, are getting farther apart 
as the prospects for legislation improve.
    Since neither ClearPlay nor any of its competitors has been found 
liable for copyright or trademark infringement, this legislation 
addresses a hypothetical problem. While a federal District Court has 
before it a case raising these issues, it has not yet issued even a 
preliminary ruling. Furthermore, the Register of Copyright will 
apparently testify that ClearPlay is likely to succeed. In other words, 
there is no problem for Congress to correct. While legislation 
addressing hypothetical problems--like the law protecting fast food 
restaurants against obesity liability--is all the rage these days, it 
is not a trend with which I agree.
    Most importantly, Congress should not give companies the right to 
alter, distort, and mutilate creative works, or to sell otherwise-
infringing products that do functionally the same thing. Such 
legislation is an affront to the artistic freedom of creators, and 
violates fundamental copyright and trademark principles.
    The sanitization of movies allowed by this legislation may result 
in the cutting of critically important scenes. For instance, the 
legislation legalizes the decision of a ClearPlay competitor to edit 
the nude scenes from Schindler's List--scenes critical to conveying the 
debasement and dehumanization suffered by concentration camp prisoners.
    Further, a close reading of the bill reveals that it will also 
legalize editing that makes movies more offensive, more violent, and 
more sexual. Just as the legislation allows nudity to be edited out, it 
allows everything but nudity to be edited out. For instance, the 
legislation allows some enterprising pornographer to offer a filter 
that edits the movie Caligula down to its few, highly pornographic 
scenes, and endlessly loops these scenes in slow-motion. The 
legislation would also appear to legalize filters that make 
imperceptible the clothes of all actors in a movie. Do the bill 
sponsors really want to legalize all-nude versions of Oklahoma and 
Superman?
    The types of edits legalized by this bill are limited only by 
editorial imagination. Anti-tobacco groups could offer a filter that 
strips all movies of scenes depicting tobacco use. Racists might strip 
Jungle Fever of scenes showing interracial romance between Wesley 
Snipes and Annabella Sciorra [SKEE-ORA], perhaps leaving only those 
scenes depicting interracial conflict. Holocaust revisionists could 
strip World War II documentaries of concentration camp footage. 
Fahrenheit 911 could be filtered free of scenes linking the Houses of 
Bush and Fahd.
    Since the bill also applies to television programming, a number of 
troubling consequences may result. Digital Video Recorder services like 
TiVo, which enable their subscribers to digitally record TV shows for 
time-shifting purposes, might offer filters geared to those programs. 
This is not far-fetched: at least one DVR service has already tried to 
filter out all commercials. In the future, they might offer filters 
that cleanse news stories of offensive content; for instance, by 
editing out comments critical of a beloved politician. In fact, under 
the bill the DVR service could unilaterally engage these filters 
without the permission of the TV viewer, and thus might choose to 
filter out stories helpful to a corporate competitor or critical of a 
corporate parent.
    I know that these outcomes are opposite to the intent of the bill's 
sponsors, but they are the unavoidable outcomes nonetheless. And these 
are just a few of the problems that are apparent after just two days' 
reflection. Thus, I hope the Subcommittee will not rush to legislate in 
this area, and instead will allow the marketplace to address the 
legitimate concerns of parents.
    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

    At the outset, I am embarrassed we are even considering this bill. 
The Republicans know full well that the directors and ClearPlay are 
engaged in settlement negotiations to resolve a lawsuit over 
copyrights; they are using this bill and this second hearing to 
pressure the directors and help the other side.
    In my tenure in Congress, this is only the second time I can 
remember having a one-sided hearing involving on-going settlement 
talks; not surprisingly, the first was a few weeks ago on the same 
issue. Our hearings should be reserved for public policy debates, not 
for strong-arming private litigants.
    It is more troubling considering that we are here to continue the 
Republican assault on the First Amendment and media content. In the 
past few months, we've seen Republican overreaction to a televised 
Superbowl stunt and to radio broadcasts. Now the self-proclaimed moral 
majority is turning to movies.
    Censoring filmmakers would diminish the nature of this medium. Let 
us not forget that Schindler's List was on broadcast television 
completely uncut. The movie studio and the broadcasters knew the film 
could not convey its feeling and authenticity if it was edited. Despite 
this, the movie has been edited by censors to diminish the atrocities 
of the Nazi party. Traffic, an acclaimed anti-drug movie, has been 
edited in a way that makes drug use appear glamorous.
    This is not to say that movie fans should be forced to watch the 
latest Quentin Tarantino movie. People looking for family-friendly fare 
have countless choices. Parents are inundated with commercials for the 
latest children's movies. Hollywood has its own ratings system that 
tells parents which movies are suitable for children and, over the past 
several years, has increased its output of G- and PG-rated films. 
Newspaper reviewers make specific mention of family-friendly films. 
Finally, organizations like Focus on the Family provide information on 
movies for parents who seek it. In short, there are options.
    At the hearing on this bill, we heard our colleagues Rep. Randy 
Forbes (R-VA) and Rep. John Carter (R-TX) say the government has no 
business in this issue. The last time I checked, Congress was a part of 
the government. Having said that, there is a simple solution to this 
problem. It is a market-based solution that conservatives should like. 
If a family finds a particular DVD offensive, it should not buy it.

                                 
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