[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]



PROMOTING THE USE OF ORPHAN WORKS: BALANCING THE INTERESTS OF COPYRIGHT 
                            OWNERS AND USERS

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

                                HEARING

                               BEFORE THE

                 SUBCOMMITTEE ON COURTS, THE INTERNET,
                       AND INTELLECTUAL PROPERTY

                                 OF THE

                       COMMITTEE ON THE JUDICIARY
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                               __________

                             MARCH 13, 2008

                               __________

                           Serial No. 110-131

                               __________

         Printed for the use of the Committee on the Judiciary





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

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                       COMMITTEE ON THE JUDICIARY

                 JOHN CONYERS, Jr., Michigan, Chairman
HOWARD L. BERMAN, California         LAMAR SMITH, Texas
RICK BOUCHER, Virginia               F. JAMES SENSENBRENNER, Jr., 
JERROLD NADLER, New York                 Wisconsin
ROBERT C. ``BOBBY'' SCOTT, Virginia  HOWARD COBLE, North Carolina
MELVIN L. WATT, North Carolina       ELTON GALLEGLY, California
ZOE LOFGREN, California              BOB GOODLATTE, Virginia
SHEILA JACKSON LEE, Texas            STEVE CHABOT, Ohio
MAXINE WATERS, California            DANIEL E. LUNGREN, California
WILLIAM D. DELAHUNT, Massachusetts   CHRIS CANNON, Utah
ROBERT WEXLER, Florida               RIC KELLER, Florida
LINDA T. SANCHEZ, California         DARRELL ISSA, California
STEVE COHEN, Tennessee               MIKE PENCE, Indiana
HANK JOHNSON, Georgia                J. RANDY FORBES, Virginia
BETTY SUTTON, Ohio                   STEVE KING, Iowa
LUIS V. GUTIERREZ, Illinois          TOM FEENEY, Florida
BRAD SHERMAN, California             TRENT FRANKS, Arizona
TAMMY BALDWIN, Wisconsin             LOUIE GOHMERT, Texas
ANTHONY D. WEINER, New York          JIM JORDAN, Ohio
ADAM B. SCHIFF, California
ARTUR DAVIS, Alabama
DEBBIE WASSERMAN SCHULTZ, Florida
KEITH ELLISON, Minnesota

            Perry Apelbaum, Staff Director and Chief Counsel
      Sean McLaughlin, Minority Chief of Staff and General Counsel
                                 ------                                

    Subcommittee on Courts, the Internet, and Intellectual Property

                 HOWARD L. BERMAN, California, Chairman

JOHN CONYERS, Jr., Michigan          HOWARD COBLE, North Carolina
RICK BOUCHER, Virginia               TOM FEENEY, Florida
ROBERT WEXLER, Florida               LAMAR SMITH, Texas
MELVIN L. WATT, North Carolina       F. JAMES SENSENBRENNER, Jr., 
SHEILA JACKSON LEE, Texas            Wisconsin
STEVE COHEN, Tennessee               ELTON GALLEGLY, California
HANK JOHNSON, Georgia                BOB GOODLATTE, Virginia
BRAD SHERMAN, California             STEVE CHABOT, Ohio
ANTHONY D. WEINER, New York          CHRIS CANNON, Utah
ADAM B. SCHIFF, California           RIC KELLER, Florida
ZOE LOFGREN, California              DARRELL ISSA, California
BETTY SUTTON, Ohio                   MIKE PENCE, Indiana


                     Shanna Winters, Chief Counsel

                    Blaine Merritt, Minority Counsel


















                            C O N T E N T S

                              ----------                              

                             MARCH 13, 2008

                                                                   Page

                           OPENING STATEMENTS

The Honorable Howard L. Berman, a Representative in Congress from 
  the State of California, and Chairman, Subcommittee on Courts, 
  the Internet, and Intellectual Property........................     1
The Honorable Howard Coble, a Representative in Congress from the 
  State of North Carolina, and Ranking Member, Subcommittee on 
  Courts, the Internet, and Intellectual Property................     3
The Honorable Lamar Smith, a Representative in Congress from the 
  State of Texas, Ranking Member, Committee on the Judiciary, and 
  Member, Subcommittee on Courts, the Internet, and Intellectual 
  Property.......................................................    10

                               WITNESSES

Ms. Marybeth Peters, Register of Copyrights, U.S. Copyright 
  Office, Washington, DC
  Oral Testimony.................................................    16
  Prepared Statement.............................................    18
Mr. Allan Adler, Vice President of Legal and Governmental 
  Affairs, Association of American Publishers, Inc., Washington, 
  DC
  Oral Testimony.................................................    30
  Prepared Statement.............................................    32
Ms. Corinne P. Kevorkian, President and General Manager, 
  Schumacher, A Division of F. Schumacher & Company, New York, NY
  Oral Testimony.................................................    43
  Prepared Statement.............................................    45
Ms. Karen C. Coe, Associate Legal Counsel, United States 
  Holocaust Memorial Museum, Washington, DC
  Oral Testimony.................................................    62
  Prepared Statement.............................................    64
Mr. Victor S. Perlman, General Counsel and Managing Director, 
  American Society of Media Photographers, Inc., Philadelphia, PA
  Oral Testimony.................................................    68
  Prepared Statement.............................................    71
Ms. Maya Gura, Director of Marketing and Sales, PicScout, San 
  Francisco, ca
  Oral Testimony.................................................    76
  Prepared Statement.............................................    78

          LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

Prepared Statement of the Honorable Howard Coble, a 
  Representative in Congress from the State of North Carolina, 
  and Ranking Member, Subcommittee on Courts, the Internet, and 
  Intellectual Property..........................................     5
Prepared Statement of the Honorable Lamar Smith, a Representative 
  in Congress from the State of Texas, Ranking Member, Committee 
  on the Judiciary, and Member, Subcommittee on Courts, the 
  Internet, and Intellectual Property............................    11

                                APPENDIX

Material Submitted for the Hearing Record........................    93


















 
PROMOTING THE USE OF ORPHAN WORKS: BALANCING THE INTERESTS OF COPYRIGHT 
                            OWNERS AND USERS

                              ----------                              


                        THURSDAY, MARCH 13, 2008

              House of Representatives,    
      Subcommittee on Courts, the Internet,
                         and Intellectual Property,
                                Committee on the Judiciary,
                                                    Washington, DC.

    The Subcommittee met, pursuant to notice, at 10:05 a.m., in 
room 2141, Rayburn House Office Building, the Honorable Howard 
Berman (Chairman of the Subcommittee) presiding.
    Present: Representatives Berman, Jackson Lee, Johnson, and 
Lofgren.
    Staff present: Shanna Winters, Subcommittee Chief Counsel; 
Eric Garduno, Majority Counsel; Christal Sheppard, Majority 
Counsel; and Rosalind Jackson, Majority Professional Staff 
Member.
    Mr. Berman. This hearing of the Subcommittee on Courts, the 
Internet, and Intellectual Property will come to order.
    I would like to begin by welcoming everyone to this hearing 
on promoting the use of Orphan Works, balancing the interests 
of copyright owners and users.
    A strong copyright law encourages the creation of original 
works of authorship and dissemination of these works to the 
public. But if the copyright holder can't be found, valuable 
works, not only in the economic sense but historically and 
culturally as well, can't be exploited without a user being 
exposed to great legal jeopardy.
    These works, then, are at significant risk of disappearing 
from the public consciousness before they can enter the public 
domain.
    I think we should correct a misnomer. The works we are 
talking about are not orphans. In fact, the specific scenario 
we struggle with is how to address what happens when the parent 
reappears. The more accurate description of the situation is 
probably an unlocatable copyright owner.
    This characterization better describes the Orphan Works 
construct, which is to correct the market failure when a 
potential user can't find the copyright owner. For the sake of 
ease, we will keep talking about it like they are orphans.
    The second thing I would like to note is that the Orphan 
Works problem we are here to discuss is, in some part, of our 
own making. Copyright term extension coupled with our 
international obligation to do away with formalities increased 
the likelihood that copyright owners would go missing.
    We made registration with the Copyright Office optional, 
and we rescinded the condition that all published works carry a 
copyright notice leading to a diminished public record of 
ownership information.
    Over the course of the last several years, there have been 
numerous attempts to address the challenges presented by Orphan 
Works. After receiving letters from the, then, Judiciary 
Subcommittee Chair and Ranking Members in both the House and 
the Senate about this issue, the Copyright Office undertook a 
comprehensive study in 2005 of the Orphan Works problem.
    We would like to commend Marybeth Peters, the register of 
copyrights, for the excellent report that office produced.
    After receiving hundreds of comments, the Copyright Office 
proposed a great foundation for approaching this issue, 
allowing for uses of Orphan Works while still protecting the 
copyright owner.
    In the most basic terms, the proposal maintained that it 
would still constitute an infringement to use a work determined 
to be orphan, but the full panoply of damages available to the 
reemerging copyright owner would be limited.
    Subject to a user completing a reasonably diligent search, 
if a copyright owner came forward after the use of the work, he 
would be limited to reasonable compensation and could not claim 
attorney's fees or statutory damages.
    Furthermore, in some circumstances, the copyright owner may 
not be able to obtain an injunction if a significant amount of 
the user's original expression was included in the infringing 
derivative work.
    Last Congress then-Chairman Lamar Smith convened a series 
of negotiations with the parties and introduced an Orphan Works 
Bill. Some changes were made to the original Copyright Office 
proposal, and that bill provided a good point for us to 
continue the discussion of this issue.
    Since that time, additional issues have been raised, new 
solutions or proposals have been presented, and some of the old 
questions still remain.
    For example, what are the appropriate parameters for a safe 
harbor? How much of the infringer's own expression should be 
required to prevent an injunction? Are additional steps 
necessary to discourage bad actors such as a heightened 
pleading requirement or filing a copy of the search before use? 
Can more definition or guidance be given to what constitutes a 
reasonable search?
    I look forward to hearing the perspective of our witnesses 
on some of these issues.
    A couple of additional points. While there is a tendency to 
believe that I am--never mind. [Laughter.]
    There is a tendency to believe I am a lot of things----
    While there is a tendency to believe that I am anti-
technology, I actually think that technology can provide part 
of the solution to this problem.
    If the state of technology is advanced to allow a user to 
search images of copyrighted works in addition to ownership 
information, then the foundation is set for a system to enable 
most works to be masked with an owner. In such a case, 
technology would help facilitate marketplace negotiations, 
benefiting copyright owners, users, and the public.
    In addition, regarding the problem of the ease of stripping 
identifying data of copyrighted works, technology may also 
provide a solution in this situation with the advancement and 
availability of digital fingerprinting, watermarking, or other 
technological measures.
    Finally, I continue to struggle with the impact of an 
Orphan Works construct layered on top of the current 
registration system, especially as it pertains to visual arts.
    If copyright owners go through the trouble of registering 
their works, but due to the nature of the database at the 
Copyright Office, their works can't be found by a user, they 
are denied full remedies which, in part, motivated them to 
register in the first place.
    While I understand that a carve-out of registered works 
from Orphan Works treatment would not work, I fear that we may 
end up discouraging copyright owners of visual works from 
registering.
    I appreciate all of you coming today, and our witnesses, 
for the time and effort they took to come here. And I know we 
have a lot of work to do to get this ready.
    And I now would like to recognize our distinguished Ranking 
Member, Howard Coble, for his opening statement.
    Mr. Coble. Thank you, Mr. Chairman.
    And I want the record to reflect that I do not believe our 
Chairman is anti-technology.
    Good to have you all with us.
    Mr. Chairman, thank you for agreeing to schedule this 
hearing on Orphan Works. It is a subject I am looking forward 
to today's testimony and hope the Subcommittee will be in a 
position to address it in more detail in the weeks and months 
ahead.
    The Constitution provides that Congress has the right and 
the responsibility, as we all know, to ``promote the progress 
of size and useful arts by securing for limited times to 
authorize and inventors the exclusive right to their respective 
writings and discoveries.''
    The founders made clear that the promotion and protection 
of what we now refer to as intellectual property is an 
essential responsibility of the legislative branch.
    Their choice of language also makes clear that the means of 
providing exclusive protection to creators was not to be 
exercised perpetually, nor is it an end to itself, but that 
this means is intended to be used in a manner that furthers the 
broader public interest.
    Many observers today, including several of our witnesses, 
are of the view that relatively recent changes to the law of 
copyright, when combined with other factors, have fostered 
situations that may tend to systematically discourage rather 
than encourage the advancement of broader societal interests.
    The copyright laws work well when users can identify the 
owner of the work, negotiate with owners to secure rights to 
use the work, and license to use the work before engaging in 
any new use.
    When users cannot identify the owner of the work they wish 
to use, the user is faced with a dilemma. The user can either 
use the work and run the risk of the owner later appearing and 
being awarded statutory damages in excessive amounts per 
infringement. Or choose to not use the work and thereby 
eliminate any potential liability for copyright infringement.
    In instances where the intended use is educational or 
culturally significant, there are those who believe that there 
is a compelling and broader public interest that would best be 
served by encouraging further use of the work subject to the 
remedy of reasonable compensation to the owner if the owner 
later comes forward.
    After a lengthy study of the Orphan Works problems, the 
Copyright Office, in a 2006 report, recommended that Congress 
amend the law to provide for such a change. Shortly thereafter, 
as you previously mentioned, Mr. Chairman, Lamar Smith, the 
distinguished gentleman from Texas, introduced the Orphan Works 
Act of 2006 which built on the office's recommendation and 
improved upon them by incorporating a number of new safeguards 
and protections designed to protect copyright owners from 
abuse.
    That legislation was favorably and unanimously reported to 
the full Judiciary Committee in May of 2006 but, unfortunately, 
was unable to advance to conclusion.
    Mr. Chairman, I am encouraged that the Subcommittee is once 
again taking up this important issue. I hope in the time 
remaining this year, we will be able to make real progress in 
resolving the remaining issues.
    To be successful, however, I think we will need to 
consider, among other questions, whether all types of 
copyrighted works should be included in the scope of any Orphan 
Works legislation and whether all or only certain classes of 
users should be able to benefit from any such regime.
    Today, I am not certain of the answer, but I look forward 
to hearing from our witnesses about their thoughts on the 
Orphan Works problem as well as the effects of proposed 
solutions.
    To the extent is that changes to the copyright law may have 
unintentionally and unnecessarily created impediments to the 
promotion of science and the useful arts, we have an obligation 
to correct this imbalance.
    With that, Mr. Chairman, I yield back my time.
    [The prepared statement of Mr. Coble follows:]
 Prepared Statement of the Honorable Howard Coble, a Representative in 
    Congress from the State of North Carolina, and Ranking Member, 
    Subcommittee on Courts, the Internet, and Intellectual Property



    Mr. Berman. Well, thank you much, Mr. Coble. I appreciate 
your vote of confidence.
    The more accurate statement, really, is that technology is 
anti-me. [Laughter.]
    Other Members wish to make opening statements?
    Ranking Member of the full Committee, former Chairman of 
the Subcommittee, Mr. Smith.
    Mr. Smith. Thank you, Mr. Chairman, and also Ranking Member 
Coble, for two things. For having this hearing today, and also 
for mentioning our past and joint efforts to try to advance 
Orphan Works legislation.
    I think I missed the Chairman's reference to the last 
couple of years, but it was referred to by Mr. Coble. I 
appreciate that.
    As you all said, 2 years ago, this Subcommittee reported 
H.R. 5439, the Orphan Works Act of 2006 to the full Committee. 
That bill was introduced in response to recommendations from 
the Register of Copyrights, Marybeth Peters, who, of course, is 
a witness here today.
    The register's recommendations were published in the 
January 2006 report on Orphan Works that followed a year-long 
study requested by me, then Ranking Member Berman, and two 
leading Members of the Senate Judiciary Committee.
    In addition to including the Register's recommendations, 
that bill also contained a number of substantive proposals and 
reasonable accommodations requested by copyright owners and 
users. Notwithstanding the many hours of discussions and 
negotiations that preceded the introduction and Subcommittee 
referral of the 2006 bill, late arising concerns caused us to 
temporarily put the bill aside in favor of fostering a broader 
discussion of the issues.
    Since that time, a number of stakeholders have stepped 
forward. Many have met repeatedly with representatives from the 
Copyright Office and Subcommittee staff. Others have conducted 
meetings among themselves for the purpose of identifying and 
proposing alternative solutions.
    In some cases, I understand there has been progress. In 
other cases, I am informed the Copyright Office has had to wait 
weeks or months before receiving promised language or 
suggestions.
    The Members of this Subcommittee have a history of openness 
and a demonstrated willingness to review any constructive 
proposal, but the good faith of the Members should not be used 
as a delaying tactic by those not interested in contributing to 
the resolution of matters before this Subcommittee.
    The enactment of Orphan Works legislation is in the public 
interest. The elimination of formal registration requirements 
and the increased term of copyright protection have fostered a 
growing recognition that Orphan Works legislation is required 
to restore balance to the law of copyright.
    Again, I want to thank the Chairman and the Ranking Member 
for all their behind-the-scenes efforts to try to move this 
legislation, which I hope will be successful this year.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Smith follows:]
 Prepared Statement of the Honorable Lamar Smith, a Representative in 
  Congress from the State of Texas, Ranking Member, Committee on the 
   Judiciary, and Member, Subcommittee on Courts, the Internet, and 
                         Intellectual Property



    Mr. Berman. Thank you, Mr. Smith.
    Any other Members wish to make an opening statement?
    All right. Then we will get to our witnesses.
    I will introduce all of you, and then you can testify and 
try and keep it to 5 minutes and we will put our entire 
statements on the record.
    Marybeth Peters has served as the United States Register of 
Copyrights since 1994.
    Prior to 1994, she held the positions of policy planning 
advisor to the register, acting general counsel of the 
Copyright Office, and chief of both the examining and the 
information and reference divisions.
    Ms. Peters is a frequent speaker of copyright issues, is 
the author of The General Guide to the Copyright Act of 1976, 
and has served as a lecturer at a number of law schools.
    She received her undergraduate degree from Rhode Island 
College and her law degree from George Washington University.
    Allan Adler is Vice President of the Legal and Governmental 
Affairs for the Association of American Publishers, the 
national trade organization that represents the book and 
journal publishing industries, and deals with intellectual 
property, freedom of speech, new technology, and other 
industry-related issues.
    Prior to joining AAP, Mr. Adler practiced law at the firm 
of Cohn and Marks and was a legislative counsel to the American 
Civil Liberties Union.
    Mr. Adler earned his undergraduate degree from the State 
University in New York at Birmingham and his law degree from 
George Washington University. That is the requirement for being 
on the panel. [Laughter.]
    Corinne Kevorkian is President and General Manager of 
Schumacher, a division of F. Schumacher and Company. Ms. 
Kevorkian also served as senior vice president, general 
counsel, and secretary of the company.
    Prior to joining Schumacher, Ms. Kevorkian was an associate 
at Chadbourne and Park and at Whitman and Ransom. Ms. Kevorkian 
received an undergraduate degree from Overland College and a 
law degree from Boston College.
    Karen Coe is Associate Legal Counsel of the United States 
Holocaust Memorial Museum. There, she advises the museum 
management and program staff on all aspects of the museum's 
administration and operation including copyright transfer and 
licensing.
    She also assists museum staff in acquiring intellectual 
property rights and responding to third-party requests for the 
same. Prior to joining the Holocaust Museum, she was an 
associate at Klimek, Kolodney and Casale. Ms. Coe holds an 
undergraduate degree from Smith College and a law degree from 
George Washington University.
    Victor Perlman is the General Counsel to the American 
Society of Media Photographers. He has been an attorney for 
over 35 years and has also served on the boards of directors of 
the Media Photographers Copyright Agency, the Copyright 
Clearance Center, and the Philadelphia Volunteer Lawyers for 
the Arts.
    He is the co-author of the book, ``Licensing Photography.''
    Mr. Perlman received his undergraduate degree from Franklin 
and Marshall College and his law degree from the University of 
Pennsylvania.
    Maya Gura is Director of Marketing and Sales for PicScout, 
a company that specializes in technology-enabled services for 
visual asset owners and users.
    Prior to joining PicScout, Maya held various marketing and 
managerial positions with a business-to-business focus 
including Business Development at Mantis, one of the leading 
Israeli design houses. She also managed CRM projects for the 
global advertising agency, McCann Erickson, and she earned her 
undergraduate and MBA degrees from Ben-Gurion University.
    As I mentioned, your statements will be part of the record. 
We will have the green light on which will switch to yellow and 
then red as your 5 minutes winds down and ends.
    Ms. Peters, would you lead the panel with your testimony?

  TESTIMONY OF MARYBETH PETERS, REGISTER OF COPYRIGHTS, U.S. 
                COPYRIGHT OFFICE, WASHINGTON, DC

    Ms. Peters. Thank you. Chairman Berman, Mr. Coble, Mr. 
Smith, Members of the Subcommittee, I am pleased to appear 
before you to support Orphan Works legislation.
    As Mr. Berman has said clearly, an orphan work is one whose 
copyright owner cannot be located. I used to call it 
unlocatable copyright owners, but it wasn't sexy enough.
    Mr. Berman. Missing parents.
    Ms. Peters. In any case, you have set out the history of 
Orphan Works legislation including the report of the Register 
and the recommendation and what happened in the last Congress.
    I am here to argue that the problem is still there and we 
need to do something about it.
    The pervasiveness of the problem is striking. So many 
users, private citizens, historians, artists, book publishers, 
film makers, museums, archives, librarians--including those at 
the Library of Congress, are frustrated because their intended 
uses do not fall within an existing exemption of the copyright 
law and they cannot locate copyright owners.
    Some uses are important on a personal level. We repeated 
heard about the case in which a private citizen is denied 
service by a photo finisher to reproduce or repair a photograph 
of her grandparents. While the private citizen may be making 
fair use, the commercial shop would be liable for infringement 
under current law.
    Other examples are important on a broader level. If a 
documentary film maker cannot identify or locate the copyright 
owner of rare footage or images that are critical to his work, 
he cannot satisfy his insurance company, the television 
station, his distributor, or other business entities who demand 
proof of rights clearances.
    The only option for the film maker other than to exclude 
the Orphan Works is to take on all the risk of exposure and 
liability and to fully indemnify the corporate partners 
including against an injunction that could kill the entire 
film. Not surprisingly, many choose to pull the material and 
the public is poorer for it.
    In 2006, film maker June Cross testified that important 
materials, many of them jewels of our culture, are unavailable 
for use because ownership cannot be determined.
    A good example of an orphan work is a photograph cited by 
some news organizations this week. The photograph is of 8-year-
old Helen Keller holding a doll and sitting with her teacher, 
Anne Sullivan. The photograph was discovered by the New England 
Historic Genealogical Society in a collection of materials 
donated by an 87-year-old Bostonian last June.
    There is no identifying information on the photograph yet, 
incidentally, researchers were still able to ascertain both the 
place of the photograph and the date of its creation: Cape Cod, 
1888. It appears to be the earliest photograph of Helen with 
her teacher.
    There are many reasons why the issue of Orphan Works has 
become such a problem. Most of the problems are caused by major 
changes to our law made in the last 30 years to bring it into 
compliance with international treaties. These include 
eliminating many formal requirements. As you mentioned, Mr. 
Berman, publication without notice of copyright. And the 
copyright term has been substantially extended. For work from 
the era of the Helen Keller photo that is anonymous and 
published, copyright protection is 120 years from the date of 
creation.
    Under the Copyright Office's solution, the use of an orphan 
work would still be infringing, but the remedies would be 
reduced to a level that will make many beneficial uses 
possible.
    A user must conduct a reasonably diligent search in good 
faith to locate the copyright owner to obtain permission. The 
copyright owner who resurfaces would still be entitled to 
recover against the user, but the remedy would be limited to 
reasonable compensation.
    In recent months, we have considered ways in which to 
provide more guidance to a user in the search process including 
a requirement that users employ the best practices that are 
relevant and that are available from copyright owner and user 
groups.
    As you mentioned, Mr. Berman, technology is an important 
aspect of best practices. We are impressed by the various 
products that exist and are being developed in the private 
sector, including image recognition, water marking, and 
fingerprinting products.
    We are confident that these will help users find owners.
    Finally, it may never be clear who owns the copyright in 
the photograph of Helen Keller and millions of other important 
works. Where there are copyright owners, we believe their 
ownership interests should be preserved. But we also believe 
that the liability of good faith users should reflect the 
market value of the use.
    The Copyright Office looks forward to legislation 
addressing the problems of Orphan Works and offers its services 
to assist you in achieving that result.
    Thank you.
    [The prepared statement of Ms. Peters follows:]
                 Prepared Statement of Marybeth Peters



    Mr. Berman. Mr. Adler?

     TESTIMONY OF ALLAN ADLER, VICE PRESIDENT OF LEGAL AND 
GOVERNMENTAL AFFAIRS, ASSOCIATION OF AMERICAN PUBLISHERS, INC., 
                         WASHINGTON, DC

    Mr. Adler. Thank you, Mr. Chairman, Mr. Coble, and Members 
of the Subcommittee.
    Book publishers are both producers and users of copyrighted 
works and have experienced the frustrations of the Orphan Works 
problem in seeking necessary permissions to incorporate 
photographs, illustrations, unpublished correspondence, and 
other third-party copyrighted works into the literary works 
they publish.
    Consequently, publishers have long supported development of 
a scheme within copyright law that will effectively address 
this issue without doing harm to the basic rights of copyright 
owners.
    Publishers thought the Copyright Office report did an 
excellent job in defining the nature of the orphan work problem 
and advocating a straightforward framework that would be 
applicable to a variety of copyrightable works and their many 
uses.
    That framework, further developed in the proposed Orphan 
Works Act of 2006, is based on the following premise: If the 
infringing user of a copyrighted work has first performed a 
reasonably diligent but ultimately unsuccessful search to 
identify or locate the copyright owner to obtain permission, 
then that infringing user would be eligible for limitations on 
the compensation and injunctive remedies that the copyright 
owner could obtain if the owner turns up and pursues an 
infringement claim subsequent to the commencement of such 
infringing use.
    Although publishers have some unresolved concerns about the 
2006 bill, AAP believes the Subcommittee-approved version of 
that legislation should be the starting point for efforts to 
enact Orphan Works legislation in the current Congress.
    In my written statement, I have noted several ways in which 
the 2006 bill fleshed out the all-important concept of what 
constitutes a reasonably diligent search.
    While it is critical to get this concept right in the 
legislation, a clear consensus on satisfactory criteria has not 
been readily forthcoming.
    On the one hand, the criteria need to be sufficient to 
thwart fraudulent search claims and to justify permitting an 
infringing use to proceed under protection of a limitation on 
remedies should the copyright owner subsequently surface.
    In effect then, they should be sufficient to ensure that in 
the vast majority of cases, the performance of a reasonably 
diligent search will mean that it is highly unlikely to the 
copyright owner will surface after the infringing use is 
commenced.
    On the other hand, the criteria need to be sufficiently 
reasonable and realistic so that the task of conducting a 
qualifying search will not seem so difficult as to discourage 
all but the most well-heeled would be users from pursuing the 
use of a particular work solely because they cannot identify or 
locate the copyright owner.
    The 2006 bill had a number of specific requirements that 
helped to make the concept of a reasonably diligent search 
meaningful, and these can be built upon as necessary to develop 
a consensus among stakeholders.
    My written statement also explains publishers' views on 
additional work necessary to resolve questions on when a person 
other than the user, who previously performed a reasonably 
diligent search, should be permitted to piggyback or rely upon 
the results of that search to claim eligibility for the billed 
limitation on remedies.
    The goal here is to avoid propagating the mistaken notion 
that ``orphan work'' is a status designation that thereafter 
governs all future uses of that work by all users.
    Besides the reasonably diligent search requirement, the 
2006 bill provided that the infringing users eligibility for 
its limitation on remedies depends on whether the infringing 
use of the work provided attribution to both the author of the 
work and the owner of the copyright.
    As explained in my written statement, publishers urge 
Congress to reconsider whether attribution should be a 
requirement for obtaining a limitation on remedies. And if so, 
whether at attribution to only the copyright owner should 
satisfy that requirement.
    Publishers believe there is more work to be done in shaping 
be the limitations on monetary and injunctive relief that would 
be available to a copyright owner who surfaces after an 
infringing user has performed a reasonably diligent search and 
commences infringing use of the work.
    I have explained these issues in my written statement and 
would be happy to answer questions about them.
    One final point, book publishers have heard some other 
producers of copyrighted works say that Orphan Works 
legislation will seriously harm their ability to protect and 
exploit their works.
    As noted earlier, book publishers share some of those 
concerns. In some cases, however, copyright owners who say they 
will be harmed by Orphan Works legislation also say they are 
unable to effectively protect their types of works from 
infringing uses under current law.
    The concern is about exacerbating existing infringement 
problems.
    Publishers believe that provisions in the 2006 bill could 
address most of these concerns insofar as they arise out of the 
Orphan Works scheme. But some of these concerns, insofar as 
they are based on problems occurring under current law, may 
require those copyright owners to take overdue action to create 
searchable ownership databases and use available technological 
means of protecting copyright within their community in the 
same way that copyright owners who produce other types of works 
have already done or are currently doing.
    Where there are current available technological solutions 
that have not yet been applied to address such problems, 
Congress should not delay the effective date of enacted 
legislation for application to certain types of works or 
exclude those works or certain uses of them from application of 
search legislation altogether except as measures of last 
resort.
    [The prepared statement of Mr. Adler follows:]
                   Prepared Statement of Allan Adler



    Mr. Berman. Thank you very much.
    Ms. Kevorkian?

   TESTIMONY OF CORINNE P. KEVORKIAN, PRESIDENT AND GENERAL 
MANAGER, SCHUMACHER, A DIVISION OF F. SCHUMACHER & COMPANY, NEW 
                            YORK, NY

    Ms. Kevorkian. Chairman Berman, Ranking Member Coble, and 
Members of the Subcommittee, thank you for the opportunity to 
testify on the issue of Orphan Works and the need to balance 
the interests of copyright owners and users.
    I come before you today to speak on behalf of the hundreds 
of American companies, members of the Decorative Fabrics 
Association, the National Textile Association, the Association 
of Contract Textiles, the Home Fashion Products Association, 
and the American Manufacturing Trade Coalition who will be 
negatively affected by an Orphan Works amendment to the 
Copyright Act, at least in the form heretofore proposed.
    Our members are weaving and printing mills, converters and 
textile designers, furniture manufacturers, and home fashion 
manufacturers.
    Most are small and mid-sized family-owned businesses.
    Collectively, our members spend several millions dollars 
every year in design development and sampling cost and have 
tens of thousands of active patterns in their lines.
    While we understand that there is a legitimate concern 
about true Orphan Works, previously-introduced legislation had 
the effect of creating orphans out of valuable visual works. It 
is hard to conceive under any scenario what greater public good 
is served by making a particular textile design available to a 
commercial enterprise which cannot locate the rightful 
copyright owner.
    There is simply no legitimate reason, educational, 
historical, cultural, or otherwise why a shower curtain 
manufacturer, for instance, has to use a certain design. If 
they are unsure of the copyright origin of a particular 
pattern, instead of risking the cost of litigation and 
infringement damages, they can just create their own design.
    The consuming public will not be cheated if it cannot buy a 
shower curtain or other product with a particular pattern on 
it. If anything, selection will be enhanced because new, 
original designs will be created.
    Every design created by textile and home furnishing 
companies is intended for commercial exploitation. They are 
created for the sole purpose of being applied to a product that 
can be sold and commercially exploited for the profit of their 
copyright owners.
    The inability to distinguish between abandoned copyrights 
and those whose owners are simply hard to find because a 
copyright notice has been removed or because the Copyright 
Office does not have a searchable database of visual work and 
no technology exists for such search, is a Catch-22 of this 
Orphan Works project.
    This legislation would orphan millions of valuable 
copyrights that can be otherwise be distinguished from true 
Orphan Works. And that would open the door to commercial theft 
on an unprecedented scale.
    The Orphan Works problem can be and should be solved with 
carefully crafted, specific limited exemptions. At a minimum, 
any orphan work legislation should exclude from its reach any 
visual work that was initially created for commercial 
exploitation or was at any time commercial exploited such as 
textile design as such works are not orphan works.
    Members of the Subcommittee know all too well that Asia, 
and China in particular, it is a major source of illegal 
copies. An orphan work proposal will only further embolden 
these copyright violators, most of whom are not subject to U.S. 
jurisdiction, to steal our designs, claim them to be orphaned, 
and we sell them to unsuspecting or unquestioning buyers who 
will rely on the infringer's claim of a reasonable search.
    Because there is no practical way to search for visual art, 
the end result is that the majority of visual artwork is likely 
to be deemed orphaned. In other words, as far as visual art is 
concerned, today almost any search is likely to be deemed 
diligent even if it has no chance of actually identifying the 
copyright owner.
    If an exclusion is not granted for visual works created for 
commercial exploitation, then at a very minimum, the proposed 
Orphan Works legislation should put the onus on the Copyright 
Office to develop a comprehensive database of visual works 
going back to 1978 that is fully searchable through effective 
image-recognition technology.
    The Copyright Office is the natural location and guardian 
of such a database. Any Orphan Works legislation should not 
come into effect until after the Copyright Office has 
successfully demonstrated and certified to Congress that it has 
implemented such a searchable database.
    While the textile and home furnishings industry is not 
opposed to an Orphan Works solution targeted to the specific 
concerns of the not-for-profit institutions and specific 
categories of copyrighted work for specific uses, we urge 
Members of this Subcommittee to take a tailored approach and 
consider the impact of any legislation on the visual arts 
industry.
    At a time when the American economy is in a recession and 
the textile industry is facing increased threats from foreign 
competition, we urge Congress not to strip the American textile 
and associated industries from their one competitive advantage: 
their intellectual property.
    Mr. Chairman, Ranking Member Coble, and Members of the 
Subcommittee, I again thank you for the opportunity to bring 
the concerns of the textile and home furnishings industry to 
your attention as you attempt to balance the interests of 
copyright owners and users.
    We look forward to working with you in the weeks ahead and 
devise a workable solution to this problem.
    Thank you.
    [The prepared statement of Ms. Kevorkian follows:]
               Prepared Statement of Corinne P. Kevorkian



    Mr. Berman. Ms. Coe?

  TESTIMONY OF KAREN C. COE, ASSOCIATE LEGAL COUNSEL, UNITED 
        STATES HOLOCAUST MEMORIAL MUSEUM, WASHINGTON, DC

    Ms. Coe. Chairman Berman, Ranking Member Coble, and Members 
of the Subcommittee, thank you for inviting me to speak this 
morning about our museum's experience with Orphan Works.
    My comments will also reflect the experiences of other 
museums, archives, libraries, and educational institutions that 
have previously submitted comments to you and to the Copyright 
Office on the Orphan Works project.
    I also want to thank Marybeth Peters and the Copyright 
Office for its comprehensive report on Orphan Works and for 
providing multiple opportunities for public comments and 
discussion of the issue.
    The United States Holocaust Memorial Museum has acquired 
and currently maintains 42 millions pages of archival 
documents, 77,000 photographs, and 985 hours of historical film 
footage.
    The majority of these materials are foreign works. Many of 
them are unpublished works, and many of them are orphan works. 
The museum acquires its orphan works in many different ways.
    We recently acquired an album of photographs that was found 
in an apartment in Germany after World War II. The individual 
who found it kept it until shortly before his death when he 
gave it to the museum. The photographer is unknown.
    The museum has been given drawings made by children of the 
Darfur region in the Sudan. We don't know who these children 
are, where they might be located, or if they are still alive.
    The museum has obtained journals and musical scores that 
were created in concentration camps and given by their creators 
to other inmates for safe keeping, and these surviving 
custodial inmates or their families have given them to the 
museum.
    We don't know whether the authors or composers are dead 
and, if so, who or where their family or other heirs might be.
    When our staff wants to use one of these orphaned works in 
a manner that requires copyright permission, we ask them to 
conduct a diligent, good-faith search to identify and locate a 
copyright owner.
    Because of the great variety of circumstances in which our 
works have been created and obtained, we allow our staff 
flexibility to structure these searches on a case-by-case 
basis.
    But often even a diligent search is not successful. The 
museum is, therefore, the custodian of a significant number of 
works that will not be made available to the public unless the 
museum assumes the risks of a copyright infringer.
    And even though these risks may be minimal, they are not 
ones that we can responsibly assume and they, thus, have a 
chilling effect on all our decisions regarding the use of 
orphan works.
    It is for this reason that we are interested in an Orphan 
Works solution that includes a safe harbor, a point at which we 
can consider making these materials available to the public in 
a variety of programs and media with the confidence that we are 
also not exposing the institution to an unknown liability.
    The museum is always prepared to negotiate with a copyright 
claimant who may come forward to claim rights to an orphan 
work, but because the work may have already been published by 
another publishing house or by the museum as part of a 
collective work, it is not always possible for us to stop using 
the work immediately.
    We, therefore, like to have a choice to either stop the use 
or to continue the use and pay a reasonable compensation to the 
copyright claimant if his claim proves to be valid. For, like 
other museums and nonprofit cultural institutions, the museum 
is more than willing to compensate copyright owners.
    Our interest in an Orphan Works solution is not because we 
want to avoid these license fees; but the compensation does 
need to be reasonable. It needs to account for the fact that 
our works have a small and limited market among educators and 
scholars and that many of them would not be published at all if 
they were not published by the museum.
    Thank you again, Mr. Chairman and Members of the 
Subcommittee, for providing me this opportunity to comment on 
the Orphan Works problem.
    The authority to make these works available to the public 
in a legitimate and constructive manner will be very helpful to 
the museum in enabling the use of its current and future 
collections to further its educational memorial purposes.
    [The prepared statement of Ms. Coe follows:]
                    Prepared Statement of Karen Coe



    Mr. Berman. Thank you, Ms. Coe.
    And Mr. Perlman?

 TESTIMONY OF VICTOR S. PERLMAN, GENERAL COUNSEL AND MANAGING 
   DIRECTOR, AMERICAN SOCIETY OF MEDIA PHOTOGRAPHERS, INC., 
                        PHILADELPHIA, PA

    Mr. Perlman. Mr. Chairman, Ranking Member Coble, 
distinguished Members of the Subcommittee, thank you for this 
opportunity to present our views on Orphan Works problems and 
solutions.
    Our testimony today is made, not on behalf of ASMP alone, 
but on behalf of the Professional Photographers of America, the 
Graphic Artists' Guild, and virtually every other major trade 
association in the United States representing the interests of 
freelance photographers and/or commercial artists and 
illustrators.
    We estimate that in the United States there are 
approximately 100,000 such photographers and at least as many 
illustrators and artists. I should specify that we support 
today's testimony and statements of Corinne Kevorkian.
    ASMP believes that the Orphan Works problem is a legitimate 
one that needs to be addressed. It is our hope to help enrich 
this Nation's visual heritage and foster creativity, not to 
stifle them.
    Many of us in this room have spent a large part of the last 
3 years, at least our professional lives in the last 3 years, 
working on Orphan Works. And it is important to us of us to get 
this legislation done, but it is more important that we get it 
done correctly and fairly.
    To do that, the Subcommittee needs to understand some of 
the you factors relating to visual images and their creators. 
Most photographers are mom and pop operations with limited 
resources and no backup.
    The Department of Labor tells us that the average 
professional photographer earns under $40,000 a year. They rely 
on the revenues from licensing the uses of their works and 
selling print. They, obviously, have little or no reserve 
resources of any kind.
    One of the effects of that limited resource is that the 
reality is that they cannot afford to litigate copyright 
infringement cases even if the copyrights are registered before 
the infringement. Most states codes of ethics for lawyers 
require the client to pay out-of-pocket expenses rather than 
the attorney. And most photographers simply do not have the 
resources to pay the out-of-pocket expenses, let alone the 
legal fees involved in infringement. The fears of mass suits 
for copyright infringement are terrifying but illusory.
    Another fact is that most published imaged are likely to be 
considered orphan works. The business model, which is not 
controlled by the photographers or the illustrators dictates 
that either no credits are given, or where they are give they 
are physically distant from the images and are easily separated 
from them or lost, even innocently.
    Making the problem worse, there is no way to search the 
Copyright Office records for visual images in a meaningful way 
unless the searcher already has the very information for which 
he or she is searching.
    The search technology is text-based only. There are no 
deposit copies accessible online, and there is no digital 
library of an archive of deposit copies that could be searched 
using image-recognition software.
    Even the wonders of image-recognition software, which my 
friend Maya will tell you about, would only be a partial cure 
because digital search technology only works on the data to 
which it has access. That means that it works fine for digital 
images that are online and on Web sites that are open to the 
public.
    The problem is that there are far more copyrighted images 
in analog print form than digital form. Millions, perhaps even 
billions, of images, and most of the images that are likely to 
be considered orphan works are probably the older images in 
print form only.
    They can only be searched digitally if they are digitized. 
And as I have made pretty clear, the photographers and 
illustrators simply do not have the resources to be able to 
digitize much of a lifetimes' body of work when they have to 
eek out a living.
    Where does that leave us? ASMP and the creative community 
want to encourage, not stifle, individuals, nonfiction authors, 
documentarians, and museums. They are not our concern.
    Our concern is that there are opportunists who will seize 
on the Orphan Works defense and the practical inability of 
creators to pursue them in court to establish commercial 
ventures making profits from the images of others without 
permission and without having to pay for their inventory.
    These are the people who registered domain names like 
OrphanWorks.com two or 3 years ago. In the last Congress, the 
parties came to a deadlock, which we think can easily be 
broken. In our view, the problem stemmed from the fact that 
Orphan Works legislation had a fairly specific goal but the 
wording of the bill was all-encompassing.
    As we understand it, the impetus for Orphan Works 
legislation was not to create a land rush for copyrighted 
works, but to create reasonable access to orphan works for 
certain kinds of uses; such as for hobbies, social Web sites, 
not-fiction publications, documentary films and videos, museum 
exhibits, and other, what we will call for lack of a better 
work, non-commercial uses.
    However, the bill, as drafted in the last Congress, would 
have allowed virtually any kind of use to qualify for an Orphan 
Works defense. Our proposal is simply to limit the scope of an 
Orphan Works bill to cover the primary intended uses and only 
those uses.
    Specifically, we would proposal inserting an additional 
requirement to the conditions for eligibility which would be 
that the infringing use of the work constituted a ``qualifying 
use.''
    We would then have a definition of qualifying use that 
would be something along the lines of uses by individuals for 
non-revenue producing personal or community purposes including 
uses on Web sites that do not generate revenues for the 
individuals using the orphaned works; uses in works of 
nonfiction such as books, articles, documentary films and 
videos; uses by nonprofit educational institutions, libraries, 
museums, or archives qualified for treatment under section 
501(c)(3) and exhibits, including Web site displays and for 
uses that produce revenues and that are ancillary to exhibits 
such as souvenir sales.
    Mr. Berman. Mr. Perlman, your time is winding down here.
    Mr. Perlman. The exact language needs to be refined, but 
that is our concept, and we hope that that will help move this 
process along.
    [The prepared statement of Mr. Perlman follows:]
                Prepared Statement of Victor S. Perlman



    Mr. Berman. Great. Thank you very much.
    Ms. Gura?

   TESTIMONY OF MAYA GURA, DIRECTOR OF MARKETING AND SALES, 
                  PICSCOUT, SAN FRANCISCO, CA

    Ms. Gura. Chairman Berman, Ranking Member Coble, and 
Members of the Subcommittee, my name is Maya Gura, and I am 
honored to testify before you today. I am here representing 
PicScout, a young technology company based in San Francisco, 
California, and Israel.
    We specialize in image recognition technology and offer 
image recognition services to our clients who are both 
copyrighted content owners and users. Our technology can match 
images or partial information of an image such as a single case 
of one person in a crowd with 99 percent success.
    With approximately 60 employees on board, PicScout was 
selected by Forbes Magazine to be a part of a ``Forbes Israeli 
E-gang,'' and we were also named one of 17 most innovative IT 
companies in Europe. PicScout's leadership thrives on 
challenges. We have strived to provide both content owners and 
users with innovative solutions.
    For example, we offer advanced web crawling capabilities to 
help address piracy on the Web and also maintain a massive 
database of copyrighted digital files through which copyrighted 
owners can be found. Our proprietary image recognition 
technology was originally developed for homeland security 
purposes.
    Today, in the consumer marketplace, our flagship product is 
called the Image Tracker. Image Tracker manages visual content, 
including photographs, across all media globally and reports to 
our clients thousands of commercial infringement cases in a 
month.
    Working with the photography industry and the supporting it 
for the last 5 years, we enable our clients to proactively 
enforce copyrights of their valued materials by tracking the 
usage of their beautiful images.
    Over the years, we have established relationships with our 
partners and now track the use of millions of digital files 
stored in our huge, centralized database. Moreover, we have 
been extremely proactive about offering our services to 
photographers of all levels, frequently at very little cost to 
them in order to encourage them to take action against 
copyright violations.
    We are well aware of the problems of orphaned works in the 
copyright community and are pleased to be a part of the 
solution. We believe that PicScout and other technology 
companies offer many options to copyright owners and users 
alike, and we will continue to play a significant role.
    Technology and market solutions will get better and better 
as more business models develop. In the past 2 years, various 
solutions have begun to emerge, targeting, specifically, the 
orphan works issues.
    This is past December, PicScout was honored to present a 
demonstration of new products of ours, called the Content 
Clearance System, at a briefing for congressional staff 
organized by the Copyright Office.
    Unfortunately, I am not able to demonstrate our technology 
for you today, but I would like to describe it to you. The 
Content Clearance System contains a massive, secured database 
of innumerable digital fingerprints and their ownership 
information, robust Image Recognition comparison engine, and a 
friendly interface for public queries, easy to access using the 
popular search engines.
    When a user unloads an orphan work to our system, it is 
compared to the full database of stored files and instantly 
provides an accurate result. This system targets the simple 
person who wants to use any digital file and doesn't know who 
it belongs to.
    All he has to do is go online, upload this file to our 
clearance system using our friendly interface, and click on the 
search button. Our system will compare this file to millions of 
other files all registered in our secure database, and the user 
will receive an e-mail certification with copyright owner 
details, contact, and licensing information.
    While performing this reasonable and diligent search at 
little or no cost at all, the users will have the ability to 
decide whether they can and want to use this content.
    PicScout strongly believes that our technology can have the 
person who wishes to search for the owner of an orphan work to 
identify the ownership of the individual file even when the 
file is highly distorted.
    For example, our technology is fully capable of recognizing 
an image even when large portions of it were deleted or 
colorized. During our web monitoring process, we routinely 
identify matches based on small portions of visual content, and 
I am confident that we could provide the same level of accuracy 
when orphan works users search our database having only partial 
materials to work with.
    PicScout is happy to be a part of the various technology 
solutions available to the good-faith user. But even more, I am 
proud to support the artists and encourage the great creation 
of art.
    Thank you.
    [The prepared statement of Ms. Gura follows:]
                    Prepared Statement of Maya Gura



    Mr. Berman. Thank you very much. Very interesting.
    We will go now to questions.
    I will recognize myself for 5 minutes. Ms. Peters, I 
understand your proposal would apply to all categories of works 
and all uses, commercial as well as non-commercial, published 
as well as unpublished, foreign as well as those originating in 
the United States.
    As a general matter, it does seem like good policy to avoid 
special carve-outs. That said, in light of some of the concerns 
that have been expressed, do you think it might be possible to 
narrow the scope of Orphan Works, perhaps, for example, by 
excluding works that are applied on useful articles like shower 
curtains or coffee mugs?
    Ms. Peters. The answer is yes. You could do that. 
Obviously, when we studied the problem, we certainly saw a 
broad need for all types of work and all types of productive 
uses.
    That being said, I want to see a bill enacted. And so if, 
in fact, legitimate concerns have been raised, and the goal 
with regard to productive uses that increase the knowledge of 
citizens of the United States, I don't think necessarily that 
it is a textile design on a cup.
    Yes, we certainly are amenable to various proposals that 
raise legitimate concerns and, if at the end of the day, you 
can strike a compromise that really achieves the goal that we 
are trying to reach but does, in fact, limit it to particular 
uses, I would suggest that all categories of works need to be 
included.
    But you could look at limiting, perhaps, some of the uses.
    Mr. Berman. It would seem logical that the Copyright 
Office, which is already supposed to receive, deposit, and 
handle registration matters would be the natural location for a 
database of the copyright registry.
    What challenges exist in terms of creating--I know this is 
well, a sensitive subject--but what challenges exist in terms 
of creating an identifiable, searchable database at the office?
    Ms. Peters. Well, let me start with, since 1978, certainly, 
all information concerning registered works is available 
online. It is text-based. Visual arts works: there is an issue 
because they don't have titles and they don't have the names of 
authors on them.
    But information that we gather when the photograph is 
registered or the textile design is registered, that 
information is available online.
    The issue really is the copy of the work that comes in. 
Copies of works, primarily, are to serve the Library of 
Congress in its acquisition for its collections and exchange 
program.
    The Library of Congress has the ability to, basically, ask 
for any copy to be transferred to it. The Copyright Office, 
basically, has most unpublished works, but, if you look at the 
legislative history, that work is for the registration 
specialist to determine the type of work, the information that 
is associated with the work, in order to create a record.
    If you were to look at our deposit regulations, they really 
didn't require a high-quality print in any instances. We accept 
Polaroids.
    So if, in fact, you really want images and you want images 
to be searchable--which I think a lot of copyright owners would 
not necessarily want to have generally available--it would be a 
huge shift in our mission, and it would be possible, frankly, 
only going forward; but I would actually submit that the 
Copyright Office is never the best way to come up with state-
of-the-art technology. The private sector, actually, can do it 
much better than we can.
    So I don't think that the cost of employing something like 
that would really serve the benefit. I see this as a business 
issue. Everybody needs to license their works. There needs to 
be a database started----
    Mr. Berman. PicScout----
    Ms. Peters. Is a perfect example. I think that is where the 
solution is.
    Mr. Berman. My last question would be to Mr. Adler. The 
last question for this round, anyway, would be to Mr. Adler.
    You have heard Mr. Perlman's proposal. I would like to get 
your reaction to it. And then I would like to get Ms. Peters' 
reaction both to Mr. Perlman's proposal and Mr. Adler's 
reaction to Mr. Perlman's.
    Mr. Adler. Thank you, Mr. Chairman.
    While it would be wonderful, I think, for book publishers 
to be thought of as opportunists these days, I don't think they 
are used to hearing that kind of appellation applied to them.
    Frankly, I think the problem with the proposal is that in 
the end, it proves to be too much.
    To limit this bill, for example, to nonfiction works would 
be somewhat ironic since I think that would mean that fictional 
works, which are actually considered to be----
    Mr. Berman. You mean memoirs?
    Mr. Adler. Memoirs could be--they are really the most 
creative category of works. And in some respects, that means 
that one of the purposes of this bill, which is to allow people 
to engage in further creativity by the use of preexisting 
works, would be thwarted if you only allowed them to be used in 
nonfiction works.
    And by limiting the used of the works, for example, with 
respect to commercial advertising, I wonder what that would 
mean, for example, to the use of an orphaned work as a book 
cover photograph, for example.
    Does that mean that you couldn't, then, commercially 
advertise the book because you would also, in essence, be 
showing the photograph in a commercial ad?
    If there was some distinction made between whether or not 
you are actually using materials in commercial advertising as 
opposed to whether or not the material is being use in 
advertising for a work that is using the orphan work, then I 
think that might be something worth discussing.
    But just simply to say that works couldn't be used in 
commercial advertising, I think, would be far too broad.
    Mr. Berman. And, then there is also the issue of the for-
profit printer of the nonprofit work.
    Mr. Adler. Right. Right. Non-revenue generating activities, 
of course, I think, would require this Committee to spend a lot 
of time in the tax code trying to design exactly how they could 
inaudible that kind of a concept into this----
    Mr. Berman. Ms. Peters, your thoughts?
    Ms. Peters. My thoughts are similar to Mr. Adler's.
    I do commend Mr. Perlman for trying to narrow the scope to 
something that is more amenable to his members, and I think 
that if that is the way you want to go, we can try to do it. 
But the way that it has been presented, it is too broad. It is 
too broad----a carve-out.
    Mr. Berman. Mr. Coble?
    Mr. Coble. Thank you, Mr. Chairman.
    Good to have you all with us.
    Madam Register?
    Ms. Peters. Yes.
    Mr. Coble. How do you respond to Ms. Kevorkian's statement 
that companies should not be stripped of their rights by 
reintroducing formalities in violation of international 
treaties or legalizing infringement through the orphaning of 
designs, (A), and (B), can you address the assertion that a 
work may be orphaned by the actions of a user or other third 
party?
    Ms. Peters. Let me start by saying nobody is trying to 
strip owners of their rights. In fact, the goal of the 
legislation is for owners to recognize that they should come 
forward and make use of various registries or other ways, like 
PicScout, of being locatable.
    So there is no stripping of rights. We couldn't do that 
under the international conventions.
    What we have is that where, after a diligent search, the 
owner cannot be located, then reasonable compensation for a 
particular use will be allowed. So all you are really doing is 
cutting back with regard to compensation, but you are cutting 
it back to what a willing buyer and a willing seller would have 
agreed to before at the time that the use was made.
    So I don't actually see that as a huge cutting back. The 
most you can say is, statutory damages, if the work had been 
registered would not be available. So, for me, I don't see it 
as a cutting back. Unfortunately, I knew it.
    Second part of the question, just to say a couple of words. 
That was the first part. That was your (A).
    Mr. Coble. Yes.
    Ms. Peters. And your (B) was?
    Mr. Coble. Oh, the (B) was the assertion that a work may be 
orphaned by the actions of the user or a third party.
    Ms. Peters. I am not exactly sure what that means. I would 
argue the opposite. I would argue if there is a reasonably 
diligent search, you will find the copyright owner.
    So it is not the user who is making the work an orphan; it 
is the copyright owner. It is the opposite.
    Mr. Coble. I got you.
    Thank you, Madam Register.
    Mr. Adler, I had planned to examine you, but my Chairman 
beat me to the punch and he asked me to ask you the same 
question.
    So let me go to Ms. Kevorkian. Ms. Kevorkian, is it 
standard practice for textile companies to register their 
designs with the Copyright Office?
    Ms. Kevorkian. Yes, Mr. Coble.
    The textile industry, in general, registers thousand of 
designs every year. It is our standard practice not only to 
register our designs with the Copyright Office, but also put a 
copyright notice on all of our printed fabric where there is a 
selvage, and on the ticket to the fabric that we sell.
    With respect to certain categories of textiles, such as 
woven there is no selvage, so there is no way of putting a 
copyright notice on the product itself; although, we do affix a 
ticket.
    But it is very easy to cut off that information; to remove 
a ticket from a rug, from wallpaper, because you cannot print 
that copyright notice and create an orphan. If you look behind 
you, on that curtain, there is no copyright notice. There is no 
way to put that copyright notice.
    And you could take that curtain and say I can't find the 
copyright owner because there is no searchable database, and, 
therefore, I have done a reasonable search. I went to Google. I 
came up with a million hits for that particular pattern with no 
images. So I am reasonable. I can use it.
    Mr. Coble. Well, without a comprehensive database, how do 
U.S. textile companies ensure that they are not infringing on 
the design of a third-party company?
    Ms. Kevorkian. It is very simple.
    Mr. Coble.--exchanging information with each other, I 
imagine.
    Ms. Kevorkian. Well, for one thing, if it happens sometimes 
that someone will come to us and say, ``Could you recreate this 
design for us?'' If we do not have a signed certificate from 
the user saying that they either own that design, we will not 
do it.
    If they know who created the design, we will do a copyright 
search at the Copyright Office, which is text-based. But if you 
at least have the pattern name or the name of the author, then 
you can do that search.
    If you have neither, then, very simply, we will not use the 
design. It is not going to change our business model. We will 
create a new design.
    Mr. Coble. Mr. Chairman, my red light is about to 
illuminate, so I yield back.
    Mr. Berman. I thank you.
    And I recognize the gentlelady from California, Ms. 
Lofgren, for 5 minutes.
    Ms. Lofgren. Thank you, Mr. Chairman.
    As you know, I am very appreciative that we are having this 
hearing today. This has been an issue of considerable concern 
to me.
    And I remember watching the Eldred case being argued and 
then reading with great interest Justice Breyer's comments 
about how the majority of copyright-protected material is 
orphaned.
    And so I do think that we need to come up with a solution 
that solves that problem for the sake of the culture, but also 
respects the copyright owners because we don't want it run over 
the compensation, the legitimate compensation needs of 
copyright owners.
    The fact that we are having this hearing today tells me 
that we are serious about moving forward to get that balance 
right. I am interested, Marybeth Peters, about what role you 
think the Copyright Office really should play in solving this 
Orphan Works problem.
    Ms. Peters. Absent having an image recognition database of 
visual arts works, we are willing to do everything we possibly 
can.
    What issues have come up with assistance with regard to 
best practices, we have gone a long way with our new electronic 
database which allows people to send both an application and a 
deposit copy to us electronically and have that information 
available much more quickly than it ever has been before.
    But I will tell you that this is a problem that I 
personally experienced in trying to do clearances for the 
Library of Congress. It is something I care about deeply. And 
the Copyright Office will do everything it can in order to see 
enactment of a balanced Orphan Works bill.
    Ms. Lofgren. Let me ask you, you mentioned the Copyright 
Office's role in establishing best practices. Of course, best 
practices are in the eye of the beholder.
    How could you envision moving forward in getting a best 
practices established in a way that has buy-ins in the various 
parties?
    Ms. Peters. I can give you an off-the-cuff answer right 
now, but if you want a really serious, detailed one, I would 
be----
    Ms. Lofgren. Well, I will take both.
    Ms. Peters. Okay. I will be glad to send you our more 
thoughtful consideration of what you are asking. The problem 
with best practices, in part, is it depends on the type of the 
work.
    So you really have to find copyright owners, organizations 
of copyright owners, organizations of copyright users of that 
type of material. And there are many people who search and who 
have actually put together for people who want to find their 
works, kind of a list of things that you should do.
    Ms. Lofgren. Right.
    Ms. Peters. So at the very least, it would be working with 
all of these communities and trying to collect and make 
available their practices. But we could even take it a step 
further if the Committee thought that that was wise.
    But let us get back to you with a very precise answer on 
what we would be willing to do.
    Ms. Lofgren. I would appreciate that.
    Let me ask you about--we have had testimony from the 
technology company in my state, nearby. There are a variety of 
things going on technologically. It is a very interesting time 
to be looking at this.
    Some people have suggested that it is the Copyright Office 
that should establish what technology we are going to use or 
prescribe. And I have seriously, very grave, reservations about 
that because the technology will move faster than the 
government ever can.
    Ms. Peters. I would agree with you.
    We are not technology experts. We employ technology, 
sometimes with difficulty. I see projects, basically, blooming 
all over.
    I visited the Copyright Clearance Center, and they have a 
project called DiscoverWorks.org where people can put in 
information about finding things. And they have, basically, the 
design library as part of their, basically, panoply of works 
that you can search.
    I think that the Copyright Office should encourage 
technology. It should use technology itself to the extent that 
it is appropriate.
    But I don't think that we are the ones who should be 
certifying technology. I think that actually it will come out 
in best practices of the copyright owner and user groups. They 
will identify which technology probably best suits the purpose.
    Ms. Lofgren. Thank you. That is very reassuring to me, and 
I see my time is about up.
    Mr. Chairman, I yield back.
    Mr. Berman. Thank you very much.
    Mr. Feeney is recognized for 5 minutes.
    Mr. Feeney. Well, thank you Mr. Chairman.
    And it may be some of these orphaned works don't want to be 
identified by their parents; they are proud to stand on their 
own. But I guess they don't have much say in the matter.
    Ms. Peters, I was interested in your response that your 
office would do what they could, but absent, I think you 
referred to an image recognition database--my understanding, 
and I don't know if any of the panelists know--my understanding 
of the Library of the Congress is working on something just 
like that.
    Does anybody know about the status of the development of 
that?
    Ms. Peters. I could find out for you.
    I actually do a lot of projects with the Library on digital 
imaging and things like that. They are working with Flickr--
they are making material available, but I was not necessarily 
aware of technology that is recognition. But if you want me to 
find out about it----
    Mr. Feeney. That would be terrific. And then the question 
is: Are they going to try to make it as comprehensive as 
possible? I guess that is almost impossible to do. People have 
old photographs stored in their attic and their garage and all 
over the place.
    That seems to me, the ideal if you are trying to find out 
whether somebody is using a photograph, you know, with respect 
to photographs, that seems to be the ideal.
    But even then, I mean, my question is: Do we have any 
technology experts? Assuming we had a perfect database of every 
photograph, for example, ever taken, would the technology be 
available to tell you whether or not superimposed photographs, 
you know, people that take part of one picture and put it into 
a different background, for example.
    Would that type of technology conceivably be able to expose 
a use of a prior work? Does anybody know the answer to that?
    Well maybe we will get some folks that are more competent 
than me to explain those issues. But it seems to me sort of the 
ideal if you are trying to find the original photographer.
    Ms. Kevorkian, in one of your statements, you suggested 
that--and I am going to quote you--``pictorial or graphic work 
that was initially created for commercial exploitation or was 
at any time commercially exploited should be excluded.''
    And I guess the question there is how would a potential 
user know what the original purpose was in a lot of--wouldn't 
it be sort of ambigious in many cases or not self-evident?
    Ms. Kevorkian. Well, surely, in our industry, I think it 
would be self-evident. If you take the curtain, again, behind 
you, the design that is featured on that curtain, the curtain 
was made for commercial exploitation. It was a useful article. 
And I think that is really where we are driving at.
    If you have a useful article, it was meant to be sold. You 
don't make fabric just to hang on your wall to look at. It is 
not a piece of artwork. The rug that we are walking on today 
was made to be sold and to be exploited.
    And our biggest concern is really that productive use of a 
design.
    Mr. Feeney. Well, there are cases where it is clearly the 
intent to have a commercial purpose, but there are cases where 
people take pictures, and they don't know what they are going 
to use them for.
    You know, you sort of decide after the fact whether a 
photograph has value. I mean, you look at magazines, whether it 
is National Geographic, I mean--in my local newspaper every 
weekend, we have readers, you know, favorite pictures.
    Well, all of a sudden, they have become commercial in a 
sense, but that wasn't the original tourist's intent; they just 
happened to catch some special moments.
    I guess we have some definitional problems there when we 
are--it is hard to look at a lot of pieces of art and decide 
when the intent of the photographer was or the artist.
    Ms. Kevorkian. Right. In the case of photographs, I agree 
with you, Mr. Feeney, that it would not be as self-evident.
    But in a case of useful articles, I think it is self-
evident. And that is really one way to address this problem 
would be to exclude that category of product or uses.
    Mr. Feeney. Anything we do need to take into account these 
ambiguities because you want a black and white law, in my 
opinion, that everybody understands.
    And then, finally, Mr. Perlman, you suggested that the user 
community would be the primary beneficiaries from an Orphan 
Works legislation, not the creator or the owner communities.
    But wouldn't it be beneficial if you are a creator and 
somebody goes through a diligent search to find you to ask 
permission, isn't there some potential benefit to the owner or 
creator of works if we would require some sort of diligent 
search before use?
    Mr. Perlman. Sure. But that exists today. What we are 
talking about here is a carve-down of owners' rights. And that 
is what the legislation is all about. Do we think that it is 
appropriate in some circumstances? Yes.
    But, you know, make no mistake about it, what we are doing 
is carving back on owners' rights.
    Mr. Feeney. If I can, just for a second, Mr. Chairman.
    The only analogy I have--and this is a fascinating aspect 
of IT, but we actually dealt with a related orphan issues 
involving real, live babies and adoption proceedings in the 
state legislature of Florida. And I am sure other legislatures 
have this problem.
    You don't know where dad is, for example, so you have to go 
through an adoption process, notifying dad, finding dad or at 
least trying to find and notify dad becomes very important.
    And we have dealt with similar issues so that reasonable 
search--and if you couldn't find the dad after a reasonable 
search, there was an avenue for mom to put the baby up for 
adoption or for that adoption to be final.
    So we need some finality here after a reasonable search if 
we are going to do something.
    Thank you. I yield back.
    Mr. Berman. The time of the gentleman is expired.
    The gentleman from Georgia, Mr. Johnson.
    Mr. Johnson. Thank you Mr. Chairman.
    Mr. Berman. And let me just say, we have two votes. Let's 
see if we can finish up before we have to go.
    Mr. Johnson. Thank you, Mr. Chairman.
    To any of the witnesses who would care to respond. Do the 
proposed limitations on monetary and injunctive relief 
represent a fair balance between the rights of the owner and 
the desires of the user?
    Ms. Peters. I am, obviously, going to say yes.
    What is not available is statutory damages. And there has 
been a question is that fair, especially if you have registered 
the work.
    I will argue that statutory damages are an enhanced remedy. 
Foreign owners don't actually get it unless they actually 
register with us as well as domestic owners.
    And we are not talking about works that are pirated. What 
we are talking about is someone who wants to use the work, who 
wants to find the owner, who wants to negotiate a license, and 
they have done all the reasonable things that they can in order 
to find that owner.
    And if that owner shows up, either a deal will be struck, 
or the owner will say no. But if, in fact, the owner isn't 
found, then what they get is close to the deal that they would 
have struck.
    It would be what a reasonable buyer and a reasonable seller 
would have agreed to at the time of the use, and there are 
numbers that various industries have on what a particular use, 
especially in the visual arts, on what somebody would pay for a 
particular use.
    So I will argue that I think that this is a fair balance, 
and it is not a major cut-back on owners' rights.
    Mr. Johnson. Thank you, Ms. Peters.
    Yes?
    Mr. Perlman. I think I might say that it isn't a totally 
fair balance. It may be a balance that we can live with 
depending on what the whole package looks like.
    Ms. Kevorkian. If I may answer as well.
    I think that if we were in a perfect world and there were a 
way to do a reasonable search so that someone could actually 
assert that they had conducted that reasonable search, then, 
perhaps, we could address the remedies at that point as being 
satisfactory.
    My concern and the concern of the textile industry is that 
there is no such means of doing a reasonable search and that 
the reasonable compensation does not include, at least in the 
previous bill, attorney's fees.
    And very often, the reasonable compensation will be far 
less than the cost of litigating in order to recover that 
reasonable compensation.
    And I believe that the reasonable compensation should be 
what the seller would have sold or licensed that particular 
copyrighted material at the time in that seller's industry.
    I would also like to address the issue of injunctive 
relief. Oftentimes, in our industry, we license design, we give 
exclusive licenses, and there may be industries or particular 
uses for which we would have never granted a license in the 
first place.
    And if our designs are incorporated into a derivative work, 
then we find ourselves in situations where that design lives on 
into another piece of work which we may not find satisfactory 
to us even if reasonable compensation is accorded.
    Mr. Johnson. Thank you.
    Yes, sir?
    Mr. Adler. I represent an industry of copyright owners who 
would naturally be concerned if they felt that their remedies 
were being unfairly reduced.
    I think it is important to point out that copyright owners, 
to some extent, hold their fate in their own hands with respect 
to the orphan works scheme.
    To the extent that they can make themselves available in 
the sense that they can be identified and be located in 
connection with their works, then their works won't be subject 
to this scheme at all.
    To the extent that somebody first has to conduct a 
reasonably diligent search which, under this scheme, by the 
way, has gotten to be far more sophisticated, I think, and a 
bit more tough than it was when originally proposed by the 
Copyright Office, until that reasonably diligent search can be 
documented and done and until the person goes ahead and 
actually engages in infringing use of the work based upon that 
search, the copyright owner is still fully entitled to all of 
the remedies available under copyright law.
    Mr. Johnson. Thank you.
    Are there a set of best practices that are being created in 
a form of a checklist for each, I guess, each type of work: 
music, visual arts, these kinds of things?
    Is there a checklist being created of best practices?
    Ms. Peters. I can try to answer.
    I don't think there is a checklist, per se. There are best 
practices that exist.
    We anticipate that best practices will be developed.
    Technology is part of the searching tools. You don't want 
them frozen in place because new technology can come tomorrow 
to do something that the industry agrees that that is something 
everybody should serve.
    But the Copyright Office is willing to assist in gathering 
best practices and playing a constructive role in making best 
practices widely known to people who might be users.
    So, yes. Best practices are critical. Users will be part of 
the process. Copyright owners will be part of the process. The 
Copyright Office will assist in any way it can.
    Mr. Berman. The time of the gentleman haas expired, I am 
sorry, just because we have a vote called. I want to give the 
gentlelady from Texas a chance to question. So I think I am 
going to recognize her.
    We have about 6 minutes left before we have to be on the 
floor.
    Ms. Jackson Lee. Thank you very much, Mr. Chairman, and 
thank you for this hearing.
    I think the depth of this Committee under your leadership 
is important as we explore the numerous issues dealing with 
property, intellectual property.
    Let me ask Ms. Peters what the knowledge she has of how 
other nations treat orphaned works. And are any of these 
lessons applicable to the United States?
    Ms. Peters. When we did the study, we actually looked at 
what was going on in other countries.
    The one system that is just to our north in Canada, there 
is a statutory license for published works that is administered 
by the Copyright Royalty Board. We looked at that and we 
rejected that.
    Europe is now looking at the issue but hasn't really come 
up with a solution. It is an emerging issue in most countries, 
but the solutions, other than the one I identified----
    Ms. Jackson Lee. And Canada's solution, again, was what?
    Ms. Peters. It is basically a statutory license when you 
cannot find the copyright owner, you go to the Copyright 
Royalty Board----
    Ms. Jackson Lee. Would that be the same as like government-
managed compulsory----
    Ms. Peters. Yes, exactly.
    Ms. Jackson Lee. And that is been rejected?
    Ms. Peters. And they set rates and things like that.
    Ms. Jackson Lee. Let me go----
    Ms. Peters.--chose not to do a basically compulsory license 
per se, but to encourage people to make themselves known and 
then just to limit the remedy.
    Ms. Jackson Lee. Ms. Coe? Did I say that right? I am not 
saying it right. Coe?
    Ms. Coe. Coe.
    Ms. Jackson Lee. Thank you.
    Give me, quickly, your dilemma--and we are rushing to the 
floor--with the Holocaust Museum and Orphan Works.
    How does that impact you? And I forgive you for not hearing 
out for testimony.
    Ms. Coe. Well, just simply that a substantial number of our 
works are orphan works. And because we cannot find the 
copyright owner to get permission, we are very limited in how 
we can use those works.
    This conflicts with our, be it statutory mandate, which is 
to really disseminate this information to the American public.
    Ms. Jackson Lee. Would you welcome a system in the 
government that would allow you to pay a fee, an assessment, 
into a patent office trust fund?
    You could use it and then if the individuals were ever to 
be found, there would at least be some compensation there for 
them and you would have at least some umbrella of utilization 
of these works that you need to use.
    Ms. Coe. Well, I think we--as I mentioned, we already have 
the resources to offer reasonable compensation to a copyright 
owner.
    I wouldn't think of when you were mentioning as----
    Ms. Jackson Lee. If you couldn't find them, then that fee 
that you might be willing to pay would be assessed by the 
government and it would be in a trust fund.
    Would that be something that you could consider?
    Ms. Coe. Well, yes, we could consider that. That is right. 
I have to think about it.
    Ms. Jackson Lee. Let me just conclude, Mr. Chairman, 
knowing that we have to go to the floor, and indicate that I 
have a number of questions, and I will submit them for the 
record.
    I yield back.
    Mr. Berman. And, I believe Mr. Johnson also has some 
questions he will submit to the record. I have a few more we 
may submit.
    I do want to mention to Mr. Perlman and Ms. Kevorkian that 
we are intending to try and put together a bill.
    You have tried to make some suggestions in how to deal with 
it, but I don't think you should relax with the sense that this 
is just a hearing and it is all going away, because that isn't 
our intention.
    I understand very well your very real and particular 
concerns in the areas of your works that you are speaking to 
today. But we have to find a practical way to deal with that.
    And with that, I will adjourn the hearing, and thank you 
very much for your cooperation.
    [Whereupon, at 11:30 a.m., the Subcommittee was adjourned.]
                            A P P E N D I X

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               Material Submitted for the Hearing Record

       Prepared Statement of the Honorable Sheila Jackson Lee, a 
    Representative in Congress from the State of Texas, and Member, 
    Subcommittee on Courts, the Internet, and Intellectual Property



                                 
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