[Congressional Record Volume 146, Number 102 (Wednesday, September 6, 2000)]
[House]
[Pages H7244-H7246]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




        WORK MADE FOR HIRE AND COPYRIGHT CORRECTIONS ACT OF 2000

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from North Carolina (Mr. Coble) is recognized for 5 minutes.
  Mr. COBLE. Mr. Speaker, today I am introducing, along with the 
gentleman from California (Mr. Berman), the ranking member of the 
Subcommittee on Courts and Intellectual Property of the Committee on 
the Judiciary, H.R. 5107, the Work Made for Hire and Copyright 
Corrections Act of 2000. This bill addresses the controversy over the 
recent amendment to the Copyright Act that added sound recordings to 
the list of works eligible to be works made for hire. It resolves the 
controversy and is supported by all parties involved. It also includes 
other noncontroversial corrections to the Copyright Act.
  First, some background about sound recording as works made for hire 
is necessary. A work made for hire is, one, a work prepared by an 
employee within the scope of his or her employment; or, two, a work 
especially ordered or commissioned for use as a contribution to a 
collective work if the parties expressly agree in a written instrument 
signed by them that the work shall be considered a work made for hire.
  The Copyright Act provides authors a right to terminate a grant of 
right 35 years after the grant. The termination right, however, does 
not apply to works made for hire. Since 1972, sound recordings have 
been registered by the Copyright Office as works made for hire, even 
though they were not statutorily recognized as such prior to the 
enactment of the Intellectual Property and Communication Omnibus Reform 
Act of 1999. This statute, known as IPCORA, included a provision that 
added sound recordings to the list of works eligible for work made for 
hire status.
  Following the passage of the amendment last year, recording artists 
argued that the change was not a clarification of the law and that it 
had substantively affected their termination rights. When apprised of 
these arguments, I agreed to hold a hearing on the issue of sound 
recordings as works made for hire. The subcommittee subsequently held a 
hearing on May 25, 2000, after which the gentleman from California (Mr. 
Berman) and I encouraged both sides to seek a mutually satisfactory 
resolution through private negotiations. Representatives of the artists 
and the recording industry negotiated diligently and in good faith, and 
during the August work period they presented us with a compromise 
solution.
  H.R. 5107, Mr. Speaker, implements that solution. It is a repeal of 
the amendment without prejudice. In other words, it restores both 
parties to the same position they were in prior to the enactment of the 
amendment in November 1999. The bill states that in determining whether 
any work is eligible to consider a work made for hire, neither the 
amendment in IPCORA nor the deletion of the amendment through this bill 
shall be considered or otherwise given any legal significance or shall 
be interpreted to indicate congressional approval or disapproval of any 
judicial determination by the courts or the Copyright Office.
  Given the complex nature of copyright law, this compromise was not 
easily reached, but I believe it is a good solution and I want to thank 
everyone who worked so diligently to resolve this controversy. I want 
to give special thanks as well to the gentleman from California (Mr. 
Berman), ranking member on our subcommittee, and the ranking member of 
the full committee, the gentleman from Michigan (Mr. Conyers), for 
their participation and cooperation.
  I also want to recognize Mr. Cary Sherman of the RIAA, the recording 
industry, and Mr. Jay Cooper, who represents the recording artists, for 
their efforts to find a solution.
  H.R. 5107 also includes other noncontroversial corrections to the 
Copyright Act. These amendments remove expired sections and clarify 
miscellaneous provisions governing fees and recordkeeping procedures. 
These are necessary amendments which will improve the operation of the 
Copyright Office and clarify U.S. copyright law.
  Mr. Speaker, it was my belief this amendment merely codified existing 
practice and that remains my belief, and there is ample authority that 
supports my contention. In fairness to the artist community, there is 
also ample and convincing authority that supports the artists' 
contention regarding this

[[Page H7245]]

issue. I believe we have reached a fair compromise with which all 
parties can live.
  In conclusion, Mr. Speaker, I think H.R. 5107 is a good, 
noncontroversial bill. I urge my colleagues to support H.R. 5107 when 
it is considered on the floor, hopefully imminently, maybe even within 
the next couple weeks.
  Mr. BERMAN. Mr. Speaker, today, Representative Howard Coble and I 
have introduced H.R. 5107, the Work Made for Hire and Copyright 
Corrections Act of 2000. Because of the very important nature of this 
bill, I believe it merits an extensive explanation.
  Section 2(a)(1) of this bill would remove the words ``as a sound 
recording'' from paragraph (2) of the definition of ``works made for 
hire'' in Section 101 of the Copyright Act--words that this Congress 
added less than a year ago through Section 1000(a)(9) of Public Law 
Number 106-113. When Congress enacted Section 1000(a)(9) last year, we 
believed it was a non-controversial, technical change that merely 
clarified current law. However, since that time, we have been contacted 
by many organizations, legal scholars, and recording artists who take 
strong issue with Section 1000(a)(9), asserting that it constitutes a 
significant, substantive change in law. We have discovered that there 
exists a serious debate about whether sound recordings always, usually, 
sometimes, or never fall within the nine, pre-existing categories of 
works eligible to be considered ``works made for hire,'' and thus there 
exists a serious debate about the substantive or technical nature of 
Section 1000(a)(9).
  In testimony before the House Judiciary Subcommittee on Courts and 
Intellectual property on May 25, 2000, esteemed legal scholars took 
broadly divergent views. Professor Paul Goldstein of Stanford 
University Law School stated that ``the contribution of an individual 
sound recording as one of several selections on a CD or other album 
will typically constitute a `contribution to a collective work,' '' 
while Professor Marci Hamilton of Cardozo School of Law maintained 
that, in a vast majority of instances, sound recordings would fail to 
qualify as ``contributions to collective works'' or as 
``compilations.'' Marybeth Peters, the Register for Copyrights in the 
United States Copyright Office, testified that, depending on the 
particular facts surrounding its creation, a sound recording might, or 
might not, constitute a contribution to a collective work. In a letter 
received by Congressman Coble and me prior to that May 25, 2000 
hearing, twenty-five highly respected professors of Law stated ``there 
may be particular situations in which a musical artist would be 
considered as having contracted to provide a `contribution to a 
collective work,' '' but asserted that, prior to the addition of the 
words, ``as a sound recording'' to Section 101 of the copyright Act, 
sound recordings would most often fail to qualify under the nine pre-
existing categories of works eligible to be ``made for hire.''
  As I stated, the testimony and correspondence of these intellectual 
property law experts and others demonstrate the existence of a serious 
debate about whether and the extent to which sound recordings were 
eligible to be ``works made for hire'' under paragraph 2 of the 
definition prior to enactment of Section 1000(a)(9) of Public Law 
Number 106-113. By mandating that all sound recordings are eligible to 
be works made for hire, Section 1000(a)(9) effectively resolved 
this debate, and impaired the ability of authors of sound recordings to 
argue that particular sound recordings and sound recordings in general 
cannot be works made for hire. Since it eviscerates the legal arguments 
of those on one side of this debate, Section 100(a)(9) may constitute a 
substantive change in certain situations and to the extent that courts 
might otherwise have upheld those arguments.

  This leads to the question of why it is necessary to undo Section 
1000(a)(9) by removing the words ``as a sound recording'' from Section 
1010 of the Copyright Act. The change embodied by Section 2000(a)(9) 
precludes authors of sound recordings from arguing that their sound 
recordings are not eligible to be considered works made for hire, and 
thus effectively prevents those authors from attempting to exercise 
termination rights under Section 203 of Title 17. Because Section 
1000(a)(9) has the potential to have such a negative effect on the 
legal arguments and rights of authors of sound recordings, Congress 
should have undertaken more extensive deliberations before making this 
change. While Section 1000(a)(9) was published in the Congressional 
Record more than a week prior to its final passage, and while the 
Members on the Conference Committee were fully aware of its existence, 
there were no congressional hearings or committee mark-ups in which 
Section 1000(a)(9) was considered or discussed.
  It is my opinion that we should immediately undo Section 1000(a)(9) 
so as to prevent any prejudice to the legal arguments of authors of 
sound recordings. Then a future Congress, after more extensive 
deliberation and careful consideration, could decide whether this legal 
debate should be resolved through legislation.
  However, we are sensitive that, in undoing the amendment made by 
Section 1000(a)(9), we must be careful not to adversely affect or 
prejudice the rights of other interested parties. Specifically, we do 
not want the removal of the words ``as a sound recording'' from the 
definition of works-made-for-hire in Section 101 of the Copyright Act 
to be interpreted to preclude or prejudice the argument that sound 
recordings are eligible to be works made for hire within the nine, pre-
existing categories. In essence, we want the removal of the words ``as 
a sound recording'' from Section 101 of the Copyright Act to return the 
law to the status quo ante, so that all affected parties have the same 
rights and legal arguments they had prior to enactment of Section 
1000(a)(9).
  It is for those reasons that we were convinced of the need to include 
Section 2(a)(2) within this statute. Section 2(a)(2) intends to ensure 
that the removal of the words ``as a sound recording'' will have no 
legal effect other than returning the law to the exact state existing 
prior to enactment of Section 1000(a)(9).
  Our legal research shows that a simple repeal of a previous amendment 
may not be interpreted by the courts as simply returning the law to its 
previous state, but may be seen as actually altering that state. For 
instance, in American Automobile Association v. United States, 367 U.S. 
687 (1961), the plaintiff had for years been using an accounting method 
that it believed was permitted under a general provision of law despite 
the absence of a statute specifically allowing this practice. 
Subsequently, Congress enacted Section 452 of the Internal Revenue Code 
of 1954, which specifically allowed this accounting practice, but one 
year later repealed Section 452. In interpreting this repeal, Justice 
Scalia wrote for the majority: ``the fact is that [Section] 452 for the 
first time specifically declared petitioner's system of accounting to 
be acceptable for income tax purposes, and overruled the long-standing 
position of the Commissioner and courts to the contrary. And the repeal 
of the section the following year . . . was just as clearly a mandate 
from the Congress that petitioner's system was not acceptable for tax 
purposes.''

  The present set of circumstances are quite similar. For years, record 
companies have treated sound recordings as works made for hire, and 
have entered into contracts to this effect, whether enforceable or not, 
with recording artists. Though previous law did not specifically list 
sound records as a category of works made for hire, record companies 
regarded sound recordings as fitting with the nine, existing categories 
of works made for hire. Section 1000(a)(9) represented the first 
specific, statutory declaration by Congress that sound recordings are a 
category of works made for hire.
  As a result of the close parallel between the current situation and 
the facts in American Automobile Association, it appears possible that 
courts would interpret a simple repeal of Section 1000(a)(9) in the 
same way the Supreme Court interpreted the simple repeal of Section 452 
in that case--namely as a sign that Congress does not consider sound 
recordings to be eligible for works made for hire status.
  The probability of the courts interpreting a simple repeal in this 
manner is increased by the existence of two U.S. District Court 
opinions that some may argue are on point. Under a well-known canon of 
statutory construction, courts assume that Congress is aware of 
existing judicial decisions when it enacts legislation and, unless 
Congress indicates otherwise and to the extent reasonable, courts 
interpret such legislation to be consistent with those decisions. Prior 
to the enactment of Section 1000(a)(9), U.S. District Courts in 
Staggers v. Real Authentic Sound and Ballas v. Tedesco stated, in 
dicta, that sound recordings were not eligible to be considered works 
made for hire because they were not specifically included as a category 
of works eligible to be works made for hire under Section 101 of the 
Copyright Act. Though the eligibility of sound recordings for inclusion 
within the nine categories of works made for hire was not briefed or 
argued by the parties in either case, and though the courts did not 
provide a detailed rationale for their comments in dicta, future courts 
might interpret a simple repeal bill to indicate Congressional 
acquiescence to these decisions.
  These considerations indicate that a simple repeal bill would 
negatively prejudice the argument, available prior to enactment of 
Section 100(a)(9), that a particular sound recording was eligible to be 
considered a work made for hire because it fit within one of the nine, 
pre-existing categories. Because of the potential prejudice to this 
argument, it appears that a simple repeal of the words ``as a sound 
recording'' would not accomplish our goal, which is to return the law 
on the eligibility of sound recordings for work made for hire status to 
its state prior to enactment of Section 1000(a)9).
  Therefore, we have crafted Section 2(a)(2) to ensure that the removal 
of the words ``as a

[[Page H7246]]

sound recording'' will not have prejudicial effect. With the inclusion 
of Section 2(a)(2) in this bill, we ensure that courts will interpret 
Section 101 exactly as they would have interpreted it if neither 
Section 1000(a)(9) nor this bill were ever enacted.
  Lastly, Section 2(b)(1) gives Section 2(a) retroactive effect. The 
need to make these sections retroactive stems from the confusion and 
injustice that would otherwise result. Because these sections will have 
retroactive effect, there will be only one, uninterrupted law governing 
the eligibility of sound recordings to qualify as works made for hire--
namely the same law that existed prior to the November 29, 1999 
enactment of Section 1000(a)(9). If Section 2(a) were not given 
retroactive effect, then sound records created or contracted for 
between November 29, 1999 and the date of enactment of this bill could 
be treated differently than sound recordings created before or after 
those dates. Such a result would be both confusing for the courts to 
administer and unfair to those who happened to enter into agreements to 
author sound recordings after November 29, 1999 and before the date of 
this bill's enactment.
  Unfortunately, there is some question as to whether it is 
constitutional under the Fifth and Fourteenth Amendments of the U.S. 
Constitution to give Section 2(a) retroactive effect. If the courts 
disagree with our conclusion that Congress can constitutionally make 
these provisions retroactive, we have added a severability clause in 
Section 2(b)(2) to ensure that the courts will not strike down the 
whole bill.
  In short, we believe passage of this bill is vital to ensure that 
whatever rights the authors of sound recordings may have had previously 
are restored, and that such restoration is achieved in a way that does 
not unfairly impair the rights of others. I urge all my colleagues to 
support this legislation when it is brought to the House floor for 
their consideration.

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