[House Report 106-861]
[From the U.S. Government Publishing Office]



106th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     106-861

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



 
        WORK MADE FOR HIRE AND COPYRIGHT CORRECTIONS ACT OF 2000

                                _______
                                

 September 18, 2000.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

Mr. Coble, from the Committee on the Judiciary, submitted the following

                              R E P O R T

                        [To accompany H.R. 5107]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on the Judiciary, to whom was referred the 
bill (H.R. 5107) making certain corrections in copyright law, 
having considered the same, reports favorably thereon without 
amendment and recommends that the bill do pass.

                           TABLE OF CONTENTS

                                                                  

                                                                 Page
Purpose and Summary........................................           1
Background and Need for the Legislation....................           2
Hearings...................................................           2
Committee Consideration....................................           3
Committee Oversight Findings...............................           3
Committee on Government Reform Findings....................           3
New Budget Authority and Tax Expenditures..................           3
Congressional Budget Office Cost Estimate..................           3
Constitutional Authority Statement.........................           4
Section-by-Section Analysis and Discussion.................           4
Changes in Existing Law Made by the Bill, as Reported......           6

                          Purpose and Summary

    The purpose of H.R. 5107, the ``Work Made for Hire and 
Copyright Corrections Act of 2000'', is to restore the status 
quo as it existed before November 29, 1999, as to the issue of 
whether a sound recording can qualify as a ``work made for 
hire'' under the second part of the definition of that term in 
section 101 of the Copyright Act, and to do so in a manner that 
does not prejudice any person or entity that might have 
interests concerning this question.
    H.R. 5107 also makes other non-controversial corrections to 
the Copyright Act. These amendments remove expired sections and 
clarify miscellaneous provisions governing fees and record 
keeping procedures. These are necessary amendments which will 
improve the operations of the Copyright Office and clarify U.S. 
Copyright law.

                Background and Need for the Legislation

    Effective as of November 29, 1999, section 1101(d) of the 
Intellectual Property and Communications Omnibus Reform Act of 
1999 (IPCORA) added ``sound recording'' to the list of types of 
commissioned or specially ordered works enumerated in paragraph 
(2) of the definition of ``work made for hire'' in section 101 
of the Copyright Act that can qualify for work made for hire 
treatment when the parties so agree in writing. Whereas some 
regarded this amendment as a technical and clarifying change 
(see H.R. Conf. Rep. No. 106-464, 145 Cong. Rec. H11769, H11796 
(Nov. 9, 1999)), others believed that the amendment effected a 
substantive change in the law (see Oversight Hearing on the 
United States Copyright Office and Sound Recordings as Works 
Made for Hire, May 25, 2000, House of Representatives, 
Committee on the Judiciary, Subcommittee on Courts and 
Intellectual Property). This bill addresses--without 
resolving--the controversy that has arisen since the enactment 
of section 1101(d) as to the nature and effects of that 
amendment.
    The purpose of this bill is to restore the status quo as it 
existed prior to November 29, 1999, without expressing or 
implying any view as to the proper interpretation of the ``work 
made for hire'' definition. Thus, the bill undoes the amendment 
made by section 1101(d), but also makes clear with new language 
in the definition of the term ``work made for hire'' that 
neither the enactment of section 1101(d) nor this bill's 
deletion of the language added by that amendment are to be 
considered in any way or otherwise given any effect by a court 
or the Copyright Office when interpreting paragraph (2) of the 
``work made for hire'' definition. To be absolutely clear, it 
is the committee's intention that paragraph (2) of the ``work 
made for hire'' definition be interpreted as if section 1101(d) 
and this bill's deletion of the language added by section 
1101(d) were never considered and enacted. To ensure that the 
status quo is restored, the effective date of section 2 of H.R. 
5107 is made expressly retroactive to November 29, 1999.

                                Hearings

    The committee's Subcommittee on Courts and Intellectual 
Property held an oversight hearing on the issue of sound 
recordings as works made for hire on Thursday, May 25, 2000. 
Testimony was received from: The Honorable Marybeth Peters, 
Register of the United States Copyright Office; Hilary Rosen, 
President and CEO of the Recording Industry Association of 
America; Paul Goldstein, Lillick Professor of Law, Stanford Law 
School; Michael Greene, President and CEO of the National 
Academy of Recording Arts and Sciences; Marci Hamilton, Thomas 
H. Lee Chair in Public Law, Cardozo School of Law; and Sheryl 
Crow, recording artist.

                        Committee Consideration

    On September 13, 2000, the committee met in open session 
and ordered favorably reported the bill H.R. 5107 without 
amendment by voice vote, a quorum being present.

                      Committee Oversight Findings

    In compliance with clause 3(c)(1) of rule XIII of the Rules 
of the House of Representatives, the committee reports that the 
findings and recommendations of the committee, based on 
oversight activities under clause 2(b)(1) of rule X of the 
Rules of the House of Representatives, are incorporated in the 
descriptive portions of this report.

                Committee on Government Reform Findings

    No findings or recommendations of the Committee on 
Government Reform were received as referred to in clause 
3(c)(4) of rule XIII of the Rules of the House of 
Representatives.

               New Budget Authority and Tax Expenditures

    Clause 3(c)(2) of the House Rule XIII is inapplicable 
because this legislation does not provide new budgetary 
authority or increased tax expenditures.

               Congressional Budget Office Cost Estimate

    In compliance with clause 3(c)(3) of rule XIII of the Rules 
of the House of Representatives, the committee sets forth, with 
respect to the bill, H.R. 5107, the following estimate and 
comparison prepared by the Director of the Congressional Budget 
Office under section 402 of the Congressional Budget Act of 
1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                Washington, DC, September 15, 2000.
Hon. Henry J. Hyde, Chairman,
Committee on the Judiciary,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 5107, the Work 
Made for Hire and Copyright Corrections Act of 2000.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Ken Johnson, 
who can be reached at 226-2860.
            Sincerely,
                                  Dan L. Crippen, Director.

Enclosure
cc:
        Honorable John Conyers Jr.
        Ranking Democratic Member
H.R. 5107--Work Made for Hire and Copyright Corrections Act of 2000.
    CBO estimates that enacting H.R. 5107 would have no 
significant impact on the federal budget. Because the bill 
would not affect direct spending or receipts, pay-as-you-go 
procedures would not apply. H.R. 5107 contains no 
intergovernmental or private-sector mandates as defined in the 
Unfunded Mandates Reform Act and would impose no costs on 
state, local, or tribal governments.
    H.R. 5107 would amend copyright law so that employers would 
no longer automatically own the copyrights to audio recordings 
created by employees as part of their jobs. Under current law, 
the federal government cannot obtain the copyrights to its 
employees' work unless it purchases those rights. Therefore, 
CBO estimates that this provision would not result in 
additional costs for the federal government.
    H.R. 5107 also would allow the Copyright Office, under 
certain circumstances, to lower the rates on certain 
administrative fees that offset the agency's appropriation. 
Currently, the agency is only allowed to adjust these fee rates 
upward. Based on information from the Copyright Office, CBO 
estimates that enacting this provision would not cause the 
agency to reduce its fee rates over the next five years. 
Therefore, CBO expects that this provision would not have a 
significant impact on spending for the operations of the 
Copyright Office.
    The CBO staff contact is Ken Johnson, who can be reached at 
226-2860. This estimate was approved by Peter H. Fontaine, 
Deputy Assistant Director for Budget Analysis.

                   Constitutional Authority Statement

    Pursuant to clause 3(d)(1) of rule XIII of the Rules of the 
House of Representatives, the committee finds the authority for 
this legislation in Article I, section 8, clause 8 the 
Constitution.

               Section-by-Section Analysis and Discussion

    Section 1. Short Title. This section states that the act 
may be cited as the ``Work Made for Hire and Copyright 
Corrections Act of 2000''.
    Sec. 2. Work Made for Hire. Paragraph (a)(1) undoes the 
amendment to the ``work made for hire'' definition in section 
101 of title 17 made by section 1101(d) of IPCORA which was 
enacted on November 29, 1999, by deleting the words ``as a 
sound recording'' that were added by that amendment.
    Paragraph (a)(2) adds language to the definition of ``work 
made for hire'' to make clear that paragraph (2) of the 
definition is to be interpreted as if neither section 1011(d) 
of IPCORA nor this bill had ever been considered or enacted by 
Congress. This provision is intended to ensure that the facts 
and substance of consideration and enactment of section 1101(d) 
of this bill are not used to support any particular 
interpretation of paragraph (2) of the definition of ``work 
made for hire.'' The committee wishes to make clear that 
neither section 1101(d) nor this bill are to be construed as 
expressing or implying any view as to the proper interpretation 
of paragraph (2) of the ``work made for hire'' definition 
before November 29, 1999 or after enactment of this bill. The 
language makes clear that, notwithstanding any principles of 
statutory construction or cases (such as American Automobile 
Association v. United States, 367 U.S. 687 (1961)), that might 
suggest otherwise, when interpreting paragraph (2) of the 
``work made for hire'' definition, courts and the Copyright 
Office are not to consider or otherwise attribute any meaning 
to section 1101(d) or this bill's deletion from the Copyright 
Act of the language added by section 1101(d). Moreover, courts 
and the Copyright Office are not to consider the enactment of 
either section 1101(d)or of this bill as an indication of 
Congressional awareness, approval, disapproval, acquiescence or 
non-acquiescence in any past judicial determinations concerning 
this issue.
    Paragraph (b)(1) restores the status quo prior to November 
29, 1999, by expressly making the bill retroactive to November 
29, 1999.
    Paragraph (b)(2) states that if the provisions of paragraph 
(b)(1), or any application of such provisions to any person or 
circumstance, is held to be invalid, the remainder of this 
section, the amendments made by this section, and the 
application of this section to any other person or circumstance 
shall not be affected by such invalidation. This paragraph is a 
savings clause to preserve this section's effectiveness in 
other circumstances if it is determined that retroactive 
application would be unconstitutional when applied to a 
particular person or circumstance.
    Sec. 3. Other Amendments to Title 17, United States Code. 
Paragraph (a)(1) amends title 17 by repealing section 710 and 
the item relating to that section in the table of contents for 
chapter 7. Section 710, as enacted by the Copyright Act of 
1976, is now redundant due to the enactment of section 121 in 
1997. Section 710 authorizes the Copyright Office to establish 
forms and procedures to permit copyright owners to voluntarily 
grant the Library of Congress a license to produce copyrighted 
works in the form of Braille or as books on tape, for example, 
to be distributed solely to blind and handicapped persons. 
Section 121 grants the same right as an exception to the 
exclusive rights of copyright but extends the right of 
reproduction more broadly to the general public. Section 121 
does not require an owner's permission so long as certain 
requirements for distribution are satisfied.
    Paragraph (a)(2) amends section 705(a) of title 17 to read 
as follows: ``(a) The Register of Copyrights shall ensure that 
records of deposits, registrations, recordations, and other 
actions taken under this title are maintained , and that 
indexes of such records are prepared.'' Section 705(a) 
addresses the Copyright Office's records of deposits, 
registration, recordations and other actions taken under title 
17. The Copyright Office, as part of the Library of Congress, 
administers the mandatory deposit provision of section 407 of 
title 17 for the benefit of the Library. For purposes of 
efficiency and administrative convenience, the responsibility 
for keeping records of deposits of serials under this provision 
has been shifted to the Serials Record Division of the library. 
Section 705(a) currently requires that ``The Register of 
Copyrights shall provide and keep in the Copyright Office'' 
such records, among others, a requirement that could be 
inconsistent with the practice of having such records made and 
maintained by another division of the library. No purpose is 
served by forbidding the maintenance of such records by the 
division of the Library that is responsible for keeping records 
of Library acquisitions.
    Also, section 705(a) currently requires the Copyright 
Office to keep records of ``all deposits . . . and other 
actions taken under this title, and . . . prepare indexes of 
all such records.'' The requirement that records of ``all'' 
deposits be kept could be construed as requiring that the 
Office keep records stating how many copies of a particular 
work have been deposited. This was the Office's practice when 
such records were hand-written. However, the record-keeping 
purposes of the Library and the Copyright Office do not require 
such information, and the Library is shifting to a record-
keeping database that cannot easily accommodate such 
information. Because the needs of the Library and the Office 
would be served by maintaining records that simply indicate the 
fact that the required deposit has been received, the ``all'' 
is stricken. Removing the word ``all'' gives the Register some 
discretion in determining what records need to be kept.
    Paragraph (a)(3) clarifies the copyright fees procedures. 
It amends section 708(a) of title 17 to clarify that the 
Copyright Office fees shall be in the amounts in effect on the 
date of the enactment of this act, as adjusted by the 
procedures in 708(b). Section 708(a) prescribes the fees that 
individuals must pay to the Copyright Office for various 
services. Prior to the amendments made by Public Law 105-80, 
subsection (a) prescribed both the type of services for which 
fees must be paid and the amounts. However, Public Law 105-80 
amended section 708(b) to allow the Register of Copyrights to 
increase the fees that appear in title 17, through regulation. 
This amendment removes the fee amounts and alerts the reader 
that fees may be different.
    Paragraph (a)(3)(B) amends section 708(b) of title 17 by 
deleting the matter preceding paragraph (1) and inserting, 
``(b) Adjustment of Fees.--The Register of Copyrights may, by 
regulation, adjust the fees for the actions specified in 
paragraphs (1) through (9) of subsection (a) in the following 
manner:''. This amendment changes the word ``increase'' to 
``adjust''. This takes into account the possibility that 
innovations such as electronic registration may result in 
decreased costs, which could be passed onto users in the form 
of decreased fees.
    Paragraph (b) is a conforming amendment. Section 121 of 
title 17 references section 710. Due to the repeal of section 
710, the words ``and 710'' are deleted from section 121.
    Paragraph (c) states that the effective date for the 
amendments made by section 3 shall take effect on the date of 
enactment of this act.

         Changes in Existing Law Made by the Bill, as Reported

    In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italics, existing law in which no change 
is proposed is shown in roman):

                      TITLE 17, UNITED STATES CODE



           *       *       *       *       *       *       *
           CHAPTER 1--SUBJECT MATTER AND SCOPE OF COPYRIGHT

           *       *       *       *       *       *       *


Sec. 101. Definitions

    Except as otherwise provided in this title, as used in this 
title, the following terms and their variant forms mean the 
following:

           *       *       *       *       *       *       *

            A ``work made for hire'' is--
                    (1) a work prepared by an employee within 
                the scope of his or her employment; or
                    (2) a work specially ordered or 
                commissioned for use as a contribution to a 
                collective work, as a part of a motion picture 
                or other audiovisual work [as a sound 
                recording,], as a translation, as a 
                supplementary work, as a compilation, as an 
                instructional text, as a test, as answer 
                material for a test, or as an atlas, if the 
                parties expressly agree in a written instrument 
                signed by them that the work shall be 
                considered a work made for hire. For the 
                purpose of the foregoing sentence, a 
                ``supplementary work'' is a work prepared for 
                publication as a secondary adjunct to a work by 
                another author for the purpose of introducing, 
                concluding, illustrating, explaining, revising, 
                commenting upon, or assisting in the use of the 
                other work, such as forewords, afterwords, 
                pictorial illustrations, maps, charts, tables, 
                editorial notes, musical arrangements, answer 
                material for tests, bibliographies, appendixes, 
                and indexes, and an ``instructional text'' is a 
                literary, pictorial, or graphic work prepared 
                for publication and with the purpose of use in 
                systematic instructional activities.
        In determining whether any work is eligible to be 
        considered a work made for hire under paragraph (2), 
        neither the amendment contained in section 1011(d) of 
        the Intellectual Property and Communications Omnibus 
        Reform Act of 1999, as enacted by section 1000(a)(9) of 
        Public Law 106-113, nor the deletion of the words added 
        by that amendment--
                    (A) shall be considered or otherwise given 
                any legal significance, or
                    (B) shall be interpreted to indicate 
                congressional approval or disapproval of, or 
                acquiescence in, any judicial determination,
        by the courts or the Copyright Office. Paragraph (2) 
        shall be interpreted as if both section 2(a)(1) of the 
        Work Made For Hire and Copyright Corrections Act of 
        2000 and section 1011(d) of the Intellectual Property 
        and Communications Omnibus Reform Act of 1999, as 
        enacted by section 1000(a)(9) of Public Law 106-113, 
        were never enacted, and without regard to any inaction 
        or awareness by the Congress at any time of any 
        judicial determinations.

           *       *       *       *       *       *       *


Sec. 121. Limitations on exclusive rights: reproduction for blind or 
                    other people with disabilities

    (a) Notwithstanding the provisions of [sections 106 and 
710] section 106, it is not an infringement of copyright for an 
authorized entity to reproduce or to distribute copies or 
phonorecords of a previously published, nondramatic literary 
work if such copies or phonorecords are reproduced or 
distributed in specialized formats exclusively for use by blind 
or other persons with disabilities.

           *       *       *       *       *       *       *


                      CHAPTER 7--COPYRIGHT OFFICE

Sec.
701.  The Copyright Office: General responsibilities and organization.
     * * * * * * *
[710.  Reproduction for use of the blind and physically handicapped: 
          Voluntary licensing forms and procedures.]

           *       *       *       *       *       *       *


Sec. 705. Copyright Office records: Preparation, maintenance, public 
                    inspection, and searching

    [(a) The Register of Copyrights shall provide and keep in 
the Copyright Office records of all deposits, registrations, 
recordations, and other actions taken under this title, and 
shall prepare indexes of all such records.]
    (a) The Register of Copyrights shall ensure that records of 
deposits, registrations, recordations, and other actions taken 
under this title are maintained, and that indexes of such 
records are prepared.

           *       *       *       *       *       *       *


Sec. 708. Copyright Office fees

    [(a) The following fees shall be paid to the Register of 
Copyrights:
            [(1) on filing each application under section 408 
        for registration of a copyright claim or for a 
        supplementary registration, including the issuance of a 
        certificate of registration if registration is made, 
        $20;
            [(2) on filing each application for registration of 
        a claim for renewal of a subsisting copyright under 
        section 304(a), including the issuance of a certificate 
        of registration if registration is made, $20;
            [(3) for the issuance of a receipt for a deposit 
        under section 407, $4;
            [(4) for the recordation, as provided by section 
        205, of a transfer of copyright ownership or other 
        document covering not more than one title, $20; for 
        additional titles, $10 for each group of not more than 
        10 titles;
            [(5) for the filing, under section 115(b), of a 
        notice of intention to obtain a compulsory license, 
        $12;
            [(6) for the recordation, under section 302(c), of 
        a statement revealing the identity of an author of an 
        anonymous or pseudonymous work, or for the recordation, 
        under section 302(d), of a statement relating to the 
        death of an author, $20 for a document covering not 
        more than one title; for each additional title, $2;
            [(7) for the issuance, under section 706, of an 
        additional certificate of registration, $8;
            [(8) for the issuance of any other certification, 
        $20 for each hour or fraction of an hour consumed with 
        respect thereto;
            [(9) for the making and reporting of a search as 
        provided by section 705, and for any related services, 
        $20 for each hour or fraction of an hour consumed with 
        respect thereto; and
            [(10) for any other special services requiring a 
        substantial amount of time or expense, such fees as the 
        Register of Copyrights may fix on the basis of the cost 
        of providing the service.
The Register of Copyrights is authorized to fix the fees for 
preparing copies of Copyright Office records, whether or not 
such copies are certified, on the basis of the cost of such 
preparation.]
    (a) Fees.--Fees shall be paid to the Register of 
Copyrights, in the amounts in effect on the date of enactment 
of the Work Made For Hire and Copyright Corrections Act of 
2000, as adjusted under subsection (b)--
            (1) on filing each application under section 408 
        for registration of a copyright claim or for a 
        supplementary registration, including the issuance of a 
        certificate of registration if registration is made;
            (2) on filing each application for registration of 
        a claim for renewal of a subsisting copyright under 
        section 304(a), including the issuance of a certificate 
        of registration if registration is made;
            (3) for the issuance of a receipt for a deposit 
        under section 407;
            (4) for the recordation, as provided by section 
        205, of a transfer of copyright ownership or other 
        document;
            (5) for the filing, under section 115(b), of a 
        notice of intention to obtain a compulsory license;
            (6) for the recordation, under section 302(c), of a 
        statement revealing the identity of an author of an 
        anonymous or pseudonymous work, or for the recordation, 
        under section 302(d), of a statement relating to the 
        death of an author;
            (7) for the issuance, under section 706, of an 
        additional certificate of registration;
            (8) for the issuance of any other certification; 
        and
            (9) for the making and reporting of a search as 
        provided by section 705, and for any related services.
The Register is authorized to fix fees for other services, 
including the cost of preparing copies of Copyright Office 
records, whether or not such copies are certified, based on the 
cost of providing the service.
    [(b) In calendar year 1997 and in any subsequent calendar 
year, the Register of Copyrights, by regulation, may increase 
the fees specified in subsection (a) in the following manner:]
    (b) Adjustment of Fees.--The Register of Copyrights may, by 
regulation, adjust the fees for the actions specified in 
paragraphs (1) through (9) of subsection (a) in the following 
manner:
            (1) The Register shall conduct a study of the costs 
        incurred by the Copyright Office for the registration 
        of claims, the recordation of documents, and the 
        provision of services. The study shall also consider 
        the timing of any increase in fees and the authority to 
        use such fees consistent with the budget.

           *       *       *       *       *       *       *


[Sec. 710. Reproduction for use of the blind and physically 
                    handicapped: Voluntary licensing forms and 
                    procedures

    [The Register of Copyrights shall, after consultation with 
the Chief of the Division for the Blind and Physically 
Handicapped and other appropriate officials of the Library of 
Congress, establish by regulation standardized forms and 
procedures by which, at the time applications covering certain 
specified categories of nondramatic literary works are 
submitted for registration under section 408 of this title, the 
copyright owner may voluntarily grant to the Library of 
Congress a license to reproduce the copyrighted work by means 
of Braille or similar tactile symbols, or by fixation of a 
reading of the work in a phonorecord, or both, and to 
distribute the resulting copies or phonorecords solely for the 
use of the blind and physically handicapped and under limited 
conditions to be specified in the standardized forms.]

           *       *       *       *       *       *       *


                                  
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