Statement of Marybeth Peters
The Register of Copyrights
before the
Subcommittee on Legislative Branch,
Committee on Appropriations

United States House of Representatives
104^th Congress, 2^nd Session

March 5, 1996

Fiscal 1997 Budget Request

Mr. Chairman and members of the Committee, I appreciate the opportunity to be here today. I am pleased to report that the Office had a very productive year; once again we have accomplished more with less. Last year 478 full-time equivalent (FTE) employees, who are responsible for the main stream activities of the Office, registered significantly more than 600,000 works; they also recorded more than 16,500 documents which contained more than 100,000 titles. The claims continue to increase in complexity and continue to require a more indepth understanding of various computer and communication technologies. These employees also handled more inquiries from the public than ever; inquiries come in writing (more than 150,000), by telephone (more than 315,000) and in person (more than 25,000). 28 FTE employees in the Licensing Division collected 178 million dollars in licensing fees and distributed fees collected under the Audio Home Recording Act to performers and producers of sound recordings. The first copyright arbitration royalty panel began its deliberations on the dispute concerning the 1990-1992 cable royalty fees. Additionally, the Office testified at six congressional hearings on legislation ranging from public performance rights for sound recordings, copyright implications of the NII (national information infrastructure), extending the copyright term to technical amendments to the copyright law.

Last year we rededicated ourselves to increased public service by creating shorter and easier application forms, allowing newsletter publishers to register one month's worth of issues with a single application and fee, creating an appeals board to address certain criticisms raised by applicants, and proposing a flexible registration scheme to meet the needs of photographers. We also had to deal with our increased responsibilities under the GATT Uruguay Round Agreements Act which restored copyright protection to millions of foreign works on January 1, 1996. In preparing to receive both documents (Notices of Intent to Enforce Rights) and claims for registration under this act, we held a public meeting, issued final regulations, prepared new forms and an information brochure. These materials were sent to the copyright officials in all countries belonging to the World Trade Organization and the Berne Convention for the Protection of Literary and Artistic Works as well as to copyright organizations in those countries. These materials are available from the Copyright Office through the Internet.

With the funds Congress approved last year, the Copyright Office established procedures and acquired and installed the workstations for processing GATT documents. During January, the Office processed 505 NIEs for which we received $15,377 in offsetting fees.

However, I believe we have reached our limit. We are not able to absorb increased costs in fiscal 1997 without decreasing the size of our already shrinking staff. Our responsibility is to issue certificates of registration that are accurate and reliable; these certificates must be issued in a timely manner. Many benefits are tied to registration, and U.S. copyright owners may not initiate a copyright infringement suit without first registering with the Copyright Office. The copyright industries are at the forefront of our economy, and the Copyright Office must support them by providing critical services.

In 1993 we had 77 examiners; we currently have 51. This loss of 16 examiners equals a 21% loss. The result is an accumulated production backlog that is unacceptable. Additionally, our mail and data entry functions are overburdened, and loss of personnel in these areas would create additional backlogs. Overall, the number of actual FTEs, excluding the Licensing Division, has declined by 50 since fiscal 1992 -- a 9.5% decrease.

It is therefore essential that we receive the mandatory increases for fiscal 1997. Moreover, to provide adequate service in the future we will need to increase our staffing levels. We are therefore examining the issue of our fees with an eye towards raising them. The current law allows us to raise the basic fees once every five years in accordance with the increase in the consumer price index. Although the fees could have been raised in 1995, the registration fee of $20 could only be raised to $23.30. Given the significant administrative costs involved in any fee increase, such an increase would have cost us more to implement than it brought in. The law provides that we could next raise the fees in the year 2000; but, we could only cumulate the rise in the consumer price index from 1996-2000 (not 1991- 2000). To raise the fees earlier than the year 2000 or to raise the fees beyond the rise in the consumer price index, Congress would need to amend the copyright law; in the past Congress has been reluctant to do this.

Early in 1995 we asked our oversight committee, the Subcommittee on Courts and Intellectual Property, to propose legislation allowing us to raise the fees in any given year and to accumulate the rise in all consumer price indexes since the previous fee increase. At a hearing on this proposal, the subcommittee suggested transferring the setting of fees to the Copyright Office with Congress retaining a veto power if it found our proposed fees unreasonable. The subcommittee recommendation was marked up, and action by the full Committee on the Judiciary is awaited. (There has been no action on this bill in the Senate.) However, even if that bill becomes law this year, the basic fees could not be raised before fiscal 1999.

Meanwhile it is important that we not only maintain our service but that we continue to create and implement our electronic registration, deposit and recordation system. Last year I reported on this system, now known as CORDS. The goal is to demonstrate and test a scalable national centralized system that will allow electronic filing over the Internet of applications, deposits and fees for copyright registration, as well as documents of transfers of ownership and licensing information. A major component is a secure repository maintained by the Copyright Office. The Library will have its own secure repository as part of its emerging National Digital Library; the Library's repository will include terms and conditions of use allowing for electronic dissemination of copyrighted works in accordance with the wishes of the authors and other copyright owners.

This electronic system is an essential investment in the future; it is critical to the protection of copyrighted content on the information superhighway. Much work has been done on this in the past year. We initiated Phase I of our external testbed-- we received the first electronic applications and copies of unpublished technical reports for examination and registration on February 27th from Carnegie Mellon University. During the next few months we will be analyzing the tests results, correcting any problems by making software and program adjustments as well as enhancing the system. We will then move into Phase 2 at the end of this year when a small number of publishers begin to submit published textual works with graphics.

In the next six years we plan to expand the initial system to include all types of works, for example, architectural works, sound recordings and motion pictures, as the Internet capability expands to accommodate these transmissions. I can't stress too strongly how critical this system is --not only to the Copyright Office but to future of the Library of Congress.

Many of the collections of the Library are largely based on copyright deposits. Moreover, as you know, the Library is a leader in digital library efforts. At the same time the Library is digitizing its rich historical and unique collections, it is also essential for the Library to receive new works in digital forms and be able to make these works available to Congress and to the nation's scholars and researchers. CORDS will serve as a major conduit for the Library--it will provide it with newly published and other important works in digital form.

Because of this, we are asking authorization to spend up to $500,000 earned from receipts for GATT registrations to assist in funding additional work on CORDS; this is a one time request for only fiscal 1997. We are also asking for the authority to hire a computer specialist ($67,457) and a system administrator ($56,727).

Also, as part of the Library's effort to improve the security of its collections, we are asking for the authority to hire six mail technicians ($154,904); these technicians are needed to insert detection targets and to attach accession labels to all items (books, CD's, videocassettes, etc.).

Finally, once again, there has been some question about the placement of the Copyright Office in the Library. The copyright system has been in the Library for 125 years. The placement of the copyright system in the Library was not by chance, and it has yielded tremendous benefits. Today, as in 1870, the Copyright Office and the Library uniquely support each other's mission very effectively. There is every reason to believe that this will remain true in the future.

Thank you for hearing me, and I welcome your questions which I will be glad to answer now or more fully in writing.