[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]





               REGISTER'S PERSPECTIVE ON COPYRIGHT REVIEW

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

                                HEARING

                               BEFORE THE

                       COMMITTEE ON THE JUDICIARY
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             APRIL 29, 2015

                               __________

                           Serial No. 114-22

                               __________

         Printed for the use of the Committee on the Judiciary

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      Available via the World Wide Web: http://judiciary.house.gov
      
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                       COMMITTEE ON THE JUDICIARY

                   BOB GOODLATTE, Virginia, Chairman
F. JAMES SENSENBRENNER, Jr.,         JOHN CONYERS, Jr., Michigan
    Wisconsin                        JERROLD NADLER, New York
LAMAR S. SMITH, Texas                ZOE LOFGREN, California
STEVE CHABOT, Ohio                   SHEILA JACKSON LEE, Texas
DARRELL E. ISSA, California          STEVE COHEN, Tennessee
J. RANDY FORBES, Virginia            HENRY C. ``HANK'' JOHNSON, Jr.,
STEVE KING, Iowa                       Georgia
TRENT FRANKS, Arizona                PEDRO R. PIERLUISI, Puerto Rico
LOUIE GOHMERT, Texas                 JUDY CHU, California
JIM JORDAN, Ohio                     TED DEUTCH, Florida
TED POE, Texas                       LUIS V. GUTIERREZ, Illinois
JASON CHAFFETZ, Utah                 KAREN BASS, California
TOM MARINO, Pennsylvania             CEDRIC RICHMOND, Louisiana
TREY GOWDY, South Carolina           SUZAN DelBENE, Washington
RAUL LABRADOR, Idaho                 HAKEEM JEFFRIES, New York
BLAKE FARENTHOLD, Texas              DAVID N. CICILLINE, Rhode Island
DOUG COLLINS, Georgia                SCOTT PETERS, California
RON DeSANTIS, Florida
MIMI WALTERS, California
KEN BUCK, Colorado
JOHN RATCLIFFE, Texas
DAVE TROTT, Michigan
MIKE BISHOP, Michigan

           Shelley Husband, Chief of Staff & General Counsel
        Perry Apelbaum, Minority Staff Director & Chief Counsel
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
                            C O N T E N T S

                              ----------                              

                             APRIL 29, 2015

                                                                   Page

                           OPENING STATEMENTS

The Honorable John Conyers, Jr., a Representative in Congress 
  from the State of Michigan, and Ranking Member, Committee on 
  the Judiciary..................................................     1
The Honorable Bob Goodlatte, a Representative in Congress from 
  the State of Virginia, and Chairman, Committee on the Judiciary    54

                                WITNESS

The Honorable Maria A. Pallante, Register of Copyrights and 
  Director, United States Copyright Office
  Oral Testimony.................................................     3
  Prepared Statement.............................................     7

          LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

Material submitted by the Honorable Tom Marino, a Representative 
  in Congress from the State of Pennsylvania, and Member, 
  Committee on the Judiciary.....................................    43
Material submitted by the Honorable Judy Chu, a Representative in 
  Congress from the State of California, and Member, Committee on 
  the Judiciary..................................................    58
Material submitted by the Honorable Ted Deutch, a Representative 
  in Congress from the State of Florida, and Member, Committee on 
  the Judiciary..................................................    70
Material submitted by the Honorable Doug Collins, a 
  Representative in Congress from the State of Georgia, and 
  Member, Committee on the Judiciary.............................    72

                                APPENDIX
               Material Submitted for the Hearing Record

Response to Questions for the Record from the Honorable Maria A. 
  Pallante, Register of Copyrights and Director, United States 
  Copyright Office..........................................85
                       deg.OFFICIAL HEARING RECORD
          Unprinted Material Submitted for the Hearing Record

List of material submitted for the Official Hearing Record.......    92

  http://docs.house.gov/Committee/Calendar/
  ByEvent.aspx?EventID=103385

 
                       REGISTER'S PERSPECTIVE ON 
                            COPYRIGHT REVIEW

                              ----------                              


                       WEDNESDAY, APRIL 29, 2015

                        House of Representatives

                       Committee on the Judiciary

                            Washington, DC.

    The Committee met, pursuant to call, at 10 a.m., in room 
2141, Rayburn House Office Building, the Honorable Tom Marino 
presiding.
    Present: Representatives Goodlatte, Smith, Chabot, Issa, 
King, Gohmert, Jordan, Poe, Marino, Labrador, Farenthold, 
Collins, Walters, Buck, Ratcliffe, Trott, Bishop, Conyers, 
Nadler, Lofgren, Jackson Lee, Chu, Deutch, Bass, DelBene, and 
Jeffries.
    Staff Present: (Majority) Shelley Husband, Chief of Staff & 
General Counsel; Branden Ritchie, Deputy Chief of Staff & Chief 
Counsel; Allison Halataei, Parliamentarian & General Counsel; 
Joe Keeley, Chief Counsel, Subcommittee on Courts, Intellectual 
Property, and the Internet; Kelsey Williams, Clerk; (Minority) 
Perry Apelbaum, Staff Director & Chief Counsel; Danielle Brown, 
Parliamentarian; Norberto Salinas, Counsel; Jason Everett, 
Counsel; and Maggie Lopatin, Clerk.
    Mr. Marino. The Judiciary Committee will come to order.
    Without objection, the Chair is authorized to declare 
recesses of the Committee at any time.
    We welcome everyone this morning to our hearing on the 
Register's Perspective on Copyright and Review. And I know we 
will get a very thorough, in-depth analysis of this.
    I'm going to turn first now to Ranking Member Conyers for 
his statement.
    And Chairman Goodlatte will arrive shortly to give his 
opening statement.
    And, with that, Ranking Member Conyers.
    Mr. Conyers. Thank you, Chairman Marino.
    And to the Committee that will be coming in soon and to all 
of our interested friends that are in the audience. You know, 
in the Declaration of Independence, our Founders--wait a 
minute--okay.
    Today's hearing culminates the Committee's 2-year-long 
examination of the Copyright Act, a process that has involved 
19 hearings and 99 witnesses. Our current Register of 
Copyrights here today makes 100 witnesses. It's a particularly 
fitting occasion that Ms. Maria Pallante, the Register of 
Copyrights, testifies at this final hearing, as she was the 
first witness to testify at the beginning of the process. Over 
the course of this review, we've identified several priorities 
that I think we should consider. First, if our Nation is to 
have a strong copyright system, we, in Congress, must 
restructure the Copyright Office.
    The Office examines the Register's copyright claims, 
records copyrighted documents, and administers statutory 
licenses. It provides expert copyright advice to Congress as 
well as various Federal agencies concerning trade agreements, 
treaty negotiations, and court proceedings. And the Office 
recommends much needed improvements to the copyright system.
    Nevertheless, the existing Copyright Office is ill-equipped 
financially and structurally to handle certain challenges 
presented by technological developments and the growing demands 
of the copyright system. Essentially, the Office needs to 
modernize and become more user-friendly and efficient.
    I thank Ms. Pallante for acknowledging the Office's 
limitations in her post-hearing response to my February request 
about her views on reorganizing the copyright letter. Her 
thorough response included different alternative proposals to 
help Congress determine how best to approach restructuring the 
Copyright Office. Now I welcome other stakeholders in the 
copyright community to submit to us their views and proposals 
to help bring the Copyright Office into the 21st century.
    The 2-year review has highlighted several other areas where 
the copyright community can find common ground and which 
Congress should address promptly. A forum to resolve small 
claims should be established. Fortunately, the Office has 
already submitted a legislative proposal for addressing the 
need.
    With respect to music licensing, the Office recently issued 
a report recommending reforms. For me, that's a very important 
area. Pending actions in the courts and by the Department of 
Justice will provide additional guidance to Congress as it 
considers reforming music licensing. The Fair Play Fair Pay 
Act, H.R. 1733, which I support, is one legislative proposal to 
address music licensing, the AM/FM royalties for musicians, 
which is not paid. The issue of orphan works must also be 
addressed. The Copyright Office will soon be issuing a report 
which will provide Congress a much needed framework for a 
legislative solution. As more copyrighted content continues to 
move to the Internet, current criminal enforcement laws must be 
updated to deter copyright infringement while encouraging new 
technological platforms which utilize the licensing copyright.
    These are a few of the copyright-related issues that have 
come to our attention over the last 2 years that Congress 
should address without delay. For areas which are not ripe and 
need more detailed discussion, we should request that the 
Copyright Office issue reports and submit legislative proposals 
on which we can act in the near term.
    And, finally, this review has confirmed that strong 
copyright protections are integral to a strong and vibrant 
copyright system. I've noted many times during this Committee's 
review that we must ensure that the copyright system treats 
creators fairly and fosters their continuing creativity. 
Whatever changes Congress makes to the Copyright Act must 
promote creation among artists and protect their rights. Strong 
copyright protections will also foster a marketplace for 
content that consumers will enjoy as well as encourage 
technological innovation that can be used to watch the content. 
I thank the Chair for holding today's hearings.
    And I welcome and look forward to hearing from Register 
Pallante.
    Thank you, Mr. Chairman.
    Mr. Marino. Thank you, Congressman.
    I want to welcome our distinguished witness here today.
    And if you would please rise and raise your right hand, I 
will swear you in. Do you swear that the testimony you're about 
to give is the truth, the whole truth, and nothing but the 
truth so help you God?
    Ms. Pallante. I do.
    Mr. Marino. Please let the record reflect the witness has 
answered in the affirmative. Please have a seat.
    I'm going to begin by introducing the witness today. She 
has been to our Committee numerous times. And we look even more 
forward today to having her here, the Register of Copyrights, 
Ms. Maria Pallante.
    And, in her role as Register, Ms. Pallante leads the legal 
policy and business activities of the United States Copyright 
Office. Prior to being named the 12th Register of Copyrights, 
Ms. Pallante served the Copyright Office in a variety of roles, 
including Deputy General Counsel, and then as Associate 
Register and Director of Policy and International Affairs.
    During her career, she also spent several years as 
intellectual property counsel and director of licensing for the 
worldwide Guggenheim Museums. Register Pallante is a 1990 
graduate of the George Washington University Law School and 
holds a bachelor's degree in history from Misericordia 
University.
    Ms. Pallante, welcome back, and we are extremely pleased to 
have you here today. Your written statement will be entered 
into the record in its entirety. And I ask that you summarize 
your testimony in 5 minutes or less. To help you stay within 
the time limit, you're used to the lights in front of you. I'm 
not going to go through that ordeal.
    And would you please begin.

   TESTIMONY OF THE HONORABLE MARIA A. PALLANTE, REGISTER OF 
    COPYRIGHTS AND DIRECTOR, UNITED STATES COPYRIGHT OFFICE

    Ms. Pallante. Thank you. Good morning. Vice Chairman 
Marino, Ranking Member Conyers, and Members of the Judiciary, 
it's a great honor to be appear before you again this morning 
to discuss the copyright law and copyright administration. I 
wish to thank this Committee for its work of the past 2 years. 
As I believe you know, the review process represents the most 
comprehensive focus on copyright issues in the United States in 
over four decades. I also want to thank the Committee's 
thoughtful policy and oversight counsel for the important and 
very helpful insights they have shared with my office in our 
work.
    And I want to recognize my own staff for their dedication 
and enthusiasm at every turn, both in the complex portfolios 
that they carry and the numerous and respectful interactions 
that they have on a daily basis with so many stakeholders. The 
Committee's review process was designed to sort through the 
many competing equities that make up the public interest in the 
digital age. Balancing these equities is more challenging than 
ever before. But it is tremendously important. In fact, 
Congress has amended the Copyright Act multiple times since 
1790, each time ensuring that it is strong, flexible, and 
consistent with our cherished principles of freedom of 
expression. These are the themes that have come through in 
abundance this time as well, both from Members of this 
Committee and the many talented witnesses, all 98 of them, that 
have appeared before the Committee.
    Before turning to the issues, I would like to highlight 
some of the recent efforts of my office. In the past 4 years, 
in support of the Committee's work, we have published seven 
policy studies, and we have two forthcoming. With respect to 
Copyright Office technology, we completed and published a 
proactive report and recommendations on current challenges and 
goals, drawing on public inquiries, stakeholder meetings, and 
expert research. In the area of copyright administration, we 
published a major overhaul of the Compendium of Copyright 
Office Practices, the first one since 1988, setting forth new 
legal guidance in the area of registering digital authorship.
    And, on the subject of document recordation, we released a 
major report assessing how the Office records copyright 
transactions for the public. This report is the foundation for 
transforming the database that we have from a paper-based 
process to an innovative and interoperable platform for the 
digital economy. In all of this work, we solicited the 
participation of the public, including scholars, librarians, 
public interest organizations, bar associations, and the 
content and technology sectors. I am grateful to these 
important communities for participating in our work and for 
providing critical legal and practical perspectives.
    I have been especially inspired by the stories of authors 
across the country, many of whom took time to talk with me 
personally, including songwriters, recording artists, 
producers, photographers, graphic artists, book authors, 
dramatists, and independent filmmakers, all of whom want to be 
credited and compensated for their work. As Register, it has 
become clear to me that the intelligent and connected world we 
live in depends heavily upon the creativity and discipline of 
authors.
    My staff and I have reviewed all of the witness testimony 
of the last 2 years and we've divided our recommendations into 
four categories: Eight issues that are ripe for legislative 
action if the Committee so chooses; four issues that require 
foundational analysis and public study to assist you; a number 
of issues that are not as urgent; and overarching matters 
related to the Copyright Office itself. These are all further 
highlighted in my 32-page written statement. But I will 
highlight just a few of them here.
    Starting with the first category, if the Committee is 
prepared to act, it is in a strong position to develop or 
advance legislation now or in the very near feature in these 
areas: One, overhauling the music licensing provisions of the 
Copyright Act; two, codifying a resale royalty act for visual 
art; three, creating a tribunal for small copyright claims; 
four, enacting felony streaming provisions; five, updating the 
outdated exceptions that libraries, archives, and museums use; 
six, creating a framework to use orphan works; seven, updating 
the exceptions for persons who are blind or visually impaired; 
and, eight, shifting the regulatory presumption in the section 
1201 rulemaking.
    I will not go into detail about updating library exceptions 
or the exceptions for persons who are blind or visually 
impaired. But I will sum them up by saying that while some have 
opposed amending them because they would prefer to rely upon 
fair use, there is virtually no dispute that these sections are 
outdated to the point of being obsolete. Many individuals who 
need them do not have clear guidance about what they can and 
cannot copy, access, adapt, or share without permission. The 
provisions do not serve the public interest, and it is our view 
that it is untenable to leave them in their current state. We 
have studied them extensively, and we will be providing 
appropriate revisions to the Committee.
    Likewise, it is clear that we have an orphan works problem 
and that most people want a framework that removes egregious 
damages for good-faith users but also establishes a reasonable 
payment mechanism for copyright owners who reappear. The 
Copyright Office has studied this issue for 10 years, and we 
will be releasing an updated proposal again soon.
    Turning to music, we recently released a major study of the 
licensing landscape. Our music community is struggling, as the 
Committee knows, to apply outdated practices, many of which are 
government-mandated. We have proposed a series of balanced 
changes to promote more efficient licensing practices, greater 
parity among competing platforms, and fair compensation for 
creators, including greater latitude for rights holders to 
negotiate licenses in the free market. The groundwork has been 
laid for a follow-on process under the oversight of this 
Committee, and my office remains available to assist you.
    With respect to small claims, we also believe the case has 
been made. In our 2013 report to the Committee, we noted the 
daunting challenges faced by copyright owners seeking to pursue 
small copyright claims through the Federal court process. And 
we recommended the creation of an alternative but voluntary 
tribunal for this purpose. Although modest in economic value, 
these claims are not small to the individual creators who are 
deprived of income or opportunities when their works are 
infringed.
    Likewise, we think defendants should be able to raise 
appropriate defenses in the small claims context. I hope you 
will give serious consideration to our proposal.
    And I want to discuss section 1201. This rulemaking is ripe 
for congressional attention and, in fact, is already receiving 
congressional attention. The anticircumvention provisions have 
played an important role in facilitating innovation and 
providing consumers with a wide range of content delivery 
options. At the same time, it has become obvious that the 
regulatory process can be burdensome for some proponents, 
especially when trying to renew the exemptions that we granted 
previously. We are therefore recommending a legislative change 
to provide a presumption in favor of renewal in cases where 
there is no opposition.
    For other aspects of section 1201, we are recommending a 
comprehensive study, including the permanent exemptions for 
security, encryption, and privacy research. The rulemaking has 
always been a good barometer for public policy concerns. For 
example, in the 2010 rulemaking, my predecessor, Register 
Peters, observed that Congress did not anticipate the types of 
computer security concerns that have arisen since enactment of 
the DMCA and suggested that the 3-year exemption process is a 
poor substitute for what is needed in this area.
    We are also recommending appropriate study of section 512 
of the DMCA. These notice and take-down provisions were 
innovative in 1998, and they have largely served stakeholders 
well. But there are challenges now that warrant a granular 
review. Legitimate questions are coming from all quarters. 
However, a core question is how individual authors are faring 
under a system that requires sending notices of infringement 
over and over and over again without relief.
    All other policy issues, those ripe for action and those 
ripe for study, are discussed at length in my written 
statement. However, I want to flag just two that we have 
reviewed extensively, the fair use doctrine and the ``making 
available'' right. In studying all the relevant scholarship, 
legislative history, and jurisprudence, we have concluded, as 
have others, that in each case, the best course of action would 
be to leave these provisions untouched.
    I will end with Copyright Office modernization. We have 
greatly appreciated the Committee's deliberations and public 
discourse on this topic. We have worked to be transparent about 
systemic deficiencies and future expectations. It's an exciting 
opportunity to rethink the Copyright Office in the 21st 
Century. And at the request of Ranking Member Conyers, I have 
elaborated on these issues and my perspectives in a recent 
letter. I believe the Office requires more secure legal footing 
and greater operational independence in order to carry out its 
duties effectively and to reflect the incredible significance 
of the copyright system in the digital age. Thank you, Mr. Vice 
Chairman for the privilege of testifying.
    [The prepared statement of Ms. Pallante follows:]
    
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                               __________
    Mr. Marino. Thank you, Ms. Pallante.
    We will now proceed under the 5-minute rule with questions 
for the witness. And I will be begin by recognizing myself for 
5 minutes.
    And, Ms. Pallante, I think you know where I'm coming from 
when I say this: If we could just take exactly what you said 
and not have a hearing and do it, we would be fine. But we have 
to have a hearing.
    Ms. Pallante. I'm all for that.
    Mr. Marino. And we will proceed that way.
    I first want to thank you for your diligent work in 
advising this Committee in our extensive oversight. Your 
insight is an invaluable process that helps us get through 
this. Your frameworking of the system the way it is and where 
it should be is very remarkable. And I've never heard such a 
precise, accurate, complete report to Congress done in less 
than 10 minutes. So I thank you for that.
    As we move forward, wrapping up through this review, it is 
clear that several changes must be made to bring the Copyright 
Office and copyright law into the 21st century. And I know no 
one is going to do it better than you. We have to modernize the 
Copyright Office, being chiefly--that's the number one thing 
among what has to be done.
    But, first, I would like to request that I be able to enter 
a statement from the U.S. Chamber of Commerce that outlines 
their views on copyright reform, which includes their echo of 
support for restructuring the Copyright Office. Do I hear any 
objection? Hearing none, then so ordered.
    [The information referred to follows:]
       
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
                               __________
    Mr. Marino. Ms. Pallante, the idea for an efficient, 
searchable database seems to have a lot of support. Can you 
tell us what you believe you and your team would need in terms 
of resources, personnel, et cetera, in order to create and 
maintain such a database that will get us into the second half 
of the 21st century?
    Ms. Pallante. Thank you, Mr. Marino. So I agree that the 
Copyright Office database is a key piece of the digital 
economy, and we have actually several databases that are not 
connected. So one thing we have to do is make sure that the 
registration database--that is, when people apply for 
registration and receive certificates--is connected to the 
recordation database, that reflects later transactions in the 
marketplace, including licensing of those works. And then that 
database, that chain of commerce needs to reflect metadata and 
connect to private sector databases where people can be found 
and licenses can happen.
    So, in terms of resources, I would say two things: We 
should look at the fee schedule that we currently have, and we 
should figure out what, if anything, the Committee would like 
us to do in terms of charging for capital expenses. Right now, 
our statute allows us to charge for cost only, not future cost. 
That's something that has come up in our appropriations 
hearings. It's an interesting question. Obviously, it would 
have to be carefully calibrated to be reasonable. Beyond that, 
some degree of taxpayer support I think is important because I 
don't think you should put the database and the cost of the 
databases on the backs of copyright owners alone. So many user 
communities and aggregators also use--the general public uses 
the databases. So, that said, I think that the lion's share of 
it can be through fees.
    Otherwise, I think in terms of technology, we have to have 
the ability to focus our own staff on our technological needs 
and not have what we need diluted through, perhaps, what the 
Library, as a bigger agency, needs. That's been a big problem 
for us.
    Mr. Marino. My next question, on the issue of depositing 
their works for purposes of registration, I'm told there are 
limited instances in which a party can simply apply and produce 
a copy in digital form. Is this true?
    Ms. Pallante. Yes. So it's a vestige of the relationship of 
the Copyright Office to the Library. And, in analog days, when 
one registered and provided a physical copy, the Library became 
the archive for that copy. Today, we don't need preservation-
quality works to register them. We need a data-driven system 
where people can register on iPads and other mobile devices. So 
that is true.
    Mr. Marino. And, in 50 seconds, my last question, can you 
describe the system used for parties to register in order to 
receive the safe harbor under DMCA?
    Ms. Pallante. Are you talking about our database?
    Mr. Marino. Yes.
    Ms. Pallante. So that has been pending for some time. We 
have a rudimentary version of it that has been in place since 
1998, when the DMCA was enacted. Three years ago, we did a 
rulemaking and provided guidance as to how to update that so 
it's more interactive and interoperable. And, because our IT is 
managed by the Library of Congress, it is one of many projects 
still pending in that office.
    Mr. Marino. Thank you. And we've come in under the wire by 
15 seconds.
    The Chair now recognizes the gentleman from Michigan, the 
Ranking Member, Congressman Conyers.
    Mr. Conyers. Thank you, Chairman Marino.
    And I want to congratulate you, Ms. Pallante, you took 35 
pages and boiled them down to 10 minutes in a very excellent 
way.
    In your written statement and oral statement, you suggest 
that there are policy issues that warrant studies and analysis, 
including section 512, section 1201, mass digitization, and 
moral rights. I would like the Copyright Office to conduct and 
complete reports on those policy issues, and we'll work with 
the Chairman on making a formal request. Is that compatible 
with all of our discussions and all your writing?
    Ms. Pallante. Thank you.
    Mr. Conyers. Okay. A strong copyright system requires a 
strong Copyright Office, obviously. And there's consensus to 
restructure the Copyright Office to bring it into the 21st 
century and to strengthen the copyright system. We think it 
hasn't been given the appropriate attention considering its 
importance. You already provided a response to my February 
request for your views on restructuring the Office. And I've 
got a couple followup questions.
    In your letter, you urge Congress to decide soon on the 
organizational structure of the Office. What kind of a 
realistic timeline for Congress addressing the restructuring do 
you have and why?
    Ms. Pallante. That's an excellent question, Mr. Conyers. I 
think, ideally, you would do it in this Congress. And my reason 
for saying that is because----
    Mr. Conyers. As soon as possible.
    Ms. Pallante [continuing]. Because we have a situation 
where we need to map out the next decade really. And we either 
have to do that in the current structure, where, for example, 
we're making IT investments for the copyright system through 
the Library's central IT governance process, or we're doing it 
in a way that's more targeted to the copyright system. That's 
not theoretical. We actually have a recordation system that is 
paper-based. We've done all of the analysis for that. We're 
ready to bring it online, and we need to know whether we're 
doing that in our own IT infrastructure and subject to our own 
IT needs or through a general agency model. I also think that 
some of the policy issues that are interesting to this 
Committee--small claims, orphan works--would be greatly 
improved if you could structure the agency itself properly.
    Mr. Conyers. Very good. I'm going to combine my last two 
questions because I know the light is going to flash. The 
Copyright Office provides an impartial voice for copyright 
policy in Congress and the Administration. How would it 
continue to do so under the different approaches you've 
suggested as an independent branch? And, finally, how would the 
different approaches you suggested in your letter affect your 
Office's future funding? And would this impact fees for the 
copyright community?
    Ms. Pallante. So it's a big question, obviously. We've been 
in the same structure for--two big questions--we've been in the 
same structure for 118 years. We have been a department of the 
Library of Congress, so not a subagency, not an agency. During 
that time, we have served the Administration, and we have had a 
very close relationship with Congress on copyright policy, 
every major revision since we were created in 1897.
    Interestingly, although we perform executive branch 
functions and serve Congress, our legal status is unclear. 
Recently, the Department of Justice, in a music case, in a CRB 
case, said that when the Library of Congress is performing 
copyright functions, it is clearly in the executive branch. 
What we are asking you to do is to codify the structure that we 
are all comfortable with and have known for over a century, 
which is an independent structure where we are impartially 
serving everybody. In that model, the President would appoint 
the next Register, the Senate would confirm the position, but 
the Congress would decide the term, and the person would be 
free to advise Congress as well as the Administration, without 
interference, in the way that it always has worked. It doesn't 
disrupt the Administration or their IP experts but, in fact, 
confirms the coordinating role that now occurs.
    In terms of funding, we are two-thirds fee-funded right 
now. As I said, we might be able to look at charging for 
capital costs. Big copyright owners, large ones, have indicated 
they're willing to do that if they get services back that 
reflect that investment. But, no doubt, there will be some 
capital improvements. What I would suggest is that those 
capital improvements are a great investment in the digital 
economy, though.
    Mr. Conyers. Thank you so much. This is your third time 
before us. And each time is as good as it gets. And it gets 
better. I welcome your coming before the Committee so much.
    And I appreciate your testimony.
    Ms. Pallante. Thank you, Mr. Conyers.
    Mr. Conyers. Thank you, Mr. Chairman.
    Mr. Marino. Thank you.
    The Chair now recognizes the gentleman from California, 
Congressman Issa.
    Mr. Issa. Thank you.
    Ms. Pallante, it's good to have you here again. I want to 
pick up where the Ranking Member left off because I think it's 
very important. When you came into office, as you know, I was 
extremely pleased. You talked in terms of things that must get 
accomplished. But today's hearing brings us a lot of 
information about studies in which you want to do more studies. 
And you already are a fairly independent agency, in spite of 
your lack of certainty in certain areas. How do we get you from 
studying to proposing? And how do we get you from proposing to 
doing?
    Ms. Pallante. Well, we would love to be able to be more 
hands-on and help the copyright system function. So that is the 
vision that I think----
    Mr. Issa. No, I'm talking about in your organization. I'm 
not talking about your affecting--because you've been very 
good, and your predecessor was, in telling us what we ought to 
do in copyright law. And I appreciate that. But I looked to the 
Constitution before I came in. And I'm okay with our role.
    What is it going to take for you to come from studies to 
real, concrete proposals, dollars and cents, ``this is what we 
need''? Look, you're the chief executive of an agency. Once the 
laws are set--and they are currently set--when you fail to 
perform, you have two choices, as a member of your board, so to 
speak, you have two choices: Come to us and tell us you don't 
have a solution or come to us and tell us you do have a 
solution. You've come to us with studies. My question today--
and I'm not trying to be in any way the bad guy here. I support 
you. I thought you started well, but now I'm beginning to see, 
after 3 years, a pattern of we have these studies and we want 
more studies. When are we going to see, beyond your desire to 
be an independent agency and have that codified, when are we 
going to see solid proposals not on what we do but on what you 
can do or what you cannot do?
    Ms. Pallante. Thank you, Mr. Issa. We have proposed 
recommendations for technology infrastructure and technology 
recommendations that are fairly precise. Those were done with 
the full public participation of the copyright community. And 
we published that in February. And that was also referenced by 
the GAO recently. So I think we have been fairly proactive 
about saying what we need. We need our own technology 
enterprise architecture, distinct from the Library. We need our 
own technology infrastructure, our own technology staff. And we 
need to make sure we have targeted IT investments that are not 
synergized with the Library mission. So we have been actually 
very precise about that.
    In terms of fees, we have been very precise that we need an 
updated fee allocation so we can begin to charge for capital 
costs.
    In terms of authority, I am not the chief executive of the 
agency. I'm the head of a department which is run by the 
Librarian of Congress. So the question, I think, that we are 
asking you is: Do you want us to put further investments in 
that structure, or do you want to give us the authority legally 
to do something different?
    Mr. Issa. Okay. Let me read you back your own words because 
I think you've given us a lot of what I asked for: One, you 
don't have enough money to update the Copyright Office to the 
level that the IT system needs; two, you don't have internal 
expertise to update the Copyright Office to that level; and, 
three, the Librarian is not going to give it to you, nor do 
they have it. Is that pretty close?
    Ms. Pallante. Almost. What I'm saying is that we don't have 
the authority to have our own IT staff or control.
    Mr. Issa. I left that part out.
    Ms. Pallante. I would love to----
    Mr. Issa. I left that part out because if I understand 
correctly, you need more money and you need a working IT system 
and you lack the expertise in-house and you believe that it 
does not exist within the Library system.
    Ms. Pallante. It does not. And we do not have the authority 
to duplicate it.
    Mr. Issa. So the request here today--and I know my time is 
expiring, Mr. Chairman--the request I see here today, the solid 
proposal that I want to go away from this with is: One, you 
need more money; two, you need an IT system that works; and, 
three, we have to figure out how we structure your getting that 
IT system that works, either, A, making sure the Library has 
it, or, B, finding an agency or a structure that would cause 
you to do so. Is that correct?
    Ms. Pallante. Yes. Except I would say this. That the IT 
system being divorced from the head of the Copyright Office has 
been a terrible model.
    Mr. Issa. No, no, I understand that. I understand that you 
are looking at a structural IT system that meets your needs.
    Ms. Pallante. Correct.
    Mr. Issa. I cannot presume today that we would do anything 
except find a way to work it under the current structure, 
albeit, independent of the Librarian's needs. So, given that, 
that is what you're asking for?
    Ms. Pallante. I think that's accurate.
    Mr. Issa. Mr. Chairman, I have a hundred more questions. 
But that is the best answer that I could possibly hope for on 
one of the root problems that we have in having the Copyright 
Office meet the 21st century needs. And I thank you for your 
indulgence. Thank you.
    Mr. Marino. Thank you.
    The Chair now recognizes the gentleman from New York, 
Congressman Nadler.
    Mr. Nadler. Thank you, Mr. Chairman.
    I want to begin by thanking Chairman Goodlatte for 
conducting the comprehensive review of copyright law and of the 
Copyright Office that we are now concluding. Over the course of 
these 20 hearings, we have learned a lot about what is working 
and also what needs to be improved. It's now our task to put 
this knowledge into action.
    Fortunately, the Copyright Office has helped guide us 
through these difficult issues. And I appreciate all the 
assistance that you, Ms. Pallante, and your staff have provided 
us throughout this review process. I particularly appreciate 
your call for the United States to join 70 other countries 
around the world in providing fair compensation to visual 
artists through a resale royalty and your comprehensive report 
on music licensing.
    Along with my colleagues Marsha Blackburn, John Conyers, 
and Ted Deutch, I recently introduced the Fair Play Fair Pay 
Act to correct several longstanding injustices that plague 
music creators. This legislation would ensure that all artists 
are fairly compensated regardless of where their music is 
played or when it was recorded and would create a technology-
neutral system whereby Internet radio is on an equal footing 
with AM/FM, cable, and satellite services.
    Ms. Pallante, you mentioned in your testimony that music 
licensing issues are ripe for action. Do you believe that 
Congress should move forward with legislation, such as the Fair 
Play Fair Pay Act, to enact the full public performance right? 
If so, why do you believe this is an urgent matter that 
Congress should address?
    Ms. Pallante. Thank you, Mr. Nadler. I think that the Fair 
Play Fair Pay Act is an excellent legislative framework. It 
reflects a lot of the findings of our study. On the public 
performance right for terrestrial radio, in particular, which I 
understand to be the focus of your question, I'll say this, 
it's indefensible as a matter of law and, frankly, embarrassing 
as a matter of policy that the United States does not pay 
public performance--for the public performance of terrestrial 
radio to the creators of the music. We are out of step with the 
entire rest of the world.
    Mr. Nadler. Thank you. I think it's very well put, very 
eloquently put.
    Similarly, do you believe it's important for Congress to 
take action now to enact platform parity, where all radio 
services play by the same rules? If so, why?
    Ms. Pallante. Yes. That was one of the major conclusions of 
our study. I think it was a conclusion that everybody knew was 
a long time coming. We have been regulating the music industry 
for a century. We, therefore, have all these disparate rates 
and grandfathered clauses that are really, really difficult to 
apply, do not serve the digital economy, do not serve new 
entrants to the digital marketplace, definitely do not serve 
creators. And beginning to look at parity across platforms is a 
crucial first step.
    Mr. Nadler. It's a first step toward?
    Ms. Pallante. Toward a balanced music bill that reflects 
the 21st century.
    Mr. Nadler. Thank you.
    Switching topics, do you think that the time is ripe for 
legislation on the issue of resale royalties for visual 
artists? In your testimony, you mentioned that several of the 
recommendations in your past reports have been included in the 
bill I introduced this Congress, the American Royalties Too Act 
of 2015. Can you explain why this bill would be a good 
foundation, in your opinion, if the Committee were prepared to 
act?
    Ms. Pallante. I think it's an excellent foundation. And we 
really enjoyed doing that study because we, again, are out of 
step with about 70 countries around the world in the way that 
we treat visual artists. They operate differently under the 
Copyright Act from others in that their works are unique. And 
the value of their works is tied to the uniqueness, not the 
proliferation of copies, as in a book or a film where you're 
pricing it according to those copies. So we would really like 
to see visual artists generally fare better under the Copyright 
Act because their contributions are critical to our heritage 
and to the digital economy. We just recently issued a Federal 
Register notice asking for even more information about how 
photographers, graphic artists, and illustrators are faring 
under the Copyright Act as a follow-on process to your request 
for that study.
    Mr. Nadler. Thank you. Going back to music, online music 
service providers today struggle to obtain accurate and 
comprehensive ownership information about the music on their 
services. Often such information is incomplete, not up to date, 
simply unavailable, or not in a format that is universally 
useable. The lack of ownership information prevents artists and 
composers from being paid in a timely manner. It also 
disincentivizes new service providers from entering the digital 
music space because of the threat of statutory damages for 
failure to appropriately license or pay creators and other 
copyright holders when they don't know who they are. What 
reforms do you think might be appropriate to remedy this 
situation?
    Ms. Pallante. Yes, so, again, another major focus of our 
public process was data. Data is everything to the digital 
music marketplace. In some instances, there is data. And, in 
some instances, there is a lack of coordination of data. In 
other words, sometimes there's data missing. Sometimes it's the 
coordination of existing data that's the problem. So we 
proposed a central authoritative public database. We 
recommended that it be operated by a nonprofit entity that is 
government mandated, along the lines of SoundExchange. 
Licensees could pay royalties for the unidentified works into 
that entity, and that would solve their exposure to liability.
    Mr. Nadler. Thank you. Let me just thank you for your 
testimony and for your work.
    And I yield back.
    Mr. Goodlatte [presiding]. Thank you, Register Pallante. 
I'm going to go ahead and give my statement since I'm late 
getting here, and then I'll go straight into my question, but a 
brief statement.
    Two years ago, this Committee began the first comprehensive 
review of our Nation's copyright laws since the 1960's. During 
these 2 years, we have had a total of 20 hearings with 100 
witnesses, had hearings that covered broader topics, such as 
the role of technology and copyright in our economy, to more 
specific topics, such as the scope of copyright protection and 
fair use.
    Our first witness was the Register of Copyrights, Ms. 
Pallante. She returns this morning and has given her 
perspective on what the Committee has learned over the past 2 
years and to update us on the in-depth studies that the 
Copyright Office has completed during this time. The Committee 
recognizes the strong, in-depth analysis routinely conducted by 
the Copyright Office. The Committee has always expected the 
advice of the Register being provided to Congress on copyright 
policy issues and the role of the Copyright Office itself to 
come from her independent perspective without filtering or 
direction from others. The Committee welcomes her 
forthrightness about the challenges her office faces, as well 
as what options Congress should consider in order to meet her 
legal requirements and the needs of the copyright community.
    As the copyright review hearing process proceeded, each 
witness was essentially limited to speaking on the topic of 
that particular hearing. However, there are a few participants 
in the copyright system that care about only one copyright 
issue. Over the next several months, the Committee will be 
reaching out to all stakeholders to invite them to share their 
views on the copyright issues we have examined over the course 
of our review so far as well as any others. Even since we began 
our review, there have been several new Copyright Office 
studies, new technologies, court decisions, and even changes in 
business models. So we look forward to hearing from 
stakeholders on all of these important issues. During this 
process, we also encourage all participants in the copyright 
system to continue their dialogues with each other. Progress in 
copyright policy requires all parties to work together. 
Although it is certainly easier to discuss copyright policy 
with a traditional ally, copyright policy will not advance 
unless the lines of communication are open among all 
participants.
    Finally, I'm going to my questions.
    You recently released a comprehensive music study, 
recommending a series of changes to the music licensing system 
to improve it. Is improving the existing music licensing system 
preferable to shifting it to a free-market system with robust 
antimonopoly controls so that market forces determine prices 
rather than the government?
    Ms. Pallante. The goal is most definitely ultimately the 
free market. I would completely agree with you on that. What we 
did was take a century-old regulatory process and try to move 
it in that direction incrementally but also progressively. So 
if you want to completely dismantle all regulation, many people 
would be very supportive of that. I think our concern would be 
the timetable for doing that and how small actors would fare 
without the regulatory protections that have served them and 
consumers fairly well.
    Mr. Goodlatte. Smaller copyright owners and users have 
indicated that they struggle with a complex copyright law that 
is difficult to navigate. Is overall clarification of the 
existing statute just as important as updating the statute 
itself?
    Ms. Pallante. Yes. There is no question that copyright law 
touches everybody, everybody in a modern culture, in a modern 
nation, in modern global world. And it's unlike other laws in 
that respect. It affects everybody. So that is something that 
our Office would presumably be able to help the Congress with 
by taking on more of the education and guidance role.
    Mr. Goodlatte. The Committee has heard numerous and 
sometimes conflicting comments about copyright remedies that 
range from a not very functional system to extreme financial 
penalties divorced from actual harm. Does this wide range of 
comments simply reflect different opinions? Or can everyone's 
comments all be accurate, indicating that we have a remedy 
system that is not focused properly?
    Ms. Pallante. Everybody is right. I think our remedies are 
critical to the functioning of the Copyright Act. You can't 
have exclusive right, a system based on exclusive rights 
without meaningful remedies. They would be hollow without 
remedies. Can we provide more guidance to courts? Possibly. Can 
we make licensing work better so that we're not in litigation 
and so that remedies play a more productive role rather than a 
hammer? Yes. But whether it's actual damages, injunctions, or 
statutory damages, they have been with the Copyright Act since 
1790 in some instances. So it's very, very, I would be very, 
very careful about amending that quickly.
    Mr. Goodlatte. This Committee traveled to New York City for 
a field hearing on first-sale issues. There are clear 
differences between analog and digital items. But how should 
the law treat mixed goods?
    Ms. Pallante. This is a great instance of our Copyright Act 
intersecting with what our consumers want. And we do live in a 
global marketplace. People do want to obtain the best prices 
and the best goods. There is a lot to be said for that model. 
And I think our stakeholders who are copyright owners are 
adapting to that. So I would probably monitor that situation at 
this point. I don't see a need for congressional legislation, 
anyway, at this point.
    Mr. Goodlatte. Thank you. Those are my questions. We are 
going to have to stand in recess for the speech by the Japanese 
Prime Minister.
    However, we do have time to take one more.
    And so the Chair recognizes the gentlewoman from 
California, Ms. Lofgren, for her questions.
    Ms. Lofgren. Thank you, Mr. Chairman.
    I appreciate this hearing. And I just wanted to make a 
quick statement. In your testimony, there's some things I agree 
with. There's some things that are reminiscent of SOPA. And I 
just want to state for the Netroots that, to the extent that 
there are SOPA-like elements, I'm still against them.
    I want to talk about the IT system. I agree that the IT 
system needs to be updated. But I want to talk about the whole 
idea of having taxpayer money allocated to this function. I 
realize from your testimony the constraint really has been 
created by us because of the forward funding. But the USPTO 
budget is $3.2 billion, and it's 100 percent fees. And it just 
seems to me that that ought to be the model here. Your budget 
is much smaller. But there is no reason why the taxpayers 
should be funding this any more than the taxpayers should be 
funding the Patent and Trademark Office. I just think that it's 
possible to do. We have very successful industries in the 
content area. And I just am eager to work with you to explore 
that further.
    I also want to talk on section 1201. And I was looking up 
and down the dais here, realizing there's only a few of us left 
who were actually here when the DMCA was adopted. And 1201 
caused me a lot of heartburn at the time. And it still does. 
And so here is one of the questions I have--and I had then--
which is, do you believe that fair use is a defense to 
circumvention under 1201?
    Ms. Pallante. I do not believe that the way you enacted the 
statute, that chapter 12 is subject to section 107. It is not 
part of the core Copyright Act. So, no, not legally.
    Ms. Lofgren. I agree with you. And it's a major problem. 
Because without a fair use exception, the digital locks could 
be used to eliminate a fair use or an otherwise authorized use. 
Digital locks could be used to perpetuate only monopolistic 
practices, not content at all. And so I'm hopeful that as you 
are thinking about 1201, that we think, not just about the 
exceptions--and I think your idea about forwarding the 
approval--of prior approval, but as the exemptions have 
proliferated, I think it tells us something about the 
underlying defect in the statute.
    Now, sometimes when you say this, people assume, well, 
you're for infringement. I'm not actually for infringement. But 
I am for eliminating monopolistic practices that hide behind 
copyright. And I am for not using copyright to cripple 
technology innovation that has nothing to do with protecting 
copyright. And I'm also for making sure that the fair use 
exception is not destroyed through misuse of technology.
    Now, I was interested in your cybersecurity exception issue 
and the need to expand it. In your mind, what would a 
cybersecurity exception look like? What would it encompass?
    Ms. Pallante. I would really want to talk to experts in 
that area before commenting on that.
    What I can say with confidence is that having cybersecurity 
research needs subject to a 3-year exemption process under the 
DMCA conducted by the Copyright Office and the Library is 
probably not the best way to go for the Nation.
    Ms. Lofgren. I very much agree. I recently met with some 
researchers, academically based, and I think they had probably 
been over to the Copyright Office as well. And they are good 
guys. They are exploring cybersecurity issues. And to do so, 
they have to actually do some breaking. And we want them to 
because we want to find out what the holes are. But they're 
very concerned. They're a law-abiding group. They don't want to 
be behind a law violation. Have you set up a group that would 
help you to think about this exception?
    Ms. Pallante. Nobody has asked us to look at the exception, 
but we would like to do that. And it would be an interesting 
group because it would be very much in need of technical 
experts and security experts and people who are really looking 
out for the security interests of the United States.
    Ms. Lofgren. Thank you, Mr. Chairman.
    I see my time is about to expire. And the Committee needs 
to get over to the floor to listen to the Japanese Prime 
Minister.
    Mr. Goodlatte. The Chair thanks the gentlewoman.
    And the Committee will stand in recess until noon. And we 
thank Ms. Pallante for her patience.
    [Recess.]
    Mr. Goodlatte. The Committee will reconvene.
    When the Committee recessed, Members were asking questions 
of our star witness, and we'll resume by recognizing the 
gentlewoman from California, Ms. Chu, for 5 minutes.
    Ms. Chu. Thank you, Mr. Chair.
    First I'd like to enter into the record statements from the 
Copyright Alliance and Creative FutureB1 deg. on their 
support for a strong copyright system. I'd also like to enter a 
statement from Sound ExchangeB2 deg. into the record.
    Mr. Goodlatte. Without objection, they will be made a part 
of the record.
    [The information referred to follows:]
    
    
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
                              
                               __________
    Ms. Chu. Thank you.
    Mr. Chair, thank you for holding this important hearing 
today. After speaking with so many diverse stakeholders from 
the Los Angeles region and throughout the country, it's clear 
to me that we have to bring the Copyright Office into the 
modern age. We need a Copyright Office that serves the needs of 
owners, users, and the American public. And that includes 
giving the Office independence and sound legal ground to 
perform its core mission to administer the Copyright Act and 
resources to invest in a workable IT infrastructure that makes 
sense for a creative future. I look forward to working with 
you, my colleagues, on the Committee, the Register, and the 
impacted stakeholders to produce a viable solution.
    Register Pallante, you and your team have done such a great 
job despite the challenges you faced from limited resources, 
staffing issues, to outdated technologies. It seems to me that 
you're faced with the challenge of running an analog office in 
a 21st century world. In addition to this, you're limited in 
your decisionmaking, given how the Office is currently 
structured under the Library of Congress.
    When Professor Brauneis last testified in the Committee, he 
urged Congress to give serious thought to the vehicle of an 
independent agency.
    What are your thoughts to creating an independent agency 
instead of placing the Copyright Office within the Department 
of Commerce or the Patent and Trademark Office?
    Ms. Pallante. Thank you, Dr. Chu, for the questions, and 
thank you for recognizing my staff as well. I don't know how 
I'm so lucky to have the staff that I do.
    I think that those questions go right to the heart of what 
copyright is about. So if the Office is in the Commerce 
Department, it clarifies a few things. It clarifies what the 
Department of Justice has said is the case, which is namely 
that we are by and large an executive branch agency when we are 
performing copyright functions. And since all we do in my shop 
in the Library is copyright functions, it's clear that we are 
the part of the Library that is engaged in executive branch 
functions.
    So the question becomes, does it matter? And what does that 
mean for the Library, and what would one lose if we were in the 
Commerce Department?
    I think the principal thing that you lose as the Congress 
is the unfettered and impartial advice of the Copyright Office, 
which you have had since 1897. I think this Congress and all 
Congresses before it have been very hands-on in copyright 
policy. The House in particular has led the way in discussions 
about what a balanced Copyright Act should look like from the 
very beginning. And I personally would be heartbroken to see 
that part of our job compromised, diluted, or even eliminated 
by putting us only in the executive branch.
    That led us to the conclusion that an independent model 
would really honor what we have always been, and that means 
that we have served Congress impartially, and we have also, 
though, supported the Administration. In treaties, in trade, we 
work with the Department of Justice very carefully because we 
administer the law. And we didn't want to disrupt what's 
already the case in the Administration, meaning that the 
Congress has provided that the Register has a statutory 
relationship with the Under Secretary, who heads the Patent and 
Trademark Office, and a statutory relationship with the IPEC, 
that is in the Executive Office of the President. The only 
issue is that the Register is not at the same level and runs 
the copyright system and the Copyright Office. So, in looking 
at potential conflicts with the Library, because the Library 
has a library mission and a library view of copyright law, in 
the future and looking at the kinds of resources and focused 
technology and staffing that we need, it led us to believe that 
separating it out but honoring the tradition as leanly as 
possible was the right answer.
    Ms. Chu. Thank you for that.
    I'd also like to ask a question about the small claims 
process that could be an alternative to Federal court. I hear 
from so many small business owners, and the general consensus 
is that going to Federal court is very, very costly. And that 
is why I believe we must establish a small claims court for 
creators that need it the most.
    Can you discuss how a system could be established and how 
it will function alongside the Federal court system?
    Ms. Pallante. Yes. Thank you.
    So this Committee requested a report from us, and we did a 
very public study for over 2 years about what a small claims 
process could look like. The overwhelming response of the 
creative community is that they are priced out of Federal 
court, even where statutory damages are available. And, without 
meaningful enforcement or resolution of contractual issues in 
cases, not necessarily full-blown major precedent-setting 
litigation, but just trying to resolve gridlock and claims, 
they need something else. And the small claims process that we 
developed constitutionally would have to be voluntary. Both 
parties would have to agree to it. We think both parties would 
in the circumstances that we've laid out. It would be capped at 
$30,000. That's certainly up to the Committee to change or 
amend or further deliberate on. We thought that number came out 
of our process. And we think it's critical because we don't 
want a Copyright Act in the 21st century that provides 
exclusive rights and no way to effectively enforce them, 
license them, protect them, and monetize them.
    Ms. Chu. Thank you.
    I yield back.
    Mr. Goodlatte. The Chair recognizes the gentleman from 
Michigan, Mr. Trott, for 5 minutes.
    Mr. Trott. Thank you, Chairman.
    I want to thank our witness this morning, Ms. Pallante. 
I've been looking forward to your testimony. I'm new here in 
Congress, but everyone I've spoken with has commented to me on 
how insightful, helpful, and pragmatic some of your suggestions 
and insight has been for this Committee, and one of the few 
people that I've heard about since being here that everyone 
says great things about, and it doesn't happen too often in 
this town.
    Ms. Pallante. Thank you. Thank you so much.
    Mr. Trott. So thank you for being here.
    I agree with your earlier comments about how you envision 
reorganizing the Copyright Office and the independence and the 
autonomy you need.
    At a high level, what additional costs--you know, how much 
do you think it would cost to do it. Particularly how much in 
technology needs to be invested, and what's the cost there? Do 
you envision the new Office, as reorganized, would be giving 
guidance on issues that come up, and would you also envision 
new positions like a chief technology officer? At a high level, 
you know, what's it look like, and how long would it take to 
accomplish?
    Ms. Pallante. Thank you. Thank you for your kind words 
about the Office.
    I think you have a big opportunity here to be innovative 
and create something that you haven't really had before in the 
Federal Government. So small, nimble, innovative, forward-
thinking, flexible agency. Independent, in so that it can serve 
the Congress as well as the Administration, protecting the 
impartial role that we've always had. To do that, I have said 
that we need to have a staff that is probably more and more 
data- and tech-driven. Right now I have created a CIO position. 
I did that last year and hired a deputy as well to begin to do 
more planning and take more direct responsibility.
    What I think you need to know is that when the GAO came in 
and audited the Library's IT and they found severe 
deficiencies--it's a public report--that was not unknown to us. 
A lot of people knew about it. But, unfortunately, I think in 
making the 39 recommendations to the Library that they made, 
they also said you shouldn't have multiple CIOs in one agency. 
You shouldn't have multiple tech staff in one agency. And, 
although they didn't say it that precisely, it's very clear 
from reading the report that that's their recommendation.
    What I said is: It hasn't worked. We've been in the 
Library's IT system for quite some time. We are not a primary 
customer. The Library's mission is their first and foremost 
mission, and I think it should be. But it makes it impossible 
for me to move forward if the steps I've taken to develop a 
small IT staff with hopes of building out a better one--and the 
IT staff includes data people, which are really business 
people. So what kind of metadata are they using in the music 
community? And these are our customers. It's hard for me to 
build that out if we're getting the opposite suggestion from 
auditors.
    And, to be fair to the Library, they're in a difficult 
position because they're being told from me that's not going to 
work and from the auditors that that's what they should do. So 
that's why I asked this Committee to please weigh in on it.
    Mr. Trott. And the timing, how long do you think once we 
have plan in place and you get some direction and the budget if 
you had to----
    Ms. Pallante. It's a great question. I've thought about 
this a lot and I've talked to the stakeholders about this. I 
hope this isn't too simplistic. I would hope the Committee 
would do what it thinks is right for the copyright system by 
elevating it appropriately to reflect the significance of the 
system so that it's no longer just a department in the Library.
    And then I would suggest that you have an effective date 
that allows you a transition plan to figure out what part of 
the budget should come from fees, what the 3- to 5-year costs 
are, what the long-term costs are. And I think it's an exciting 
situation because I think in a modern government you should 
expect a lean, small agency to borrow and purchase services 
from across the government. Like, the Office doesn't need to 
have its own HR department. It doesn't necessarily need to 
create data standards from thin air. So I think it could go 
actually fairly innovatively because our customers are in that 
space now.
    Mr. Trott. Great. Well, thank you. I agree with everything 
you said, and the only disappointment is, with all those tech 
savvy people, you're going to need you probably don't need 
someone like me that has Betamax and tape cassettes still.
    So, you know, one of the things that I've--since I've been 
here there have been a number of groups have come and talked to 
me about the performance rights issue. And there was an earlier 
question, and I can't discern necessarily whether you think the 
fair play legislation that's been introduced is going to solve 
that problem, but, you know, how should I approach that? 
Because you have the strain necessarily between the 
broadcasters and then, you know, the artist who, you know, 
believe in a willing seller/willing buyer concept.
    How should that be looked at by Members, in your opinion?
    Ms. Pallante. Well, almost always our Office finds the 
right balance in these discussions because almost always 
everybody has a legitimate point of view. I have to say, our 
Office has been looking at the public performance right for 
over 20 years, and it is an example of an issue where we are 
just on the wrong side. We are out of step with virtually every 
industrial country in the world, and it is, as I said earlier 
to Mr. Nadler, it's just frankly indefensible as a matter of 
policy that we are not paying creators when their songs are 
played on radio. They're subsidizing the profits of 
broadcasters in that particular issue. There are plenty of 
issues where broadcasters have legitimate rights and they 
should be looked at, but that is not one I agree with them on.
    Mr. Trott. Great. Thank you for being here today.
    I yield back. Thank you, Chairman.
    Mr. Goodlatte. The Chair thanks the gentleman.
    Recognizes the gentleman from Florida, Mr. Deutch, for 5 
minutes.
    Mr. Deutch. Thank you, Mr. Chairman.
    Mr. Chairman, first I'd like to join the chorus of voices 
heaping praise on Ms. Pallante and her office. Thank you for 
your leadership, your thoughtful, very thoughtful, analysis of 
these issues and the tireless efforts that you and your staff 
put in in really strengthening the intellectual property of our 
country. We appreciate it.
    I want to follow up on this issue of independence, and the 
understanding that I have that a lot of us I think have come to 
conclude, certainly from today, that the Register would be in a 
better position--significantly better position if it gained 
more independence through Copyright Office modernization, which 
I think is one thing where there's broad agreement and I hope 
that we move forward on.
    But following up on this issue, when you were here with us 
last, you somewhat reluctantly discussed the challenges created 
by the fact that the Copyright Office is forced to rely on 
technical infrastructure at the Library of Congress, including 
its network servers, telecommunications and security 
operations, in spite of the vastly different mandates that the 
Library and the Copyright Office have. And you touched on that 
a bit here today.
    It seems to me like your inclusion under the umbrella of 
the Library of Congress, however well intentioned, is hampering 
the work that you do beyond simple technical challenges. It's 
not just about the technical issues. And I'm sure that--and I 
acknowledge that your response has been somewhat limited here 
today, but I will simply say on your behalf, if I may, that 
it's hard to see how the Copyright Office can rise to the many 
challenges of the 21st century work that you do without 
dramatically more independence and dramatically more 
flexibility. I would just make that point.
    I also wanted to follow up on Mr. Trott's last point. One 
of the primary recommendations of your recent music licensing 
study is that Congress should adopt a uniform market-based rate 
setting a standard for all government rates, and I agree with 
that. And when the Music First Coalition showed me this graphic 
that we're about to hold up that depicts the current system for 
the various forms of radio, it solidified for me how 
unnecessarily complex and, in fact, as you've just pointed out, 
how unfair the current system is. You spoke about the--I mean, 
your words, that it's indefensible that we don't pay creators 
when songs are played on the radio. I wholeheartedly agree with 
that.
    Do you agree that all forms of radio should be governed by 
the same fair-market-value rate standard?
    Ms. Pallante. I do. And I think what we're suggesting in 
our report is that we move toward the free market and we not 
subsidize or grandfather in oddities that are a reflection of a 
century-old system that's been cobbled together.
    Mr. Deutch. Great. And, Mr. Chairman, I'd like to submit 
for the record a considerably smaller version of this graphic 
that I presented.
    [The information referred to follows:]
    
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                               __________
    Mr. Collins [presiding]. Oh, without objection, but the 
bigger version will be fine as well.
    Mr. Deutch. Thank you.
    And, Ms. Pallante, when you appeared before the Committee 
in March of 2013, you and I had an exchange about how to keep 
the copyright review effort timely and relevant, and you said 
at the time that although we love the trade associations that 
visit us on a daily basis----
    Ms. Pallante. We do.
    Mr. Deutch [continuing]. As we all do, getting around them, 
as you said then, sometimes in getting to other kinds of 
creators would really by instructional. So, you said, I would 
also probably recommend that if we were to have roundtables, 
that we get of Washington a little bit, go somewhere where 
people make from a living from writing songs at their kitchen 
table.
    I wonder if you've had an opportunity to follow through on 
that and meet with real working creators outside of Washington.
    Ms. Pallante. Yes, in fact, and I remember that exchange. 
In fact, that's been the most inspiring part of the work for me 
for the last 2 years. I have met with recording artists across 
the country in multiple cities, and to the Recording Academy's 
credit, they did not filter or script those meetings. I think 
there was some squirming at times, but it was a very inspiring 
set of meetings because I was really hearing from creators 
about why they make the livings they make, why they care about 
culture, why they care about creativity; how incredibly 
disciplined they are and trained in their various disciplines; 
and how they really just want to make sure that they are 
credited and compensated fairly.
    Mr. Deutch. And, ultimately, as we go about our work here, 
it is that commitment to their craft, the discipline that they 
exercise, that not only wants them to be compensated, but I 
think requires us to fairly compensate them, ensure that they 
are fairly compensated for the work that they do.
    Ms. Pallante. I agree with you.
    Mr. Deutch. Thanks, Miss, Pallante. I yield back.
    Mr. Collins. Gentleman yields back.
    And now, at this time, the Chair recognizes himself for his 
questions. And before I start I want to ask unanimous consent 
to--and put into the record Intellectual Property Guidelines 
for the 114th Congress. It's an open letter.
    Hearing no objection, so ordered.
    [The information referred to follows:]
    
    
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                               __________
    Mr. Collins. Ms. Pallante, you're back, and it's good to 
have you here.
    Ms. Pallante. Thank you.
    Mr. Collins. Your staff and you, we have probably developed 
a very good relationship I feel like, and it's because I think 
of your frankness. I think it's because of your staff's 
willingness to be open about where you are in the situations 
that you're facing. I think also, just as a little bit for 
those who've been here for the hearing as well, I think the 
good part about it it is time for us to act. It is time for 
Congress to act. You have gave ideas and you have laid it out 
fairly well, and I do appreciate that. And we're going to talk 
about a little bit of that today in my time of questioning.
    But one of things I want to go back to, it's been mentioned 
a lot, is the copyright in the music marketplace that we have 
spoke of before. Those guiding principles, as you know, and 
most everybody in this world and hopefully in this room know 
that I introduced the Songwriter Equity Act, along with my 
friend from New York as well, to make modest fundamental 
changes to section 114 and 115 of the Copyright Act, and I 
believe it comports with the principles of fair compensation 
that you talk about.
    Do you agree that the Songwriter Equity Act is ripe for 
congressional consideration and passage?
    Ms. Pallante. I do. It's a great framework. It reflects 
everything we said in our report on those issues. What we 
provided you with is a bigger ecosystem with more issues. We 
gave you all the music issues in one bundle.
    Mr. Collins. Yes, you did.
    Ms. Pallante. We thought that would be more fun for you. We 
obviously defer to you. If you want to pull out some issues 
that are more ripe than others.
    Mr. Collins. Well, and can I just--because we've had this 
conversation. And I think sometimes that getting this whole 
thing--we've looked at this sort of ball of copyright, and I 
think one of the things is what is putt read out there? Where 
are we going with this so that the community, not just music, 
but publishers, everything--and writers all look at this. And 
so I am anxious to sort of see where we're going, and I 
appreciate your comments on that.
    If we don't act, do you see a down side in the marketplace 
on these issues, especially from the songwriter and creator 
standpoint?
    Ms. Pallante. I'm sorry. One more time.
    Mr. Collins. If we don't act, if Congress doesn't act, we 
continue to sort of move--do you--what kind of downside do you 
see from your position.
    Ms. Pallante. Oh, we are already torturing our music 
community, right, on music issues. So I don't know if your 
question's broader than music, but in that space alone----
    Mr. Collins. It is.
    Ms. Pallante. So, in general, the fundamental principles of 
the Copyright Act are strong. We have a duty to protect 
exclusive rights, provide flexible exceptions, but limited, and 
to provide meaningful enforcement. So many of the provisions 
that we have now are from the analog world or older, from the 
turn of the century. And we're trying to reinforce the 
incredible creative output of the United States. And to do 
that, we owe all creators, all investors in the marketplace and 
the public a strong Copyright Act.
    Mr. Collins. Okay. One of the things--and you've always 
been very blunt, and I appreciate that. And for anyone who 
would take your bluntness to be anything else, consider it--you 
know, I would just say to them, this Congress, and especially 
this Congressman, would take to grass the exception if anyone 
was to say anything about that. So I'm going to ask direct 
questions; we've talked about this. On administering, because, 
in your report, it's very broad, especially for music, and 
we're not even touched the other parts, and I believe that 
leads to something that I said in one of these hearings 
earlier, that I'm very concerned your department would have a 
trouble handling that given the current structure.
    So if the Copyright Office was not located in the Library 
of Congress, you know, and did not act as a subdepartment under 
the authority of the Librarian of Congress, could you more 
effectively administer and sustain our national copyright 
system?
    Ms. Pallante. There's no question.
    Mr. Collins. And, again, I don't think that's a fault of 
anyone. I think it's the development of the process. But you do 
report to the Librarian of Congress. Correct?
    Ms. Pallante. Absolutely. My whole staff does.
    Mr. Collins. And really from a constitutional perspective, 
does that not at times lead to a conflict, inherent?
    Ms. Pallante. Yeah. It's a very interesting constitutional 
question. So, legally, there are potentials for conflict all 
the time. The Library has a library mission. The Librarian's 
being asked to oversee two very different missions at the same 
time. There's an accountability question. The Librarian is 
appointed by the President and, therefore, can appoint inferior 
officers like the Register. That's the legal accountability.
    But the practical accountability is that Librarians serve 
multiple Presidents generally, and so the accountability as a 
practical matter is less clear. After the--there was a case 
where the Department of Justice basically said you are in the 
executive branch, not the legislative branch, which opens the 
door for us not to be able to serve Congress the way we have in 
the past. So that's why we're asking for a secure legal 
footing.
    Mr. Collins. Well, and I think that is something that we 
will have because I am concerned about sometimes basically you 
getting contradictory directives from the Librarian's mission, 
and no offense to them. I think they have that perfect mission 
to do. They need to encourage--but when we talk about IT, we 
talk about all these other things, you are in a different 
situation. I want you to continue, you and your staff, to keep 
that fight going because you do have Members who are intensely 
interested in what's going on there because I believe it is the 
very underpinning of our foundation for the next generation of 
economic development and also the creators that have been 
around forever. So I do appreciate that.
    With that, my time has expired, and I recognize the 
gentlelady from Texas, Ms. Jackson Lee.
    Ms. Jackson Lee. Let me thank you for your presence here 
today, and I know that Members have been going in and out 
because we've been detained in other meetings, and in fact 
there is one overlapping now. But I think it's very important 
to, one, emphasize how important copyright and intellectual 
property is to this Committee, to this Congress, and to the 
Nation, and I might say that you are particularly important 
today because the prime minister of Japan in his speech just 
finished and indicated his commitment to protecting 
intellectual property, of which I think he received a standing 
ovation. So you might want to use that quote or comment on how 
important it is to do that.
    Let me go to the whole question of finance and staffing. In 
your testimony, you mentioned that the Copyright Office has one 
of the smallest staffs within the government generally, and so 
I would be interested in how that's impacting on your work, and 
as we're going forward, have you looked at--I know you looked 
at the President's budget, but we're getting ready to go 
forward. We are absolutely opposed to sequester. We think it 
has had a dastardly impact. But I'd like to know presently what 
your situation is with your copyright staffing.
    Ms. Pallante. Thank you, Congresswoman Jackson Lee.
    I think we should be lean and innovative, and I think when 
we add staff, they should be the kind of staff that can take us 
into the 21st century. That said, we've lost over 100 people 
since 2007, and we only--you know, we have under 400 FTEs 
filled now. That's just way too small to do the kind of complex 
work that we do, and it's much smaller than the staff that 
previous Copyright Offices had when they were doing less 
complex things. So, while I think we should stay small, I think 
we are cut to the bone at the moment.
    One thing that has been rather frustrating for me is that 
in my conversations with the community, the tech sector, and 
the content industry, it became clear that we should have more 
hands-on technology expertise. So I took the step of hiring the 
first Copyright Office CIO, chief technologist, and filled that 
position last year, and then hired a deputy as well for the 
purpose of figuring out what our infrastructure should be, what 
our databases should look like, what our enterprise 
architecture should be, and then to build out the kind of staff 
that we need slowly, but using our budget allocations.
    What was frustrating for me is that because best practices 
in the Federal Government generally avoid duplication, when the 
Government Accountability Office audited the Library and made 
its 39 recommendations about how to fix that very severely 
deficient system, one of the things they said was that there 
shouldn't be multiple CIOs. There shouldn't be duplications of 
staff. So I am really caught in a bind on this, and I really am 
asking the Committee to help because I frankly think it's 
ludicrous that the Copyright Office wouldn't have data experts 
and IT staff.
    Ms. Jackson Lee. I'm going to follow up on that line of 
questioning.
    Let me just quickly ask this question about modernizing the 
Office with the structure of greater legal and operational 
independence. And what should Congress consider in that new 
structure?
    And let me get in another question as well because I think 
this goes to how you do your job. And I like the word ``lean 
but effective.'' I like to say that. Lean and ineffective or 
with the shades down and the doors locked are not helpful to 
creating the economic engine that you want to create. So the 
other question I would have, I'm wearing my Homeland Security 
hat, we just passed two cybersecurity initiatives last week, 
when I chaired the Transportation and Security and 
Infrastructure Committee, we recognize, and I know that 
number's gone up, 85 percent of the cyber ownership is in the 
private sector, but the private sector submits through the 
copyrighting process their data.
    So the question I'd ask is the question about legal and 
operational independence, but also how important it is to have 
a tech-savvy office----
    Ms. Pallante. Yes.
    Ms. Jackson Lee [continuing]. That puts for you, the 
government, an infrastructure to protect the intellectual 
property that you are now the custodian of or the requests that 
come in, the applications that come in. If you would include 
that in your coming together of your answer and the kind of 
investment and planning you think we need for a tech-savvy 
office that is 21st century.
    Ms. Pallante. Thank you so much for the question. That is 
exactly the crossroads that we find ourselves at. How do we 
build out the tech-savvy office that actually not just serves 
the digital economy but interacts with it in a way that 
facilitates it? So when people are submitting to us for 
registration digital works, they want them to be secure. They 
want them to be effective for registration purposes. And they 
want the technology to accept the data that they're sending us 
and the files, not to not recognize it because we're using 
antiquated technology. I don't think that's too much to ask 
when people are seeking legal protection and, hence, remedies.
    They then want the chain of commerce to reflect the entire 
copyright transaction. So people register with us, and then 
later they might license their works. And then we record those 
licenses, and the metadata should be the same global 
identifying information that is used in the private sector. 
That is exactly the vision that you should expect for the 21st 
century Copyright Office.
    And as to cost, we, as I said, are two-thirds fee-funded 
now, but that is because we are also intertwined in the 
Library's IT. That could be viewed as a subsidy. My argument 
would be that that is not a subsidy that is working for the 
copyright community. And so, as we look at the proper ratio of 
taxpayer investment and fees, we should go back to what you 
just said and think about what it takes to invest in the 
economic engine that is the Copyright Act for this country.
    Ms. Jackson Lee. And do you think the operational and legal 
independence would help you as well as you look forward just 
restructuring or structuring the Office?
    Ms. Pallante. Yeah. I think it's essential because if you 
don't have that directive, you have an agency that is being 
required to find synergies even though the missions are 
different and to use IT investments for multiple competing 
purposes. And even in the system we have now where people are 
paying us for services, nonetheless the money needs to be 
allocated in this kind of central IT environment, and it hasn't 
worked, and I hope that the Library makes all the improvements 
it needs to make for the national Library, but I don't think 
it's fair or logical to ask the Copyright Office to wait until 
that happens and then to expect that it will work.
    Ms. Jackson Lee. Mr. Chairman, and I thank you. I saw the 
Chairman with the gavel up. I'd ask unanimous consent for an 
additional minute just to pose a follow up on the questions 
that I just gave her.
    Mr. Collins. At this point, we have a hard meeting coming 
up at 1 o'clock they're going to have to clear the room for. So 
at this point----
    Ms. Jackson Lee. Thirty seconds then?
    Mr. Collins. How about 15?
    Ms. Jackson Lee. Okay. But she'll have to ask her question.
    We know that Korea and Singapore have strong copyright 
protections. Should we have that in the TPP?
    Ms. Pallante. Strong copyright protections in the TPP? 
Should we have strong copyright protections in the TPP?
    Ms. Jackson Lee. Yes. We know Korea and Singapore have----
    Ms. Pallante. We should most certainly have strong 
copyright protections as negotiating goals of the TPP.
    Ms. Jackson Lee. And the Congress--you're asking us on some 
of the items that you've just said to help you with the tech 
and the funding, staffing, and the operational control.
    Ms. Pallante. Yes. You are our oversight Committee. We need 
you to direct us.
    Mr. Collins. And the gentlelady----
    Ms. Jackson Lee. Thank you.
    Mr. Collins [continuing]. Had a wonderful Georgia 15 
seconds.
    With that, the gentleman from New York is now recognized.
    Mr. Jeffries. Thank the Chairman, and I thank the Register 
for your testimony here today----
    Ms. Jackson Lee. I yield back.
    Mr. Jeffries [continuing]. And your----
    Mr. Collins. Thank you. Since the time is expired, that's 
wonderful.
    Mr. Jeffries. Thank you for your testimony here today, and 
for your thoughtfulness on a whole host of these issues.
    Let me just begin by just trying to get a deeper 
understanding of your perspective as it relates to the need for 
independence.
    I think the three things that have been under consideration 
in terms of a different model from the current one, would, one, 
obviously, involve a Presidential appointment but the Office 
remaining within the Library of Congress; two, taking the 
Office out of the Library of Congress and placing it perhaps 
within another department, most often discussed is the 
Department of Commerce; and then, three, creating an 
independent agency.
    It's my understanding, of course, that you strongly support 
the third option, an independent agency. Is that correct?
    Ms. Pallante. That's correct.
    Mr. Jeffries. And so that would involve both a Presidential 
appointment----
    Ms. Pallante. Yes.
    Mr. Jeffries [continuing]. Of the director. Correct?
    Ms. Pallante. Yes.
    Mr. Jeffries. And, presently, you're appointed by the 
Librarian of Congress. Is there a fixed term to that 
appointment, or do you serve at the pleasure of the Librarian?
    Ms. Pallante. Serve at the pleasure of the Librarian. The 
Librarian has the power to appoint and remove the Register and 
the entire Copyright Office staff, actually.
    Mr. Jeffries. Now, in the context of an independent agency, 
would you suggest, or is it your view, have you given any 
thought to whether a fixed term would be appropriate connected 
to the Presidential appointment to establish and embed the 
independence of the agency?
    Ms. Pallante. Yes. So that's a great granular question. My 
understanding is that in order to make it an independent 
agency, which is a way of saying that you are preserving the 
role that the agency would play with Congress, because if the 
agency is in the executive branch fully, completely, it will be 
subject to the normal clearances of executive branch agencies 
when it speaks to Congress. So, in order to preserve that 118-
year tradition, the President would appoint the Register or the 
director, the Senate would confirm the position, that's the 
accountability that you need because the system is so 
important. But, by Congress setting a fixed term, Congress is 
saying you're not serving at the pleasure of the President 
completely. You're serving subject to a term that Congress has 
enacted. That's point number one to make it independent.
    Point number two is that you would specify that that 
agency, when called by Congress, will speak impartially and 
freely.
    And, thirdly, you will decide what the regulatory powers of 
that agency are. Could just be registration, recordation, 
statutory licenses. It could be small claims. You could add 
things over time, but it's completely in your discretion.
    Mr. Jeffries. And, in your view, is that important, given 
the long tradition and involvement in Congress with respect to 
copyright and the fact that our authority to create an 
intellectual property system in fact traces back to Article I, 
section 8, clause 8, in the Constitution?
    Ms. Pallante. Yes. And, you know, you didn't have a 
Copyright Office the entire time, but you have had one since 
1897, and copyright policy has always been very hands on in 
Congress. It has the only position in the government that 
allows the kind of balancing of equities that is essential to a 
good Copyright Act. The Supreme Court has affirmed this 
multiple times that it is in Congress' power to do that and to 
decide the overall regime. So I would be personally quite 
heartbroken to see that dissipated. I think it served the 
Nation well, and I think that an agency that continues to serve 
Congress but also continues to interact in a coordinated manner 
with the Administration is a great model for the 21st century.
    Mr. Jeffries. And in order to have sort of a modern, fully 
functional, first-rate, 21st century Copyright Office, how 
important is the budget autonomy that would be provided in an 
independent agency context that might not necessarily exist if 
you were to be resident within the Department of Commerce or 
even remain within the Library of Congress even as a 
Presidential appointee?
    Ms. Pallante. I think it's crucial. So you have never had a 
Register tell appropriators directly and freely what the Office 
needs because that's not how budgets work in the Federal 
Government. You wouldn't have it in the Commerce Department 
either. What you will always have, unless you give budget 
autonomy, meaning that the head of the Office can tell the 
appropriators what the needs are and then have a direct 
conversation. If you don't have that, you will always have 
Copyright Office needs being weighed along things that are not 
about the Copyright Office.
    Mr. Jeffries. As my time expires, one last question. With 
the leadership of my good friend from Georgia, Representative 
Collins, in a bipartisan way, several of us have become 
interested in resolving inequities that exist in the 
compensation of songwriters. And Congressman Collins touched on 
this to some degree, but I just wanted to ask one followup 
question. You mention that music licensing issues broadly 
defined are ripe for congressional action. Do you think that 
there's room for us to precisely consider the dynamic that 
songwriters find themselves in in terms of their compensation 
or perhaps moving toward a willing buyer/willing seller 
standard, and also allowing the rate courts to have an 
opportunity to consider how artists are compensated on the song 
recording side and factoring in what is fair?
    Ms. Pallante. Yes. So we thought those provisions in the 
Songwriter Equity Act were right on the money. I think we have 
talked extensively today about why a willing buyer/willing 
seller is the right move toward the free market. A better 
reflection of it than a regulated rate, but the issue about 
what the courts are allowed to consider is a crucial one, and 
we are fully supportive of changing that.
    Mr. Jeffries. Thank you very much.
    I yield back.
    Mr. Collins. I thank the gentleman from New York.
    As we get ready I just want to--something that was brought 
up is your office has been since 1897. I think what's amazing 
is, is some of our creators, and especially in the music 
community are still dealing with laws that were created only 15 
to 20 years after that. That seems to be ripe, if not overripe, 
for a change. But I also want to remind--you also represent a 
vast industry that is--that is growing and changing. I hold in 
my hand here something that I found over the weekend. And if 
you look through these, here is something that you've heard me 
mention before about why songwriters matter. These are 
handwritten songs and poems that were written from my wife's 
grandfather and her brothers.
    Ms. Pallante. Is that right?
    Mr. Collins. They're somewhere in the neighborhood of 50 to 
60 years old. They were written probably at a kitchen table or 
on the side of the road. But, for everyone who is here, and for 
the reason that operate your office and what you do every day, 
there's a book to be written, there's a song to be sung. 
There's these creative rights that I believe the Copyright 
Office is there to protect, not to inhibit but to promote 
creativity like's in this folder right here.
    And, with that, that concludes today's hearing. Thanks to 
the witnesses for attending.
    Without objection, all Members will have 5 legislative days 
to submit additional written questions for the witnesses and 
additional materials for the record.
    With that, the hearing is adjourned.
    [Whereupon, at 12:53 p.m., the Committee was adjourned.
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    ]
                            A P P E N D I X

                              ----------                              


               Material Submitted for the Hearing Record

   Response to Questions for the Record from the Honorable Maria A. 
Pallante, Register of Copyrights and Director, United States Copyright 
                                 Office

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                                

          Material submitted for the Official Hearing Record*

Letter from James H. Billington, The Librarian of Congress

Letter from Ruth Vitale, Executive Director, CreativeFuture; 
    and Sandra Aistars, Chief Executive Officer, Copyright 
    Alliance

Letter from Rick Swindelhurst, President, Fairness in Music 
    Licensing Coalition (FMLC)

Letter from Michael Beckerman, President & CEO, Internet 
    Association (IA)

Recommendations of the Library Copyright Alliance (LCA) on 
    Copyright Reform

Letter from Christopher J. Dodd, Chairman and Chief Executive 
    Officer, the Motion Picture Association of America, Inc. 
    (MPAA)

Letter from Daryl P. Friedman, Chief Industry, Government, & 
    Member Relations Officer, The Recording Academy

--------
*Note: The submitted material is not printed in this hearing record but 
is on file with the Committee and can also be accessed at: http://
docs.house.gov/Committee/Calendar/ByEvent.aspx?EventID=103385.

                                 [all]