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From: no...@house.gov
Subject: 1998CRH1456A COPYRIGHT TERM EXTENSION ACT, Part 2/4
Date: 1998/03/26
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[[Page H1463]]

  Last but not least, there is a compromise in what I am going to offer 
out here in a little while dealing with the question of complaints we 
have had for some time about the fact that restaurants in particular, 
small businesses, have had to go a long way, to New York, to go appeal 
a fee dispute with these associations collecting the music licensing 
fees, because there is a rate commission set up to do it.

  What the gentleman from Wisconsin (Mr. Sensenbrenner) would provide 
would be that there would be arbitration in every locality around the 
country. That would provide uniformity. That would be expensive the 
other way around.
  What we have tried to do in a compromise is say we will set up a 
provision for circuit riders from this rate commission to go around to 
the sitting seats of all 12 Federal judicial circuits to sit regularly 
to settle these disputes, so people do not have to travel as far.
  I think what I am offering in a little while out here truly is the 
compromise substitute. Let us do it now so we can get on with the main, 
underlying thrust of this bill, and that is copyright extension. That 
is what we are here about today. It is long overdue. We cannot afford 
to have this dispute between the restaurants and the songwriters tie up 
this legislation any longer. The bill, underlying bill, is too 
important. I urge my colleagues to both vote for my substitute when the 
time comes and vote for the underlying bill.
  Mr. DELAHUNT. Mr. Chairman, I yield myself such time as I may 
consume.
  Mr. Chairman, I rise in strong support of the underlying bill. I 
think it is important to understand that this bill is not simply a 
means to encourage American creativity and to protect the products of 
that creativity. Just as importantly, it is about the future of our 
national economy. I suggest that is not an exaggeration.
  Most importantly, it is about our balance of trade, a balance of 
trade that for some time has registered a substantial deficit, a 
deficit that exploded last month as a result of the financial crisis in 
Asia, and according to most economists, a deficit that will continue to 
escalate because of that crisis.
  Mr. Chairman, we cannot afford to not pass this bill if we hope to 
control this burgeoning trade deficit and protect our national economic 
well-being. Furthermore, it is essential that the Sensenbrenner 
amendment that we will be considering shortly be defeated and the 
McCollum-Conyers substitute pass. Otherwise our trading partners will 
claim that Congress has enacted an overly broad exemption to our 
copyright laws that violates our international treaty obligations. If 
we do not defeat the Sensenbrenner amendment, not only will this be 
unfair to songwriters, but it will further exacerbate our trade 
deficit.
  America is the world's leading producer and exporter of copyrighted 
products. The entire world clamors for American software, American 
movies, American television programs, American videos, American 
literature, and American music. Just these core copyrighted industries 
produce a surplus of $50 billion annually in our trade with the rest of 
the world.
  Just imagine what our trade deficit would be if that $50 billion 
annual surplus were at risk or declining. Imagine how many well-paying 
American jobs would be jeopardized in just these industries, which 
create new jobs for American workers at nearly three times the rate of 
the rest of the economy.

                              {time}  1145

  Well, if we want to avoid that disastrous scenario, we must pass this 
bill; because if we are to maintain American leadership and retain our 
comparative advantage in this aspect of international commerce, we must 
adapt to changing international standards of copyright protection, and 
this bill does just that.
  The emerging world standard for the term of copyright protection in 
Europe and throughout most of the developed world is the life of the 
author plus 70 years. In 1995, the European Union adopted this 
standard, but only with respect to works that enjoy comparable 
protection in the country of origin. This means that until the United 
States extends its copyright term to 70 years from its current term of 
50 years, U.S. works will not be entitled to protection for the full 
term accorded to works in the European markets. If this situation 
persists, it will put our creative industries at a serious competitive 
disadvantage and will substantially and adversely affect our overall 
trade posture. Rather, we should foster and nurture our creative 
industries for the sake of our economic future.
  So, Mr. Chairman, I urge my colleagues to vote for American 
prosperity. Support the bill as amended by the McCollum-Conyers 
substitute.
  Mr. Chairman, I yield back the balance of my time.
  Mr. COBLE. Mr. Chairman, I yield 3 minutes to the gentleman from 
California (Mr. Gallegly), a member of the Committee on the Judiciary.
  Mr. GALLEGLY. Mr. Chairman, I thank the gentleman from North Carolina 
(Mr. Coble) for giving me the opportunity to speak today in support of 
this important piece of legislation.
  In February of last year, I introduced a copyright term extension 
bill which is almost identical to the legislation we are considering 
here today. This legislation extends the term for copyrighted products 
by 20 years. This will allow the U.S. copyright term to keep pace with 
the term of European countries that are now our main competitors for 
copyrighted products such as motion pictures and music.
  In 1995, the European Union required member Nations to extend the 
copyright term to life of the author plus 70 years. This is 20 years 
more than is currently granted to the U.S.-based copyrighted works. 
Moreover, under the rules of an international treaty, most of our 
economic competitors are not required to give U.S. works the same term 
of protection as they give their domestic works if the U.S. has a 
shorter copyright term.
  The European Union has exercised this rule and now requires EU member 
States to limit protection of U.S. works to the shorter term granted in 
the United States. Let me emphasize this point: Under a current 
European Union directive, member nations are actually required to 
discriminate against American copyrighted works. The result, unless 
this bill becomes law, is to place our copyright industries at a 
competitive disadvantage with other nations, threatening the incomes of 
U.S. authors, artists, songwriters, and other copyright holders.
  As many of my colleagues know, our copyright industry employs over 6 
million Americans and is one of the fastest growing segments of our 
economy. Moreover, with estimated foreign sales of over $53 billion 
last year, the copyright industry is one of the few areas in the U.S. 
actually enjoying a healthy trade surplus.
  Copyright term extension has enjoyed strong bipartisan backing and is 
supported by a wide-ranging coalition in the current Congress. Among 
many of the groups that support term extension legislation are the 
Songwriters Guild of America, National Academy of Songwriters, the 
Motion Picture Association of America, the Intellectual Property Law 
Section of the American Bar Association, the Recorded Industry 
Association of America, National Music Publishers Association, the 
Information Technology Association of America, and many, many others.
  Mr. Chairman, I would like to congratulate the gentleman from North 
Carolina (Mr. Coble), my friend and colleague, the chairman of the 
Subcommittee on Courts and Intellectual Property of the Committee on 
the Judiciary, for recognizing the importance of the copyright industry 
to the U.S. economy and the need to update our copyright law to the 
current legal and competitive climate faced by the U.S. from countries 
throughout the world.
  Mr. Chairman, I urge my colleagues to support this commonsense yet 
very critical piece of legislation.
  Mr. CONYERS. Mr. Chairman, I urge my colleagues to support this 
amendment which is a fair and balanced compromise to the current 
dispute surrounding music licensing. This dispute really revolves 
around big business seeking an exemption to paying public performance 
royalties for radio, television and other broadcast in their 
restaurants. Copyright owners have the exclusive right to authorize 
others to publicly perform their works. When a commercial establishment 
turns on the radio or television, that is a public performance of 
another's intellectual property.

[[Page H1464]]

  Why should all commercial establishments be exempted from licensing 
fees? Representative Sensenbrenner's amendment is far from a fair 
approach to music licensing. His amendment would create a carve out for 
all commercial establishment using music via any transmission, not just 
standard radio and TV broadcast. Adopting this provision would mean an 
outrageous give away of music by allowing big restaurants to stop 
paying a mere $1.58 a day! Meanwhile ninety percent of music writers 
make less than $10,000 a year! Most songwriters don't perform, so 
licensing fees are critical to their incomes. This amendment is a 
direct big business attack on the livelihood of songwriters.
  My amendment, offered with Representative McCollum, represents 
provisions of an agreement which the parties came close to at the end 
of recent negotiations. The McCollum-Conyers substitute expands the 
current exemption from music licensing to cover all restaurants of less 
than 3,500 square feet, excluding parking lots, no matter what kind of 
radio or television devices are being used. It also exempts restaurants 
of 3,500 square feet or larger if they use only four television sets 
and six speakers, with no more than four speakers in one room and 
reasonable television screen sizes. This compromise offers a fair 
approach by providing a broad exemption to small businesses and 
protecting royalties of songwriters.
  Many of you have heard the song, ``I Heard It Through the Grapevine'' 
which has been recorded by the Temptations, Gladys Knight and the Pips, 
Marvin Gaye and many others. But I bet you have never heard of Barrett 
Strong, the songwriter. Music licensing fees collected by performing 
rights organization (e.g. BMI, ASCAP and SESAC) is the only income Mr. 
Strong receives from his creative work. Don't let big businesses ``rip 
off' artists!
  It is time to end this long dispute--but not by giving away artists' 
rights to just compensation for their creative works. I urge my 
colleagues to vote for the McCollum-Conyers substitute.
  Mr. HOYER. Mr. Chairman, I rise in strong support of the legislation, 
in strong support of the McCollum amendment, and in opposition to the 
Sensenbrenner amendment.
  The Sensenbrenner amendment is nothing short for a ``takings'' 
provision. I have heard a lot about taking. This is about taking, 
whether to or not to. It would force songwriters to provide their music 
for free to restaurants and others. These restaurants then, in turn, 
use this music to enhance their business.
  How is this fair? For the thousands of songwriters, composers and 
music publishers, this amendment is a two-fold insult. First, it says 
to them, ``Your hard work and creative talent aren't worth 
protecting.'' Then it says, ``And by the way, it's not worth a dime 
either.''
  My colleague, Stephen Foster died a pauper. Why did Stephen Foster 
die a pauper? Because the product he created was not popular, was not 
wanted, was not used? No. Because Stephen Foster put his product on the 
table, it was eaten--if you will--listened to, more appropriately, but 
not paid for. And so Stephen Foster, one of the great songwriters of 
America, and indeed the world, died a pauper because the world enjoyed 
his music but did not compensate him for his music.
  The McCollum amendment tries in a reasonable way to get at what is a 
problem that is by some perceived as cataclysmic and by others 
perceived as procedural. It is a reasonable alternative. It is one that 
I will support. But if it does not pass, I will as strongly as I know 
how oppose this legislation, even though I believe its underlying 20-
year extension of the copyright protecting one's property is 
appropriate.
  Mr. Speaker, I have been and always will be opposed to any 
legislation that infringes upon the property rights of anyone. I cannot 
digest ``taking'' someone else's hard work from them for free. This 
amendment is an affront to the tens of thousands of individuals who 
spend a lifetime trying to sell their work in a competitive and 
sparsely rewarded field--especially after considering the cost benefit 
analysis.
  It is estimated that the restaurant business is a $289.7 billion 
industry, while thousands of songwriters draw an income that is 
minuscule in comparison and subsist largely off of royalties. Music 
licensing fees account for less than one percent of expenses for a full 
service restaurant, and the average cost for a restaurant business that 
uses music is $1.58 a day--equivalent to one draft beer.
  Mr. Chairman, let me make it plain: we are considering stripping 
individuals of their intellectual property rights over what boils down 
to a mug of beer.
  Mr. Chairman, I would hope that my colleagues who in fact have some 
property that we put in the public sphere, not expecting remuneration, 
at least not in money, the remuneration we expect is votes when we put 
our property, our ideas, our thoughts, our opinions in the public 
wheel. But when a songwriter sits down to create art, that songwriter 
does so for their own personal enjoyment, but they also do so with the 
expectation that if someone wants to use their product, they will do in 
a capitalistic society what we expect, and that is to compensate them 
fairly for that.
  The previous speaker spoke about the problem with small business. 
Government does not require a small business in America to turn on the 
radio in their place of business or to turn on the television in their 
place of business, not one. They do so because they think to some 
degree it enhances the ambiance of their establishment, and I agree 
with them. And if they thought curtains did or tablecloths did or 
pretty windows did, they would have to pay for all of those increases 
to the ambiance of their establishment. If the restaurant pays for the 
hamburger, it should also face the music and pay for the licensing.
  I have a lot of restaurants in my district and in my State. I 
understand some of them are concerned, and I believe that the McCollum 
amendment tries to reach out to them and say yes, we understand there 
is a problem, let us try to solve it and let us try to solve it where 
there is a meeting of the minds. And in fact, I understand there was a 
meeting of the minds until one party thought perhaps they could win 
without agreement. I do not know that; I have heard that.
  But let us, as we vote on the Sensenbrenner amendment, remember 
Stephen Foster, remember that Stephen Foster gave us so much, this 
Nation and this world, enriched our lives, enriched our culture, 
enriched our enjoyment, and let us not say to the Stephen Fosters of 
the world what they do is not worth us compensating them for it.
  Let me share with you part of a concise perspective offered by former 
Chief Justice Oliver Wendell Holmes: ``If music did not pay, it would 
be given up. If it pays, it pays out of the public's pocket. Whether it 
pays or not, the purpose of employing it is profit, and that is 
enough.''
  I would hope that we would defeat the Sensenbrenner amendment, pass 
the McCollum amendment and pass the bill.
  Mr. HYDE. Mr. Chairman, I rise in support of the bill H.R. 2589, the 
``Copyright Term Extension Act,'' reported by the Committee on the 
Judiciary by voice vote, without objection.
  This is an important bill for our economy. It will mean 20 more years 
of foreign sales revenue coming back into the United States for our 
intellectual property products sold abroad. We are by far the world's 
largest producers of intellectual property and it is one of our most 
significant trade surpluses.
  Copyright is a property right. It is meant to be handed down by its 
creator to his or her children and grandchildren. This amendment 
provides for a small extension in the term of copyright which will 
allow the heirs of our nation's creators to benefit from the work of 
their family members. Writing a song or a novel is no less significant 
than contributing to a family business to be passed on to those we 
choose.
  The Berne Convention for Literary and Artistic Works, of which we are 
a Member, has a provision called the ``Rule of the Shorter Term.'' It 
states that a country need not give a foreign work any more protection 
than that work is given in its country of origin. The European Union 
countries recently adopted the term for copyright that we propose in 
this bill, life of the author plus 70 years. Under the Berne 
Convention, they need not give American copyrighted works the benefit 
of that term, but may limit protection in their countries of our works 
to our current term of life of the author plus 50 years. That, of 
course, means that their works are protected in their countries for 20 
years longer than our works are protected in their countries. While 
that may be good for their products, it is not good for ours.
  I am proud of the fact that American creators and owners of creations 
have made the U.S. the dominant producer in the world of copyrighted 
material. It reflects the ingenuity of our people and indicates that 
through freedom and democracy, people will use their powers of 
creativity for their own benefit and, consequently, for society's 
benefit. This bill will maintain our dominance and continue to allow 
for the exploitation of that creativity which brings it to consumers 
for their enjoyment.
  I want to say a special word about the creative community that is the 
bedrock of our great film and television business. I refer to the 
screenwriters, the directors and the performers. Through their 
respective guilds, they have consistently supported the extension of 
the copyright term, and have asked that they be specifically made 
beneficiaries of the extension. In particular, they requested 
remuneration during the new term for those who currently receive no 
residuals and no royalties for films made before 1960. These films 
include such masterpieces as Casablanca, The Best Years of Our Lives, 
and Sunset Boulevard.
  This bill does not give them that because the Committee believes that 
private negotiation between private parties is always the best place to 
start when determining remuneration. I am certainly a believer in the 
marketplace. But this bill does contain a very strong and

[[Page H1465]]

very serious admonition, a ``Sense of the Congress,'' that urges film 
studios and the guilds to voluntarily negotiate what remuneration 
screenwriters, directors and performers of pre-1960 films shall receive 
for the new term. Congress will be watching the negotiations. I expect 
that both sides in good faith will negotiate a fair outcome, and it 
will certainly not be taken lightly if the ``Sense of the Congress'' is 
not turned into a contractual reality.
  Mr. Speaker, this is a good and balanced bill which will ensure our 
global competitiveness while urging fair compensation for the creators 
who, with the investors and owners, make great copyrighted works our 
national treasures.
  I urge my colleagues to support this fine legislation.
  Mr. CONYERS. Mr. Chairman, I rise in strong support of H.R. 2589, the 
``Copyright Term Extension Act''. This bill will allow the United 
States to keep pace with the copyright terms of European countries that 
are our main competitors for copyright products such as motion pictures 
and music.
  In 1995, the European Union harmonized the copyright term in its 
member countries at a minimum of life plus 70 years--20 years longer 
than the term in the United States. By directive, EU countries will not 
provide copyright protection for U.S. intellectual property in Europe 
beyond what our own law provides. This approach is known as the ``rule 
of the shorter term.'' As a result, absent congressional action, U.S. 
copyright owners will not receive income from uses of their works 
during the 20 additional years of protection available in European 
countries and will therefore be at a relative disadvantage to their 
European competitors.
  Changes in technology that have increased the commercial value of 
works created many years ago. In music, for instance, copyright owners 
are now digitizing musical works and reissuing them to a receptive 
market. A short copyright term is harmful to works of art and music 
whose value may not be recognized until many years since they were 
initially created.
  The world loves American-made music, movies, computer software and 
books. Creators of these works should not be placed at a competitive 
disadvantage in overseas markets. American intellectual property is the 
most sought after abroad and is one of the few bright spots in our 
balance of trade. By acting on copyright extension, Congress will be 
furthering American innovation and protecting American jobs.
  H.R. 2589 also includes a carefully crafted, balanced library 
exemption that ensures that the legitimate needs of the libraries are 
met. In addition the ``fair use doctrine'' is unaffected by the bill. 
Therefore, users continue to enjoy the full benefits of ``fair use'' 
under Section 107 of the Copyright Act.
  I urge all Members to support extending the copyright term which will 
protect American creators and keep U.S. copyright laws in proper 
balance domestically and abroad.
  Mr. COBLE. Mr. Chairman, I have no further speakers, and I yield back 
the balance of my time.
  The CHAIRMAN. All time for general debate has expired.
  Pursuant to the rule, the committee amendment in the nature of a 
substitute printed in the bill is considered as an original bill for 
the purpose of amendment and is considered read.
  The text of the committee amendment in the nature of a substitute is 
as follows:

                               H.R. 2589

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Copyright Term Extension 
     Act''.

     SEC. 2. DURATION OF COPYRIGHT PROVISIONS.

       (a) Preemption With Respect to Other Laws.--Section 301(c) 
     of title 17, United States Code, is amended by striking 
     ``February 15, 2047'' each place it appears and inserting 
     ``February 15, 2067''.
       (b) Duration of Copyright: Works Created on or After 
     January 1, 1978.--Section 302 of title 17, United States 
     Code, is amended--
       (1) in subsection (a) by striking ``fifty'' and inserting 
     ``70'';
       (2) in subsection (b) by striking ``fifty'' and inserting 
     ``70'';
       (3) in subsection (c) in the first sentence--
       (A) by striking ``seventy-five'' and inserting ``95''; and
       (B) by striking ``one hundred'' and inserting ``120''; and
       (4) in subsection (e) in the first sentence--
       (A) by striking ``seventy-five'' and inserting ``95'';
       (B) by striking ``one hundred'' and inserting ``120''; and
       (C) by striking ``fifty'' each place it appears and 
     inserting ``70''.
       (c) Duration of Copyright: Works Created but Not Published 
     or Copyrighted Before January 1, 1978.--Section 303 of title 
     17, United States Code, is amended in the second sentence by 
     striking ``December 31, 2027'' and inserting ``December 31, 
     2047''.
       (d) Duration of Copyright: Subsisting Copyrights.--
       (1) In general.--Section 304 of title 17, United States 
     Code, is amended--
       (A) in subsection (a)--
       (i) in paragraph (1)--

       (I) in subparagraph (B) by striking ``47'' and inserting 
     ``67''; and
       (II) in subparagraph (C) by striking ``47'' and inserting 
     ``67'';

       (ii) in paragraph (2)--

       (I) in subparagraph (A) by striking ``47'' and inserting 
     ``67''; and
       (II) in subparagraph (B) by striking ``47'' and inserting 
     ``67''; and

       (iii) in paragraph (3)--

       (I) in subparagraph (A)(i) by striking ``47'' and inserting 
     ``67''; and
       (II) in subparagraph (B) by striking ``47'' and inserting 
     ``67'';

       (B) by amending subsection (b) to read as follows:
       ``(b) Copyrights in Their Renewal Term at the Time of the 
     Effective Date of the Copyright Term Extension Act of 1997.--
     Any copyright still in its renewal term at the time that the 
     Copyright Term Extension Act of 1997 becomes effective shall 
     have a copyright term of 95 years from the date copyright was 
     originally secured.'';
       (C) in subsection (c)(4)(A) in the first sentence by 
     inserting ``or, in the case of a termination under subsection 
     (d), within the five-year period specified by subsection 
     (d)(2),'' after ``specified by clause (3) of this 
     subsection,''; and
       (D) by adding at the end the following new subsection:
       ``(d) Termination Rights Provided in Subsection (c) Which 
     Have Expired on or Before the Effective Date of the Copyright 
     Term Extension Act of 1997.--In the case of any copyright 
     other than a work made for hire, subsisting in its renewal 
     term on the effective date of the Copyright Term Extension 
     Act of 1997 for which the termination right provided in 
     subsection (c) has expired by such date, where the author or 
     owner of the termination right has not previously 
     exercised such termination right, the exclusive or 
     nonexclusive grant of a transfer or license of the renewal 
     copyright or any right under it, executed before January 
     1, 1978, by any of the persons designated in subsection 
     (a)(1)(C) of this section, other than by will, is subject 
     to termination under the following conditions:
       ``(1) The conditions specified in subsection (c) (1), (2), 
     (4), (5), and (6) of this section apply to terminations of 
     the last 20 years of copyright term as provided by the 
     amendments made by the Copyright Term Extension Act of 1997.
       ``(2) Termination of the grant may be effected at any time 
     during a period of 5 years beginning at the end of 75 years 
     from the date copyright was originally secured.''.
       (2) Copyright renewal act of 1992.--Section 102 of the 
     Copyright Renewal Act of 1992 (Public Law 102-307; 106 Stat. 
     266; 17 U.S.C. 304 note) is amended--
       (A) in subsection (c)--
       (i) by striking ``47'' and inserting ``67'';
       (ii) by striking ``(as amended by subsection (a) of this 
     section)''; and
       (iii) by striking ``effective date of this section'' each 
     place it appears and inserting ``effective date of the 
     Copyright Term Extension Act of 1997''; and
       (B) in subsection (g)(2) in the second sentence by 
     inserting before the period the following: ``, except each 
     reference to forty-seven years in such provisions shall be 
     deemed to be 67 years''.

     SEC. 3. TERMINATION OF TRANSFERS AND LICENSES COVERING 
                   EXTENDED RENEWAL TERM.

       Sections 203(a)(2) and 304(c)(2) of title 17, United States 
     Code, are each amended--
       (1) by striking ``by his widow or her widower and his or 
     her children or grandchildren''; and
       (2) by inserting after subparagraph (C) the following:
       ``(D) In the event that the author's widow, widower, 
     children, and grandchildren are not living, the author's 
     executors shall own the author's entire termination interest, 
     or, in the absence of a will of the author, the author's next 
     of kin shall own the author's entire termination interest, on 
     a per stirpes basis according to the number of such author's 
     next of kin represented. The share of the children of a dead 
     next of kin at the same level of relationship to the author 
     eligible to take a share of a termination interest can be 
     exercised only by the action of a majority of them.''.

     SEC. 4. REPRODUCTION BY LIBRARIES AND ARCHIVES.

       Section 108 of title 17, United States Code, is amended--
       (1) by redesignating subsection (h) as subsection (i); and
       (2) by inserting after subsection (g) the following:
       ``(h)(1) For purposes of this section, during the last 20 
     years of any term of copyright of a published work, a library 
     or archives, including a nonprofit educational institution 
     that functions as such, may reproduce, distribute, display, 
     or perform in facsimile or digital form a copy or phonorecord 
     of such work, or portions thereof, for purposes of 
     preservation, scholarship, or research, if such library or 
     archives has first determined, on the basis of a reasonable 
     investigation, that none of the conditions set forth in 
     subparagraphs (A), (B), and (C) of paragraph (2) apply.
       ``(2) No reproduction, distribution, display, or 
     performance is authorized under this subsection if--
       ``(A) the work is subject to normal commercial 
     exploitation;
       ``(B) a copy or phonorecord of the work can be obtained at 
     a reasonable price; or
       ``(C) the copyright owner or its agent provides notice 
     pursuant to regulations promulgated by

[[Page H1466]]

     the Register of Copyrights that either of the conditions set 
     forth in subparagraphs (A) and (B) applies.
       ``(3) The exemption provided in this subsection does not 
     apply to any subsequent uses by users other than such library 
     or archives.''.

     SEC. 5. VOLUNTARY NEGOTIATION REGARDING DIVISION OF 
                   ROYALTIES.

       It is the sense of the Congress that copyright owners of 
     audiovisual works for which the term of copyright protection 
     is extended by the amendments made by this Act, and the 
     screenwriters, directors, and performers of those audiovisual 
     works, should negotiate in good faith in an effort to reach a 
     voluntary agreement or voluntary agreements with respect to 
     the establishment of a fund or other mechanism for the amount 
     of remuneration to be divided among the parties for the 
     exploitation of those audiovisual works.

     SEC. 6. EFFECTIVE DATE.

       This Act and the amendments made by this Act shall take 
     effect on the date of the enactment of this Act.

  The CHAIRMAN. No amendment to the bill is in order unless printed in 
the portion of the Congressional Record designated for that purpose.
  The Chairman of the Committee of the Whole may postpone a request for 
a recorded vote on any amendment and may reduce to a minimum of 5 
minutes the time for voting on any postponed question that immediately 
follows another vote, provided that the time for voting on the first 
question shall be a minimum of 15 minutes.
  Are there any amendments?


                  Amendment No. 2 Offered by Mr. Coble

  Mr. COBLE. Mr. Chairman, I offer an amendment.
  The Clerk read as follows:

       Amendment No. 2 offered by Mr. Coble:
       Page 4, line 9, strike ``of 1997''.
       Page 4, line 24, strike ``of 1997''.
       Page 5, line 12, strike ``of 1997''.
       Page 6, line 4, strike ``of 1997''.
       Page 6, strike line 17 and all that follows through page 7, 
     line 4 and insert the following:
       ``(D) In the event that the author's widow or widower, 
     children, and grandchildren are not living, the author's 
     executor, administrator, personal representative, or trustee 
     shall own the author's entire termination interest.''.
       Insert the following after section 5 and redesignate the 
     succeeding section accordingly:

     SEC. 6. ASSUMPTION OF CONTRACTUAL OBLIGATIONS RELATED TO 
                   TRANSFERS OF RIGHTS IN MOTION PICTURES.

       (a) In General.--Part VI of title 28, United States Code, 
     is amended by adding at the end the following new chapter:

      ``CHAPTER 180--ASSUMPTION OF CERTAIN CONTRACTUAL OBLIGATIONS

``Sec.
``4001. Assumption of contractual obligations related to transfers of 
              rights in motion pictures.

     ``Sec. 4001. Assumption of contractual obligations related to 
       transfers of rights in motion pictures

       ``(a) Assumption of Obligations.--In the case of a transfer 
     of copyright ownership in a motion picture (as defined in 
     section 101 of title 17) that is produced subject to 1 or 
     more collective bargaining agreements negotiated under the 
     laws of the United States, if the transfer is executed on or 
     after the effective date of this Act and is not limited to 
     public performance rights, the transfer instrument shall be 
     deemed to incorporate the assumption agreements applicable to 
     the copyright ownership being transferred that are required 
     by the applicable collective bargaining agreement, and the 
     transferee shall be subject to the obligations under each 
     such assumption agreement to make residual payments and 
     provide related notices, accruing after the effective date of 
     the transfer and applicable to the exploitation of the rights 
     transferred, and any remedies under each such assumption 
     agreement for breach of those obligations, as those 
     obligations and remedies are set forth in the applicable 
     collective bargaining agreement, if--
       ``(1) the transferee knows or has reason to know at the 
     time of the transfer that such collective bargaining 
     agreement was or will be applicable to the motion picture; or
       ``(2) in the event of a court order confirming an 
     arbitration award against the transferor under the collective 
     bargaining agreement, the transferor does not have the 
     financial ability to satisfy the award within 90 days after 
     the order is issued.
       ``(b) Failure To Notify.--If the transferor under 
     subsection (a) fails to notify the transferee under 
     subsection (a) of applicable collective bargaining 
     obligations before the execution of the transfer instrument, 
     and subsection (a) is made applicable to the transferee 
     solely by virtue of subsection (a)(2), the transferor shall 
     be liable to the transferee for any damages suffered by the 
     transferee as a result of the failure to notify.
       ``(c) Determination of Disputes and Claims.--Any dispute 
     concerning the application of subsection (a) and any claim 
     made under subsection (b) shall be determined by an action in 
     United States district court, and the court in its discretion 
     may allow the recovery of full costs by or against any party 
     and may also award a reasonable attorney's fee to the 
     prevailing party as part of the costs.''.
       (b) Conforming Amendment.--The table of chapters for part 
     VI of title 28, United States Code, is amended by adding at 
     the end the following:

``180. Assumption of Certain Contractual Obligations........4001''.....

  Mr. COBLE (during the reading). Mr. Chairman, I ask unanimous consent 
that the amendment be considered as read and printed in the Record.
  The CHAIRMAN. Is there objection to the request of the gentleman from 
North Carolina?
  There was no objection.
  Mr. COBLE. Mr. Chairman, this amendment will make technical changes 
to further clarify who owns the termination interest in a copyrighted 
work when an author passes away, and provide for the proper transfer of 
contractual obligations when a copyright is transferred.
  Regarding the transfer of contractual obligations provision, I would 
like to clarify the meaning of a certain term. The ``reason to know'' 
language is intended to be interpreted in light of common sense and 
industry practice. Because many motion pictures made in the United 
States are produced subject to one or more collective bargaining 
agreements, the distributor would ordinarily perform some check on 
whether the motion picture is subject to such an agreement. The 
provision would not, however, require a burdensome or exhaustive 
examination. Publicly available information that indicates a work's 
status, such as records of a guild's security interest in the motion 
picture filed with the copyright office, would ordinarily provide 
``reason to know'' within the meaning of the act.
  Mr. Chairman, this amendment is noncontroversial and as best I can 
determine is not opposed, and I urge my colleagues to support it.
  Mr. FRANK of Massachusetts. Mr. Chairman, I move to strike the last 
word.
  Mr. Chairman, the gentleman from North Carolina (Mr. Coble) is right. 
It is not controversial and there is no opposition.
  The CHAIRMAN. The question is on the amendment offered by the 
gentleman from North Carolina (Mr. Coble).
  The amendment was agreed to.


              Amendment No. 1 Offered by Mr. Sensenbrenner

  Mr. SENSENBRENNER. Mr. Chairman, I offer an amendment.
  The Clerk read as follows:

       Amendment No. 1 offered by Mr. Sensenbrenner:
       Page 1, insert before section 1 the following:
                   TITLE I--COPYRIGHT TERM EXTENSION
       Strike section 1 and insert the following:

     SEC. 101. SHORT TITLE.

       This title may be referred to as the ``Copyright Term 
     Extension Act''.
       Redesignate sections 2 through 5 as sections 102 through 
     105, respectively.
       In section 105, as so redesignated, strike ``this Act'' and 
     insert ``this title''.
       Strike section 6 and insert the following:

     SEC. 106. EFFECTIVE DATE.

       This title and the amendments made by this title shall take 
     effect on the date of the enactment of this Act.
       Add at the end the following:
                       TITLE II--MUSIC LICENSING

     SEC. 201. SHORT TITLE.

       This title may be cited as the ``Fairness in Musical 
     Licensing Act of 1998''.

     SEC. 202. EXEMPTION OF CERTAIN MUSIC USES FROM COPYRIGHT 
                   PROTECTION.

       (a) Business Exemption.--Section 110(5) of title 17, United 
     States Code, is amended to read as follows:
       ``(5) communication by electronic device of a transmission 
     embodying a performance or display of a nondramatic musical 
     work by the public reception of a broadcast, cable, 
     satellite, or other transmission, if--
       ``(A)(i) the rooms or areas within the establishment where 
     the transmission is intended to be received by the general 
     public contains less than 3,500 square feet, excluding any 
     space used for customer parking; or
       ``(ii) the rooms or areas within the establishment where 
     the transmission is intended to be received by the general 
     public contains 3,500 square feet or more, excluding any 
     space used for customer parking, if--
       ``(I) in the case of performance by audio means only, the 
     performance is transmitted by means of a total of not more 
     than 6 speakers (excluding any speakers in the device 
     receiving the communication), of which not more than 4 
     speakers are located in any 1 room or area; or
       ``(II) in the case of a performance or display by visual or 
     audiovisual means, any visual portion of the performance or 
     display is communicated by means of not more than 2 audio 
     visual devices, if no such audio visual device has a diagonal 
     screen size greater

[[Page H1467]]

     than 55 inches, and any audio portion of the performance or 
     display is transmitted by means of a total of not more than 6 
     speakers (excluding any speakers in the device receiving the 
     communication), of which not more than 4 speakers are located 
     in any 1 room or area;
       ``(B) no direct charge is made to see or hear the 
     transmission;
       ``(C) the transmission is not further transmitted to the 
     public beyond the establishment where it is received; and
       ``(D) the transmission is licensed.''.
       (b) Exemption Relating to Promotion.--Section 110(7) of 
     title 17, United States Code, is amended--
       (1) by striking ``a vending'' and inserting ``an'';
       (2) by striking ``sole'';
       (3) by inserting ``or of the audio, video, or other devices 
     utilized in the performance,'' after ``phonorecords of the 
     work,''; and
       (4) by striking ``and is within the immediate area where 
     the sale is occurring''.

     SEC. 203. BINDING ARBITRATION OF RATE DISPUTES INVOLVING 
                   PERFORMING RIGHTS SOCIETIES.

       (a) In General.--Section 504 of title 17, United States 
     Code, is amended by adding at the end the following new 
     subsection:
       ``(d) Performing Rights Societies; Binding Arbitration.--
       ``(1) Arbitration of disputes prior to court action.--
       ``(A) Arbitration.--(i) If a general music user and a 
     performing rights society are unable to agree on the 
     appropriate rate or fee to be paid for the user's past or 
     future performance of musical works in the repertoire of the 
     performing rights society, the general music user shall, in 
     lieu of any other dispute-resolution mechanism established by 
     any judgment or decree governing the operation of the 
     performing rights society, be entitled to binding arbitration 
     of such disagreement pursuant to the rules of the American 
     Arbitration Association. The music user may initiate such 
     arbitration.
       ``(ii) The arbitrator in such binding arbitration shall 
     determine a fair and reasonable rate or fee for the general 
     music user's past and future performance of musical works in 
     such society's repertoire and shall determine whether the 
     user's past performances of such musical works, if any, 
     infringed the copyrights of works in the society's 
     repertoire. If the arbitrator determines that the general 
     music user's past performances of such musical works 
     infringed the copyrights of works in the society's 
     repertoire, the arbitrator shall impose a penalty for such 
     infringement. Such penalty shall not exceed the arbitrator's 
     determination of the fair and reasonable license fee for the 
     performances at issue.
       ``(B) Definitions.--(i) For purposes of this paragraph, a 
     `general music user' is any person who performs musical works 
     publicly but is not engaged in the transmission of musical 
     works to the general public or to subscribers through 
     broadcast, cable, satellite, or other transmission.
       ``(ii) For purposes of this paragraph, transmissions within 
     a single commercial establishment or within establishments 
     under common ownership or control are not transmissions to 
     the general public.
       ``(iii) For purposes of clause (ii), an `establishment' is 
     a retail business, restaurant, bar, inn, tavern, or any other 
     place of business in which the public may assemble.
       ``(C) Enforcement of arbitrator's determinations.--An 
     arbitrator's determination under this paragraph is binding on 
     the parties and may be enforced pursuant to sections 9 
     through 13 of title 9.
       ``(2) Court-annexed arbitration.--(A) In any civil action 
     brought against a general music user, as defined in paragraph 
     (1) for infringement of the right granted in section 106(4) 
     involving a musical work that is in the repertoire of a 
     performing rights society, if the general music user admits 
     the prior public performance of one or more works in the 
     repertoire of the performing rights society but contests the 
     rate or the amount of the license fee demanded by such 
     society for such performance, the dispute shall, if requested 
     by the general music user, be submitted to arbitration under 
     section 652(e) of title 28. In such arbitration proceeding, 
     the arbitrator shall determine the appropriate rate and 
     amount owed by the music user to the performing rights 
     society for all past public performances of musical works in 
     the society's repertoire. The amount of the license fee shall 
     not exceed two times the amount of the blanket license fee 
     that would be applied by the society to the music user for 
     the year or years in which the performances occurred. In 
     addition, the arbitrator shall, if requested by the music 
     user, determine a fair and reasonable rate or license fee for 
     the music user's future public performances of the musical 
     works in such society's repertoire.
       ``(B) As used in this paragraph, the term `blanket license' 
     means a license provided by a performing rights society that 
     authorizes the unlimited performance of musical works in the 
     society's repertoire, for a fee that does not vary with the 
     quantity or type of performances of musical works in the 
     society's repertoire.
       ``(3) Term of license fee determination.--In any 
     arbitration proceeding initiated under this subsection, the 
     arbitrator's determination of a fair and reasonable rate or 
     license fee for the performance of the music in the 
     repertoire of the performing rights society concerned shall 
     apply for a period of not less than 3 years nor more than 5 
     years after the date of the arbitrator's determination.''.
       (b) Actions That Shall Be Referred to Arbitration.--Section 
     652 of title 28, United States Code, is amended by adding at 
     the end the following:
       ``(e) Actions That Shall Be Referred to Arbitration.--In 
     any civil action against a general music user for 
     infringement of the right granted in section 106(4) of title 
     17 involving a musical work that is in the repertoire of a 
     performing rights society, if the general music user admits 
     the public performance of any musical work in the repertoire 
     of the performing rights society but contests the rate or the 
     amount of the license fee demanded by the society for such 
     performance, the district court shall, if requested by the 
     general music user, refer the dispute to arbitration, which 
     shall be conducted in accordance with section 504(d)(2) of 
     title 17. Each district court shall establish procedures by 
     local rule authorizing the use of arbitration under this 
     subsection. The definitions set forth in title 17 apply to 
     the terms used in this subsection.''.

     SEC. 204. VICARIOUS LIABILITY PROHIBITED.

       Section 501 of title 17, United States Code, is amended by 
     adding at the end the following:
       ``(f) A landlord, an organizer or sponsor of a convention, 
     exposition, or meeting, a facility owner, or any other person 
     making space available to another party by contract, shall 
     not be liable under any theory of vicarious or contributory 
     infringement with respect to an infringing public performance 
     of a copyrighted work by a tenant, lessee, subtenant, 
     sublessee, licensee, exhibitor, or other user of such space 
     on the ground that--
       ``(1) a contract for such space provides the landlord, 
     organizer or sponsor, facility owner, or other person a right 
     or ability to control such space and compensation for the use 
     of such space; or
       ``(2) the landlord, organizer or sponsor, facility owner, 
     or other person has or had at the time of the infringing 
     performance actual control over some aspects of the use of 
     such space, if the contract for the use of such space 
     prohibits infringing public performances and the landlord, 
     organizer or sponsor, facility owner, or other person does 
     not exercise control over the selection of works 
     performed.''.

     SEC. 205. CONFORMING AMENDMENTS.

       Section 101 of title 17, United States Code, is amended by 
     inserting after the undesignated paragraph relating to the 
     definition of ``perform'' the following:
       ``A `performing rights society' is an association, 
     corporation, or other entity that licenses the public 
     performance of nondramatic musical works on behalf of 
     copyright owners of such works, such as the American Society 
     of Composers, Authors, and Publishers, Broadcast Music, Inc., 
     and SESAC, Inc. The `repertoire' of a performing rights 
     society consists of those works for which the society 
     provides licenses on behalf of the owners of copyright in the 
     works.''.

     SEC. 206. CONSTRUCTION OF TITLE.

       Except as provided in section 504(d)(1) of title 17, United 
     States Code, as added by section 203(a) of this Act, nothing 
     in this title shall be construed to relieve any performing 
     rights society (as defined in section 101 of title 17, United 
     States Code) of any obligation under any consent decree, 
     State statute, or other court order governing its operation, 
     as such statute, decree, or order is in effect on the date of 
     the enactment of this Act, as it may be amended after such 
     date, or as it may be enacted, issued, or agreed to after 
     such date.

     SEC. 207. EFFECTIVE DATE.

       This title and the amendments made by this title shall take 
     effect on the date of the enactment of this Act, and shall 
     apply to actions filed on or after such date.

  Mr. SENSENBRENNER (during the reading). Mr. Chairman, I ask unanimous 
consent that the amendment be considered as read and printed in the 
Record.
  The CHAIRMAN. Is there objection to the request of the gentleman from 
Wisconsin?
  There was no objection.
  Mr. SENSENBRENNER. Mr. Chairman, the amendment that I offer today is 
the culmination of nearly 4 years of effort to provide relief for the 
small business community from the unfair music licensing system 
administered by the performance rights monopolies.
  My involvement in this issue stems from the tactics of an ASCAP 
operative who circumnavigated a lake in my district, hitting up every 
bar or restaurant with the standard take-or-leave-it proposition. 
Needless to say, I received a number of calls from perplexed and 
outraged owners. The tactics of ASCAP's representative prompted me to 
make a more thorough investigation of how these performance rights 
organizations function and who, if anybody, controls their behavior.
  What I learned was an eye opener. ASCAP and BMI, the two largest 
music licensing societies, are virtual monopolies operating under 
consent decrees administered by the Justice Department. Unfortunately, 
the Justice Department's priorities have been elsewhere, allowing the 
two monopolies to

[[Page H1468]]

operate with impunity. The conduct of these monopolies has prompted 22 
States to adopt code of conduct laws. Given the licensing society's' 
record of heavy-handed action, a Justice Department that has looked the 
other way, and a Federal law that is either ambiguous or clearly 
skewed, now is the time for Congress to act.
  My amendment incorporates three of the core principles embodied in my 
original bill, H.R. 789, the Fairness in Music Licensing Act. First it 
eliminates the most unfair aspect of the current system. Under the 
consent decrees, any business in the United States that wishes to 
dispute a licensing fee with ASCAP or BMI is forced to travel to New 
York City, hire a New York attorney, and fight it out in the Federal 
District Court for the Southern District of New York, the so-called 
rate court.
  My amendment establishes local arbitration of these rate disputes so 
no one is coerced into accepting a license rate simply because it would 
be foolish to spend thousands of dollars to travel to New York to 
challenge the licensing monopolies and their litigation war chest.
  Let me point out that the current law requires that these disputes be 
resolved in court. My amendment takes it out of court, eliminates the 
necessity of hiring an attorney, and has local arbitration decide the 
issue.
  Second, the amendment updates the existing home-style exemption. 
Under the amendment, businesses whose public space is 3,500 square feet 
or less would be exempt from paying royalties for playing the radio or 
TV unless they charge admission. Those over 3,500 square feet would be 
exempt if they had two TVs or less and no more than six speakers.
  It is important to note that the exemption provided in my amendment 
does not, and I repeat, does not apply to live or recorded music where 
the proprietor controls the content. Only TV and radio broadcasts for 
which the broadcaster has already paid the royalty are exempt.
  Let me give an example of how far down the food chain the licensing 
societies go in pursuit of royalties. A marching band plays a song 
during the half time of a football game. First the stadium pays the 
licensing society to use the song played by the band. Then the national 
TV network pays to broadcast the song. Next the local TV station pays 
to broadcast the song. Then the local cable system pays for the song 
again. And finally, the bar in Pewaukee Lake, Wisconsin pays for airing 
the song on TV. That is right. The music licensing societies are paid 
five times, five times for the right, the one playing of one song. That 
is a scam and that is what my amendment reforms.
  The provision also exempts retailers of stereos and television sets 
who under existing laws must pay licensing fees simply to demonstrate 
that their product works so that a customer may buy it. You go into 
your local appliance store to buy a TV. The proprietor turns the TV on 
so that you can see the quality of the picture. And because the 
proprietor did that to sell the TV, they have to pay ASCAP under this 
current law. My amendment eliminates that.
  And finally, the amendment protects landlords and convention owners 
from vicarious liability for music licensing fees for music played by a 
tenant or an exhibitor.
  The CHAIRMAN. The time of the gentleman from Wisconsin (Mr. 
Sensenbrenner) has expired.
  (By unanimous consent, Mr. Sensenbrenner was allowed to proceed for 2 
additional minutes.)
  Mr. SENSENBRENNER. Mr. Chairman, many of our communities do operate 
convention centers and they lease out space. If somebody turns on a TV 
set because they are selling a product or asking to go on vacation 
someplace, then the city or the owner of the convention center gets hit 
up for a licensing fee because they could not turn the hand of the 
tenant on the dial to turn the TV set off.
  Mr. Chairman, while considering the underlying bill, we have 
suggested that Congress is the appropriate place for the expansion of 
the scope of copyright expansion of business' obligations to pay 
additional fees. Meanwhile, the licensing societies and their defenders 
in the Congress claim that this body has no role in the music licensing 
debate where the central issue is a proposal to perhaps modestly 
diminish their ability to extract fees. But the Constitution itself 
suggests the need for balanced intellectual property rights. That is 
precisely what my amendment accomplishes.
  Mr. Chairman, I urge my colleagues not to stand aside and permit this 
Congress to do the bidding of the copyright holders who seek a one-way 
street to expand their rights while denying balance and fairness to the 
small business users of intellectual property. My amendment is 
supported by virtually every small business organization in the 
country, including the NFIB, the National Restaurant Association, the 
National Retail Federation, home builders, florists, and the list goes 
on.
  In the name of balance and in the name of America's small business, I 
ask my colleagues for an ``aye'' vote on the Sensenbrenner amendment.

                              {time}  1200


 Amendment No. 3 Offered by Mr. McCollum to Amendment No. 1 Offered by 
                           Mr. Sensenbrenner

  Mr. McCOLLUM. Mr. Chairman, I offer an amendment.
  The Clerk read as follows:

       Amendment No. 3 offered by Mr. McCollum to Amendment No. 1 
     offered by Mr. Sensenbrenner:
       In lieu of the matter proposed to be inserted as title II, 
     insert the following:
   TITLE II--MUSIC LICENSING EXEMPTION FOR FOOD SERVICE OR DRINKING 
                             ESTABLISHMENTS

     SEC. 201. SHORT TITLE.

       This title may be cited as the ``Fairness In Music 
     Licensing Act of 1998.''

     SEC. 202. EXEMPTION.

       Section 110(5) of title 17, United States Code is amended--
       (1) by striking ``(5)'' and inserting ``(5)(A) except as 
     provided in subparagraph (B),'';
       (2) by adding at the end the following:
       ``(B) communication by a food service or drinking 
     establishment of a transmission or retransmission embodying a 
     performance or display of a nondramatic musical work intended 
     to be received by the general public, originated by a radio 
     or television broadcast station licensed by the Federal 
     Communications Commission, or, if an audiovisual 
     transmission, by a cable system or satellite carrier, if--
       ``(i) either the establishment in which the communication 
     occurs has less than 3500 gross square feet of space 
     (excluding space used for customer parking), or the 
     establishment in which the communication occurs has 3500 
     gross square feet of space or more (excluding space used for 
     customer parking) and--

       ``(I) if the performance is by audio means only, the 
     performance is communicated by means of a total of not more 
     than 6 loudspeakers, of which not more than 4 loudspeakers 
     are located in any 1 room or adjoining outdoor space; or
       ``(II) if the performance or display is by audiovisual 
     means, any visual portion of the performance or display is 
     communicated by means of a total of not more than 4 
     audiovisual devices, of which not more than one audiovisual 
     device is located in any 1 room, and no such audiovisual 
     device has a diagonal screen size greater than 55 inches, and 
     any audio portion of the performance or display is 
     communicated by means of a total of not more than 6 
     loudspeakers, of which not more than 4 loudspeakers are 
     located in any 1 room or adjoining outdoor space;

       ``(ii) no direct charge is made to see or hear the 
     transmission or retransmission;
       ``(iii) the transmission or retransmission is not further 
     transmitted beyond the food service or drinking establishment 
     where it is received; and
       ``(iv) the transmission or retransmission is licensed by 
     the copyright owner of the work so publicly performed or 
     displayed;''; and
       (3) by adding after paragraph (10) the following:
     ``The exemptions provided under paragraph (5) shall not be 
     taken into account in any administrative, judicial, or other 
     governmental proceeding to set or adjust the royalties 
     payable to copyright owners for the public performance or 
     display of their works. Royalties payable to copyright owners 
     for any public performance or display of their works other 
     than such performances or displays as are exempted under 
     paragraph (5) shall not be diminished in any respect as a 
     result of such exemption''.

     SEC. 203. LICENSING BY PERFORMING RIGHTS SOCIETIES.

       (a) In General.--Chapter 5 of title 17, United States Code, 
     is amended by adding at the end the following:

     ``Sec. 512. determinations of reasonable license fee for 
       individual proprietors

       ``In the case of any performing rights society subject to a 
     consent decree which provides for the determination of 
     reasonable license fees to be charged by the performing 
     rights society, notwithstanding the provisions of that 
     consent decree, an individual proprietor who owns or operates 
     fewer than 3

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		       SCO Files Lawsuit Against IBM

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