¹ 17 U.S.C. §107.

² For more information on this issue see infra n. 76.

³ This sort of “seepage” rate of illicit copying—ten percent—is actually not very large. Many enforcement systems would be delighted with such a compliance rate. It is also clear that using a baseline figure of ten million represents only a tiny fraction of university copying in the United States. Duplicating machines at Georgetown University Law Center alone produce more than twenty million pages in a single year.

⁴ Several important decisions have been rendered on the legitimacy of Napster, Aimster, Grokster and other similar systems. In A & M Records v. Napster, Inc., 239 F.3d 1004 (9th Cir. 2001) and); In re Aimster Copyright Litigation, 334 F.3d 7643 (7th Cir. 2003) the courts concluded that such online systems violate the copyright code. In a similar case involving Grokster, Ltd. v. Metro-Goldwyn-Mayer Studios, Inc., 380 F.3d 1154 (9th Cir. 2004), however, the opposite result was reached. The United States Supreme Court recently reversed a Ninth Circuit opinion that had allowed the company has agreed to distribute file sharing software “passively”—that is, by not providing any online assistance to those exchanging files. Grokster, Ltd. v. Metro-Goldwyn-Mayer Studios, supra. The Supreme Court concluded that purveyors of file sharing software violate the code if they know their products will review this result in substantial third party copying of protected works and promote its use for that purpose. Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd., 125 S.Ct. 2764 (9^th Cir. 2005). Further discussion of Grokster may be found infra at p. 101-102. (36-37)

⁵ See, for example, the web site of Peer 2 Peer United available at http://www.p2punited.org (Last visited September 2005).

⁶ Some of the vibrancy of the debate about the consequences of modern technology is visible on the web sites of the Berkman Center for Interent and Society at Harvard Law School available at http://cyber.law.harvard.edu/home/ (Last Visited September 2005) and the Stanford Law School Center for Internet and Society available at http://cyberlaw.stanford.edu/index.shtml (Last visited September 2005).

⁷ The revision proposal now being considered by the Justice Ministry rationalizes the various copyright laws that have been enacted since the original British law went into effect during the mandate, but does not include any dramatic changes in the existing philosophy of Israeli copyright law. See Memorandum of the Copyright Law, 5764-2003 (English translation available in author's files.)

⁸ Much of the history about enlargement of the scope of copyright is laid out in the famous cases of Burrow-Giles Lithographic Co. v. Sarony, 111 U.S. 53 (1884) and Bleistein v. Donaldson Lithographic Co., 188 U.S. 239 (1903). Sarony involved the copyrightability of a beautiful photograph of Oscar Wilde and Bleistein the status of circus advertising posters.

⁹ A brief and lucid description of early American player pianos is available at http://www.pianola.com/pphist.htm (Last Visited September 2005). For a more complete history, go to http://www.amica.org/Instruments/Player_Pianos/Player_Piano_History.htm (Last visited September 2005).

¹⁰ This process, of course, is familiar to all who use Microsoft Windows.

¹¹ White-Smith Music Publishing Co. v. Apollo Co., 209 U. S. 1 (1908).

¹² § 1 (e) of the Copyright Act of 1909.

¹³ A recent example of that view is Feist Publications, Inc. v. Rural Telephone Service Co., 499 U.S. 340 (1991). The Court declined to allow a “sweat of the brow” theory of originality govern a dispute about the copyrightability of telephone directories. A work, the Court said, must have some minimal level of creativity in order to gain protection. Works requiring significant amounts of labor to create often contain facts or data, just the sorts of material American courts insist should be widely (and often freely) distributed. Before computers made the creation of telephone books from customer data bases simple, it took a great deal of time and effort to compile them. Under those circumstances it was tempting to extend copyright protection to them. But today, preparation of alphabetized telephone directories requires neither a significant amount of labor nor much ingenuity. Under such circumstances it is not surprising that the Court left them in the public domain.

On the “sweat of the brow” issue, Israel presents an interesting case. To some extent the decision in the Dead Sea Scroll cases relied upon the labor required to reassemble a fragmented scroll. An English translation of the opinion is available at http://lawatch.haifa.ac.il/heb/month/dead_sea.htm (Last Visited September 2005). The trial level opinion is also available in English in Cohen, David L., “Copyrighting the Dead Sea Scrolls: Qimron v. Shanks” (2000) 52 Maine L. Rev. 379, 399 Google Scholar.

¹⁴ Civil law countries frequently claim that their codes are designed to protect the natural creative talents of those making new works. They therefore tend to provide larger realms of protection than America. Lending rights, moral rights and performance rights, for example, are likely to exist in countries outside the United States. The American work for hire rules, which grant to companies control over the creative work of their employees and other workers, also are less prevalent in the rest of the world. See the definition of “work for hire” in 17 U.S.C §101 and the ownership provisions in 17 U.S.C. §201(b).

¹⁵ The claims about the purposes of American copyright law made in cases like Feist, supra n. 13, certainly are debatable on a number of levels. The remedial structure of the code, for example, is not really market based. Rather than relying on a contract-like system of rewards, copyright uses a tort-like scheme. The calculation of “actual” damages is not based on a market formula, statutory damages are available as an alternative form of relief and attorney's fees may be awarded to a prevailing party. 17 U.S.C §§504-505. On a more sophisticated level, some make the claim that certain types of strong copyright law, such as the enhancement of protection for technological controls over the distribution of works under the Digital Millennium Copyright Act, 17 U.S.C. §§1201 et seq., actually reduce the distribution and use of copyrighted works. See, e.g., Pessach, Guy, “Copyright Law as a Silencing Restriction on Non-infringing Materials—Unveiling the Scope of Copyright's Diversity Externalities” (2003) 76 S. Cal. L. Rev. 1067 Google Scholar.

¹⁶ Licensing control by owners is an important issue in developing a new copyright paradigm. Without reducing the ability of owners to oversee the distribution and dissemination of their works, it will be impossible to develop a more efficient online distributional system. This idea is developed later in the paper, infra Section II(C)(2).

¹⁷ Culturally the combined effect of player pianos, sound recordings and radio substantially reduced the propensity of Americans to learn how to play music. In most middle and upper class homes, playing and singing music was a common form of entertainment. After the radio became a common consumer good, sales of sheet music and pianos fell, and fewer people learned how to play an instrument.

¹⁸ This result was not affirmed in the courts until 1942. Skilkret v. Musicraft Records Inc., 131 F.2d 929 (2d Cir. 1942).

¹⁹ 17 U.S.C. §115. Performers do get paid when recordings are sold. This is both because the performers generally will not agree to make a record unless they receive remuneration and because under the present code, the precisely identical sounds embedded on a sound recording are protected from unauthorized copying and sale. 17 U.S.C. §114. (This protection, of course, has been deeply challenged by the proliferation of portable devices and internet systems for duplicating digital files.) But the performance of a sound recording on the radio or in another public setting produces royalties only for the composer, not the performer.

²⁰ The original version of § 114(d) in the Copyright Act of 1976 required the Copyright Office to study the issue of performance rights in sound recordings. Their report urged Congress to provide for such rights. Subcomm. On Courts, Civil Liberties and the Administration of Justice of the Comm. on the Judiciary, 95th cong., 2d Sess., Performance Rights in Sound Recordings (Comm. Print 1978). Hearings were held on a proposed bill in the late 1970s, but no legislation was adopted. Some of this history is recited and critiqued in Nimmer, David, “Ignoring the Public, Part I: On the Absurd Complexity of the Digital Audio Transmission Right” (2000) 7 U.C.L.A. Ent. L. Rev. 189 Google Scholar; Teller, Bonnie, “Toward Better Protection of Performances in the United States: A Comparative Look at Performers' Rights in the United States, Under the Rome Convention and in France” (1990) 29 Colum. J. Transnat'l. L. 775 Google Scholar.

²¹ 17 U.S.C. §114(d) was significantly amended by the Digital Performance Right in Sound Recordings Act of 1995. This legislation was further changed in 1998 and 2002 to deal with the explosion in digital broadcasts and the arrival of streaming audio transmissions over the internet.

²² And others responded that such a system penalized some musicians, including symphonies or “edgy” performers that rarely toured, those making music with complex equipment that can't easily be taken on tour, or small time musicians popular only in a local area. In addition, the lack of royalties meant that radio stations looked to recording companies for material to play, sometimes demanding payoffs before broadcasting material. To the extent that such a payoff system operates it has the potential, in essence, to transfer performance royalties from the performers to the radio companies.

²³ In Israel, for example, broadcasting a sound recording is a royalty producing event for both the composer and the performer. Article 2, Performers' and Broadcasters' Rights Law of 1984 (1996).

²⁴ Perhaps the anomaly was less noticeable when phonorecords first appeared. The recordings were scratchy and the quality of the performance was therefore difficult to evaluate. Today, however, recording quality is very good and the creative abilities of the performers are easily discernible.

²⁵ This pattern is well described in Litman, Jessica, “Copyright, Compromise, and Legislative History” (1987) 72 Cornell L. Rev. 857 Google Scholar. The Copyright Act of 1976 was a partial exception. Many of the basic provisions resulted from careful study. But here too a number of compromise provisions resulted from industrial bargaining, including, among others, language in the fair use rule (§ 107), exemptions for certain performances and displays (§ 110), secondary transmissions by cable television (§ 111) and performances on juke boxes (§ 116).

²⁶ For more on the Copyright Office review, see supra n. 20.

²⁷ The core of the compromise may be found in 17 U.S.C. § 1001 et seq.

²⁸ 17 U.S.C. § 1001(3) limits coverage to devices with a primary purpose of making digital audio copies for personal use.

²⁹ Under §114 the rights of performers in sound recordings originally were limited to the right to control the distribution and use of the actual sounds fixed in the copies. As noted in the text, greater performance rights were added only with the advent of digital tape recorders.

³⁰ § 106(6) was added creating a performance right in digital audio transmissions and that right was subjected to numerous limitations in § 114(d).

³¹ Indeed the performance rights legislation has already been amended twice since its adoption in 1995—once in 1998 and again in 2002—to deal with the impact of radio webcasting. For more on these recent developments see Magri, Joseph, “New Media—New Rules: The Digital Performance Right and Streming Music Over the Internet” (2003) 6 Vand. J. L. & Prac. 55 Google Scholar.

³² 464 U.S. 417(1984).

³³ The recording format on Sony's Betamax differed from that of the rest of the industry. Though widely recognized as the better technology, consumers usually purchased cheaper machines using the VCR standard. When businesses first opened renting video tapes to consumers for home use, tapes were available in both formats. As consumers moved to the VCR format, however, movie makers stopped making Betamax tapes. That sounded the death knell for the technology. My Betamax machine became as useless as a player piano!

³⁴ In American law, vicarious liability is imposed on parties who control the venue or system used to copy, perform or otherwise infringe a work and receive financial benefit from the activity. The classic case is Shapiro, Bernstein and Co. v. H.L. Green Co., 316 F.2d 304 (2d Cir. 1963), which involved a chain of department stores selling counterfeit recordings. Contributory infringement arises when a party knowingly contributes to or induces unlawful activity. A leading case in this area is Fonovisa, Inc. v. Cherry Auction, Inc., 76 F.3d 259 (9th Cir. 1996), in which the operator of a flea market was found responsible for the actions of parties renting space in the market and selling counterfeit recordings. At times it is difficult to tell the difference between the two theories.

³⁵ The Court viewed this formulation of the question as the best balance between protecting the interests of copyright owners and creating appropriate incentives for industrial inventors to bring new products to the market.

³⁶ Indeed, those living at the beginning of the twentieth century may have felt the same way we do about the pace of technological change. Within a few decades around the turn of the century, electricity, the telegraph, radios, record players, high-rise buildings and the automobile became common.

³⁷ Recently some record companies and storage device manufacturers have established websites for the distribution of music repertoires, allowing each tune to be downloaded at a relatively low price such as 99 cents. This may reduce the degree of peer-to-peer file sharing, at least among those with some moral sensibilities about copying protected works. But it is hard to believe that such systems will have a serious impact on the overall use of peer-to-peer systems.

³⁸ Prior to the digital age, software companies sometimes attempted to place systems in their software that barred making copies. At an early point in the history of Word, Microsoft imposed a primitive copy limitation on the software. It was easy to subvert and caused antipathy in the market. It was soon withdrawn. Most consumer software published since has not contained any copy limitations. But copy limitations systems are now having a comeback, particularly with the distribution of online updates that will not install without use of the original CD containing the program.

³⁹ This is especially true with web based distribution systems requiring payment for access and barring downloading. But once a work has been sold and downloaded it usually becomes just another easily distributed digital file. That may well change as file marking and control systems become more sophisticated and their use more widespread. For discussion of the capabilities of digital management systems, see Hugenholtz, P. Bernt, Guibault, Lucie and van Geffen, Sjoerd, The Future of Levies in a Digital Environment: Final Report (Amsterdam, Institute for Information Law, 2003)Google Scholar; Stefik, Mark, “Shifting the Possible: How Digital Property Rights Challenge Us To Rethink Digital Publishing” (1997) 12 Berkeley Tech. L. J. 138 Google Scholar. Major companies, including Microsoft, Time Warner and Thomson, have large stakes in Content-Guard, a company working on setting an industry standard for software designed to prevent unauthorized copying of music and movie files off the internet. “Thomson Buys Into Anti-Piracy Company” International Herald Tribune, 23 Nov. 2004, p. 16 Google Scholar.

⁴⁰ The polarized nature of the debate is patent in the positions taken by the parties in the Aimster litigation. Indeed, the extreme positions of the litigants gave the courts lots of room to claim it was simply searching for a happy medium. In the end, Judge Posner refused both the music owners' claims that any copying assistance provided by online services was unlawful and Aimster's claim that online services were free of any responsibility for the uses made of their systems. Finding that Aimster could exercise some control over the uses made of its system, the court concluded that Aimster had the burden of proving that its service had substantial non-infringing uses and that imposing constraints on the system's use were costly or impractical. In re Aimster Copyright Litigation, 334 F.3d 643 (7th Cir. 2003).

⁴¹ This issue is probably best discussed in Cohen, Julie E., “A Right to Read Anonymously: A Closer Look at ‘Copyright Management’ in Cyberspace” (1996) 28 Conn. L. Rev. 981 Google Scholar. Browsing, she argues, is an essential part of deciding which creative works to study or read in depth. Using a library often entails walking by the shelves and briefly perusing a book in order to decide whether to check it out. Cohen worries that copyright controls will, among other things, remove our ability to browse in the online world of culture.

⁴² Julie Cohen has also written at length about this problem. See Cohen, Julie E., “Copyright and the Perfect Curve” (2000) 53 Vand. L. Rev. 1799 Google Scholar; Cohen, Julie E., “Lochner in Cyberspace. The New Economic Orthodoxy of ‘Rights Management” (1998) 97 Mich. L. Rev. 462 CrossRefGoogle Scholar.

⁴³ See, e.g., Litman, Jessica, The Public Domain (1990) 39 Emory L. J. 965 Google Scholar.

⁴⁴ 406 F.3d 689 (D.C. Cir. 2005).

⁴⁵ The court concluded that the FCC has authority to deal with transmissions but lacks the power to issue regulations controlling what receiver owners do after they receive a broadcast.

⁴⁶ 17 U.S.C. §1201. Like the provisions dealing with digital audio tape recorders, this section is enormously complex. It contains narrowly drawn exceptions for libraries, reverse engineering and encryption research. But, as with fair use, nothing in the act requires the creators of copyright management systems to build in ways to use the exemptions.

⁴⁷ 17 U.S.C. §1201(c)(1).

⁴⁸ Articles 5(b)(2), 7(1)(a), Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the Harmonisation of Certain Aspects of Copyright and Related Rights in the Information Society, Official Journal L 167,22/06/2001 P. 0010-0019. The WIPO Copyright Treaty also requires nations to protect copyright protection systems. The treaty, for example, requires that “adequate legal protection” be provided against the circumvention of technical controls.

⁴⁹ Supra n. 13.

⁵⁰ Recall the comments at the beginning of this essay on the scope of copying at universities and other major institutions.

⁵¹ A good example is the recent suits brought by the record industry against hundreds of individuals, many of them youngsters or college students, using peer-to-peer programs to swap and download digital files. Though the defendants may be infringers, the cases have produced quite a lot of negative publicity. Student defendants, claiming poverty, angrily protested that they were merely attempting to gain access to music that is vastly overpriced at $15 or more per compact disc.

⁵² Standard vicarious liability rules were probably inapplicable. They require the defendant to have control over the forum in which infringement occurs and to obtain financial reward from the infringing activity. See supra n. 34. While the makers of video tape recorders certainly derived income from sales of the devices, they did not have control over the ways consumers used them at home or at the office.

⁵³ And when they do obtain monopoly like status, it is because a copyright, or series of copyrights, operates in the market like a patent. Operating system software may be the best example. Because standardization is so important to the successful world-wide use of computers, a copyright on basic operational software will tend to operate like a patent. Windows, of course, is the prime contemporary example, though we should not forget piano scrolls.

⁵⁴ §877(c). Restatement (2d) of Torts (1979).

⁵⁵ §206(7), Model Penal Code, Uniform Laws Annotated.

⁵⁶ The basic contributory tortfeasor rules are described §877, Restatement (2d) of Torts (1979).

⁵⁷ This does not mean that the individual actions of people using duplication technology should have no impact on copyright policy. While the impact of individuals is small, the total impact of all users can be enormous. While policing systems directed at consumers might be unworkable and intrusive, that does not mean that other ways of extracting costs from consumers are also inappropriate. Imposing levies on equipment, for example, avoids the enforcement problems that drove the Sony Court. Further discussion of this issue appears later in this section of the paper.

⁵⁸ There is a technical statutory construction argument against this position. Section 107 of the Copyright Code provides that “the fair use of a copyrighted work […] is not an infringement of copyright”. It can be argued that this not only relieves a consumer of responsibility for her private use of copyright technology but also all others related to the activity. In short, declaring actions protected by fair use as “not an infringement” could be read quite broadly. But that construction is not required. The language could easily be deemed applicable only to the party successfully claiming that his or her actions were fair.

⁵⁹ The story is told in Gaita, Katerina and Christie, Andrew F., “Principle or Compromise? Understanding the Original Thinking Behind Statutory Licence and Levy Scheme s for Private Copying” (2004) 4 Intellectual Prop. Q. 422 Google Scholar and in Hugenholtz, Guibault and van Geffen, supra n. 39, at 10-12. Th e tape recorder legislation has since been expanded to cover recording media and reprography. Ibid., at 436-37.

⁶⁰ As of 2003 twelve members of the European Union had such legislation and thirty other nations had some sort of levy system in place for various forms of private copying. Hugenholtz, Guibault and van Geffen, supra n. 39, at 13.

⁶¹ Metro-Goldwyn Mayer Studios v. Grokster, supra n. 4.

⁶² Justice Souter wrote the main Grokster opinion for a unanimous Court. But Justice Ginsburg, writing for herself and Justices Rehnquist and Kennedy, concluded that MGM might also prevail on a Sony contributory liability theory. In addition, Justice Breyer, writing for himself and Justices Stevens and O'Connor, argued that the defendant's prevailed under Sony. It seems likely there was no clear majority on whether Grokster was a contributory infringer under Sony.

⁶³ Gaita and Christie, supra n. 59, report that compulsory levy systems of some sort exist in Austria, Finland, France, the Netherlands, Spain, Switzerland, Denmark, Italy, Belgium, Greece, Portugal, Sweden, Japan, and Canada, in addition to Germany and the United States (the digital audio tape legislation adopted in 1992 and now largely out of date). Ibid., at 423, n. 2.

⁶⁴ §§54, 54a, Act Dealing with Copyright and Related Rights. An English translation of the act is available in Beier, Friedrich-Karl, Schricker, Gerhard and Fikentscher, Wolfgang, eds. German Industrial Property (Weinheim and New York, VCH, 1996)Google Scholar and Supplements.

⁶⁵ This change was made in 1996, when the Performers' and Broadcasters' Rights Law of 1984 was amended and §§3(C)-(D) were added to the Copyright Ordinance. See also Geller, Paul Edward, ed. 2 International Copyright Law and Practice (New York, Matthew Bender, 2003) §8[2]Google Scholar.

⁶⁶ 5% of the retail price, less the value added tax, charged to consumers is placed in the royalty pool. So for each NIS, the actual levy rate is 5/95, or 5.263%. Article D of the Copyright Ordinance.

⁶⁷ The proposal would add a new chapter on Recording Devices Levy to the Copyright Ordinance. Proposed Article 17D would require the Minister of Justice to “appoint an advisory committee […] whose members shall be a representative of the Ministry of Finance, a representative of the Ministry of Justice and a representative of the Ministry of Education, Culture and Sport.” After consultation with the committee, the Minister of Justice, according to proposed Article 17(e) would determine “the types of taxable devices to which this Chapter shall apply” and “the percentage of the consumer price of taxable devices to be levied.” The flexibility created by this language would be a welcome addition to the code.

⁶⁸ For more discussion of the ways copyright regimes may reduce the dissemination and use of preexisting works, see Pessach, supra n. 15.

⁶⁹ Suggestions to impose levies on duplicating equipment and media are also beginning to appear in the literature. See Fisher, William W. III, Promises to Keep: Technology, Law and the Future of Entertainment (Stanford, Stanford University Press, 2004) 199–258 Google Scholar. Peer-to-peer copying is the focus of Netanel, Neil Weinstock, “Impose a Noncommercial Use Levy to Allow Free Peer-to-Peer File Sharing” (2003) 17 Harv. J.L. & Tech. 1 Google Scholar. Lemley, Mark A. and Reese, R. Anthony, “Reducing Digital Copyright Infringement Without Restricting Innovation” (2004) 56 Stan. L. Rev. 1345 Google Scholar writes about internet service providers.

⁷⁰ Arbitration systems are used to resolve disputes over the distribution of compulsory royalty pools under existing American law. 17 U.S.C. §§801-803. That process appears to be working fine.

⁷¹ This may require some alternations in traditional moral right theory. §12(1) of the German Copyright Code, for example, declares it a moral right that the “author shall have the right to determine whether and how his work is to be disseminated.” An efficient levy system will require a narrow understanding of the meaning of “dissemination.” Copyright codes also commonly provide that owners have the right to “reproduce” or “publish” a work. These ideas may also have to be limited. This issue is discussed in the next section of this paper.

⁷² I am certainly not the first person to suggest that a levy system should be implemented, though many of the details presented here are lacking in other literature. See, e.g., Fisher, supra n. 69, at 198-262; Litman, Jessica, “Sharing and Stealing” (2004) 27 Hastings Comm. & Ent. L. J. 1 Google Scholar. Others have suggested that establishing free areas on the web may be a way to undermine the traditional market for copyrighted products and force businesses to change their strategies without making significant alterations in the copyright code. Those running the efforts to develop freeware to compete with Microsoft—Linux, Mozilla, Firefox and Thunderbird, among others—are attempting this strategy with some success. Scholarly support for this approach is most notable in the work of Lawrence Lessig. See, e.g., Lessig, Lawrence, Free Culture (New York, Penguin Press, 2004)Google Scholar. Some work is now being released with Creative Commons licenses allowing for free distribution. Cha, Ariana Eunjung, “Creative Commons is Rewriting Rules of Copyright” Washington Post, 15 March 2005, E1 Google Scholar. And IBM recently made headlines by agreeing to make many of its patents freely available in an effort to stimulate use of its products and enhance its support and consulting business. Lohr, Steve, “Sharing the Wealth at IBM’ New York Times, 11 April 2005, C1 Google Scholar. Though all of these “open” online community endeavors make lots of sense, I am skeptical that they will so significantly undermine traditional business models seeking to use intellectual property law to protect their interests that a levy system will become unnecessary.

⁷³ See supra n. 46 and accompanying text.

⁷⁴ Hugenholtz, Guibault and van Geffen, supra n. 39, at 40, for example, claim that if “the primary use of certain equipment is not to reproduce protected works, performances or phonograms for private purposes, subjecting such equipment to a levy would not be justified.” This led the authors to conclude that computers, for example, should not be levied.

⁷⁵ The same issue arose in Germany, where the courts declined to impose liability on individual users of recording equipment because of concerns about intrusive policing. Gaita and Christie, supra n. 59, at 428-29.

⁷⁶ The levy system, remember, kicks into gear only after the publisher relinquishes control over a work.

⁷⁷ The dispute over publication of material from Ford's memoirs by The Nation is a perfect example. See Harper & Row, Publishers v. Nation Enterprises, 471 U.S. 539 (1985).

⁷⁸ The debate actually began while the Copyright Act of 1976 was being drafted. Disputes over the extent to which educational uses of works should be privileged led to the creation of guidelines that were incorporated into the legislative history of the code. The Agreement on Guidelines for Classroom Copying in Not-For-Profit Educational Institutions with Respect to Books and Periodicals, reprinted in H.R. Conf. Rep. No. 1733, 94th Cong., 2d Sess. (1976). The Guidelines were written jointly by publishers and various educational organizations. But two very important groups—the American Association of University Professors and the Association of American Law Schools—refused to agree to the guidelines.

⁷⁹ This sort of system is a bit like the German provisions mandating “fair” compensation for allowing private persons to make copies of protected works. See supra n. 19.

⁸⁰ 17 U.S.C. §106(1) and (3).

⁸¹ There are two very famous examples of this in American copyright law. Salinger v. Random House, Inc., 811 F.2d 90 (2d Cir. 1987) involved the publication of excerpts of letters written by J. D. Salinger. Salinger, who was a recluse, had no desire to publish the letters. In the other case, Harper & Row, Publishers v. Nation Enterprises, supra n. 77, the Nation published excerpts about the pardoning of Richard Nixon from ex-President Ford's memoirs prior to the book's scheduled release date, preempting an agreement between Time Magazine and Harper & Row granting Time first publication rights. In both cases, the authors' right to control first publication prevailed.

⁸² A strong argument may be made that just the release of twenty-five copies should trigger the levy system. Photographs may be scanned quite easily and sent on their digital way. As time goes on, the mere release of a work to another person may come to be read as a general release into the levy system. We may come to the point where royalties for all copyrightable works are governed by the levy system once an author agrees to any distribution of the work. In the case of photography, it also is inevitable that the price for an “original” copy signed and numbered by the photographer will be significantly higher than the levy system costs imposed on users obtaining a copy of the picture online.

⁸³ Virtually identical conclusions should be reached in any country—including Israel and most civil law countries in the world—where the primary purpose of copyright law is to protect the natural rights of authors, rather than, as in the United States, to maximize distribution of creative works. For the right to receive remuneration for creativity is as much a natural right as it is a product of utilitarian theory. The point is nicely made about German law by Gaita and Christie, supra n. 59, at 432-33.

⁸⁴ 17 U.S.C. §§101, 106(2). In many places this issue is subsumed in infringement law. That is, if something labeled a derivative work in American law is made without the permission of the copyright owner in the underlying work, it is deemed to be an infringement. In Israel, the derivative work provision is not as broad as in the United States, applying only to translations, novelizing a dramatic work or dramatizing a novel. Article 1(2), Copyright Act of 1911. But similar protection exists because copyright owners may claim that a derivative work—a play based on a novel for example—copies a portion of and therefore infringes upon the underlying work.

⁸⁵ Article 4A, Copyright Ordinance of 1924.

⁸⁶ 17 U.S.C. §106A. The definition of a work of visual art in §101 is complicated. Basically it is a work of fine art or photography released in editions of 200 or less. There is some case law support for the proposition that unfair trade law bars the alteration of a work in ways that endanger the reputation of authors. See Gilliam v. American Broadcasting Companies, Inc., 538 F.2d 14 (2d Cir. 1976), a famous case involving atrocious alterations in Monty Python programs in order to allow time for commercials to be aired by an American television network.

⁸⁷ Note that the Israel Supreme Court affirmed a quite large damage award for the failure of Hershel Shanks to attribute authorship of proposed wording to fill in missing segments of the MMT Dead Sea Scroll to Elisha Qimron. The copyright infringement judgment was for 20,000 NIS, but the moral right damage award was 80,000 NIS.

⁸⁸ § 115(2) provides that a cover recording may alter the original composition by making changes in the arrangement of a composition “to the extent necessary to conform it to the style or manner of interpretation of the performance involved, but the arrangement shall not change the basic melody or fundamental character of the work and shall not be subject to protection as a derivative work.”

⁸⁹ Performance rights societies have run into serious antitrust problems in the United States. They were charged with price fixing by requiring radio stations, night clubs and other users of compositions to purchase blanket licenses covering all the music in the organizations' repertoires. Use of blanket licenses enhanced the ability of the performance rights organizations to raise prices by removing the ability of individual users to bargain for the right to use specific works. The case against ASCAP was eventually settled. Among other things, the federal district court retained authority to oversee the prices to be charged for blanket licenses and required ASCAP to offer single use as well as blanket licenses. United States v. The American Society of Composers, Authors and Publishers, 1950-51 Trade Cases ¶62595 (1950). These sorts of problems should not arise in a levy system, provided that the levy rates are decided by a government agency.

⁹⁰ A good, but simple, explanation of the ASCAP system may be found in Lee Ann Obringer, “How Music Royalties Work” available at http://www.stuffo.com/music-royalties7.htm (Last visited Septenber 2005). ASCAP and BMI do not use the same system. BMI, for example, tends to favor well-established performers a bit more than ASCAP.

⁹¹ Many copyrighted products—books and sound recordings may be the best examples—already have universal product codes. It may be that the copyright monitoring system could simply piggyback onto the existing UPC system.

⁹² While it is possible that such devices could be turned off if they are badly designed or easily accessible, the incentives to do so are quite low. Once a machine has been purchased and its levy paid, no further expenses are imposed on the users of the device. They will gain nothing by disabling it.

⁹³ If complaints about implementation costs become too severe, it certainly would be appropriate for the government to make some monetary contributions. The long-term benefits of the levy system make such a one-time investment worthwhile.

⁹⁴ Perhaps the most obvious data of this sort is the number of pages copied from a book on a reprography machine.