Statement of Marybeth Peters
The Register of Copyrights
before the
Subcommittee on Legislative Branch,
Committee on Appropriations
United States House of Representatives
110th Congress, 2nd Session
March 5, 2008
Fiscal Year 2009 Budget Request
Madam Chair, Mr. Latham, and other Members of the Subcommittee:
Thank you for the opportunity to present the Copyright Office’s
Fiscal 2009 budget request.
In Fiscal 2009 the Office is requesting two
changes in the Basic appropriation: a permanent $9.975 million restoration
of net appropriations that the committee temporarily reduced while directing
the Office to use the remaining funds in the no-year account, and a temporary
$1 million increase in net appropriations for the Records Preservation
Project. The net impact of these two requests on the total spending authority
is zero.
I will discuss these requests in more detail after I
provide some brief highlights of the Office’s work and an overview of our
accomplishments in reengineering during 2007.
Highlights of Copyright Office Work
Policy and Legal Activities
The Office continued to work closely with the House Committee on the
Judiciary and in particular with its Subcommittee on Courts, the Internet
and Intellectual Property. The Committee’s primary focus continued
to be orphan works — works of authorship (literary works, photographs,
motion pictures, sound recordings and other creative works) for which
the potential user cannot identify or locate the copyright owner. At
the request of Senators Leahy and Hatch, supported by Congressmen Berman
and Smith, the Office conducted a yearlong study of the problems and
potential solutions associated with orphan works. Our report, delivered
in January 2006, recommended a new section 514 of the Copyright Act which
would allow a good faith user to use a work if, after conducting a reasonably
diligent search, the user was unable to locate the copyright owner. If
the copyright owner emerged, he or she would be entitled to reasonable
compensation from the user in most cases. Legislation based on our recommendations
was introduced in the House during the 109th Congress and was widely
debated. A new bill is expected to be introduced shortly, and the Subcommittee
has tentatively scheduled a hearing for March 13, 2008. During the past
year, the Office has worked closely with the congressional staff on legislative
text that would address the concerns and issues of many stakeholders.
Additionally, at the request of Senators Leahy and Hatch and in collaboration
with Representatives Berman and Coble, the Office organized “Technology
and Orphan Works: The State of the Art,” an event held in December
at the Dirksen Senate Office Building, to acquaint staff with technologies
that can be used to assist in identifying and locating copyright owners.
Six companies participated — Google, Corbis, DigiMarc, Infoflows, Copyright
Clearance Center, PicScout and PLUS. Corbis and Audible Magic sent materials
for distribution. On display were a broad array of software and related
tools that demonstrated image recognition, audio recognition, fingerprinting,
watermarking and technical tagging capabilities.
The Office also worked closely with congressional staff on other copyright
issues, including legislation relating to expanding the public performance
right for sound recordings to cover over the air radio broadcasts, protection
for fashion designs, updating of statutory licenses, and issues relating
to copyright registration and statutory damages. In January, at the request
of the Subcommittee, the Office conducted an all day roundtable discussion
examining whether statutory damages should be available for component
parts of compilations and derivative works.
In 2007, the Copyright Office
assisted federal government agencies with a number of multilateral, regional
and bilateral negotiations and served on many U.S. delegations. Notable
among these meetings were special sessions of the World Intellectual
Property Organization’s Standing Committee on Copyright and Related
Rights, which met to consider a possible Treaty for the Protection of
Broadcasting Organizations.
The Office assisted the Justice Department
in a number of important court cases. Among the most significant cases
were several constitutional challenges to various provisions of Title
17 involving copyright and related rights.
Registration of Copyright Claims, Recordation of Documents,
and Deposit of Copies of Copyrighted Works
During Fiscal 2007, the Copyright Office received 541,212 claims to
copyright covering more than a million works and registered 526,738 claims,
more than 10 percent of which were submitted electronically through eCO
and the CORDS prototype. The Office recorded 11,534 documents which included
more than 500,000 titles of works. During the year, the Office transferred
1,077,152 copies of registered and nonregistered works valued at more
than $45 million to the Library of Congress for its collections and exchange
programs.
Public Information and Education
The Office logged millions of external hits on key pages of its website
during the year, including over 2 million public searches of the database
and 50,000 hits on Spanish language pages. In Fiscal 2007, the Office
responded to 304,688 telephone, letter, and email requests for direct
reference services and assisted more than 20,000 visitors. The Public
Information Office took in 12,547 applications for registration and 3,206
documents for recordation.
In response to public requests, the Office searched 18,292 titles and
prepared 444 search reports. The Office published twenty-nine issues
of NewsNet, an electronic news update about the Copyright Office and
copyright-related activities, to more than 6,000 subscribers.
Statutory Licensing Activities
The Licensing Division collected nearly $234 million in royalty payments
during Fiscal 2007, and distributed royalties totaling nearly $280 million.
The Office is in the process of updating its regulations to deal with
issues related to the carriage of digital broadcast signals by cable
systems. Additionally, we are in the process of reengineering the functions
of the Licensing Division.
Reengineering Program
By the end of Fiscal 2007, the Copyright Office neared completion of
its multi-year business process reengineering (BPR) project, which began
in Fiscal 2000 with your support. Major BPR tasks completed include an
Office-wide reorganization, the renovation of Office facilities, and
the implementation of re-designed business processes and an integrated
IT system. Fiscal 2008 is a challenging transition period. We must complete
the work remaining from the old processes and at the same time we must
adjust to and become competent in the new IT system, eCO (electronic
Copyright Office), and the new processes.
Organization
To implement its new processes, the Office reorganized its divisions
and modified most of its position descriptions. The reorganization took
effect on August 5, 2007; it affected all staff in the Receiving and
Processing, Examining, Cataloging, Information and Reference, and Acquisitions
Divisions. The Examining and Cataloging Divisions no longer exist; their
functions were merged and organizationally they are now located in the
Registration and Recordation Program (RRP) which includes three new divisions
— Literary, Performing Arts, and Visual Arts and Recordation, headed
by an Associate Register for Registration and Recordation.
One hundred twenty five new positions were created to align job duties
with the new business processes. Most staff were transferred directly
into new jobs at the same grade. A small number of staff applied and
were selected for jobs with very different duties and/or higher grades.
The impact of the reorganization was bargained with the labor organizations
before implementation. Support from the labor organizations was a key
factor in the success of the reorganization and the reengineering project
as a whole.
Extensive training was provided in 2007 to prepare staff
for their new jobs. In addition to training in the use of eCO, staff
received training in basic computer skills, the new Copyright Voyager
system for copyright public records, and a computer application that
utilizes optical character recognition technology to transfer data from
scanned application images. Training was also provided to prepare former
catalogers and examiners for the combined duties of the new registration
specialist position, and for all Office staff to help them deal effectively
with the interpersonal issues and stress that often accompany major changes
in the workplace.
Information Technology
In July 2007, the Office began implementing the new eService component
of the eCO system by opening a beta test for filing copyright claims,
which represent approximately 82 percent of the fee services provided
by the Copyright Office. Well over 10,000 individuals and organizations
have been invited to test the system; more than 11,000 electronic claims
have been received. A Help Desk, modeled on the Patent and Trademark
Office Help Desk, was established to support both Office staff and users
of the eCO system. The testing period has allowed us to gain experience
with the system and use feedback from test participants to improve system
performance and functionality. System testing has also validated one
of the key justifications for engaging in reengineering — electronic
claims are more easily and efficiently processed than paper claims. The
Office will conclude the test phase of efiling and open eService to the
general public in the next few months.
The Office is also developing a portable document format
(pdf) “smart” form that incorporates 2-D barcode technology.
The pdf form, which applicants will complete online and then print out
for mailing, includes a scannable barcode that enables efficient processing.
This option, which will be ideal for applicants who are reluctant to
use a credit card online, will be released in conjunction with eService
In August, the Office began processing paper claims in
eCO by scanning applications and using optical character recognition
software to transfer data from the scanned images. At the same time fee
processing, including prepaid deposit accounts, was migrated from legacy
systems into eCO. Processing paper claims in eCO is cumbersome and time
consuming. The result is a current backlog of 48,000 claims, representing
$2.2 million in fees that need to be entered into the system and 231,000
claims to process. We are taking steps to reduce the backlog; the real
solution is a fully trained staff. Opening eService and offering the
2-D barcode application are also critical steps to improving claim processing.
In September, eCO Search, the new on-line copyright records
search system, was implemented. The 20 million plus copyright records
from 1978 to the present, available world wide via the Internet, now
have an improved format and a superior index and word searching capability.
The new search system is based on the same software used for the Library’s bibliographic
records, and consequently, the public can now use the same search tool
to find both bibliographic and copyright information.
This year the Office
will implement the functionality for processing additional types of copyright
claims, recording documents, supporting the deposit of published works
for Library collections, and managing internal work. Our experience during
this year will assist in adjusting and refining the system so that the
full benefits of an integrated on line system can be realized.
Facilities Renovation
There were two milestones in Fiscal 2007. First, the Architect of the
Capitol completed all phases of the space renovation in the Madison Building.
Second, in a series of twelve moves, 550 employees and contractors successfully
relocated from temporary swing space in Crystal City, VA, and in the
Madison and Adams buildings to permanent renovated space in the Madison
Building. The twelfth and final move occurred in early October 2007
Remaining facilities-related work continues in Fiscal 2008 and will
be completed in Fiscal 2009. Graphic displays for division entrances
and public areas and an historic copyright law timeline are being designed
and will be fabricated and installed in Fiscal 2009. Also in Fiscal 2009,
a much needed audio system for the new Copyright Hearing Room will be
installed.
FY 2008 Budget Request
Restoration of Base Funds
To continue current operations, the Copyright Office requires a restoration
of $9.975 million in net appropriations that was temporarily reduced
by the committee with direction to use the remaining funds in the no-year
account. The no-year fund balance will be depleted by the end of Fiscal
2008, leaving a shortfall of $9.975 million in Fiscal 2009.
If the Office’s net appropriation for Fiscal 2009 does not include
the restoration of $9.975 million, the Office will simply not be able
to fulfill its statutory mandates. First and foremost, the Office will
need to reduce the number of staff (FTEs) by approximately 115. This
will affect all of our services. Registrations that people rely on to
enforce their rights will be significantly delayed. Documents concerning
copyright transactions (assignments/mortgages) will not be processed
in a timely manner resulting in potential harm to a wide variety of businesses.
The number of copies acquired for the collections of the Library through
registration and administration of the mandatory deposit program will
be significantly reduced. A reduced staff will also mean reduced service
to the Congress, the Department of Justice and other federal agencies.
Response to congressional and public inquiries will suffer. The unfortunate
result will be that after all the efforts and promises to reengineer
our processes to be more efficient and responsive to the public, the
Office will lack the resources to carry on the fundamental functions
of its mission and services could come to a standstill.
Copyright Records Preservation
The Office requests $1 million in net appropriations authority to fund
the first stage of digitization of 70 million pre-1978 copyright records.
Although the Copyright Office was authorized in Fiscal 2008 to use $1
million in offsetting collections authority to fund the project, the
lack of sufficient funds in the no-year account requires that all annual
receipts have to be used to fund base operations and the reengineering
project. In Fiscal 2009, annual receipts are estimated to be $28.7 million,
one million less than Fiscal 2008 receipts. The lower annual fee projection
is based on lower fees associated with a discounted fee for electronic
submissions and a gradual decline in receipts over the past several years.
The first stage of the Records Project would cost approximately $6 million
over a six-year period and would achieve the preservation goal and very
basic online access. The second stage would add item level indexing,
enhanced searching and retrieval, costing between $5 million and $65
million depending on the number of fields indexed.
The key objectives of this record digitization project are (1) disaster
preparedness preservation of pre-1978 public records and (2) provision
of online access to those public records. Copyright records are vital
to the mission of the Library and the Copyright Office and they are important
to the public and the copyright industries that are a significant part
of the global economy. The pre-1978 records document the ownership and
copyright status of millions of creative works. Loss of these sole-copy
public records due to a site disaster would trigger a complex and expensive
intellectual property ownership dilemma.
Conclusion
Madam Chair, I ask you to support the Fiscal 2009 Copyright Office budget
request for the Basic Appropriations funding changes. Our request includes
the restoration of net appropriation base funds and the non-recurring
net appropriation funding for the Records Preservation Project. I cannot
emphasize enough how important it is for the Office to receive the $9.975
million restoration of funds. Without this funding, the Office will have
to shut down a good portion of its services and doing so will significantly
harm the public and copyright owners who so heavily depend on the Copyright
Office for services.
I thank the Congress for its past support of the Copyright Office requests
and for your consideration of this request in this time of fiscal austerity.
|
