§ 601. Manufacture,
importation, and public distribution of certain copies
The Requirement in General.
A chronic problem in efforts to revise the copyright statute for
the past 85 years has been the need to reconcile the interests of
the American printing industry with those of authors and other copyright
owners. The scope and impact of the ''manufacturing clause,'' which
came into the copyright law as a compromise in 1891, have been gradually
narrowed by successive amendments.
Under the present statute,
with many exceptions and qualifications, a book or periodical in
the English language must be manufactured in the United States in
order to receive full copyright protection. Failure to comply with
any of the complicated requirements can result in complete loss
of protection. Today the main effects of the manufacturing requirements
are on works by American authors.
The first and most important
question here is whether the manufacturing requirement should be
retained in the statute in any form. Beginning in 1965, serious
efforts at compromising the issue were made by various interests
aimed at substantially narrowing the scope of the requirement, and
these efforts produced the version of section 601 adopted by the
Senate when it passed S. 22.
The principal arguments
for elimination of the manufacturing requirement can be summarized
1. The manufacturing
clause originated as a response to a historical situation that
no longer exists. Its requirements have gradually been relaxed
over the years, and the results of the 1954 amendment, which partially
eliminated it, have borne out predictions of positive economic
benefits for all concerned, including printers, printing trades
union members, and the public.
2. The provision places
unjustified burdens on the author, who is treated as a hostage.
It hurts the author most where it benefits the manufacturer least:
in cases where the author must publish abroad or not at all. It
unfairly discriminates between American authors and other authors,
and between authors of books and authors of other works.
3. The manufacturing
clause violates the basic principle that an author's rights should
not be dependent on the circumstances of manufacture. Complete
repeal would substantially reduce friction with foreign authors
and publishers, increase opportunities for American authors to
have their works published, encourage international publishing
ventures, and eliminate the tangle of procedural requirements
now burdening authors, publishers, the Copyright Office, and the
United States Customs Service.
4. Studies prove that
the economic fears of the printing industry and unions are unfounded.
The vast bulk of American titles are completely manufactured in
the United States, and U.S. exports of printed matter are much
greater than imports. The American book manufacturing industry
is healthy and growing, to the extent that it cannot keep pace
with its orders. There are increasing advantages to domestic manufacture
because of improved technology, and because of the delays, inconveniences,
and other disadvantages of foreign manufacture. Even with repeal,
foreign manufacturing would be confined to small editions and
scholarly works, some of which could not be published otherwise.
The following were the
principal arguments in favor of retaining some kind of manufacturing
1. The historical reasons
for the manufacturing clause were valid originally and still are.
It is unrealistic to speak of this as a ''free trade'' issue or
of tariffs as offering any solution, since book tariffs have been
removed entirely under the Florence Agreement. The manufacturing
requirement remains a reasonable and justifiable condition to
the granting of a monopoly. There is no problem of international
comity, since only works by American authors are affected by section
601. Foreign countries have many kinds of import barriers, currency
controls, and similar restrictive devices comparable to a manufacturing
2. The differentials
between U.S. and foreign wage rates in book production are extremely
broad and are not diminishing: Congress should not create a condition
whereby work can be done under the most degraded working conditions
in the world, be given free entry, and thus exclude American manufacturers
from the market. The manufacturing clause has been responsible
for a strong and enduring industry. Repeal could destroy small
businesses, bring chaos to the industry, and catch manufacturers,
whose labor costs and break-even points are extremely high, in
a cost-price squeeze at a time when expenditures for new equipment
have reduced profits to a minimum.
3. The high ratio of
exports to imports could change very quickly without a manufacturing
requirement. Repeal would add to the balance-of-payments deficit
since foreign publishers never manufacture here. The U.S. publishing
industry has large investments abroad, and attacks on the manufacturing
clause by foreign publishers, show a keen anticipation for new
business. The book publishers arguments that repeal would have
no real economic impact are contradicted by their arguments that
the manufacturing requirement is stifling scholarship and crippling
publishing; their own figures show a 250 percent rise in English-language
book imports in 10 years.
After carefully weighing
these arguments, the Committee concludes that there is no justification
on principle for a manufacturing requirement in the copyright statute,
and although there may have been some economic justification for
it at one time, that justification no longer exists. While it is
true that section 601 represents a substantial liberalization and
that it would remove many of the inequities of the present manufacturing
requirement, the real issue is whether retention of a provision
of this sort in a copyright law can continue to be justified. The
Committee believes it cannot.
The Committee recognizes
that immediate repeal of the manufacturing requirement might have
damaging effects in some segments of the U.S. printing industry.
It has therefore amended section 601 to retain the liberalized requirement
through the end of 1980, but to repeal it definitively as of January
1, 1981. It also adopted an amendment further ameliorating the effect
of this temporary legislation on individual American authors.
In view of this decision,
the detailed discussion of section 601 that follows will cease to
be of significance after 1980.
Works Subject to the
Manufacturing Requirement. The scope of the manufacturing requirement,
as set out in subsections (a) and (b) of section 601, is considerably
more limited than that of present law. The requirements apply to
''a work consisting preponderantly of nondramatic literary material
that is in the English language and is protected under this title,''
and would thus not extend to: dramatic, musical, pictorial, or graphic
works; foreign-language, bilingual, or multilingual works; public
domain material; or works consisting preponderantly of material
that is not subject to the manufacturing requirement.
The term ''literary material''
does not connote any criterion of literary merit or qualitative
value; it includes catalogs, directories and ''similar materials.''
A work containing ''nondramatic
literary material that is in the English language and is protected
under this title,'' and also containing dramatic, musical, pictorial,
graphic, foreign-language, public domain, or other material that
is not subject to the manufacturing requirement, or any combination
of these, is not considered to consist ''preponderantly'' of the
copyright-protected nondramatic English-language literary material
unless such material exceeds the exempted material in importance.
Thus, where the literary material in a work consists merely of a
foreword or preface, and captions, headings, or brief descriptions
or explanations of pictorial, graphic or other nonliterary material,
the manufacturing requirement does not apply to the work in whole
or in part. In such case, the non-literary material clearly exceeds
the literary material in importance, and the entire work is free
of the manufacturing requirement.
On the other hand, if
the copyright-protected non-dramatic English-language literary material
in the work exceeds the other material in importance, then the manufacturing
requirement applies. For example, a work containing pictorial, graphic,
or other non-literary material is subject to the manufacturing requirement
if the non-literary material merely illustrates a textual narrative
or exposition, regardless of the relative amount of space occupied
by each kind of material. In such a case, the narrative or exposition
comprising the literary material plainly exceeds in importance the
non-literary material in the work. However, even though such a work
is subject to the manufacturing requirement, only the portions consisting
of copyrighted non-dramatic literary material in English are required
to be manufactured in the United States or Canada. The illustrations
may be manufactured elsewhere without affecting their copyright
Under section 601(b)(1)
works by American nationals domiciled abroad for at least a year
would be exempted. The manufacturing requirement would generally
apply only to works by American authors domiciled here, and then
only if none of the co-authors of the work are foreign.
In order to make clear
the application of the foreign-author exemption to ''works made
for hire'' - of which the employer or other person for whom the
work was prepared is considered the ''author'' for copyright purposes
- section 601(b)(1) provides that the exemption does not apply unless
a substantial part of the work was prepared for an employer or other
person who is not a national or domiciliary of the United States,
or a domestic corporation or enterprise. The reference to ''a domestic
corporation or enterprise'' is intended to include a subsidiary
formed by the domestic corporation or enterprise primarily for the
purpose of obtaining the exemption.
The provision adopts
a proposal put forward by various segments of both the United States
and the Canadian printing industries, recommending an exemption
for copies manufactured in Canada. Since wage standards in Canada
are substantially comparable to those in the United States, the
arguments for equal treatment under the manufacturing clause are
Limitations on Importation
and Distribution of Copies Manufactured Abroad. The basic purpose
of the temporary manufacturing requirements of section 601, like
that of the present manufacturing clause, is to induce the manufacture
of an edition in the United States if more than a certain limited
number of copies are to be distributed in this country. Subsection
(a) therefore provides in general that ''the importation into or
public distribution in the United States'' of copies not complying
with the manufacturing clause is prohibited. Subsection (b) then
sets out the exceptions to this prohibition, and clause (2) of that
subsection fixes the importation limit at 2,000 copies.
to the copies affected by the manufacturing requirements are set
out in clauses (3) through (7) of subsection (b). Clause (3) permits
importation of copies for governmental use, other than in schools,
by the United States or by ''any State or political subdivision
of a State.'' Clause (4) allows importation for personal use of
''no more than one copy of any work at any one time,'' and also
exempts copies in the baggage of persons arriving from abroad and
copies intended for the library collection of nonprofit scholarly,
educational, or religious organizations. Braille copies are completely
exempted under clause (5), and clause (6) permits the public distribution
in the United States of copies allowed entry by the other clauses
of that subsection. Clause (7) is a new exception, covering cases
in which an individual American author has, through choice or necessity,
arranged for publication of his work by a foreign rather than a
What Constitutes ''Manufacture
in the United States'' or Canada. A difficult problem in the manufacturing
clause controversy involves the restrictions to be imposed on foreign
typesetting or composition. Under what they regard as a loophole
in the present law, a number of publishers have for years been having
their manuscripts set in type abroad, importing ''reproduction proofs,''
and then printing their books from offset plates ''by lithographic
process * * * wholly performed in the United States.'' The language
of the statute on this point is ambiguous and, although the publishers'
practice has received some support from the Copyright Office, there
is a question as to whether or not it violates the manufacturing
In general the book
publishers have opposed any definition of domestic manufacture that
would close the ''repro proof'' loophole or that would interfere
with their use of new techniques of book production, including use
of imported computer tapes for composition here. This problem was
the focal point of a compromise agreement between representatives
of the book publishers and authors on the one side and of typographical
firms and printing trades unions on the other, and the bill embodies
this compromise as a reasonable solution to the problem.
Under subsection (c)
the manufacturing requirement is confined to the following processes:
(1) Typesetting and platemaking, ''where the copies are printed
directly from type that has been set, or directly from plates made
from such type''; (2) the making of plates, ''where the making of
plates by a lithographic or photoengraving process is a final or
intermediate step preceding the printing of the copies''; and (3)
in all cases, the ''printing or other final process of producing
multiple copies and any binding of the copies.'' Under the subsection
there would be nothing to prevent the importation of reproduction
proofs, however they were prepared, as long as the plates from which
the copies are printed are made here and are not themselves imported.
Similarly, the importation of computer tapes from which plates can
be prepared here would be permitted. However, regardless of the
process involved, the actual duplication of multiple copies, together
with any binding, are required to be done in the United States or
Effect of Noncompliance
with Manufacturing Requirement. Subsection (d) of section 601 makes
clear that compliance with the manufacturing requirements no longer
constitutes a condition of copyright with respect to reproduction
and the distribution of copies. The bill does away with the special
''ad interim'' time limits and registration requirements of the
present law and, even if copies are imported or distributed in violation
of the section, there would be no effect on the copyright owner's
right to make and distribute phonorecords of the work, to make derivative
works including dramatizations and motion pictures, and to perform
or display the work publicly. Even the rights to reproduce and distribute
copies are not lost in cases of violation, although they are limited
as against certain infringers.
Subsection (d) provides
a complete defense in any civil action or criminal proceeding for
infringement of the exclusive rights of reproduction or distribution
of copies where, under certain circumstances, the defendant proves
violation of the manufacturing requirements. The defense is limited
to infringement of the ''nondramatic literary material comprised
in the work and any other parts of the work in which the exclusive
rights to reproduce and distribute copies are owned by the same
person who owns such exclusive rights in the nondramatic literary
material.'' This means, for example, that the owner of copyright
in photographs or illustrations published in a book copyrighted
by someone else who would not be deprived of rights against an infringer
who proves that there had been a violation of section 601.
Section 601(d) places
the full burden for proving violation on the infringer. The infringer's
defense must be based on proof that: (1) copies in violation of
section 601 have been imported or publicly distributed in the United
States ''by or with the authority'' of the copyright owner; and
(2) that the infringing copies complied with the manufacturing requirements;
and (3) that the infringement began before an authorized edition
complying with the requirements had been registered. The third of
these clauses of subsection (d) means, in effect, that a copyright
owner can reinstate full exclusive rights by manufacturing an edition
in the United States and making registration for it.
Subsection (e) requires
the plaintiff in any infringement action involving publishing rights
in material subject to the manufacturing clause to identify the
manufacturers of the copies in his complaint. Correspondingly, section
409 would require the manufacturers to be identified in applications
for registration covering published works subject to the requirements
of section 601.