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A powerful coalition of Hollywood players is urging Congress to reject part of the proposed Copyright Reform Act that they say could render independent productions D.O.A.

Section 101 of the bill would move copyright registration from the federal to the state level. If enacted, a film would have to be registered in 50 states rather than just once at the federal level, critics contend.

Behind the petition are the three Hollywood talent guilds and the American Film Marketing Assn. A number of banks that back indie productions are currently reviewing the petition.

“This is a retreat backwards,” explained Lorin Brennan, AFMA vice chairman. “In 1978 the law was amended to eliminate the state/federal system.”

Since then, the law has required a single filing in the U.S. Copyright Office.

Brennan likened the current streamlined federal copyright system to that of registering a car in California. “Under this new system, you would have to register your car in every county where you might drive,” he said.

The major concern voiced by the guilds — the Writers Guild of America, the Screen Actors Guild and the Directors Guild of America — is that section 101 would “significantly impair their ability to collect residuals.”

The coalition’s 17-page petition was submitted June 8 to Congress.

Jay Roth, attorney for the guilds, said under the new legislation, the process of searching state by state for copyright approval and/or residuals-interest information would be “like using a divining rod.”

At the heart of the alarm are three words in the proposed bill, “perfecting security interests,” which concerns establishing the priority of creditors.

“Security interests are an essential protection for the hundreds of millions of dollars of residuals paid annually to Guild members,” Roth said.

“After reviewing Section 101, we believe that the proposed change in current law could have a significant effect on the ability of the guilds to perfect security interest and thus protect their members’ residuals.”

With more than two dozen bankruptcies filed by indie film companies over the last two years, it’s increasingly important for the guilds to maintain the security interest, Roth said.

Lewis Horwitz, chairman of AFMA’s banking members and president of the Lewis Horwitz Organization, noted that AFMA and the guilds will lobby Congress on this issue.