Thank you very much. I am very happy to be here this morning. I am going to share with you a story that will illustrate a violation of fundamental constitutional property rights aided and abetted by our federal government. I am going to explain why this is a vital issue for every property rights advocate and how we can fight it. And I am going to share with you an experience I had with a Russian scientist immigrant and how he inspired me to continue the fight, and why it is so vitally important for us to fight for our rights. Again, any time we fight for our own rights we are fighting for the rights of all of those who come after us. We are never in this alone, and that is why this organization is so important. I am so deeply grateful to Carol and to Mr. Smith in the back of the room, to the Competitive Enterprise Institute, for the help they have given me in fighting this very large organization.
I am going to tell you my perspective. I am an author, journalist, an editor, and a publisher. I have written for television, radio, newspapers, and magazines for more than 30 years. I created a cartoon called "Blockheads and Company," which was syndicated by the Register and Tribune Syndicate. I wrote a column called "Gile Without Guile," which was syndicated by the NC News Service. I started a publication in our own community of Rockford, Illinois. It was a monthly magazine in a tabloid format that was distributed by mail to 15,000 homes in a historic area of our community designed, again, to aid the small businesses that were thriving in that area. Then I moved into the world of book publishing. We have a mission statement for our company that led me to do that.
Our mission is to create, produce, and market books, programs, and electronic publications to inform, edify, entertain, and inspire. Our primary audience is made up of those engaged in fostering personal and professional growth in themselves and others by imparting knowledge and by enhancing critical thinking skills, coping skills, communication skills, and creative powers. Our products enable those we serve to enrich their family, business, church, school, and civic communities.
I have a dream. My little operation, my little publishing company is modeled after another author by the name of Bennett Cerf. He was an author who wrote for other publishers, as I do. He was an author who decided to start his own publishing company as I did, and his little publishing house was founded on classics. His little publishing company went on to become what is now known as Random House. So I have a dream moving in that direction.
The thing that started it all was we got off to a very good
start with a book by the title of The First Forest. Now,
it looks like a children's book but actually, in the trade, it
is called a crossover book. In other words, it is a story that
can be read at a level for young children, but it also has a very
serious message in it for adults. It is a book that is used across
the spectrum even up into high schools where teachers use it to
introduce concepts such as social responsibility, neighborliness,
actions have consequences, etc. But the story was originally created
just because my wife and I have two boys and four girls, and our
two oldest children were having a little trouble getting along
with each other. So I wanted to create a story that would help
them understand how important it is to be kind to each other,
but also to help them understand that when they hurt each other
they hurt me too. So that is how the story was born.
But it was found by teachers and they began to use it in schools in a variety of wayslanguage arts, graphic arts, conflict resolution, environmental issues, etc. It spent four holiday seasons on the Chicago Tribune best seller list. It has come out in Chinese; it is coming out in Spanish. It was voted by a national readers coordinating organization as what they call a Read America Classic, a book that transcends the limitations of time and addresses enduring issues. Nan Talese from Doubleday came out from New York and visited me, trying to buy the rights to the book, but, of course, I was seeing this as the foundation for a publishing company, so I rejected that offer. We had a film rights offer from a company in North Hollywood, California, but I rejected that offer, also. They wanted to put music with it and make a video version of it but one of our goals is to encourage children to develop their reading power. That is one of the major crises we have and so I rejected those rights.
The First Forest led to a lot of invitations to work in schools, so I spend a good deal of time now working with students, encouraging them in the development of their reading and writing powers. I love to see people who can think for themselves, because, if we think for ourselves, we are going to be able to defend this incredibly important document called the United States Constitution, and we are not going to fall for some of the things that some of these government agencies are trying to do to us.
The book now is over 128,000. Now, to put that into perspective, an ordinary children's book sells 4,000 copies in its lifetime. What publishers think is a successful children's book will sell 15,000 copies in its lifetime. This is over 128,000, and it has been joined by another book called Oh How I Wish I Could Read, which is designed to motivate children to develop their reading power. I also write for adults and we also publish other authors' works. But, at any rate, this is kind of the foundation for our company, because it just keeps selling and selling.
Things were going very well. We built our product line, and, by our own marketing knowledge, we are able to determine that we are now poised to sell one million units of this book and Oh How I wish I Could Read in 60 months with a net profit of about $9.2 million.
But then something very interesting happened. Along came a National Wildlife Federation and they liked the book too. They liked it so much that they decided to steal it and publish it in one of their publications distributed to 547,000 homes, libraries, and schools. It was just sort of devastating. It was right in the middle of our primary market. They put my name on it. They altered the story. They changed it from a story of love, disappointment, consequences, forgiveness, and renewal to a story of crime and punishment. I would never have written a story like the one they published and put my name on it in their publication as if I endorsed them and as if I endorsed what they did.
The retail value of the damage they did is $8.1 million. The wholesale value is a little over $4 million and the royalties, lost royalties, total in excess of $3.1 million. My first reaction was, wow, these people have done something wrong. I have got to help them out here. So we created a way that they could redeem themselves. We offered books to them at a less than wholesale, which they could use. This was before I learned a lot about the National Wildlife Federation and what kind of organization it really is. And they could use that for what I am terming legitimate environmental projects, such as a refuge for certain species or whatever.
But we were just met with refusal. First of all, they said, well, we have the rights to publish that. I said, no, you don't. It is a registered copyright. I am the only person on the planet who can give that right. Then they said, well, we don't need rights because of the nature of our organization. Now there is such a thing as "fair use" but fair use doesn't mean taking 96 percent of a person's lyrically written text and the artwork and distributing it and making $683,000 in the process. So I pointed out that that wasn't quite correct. Then they said that I should be flattered because they decided to publish my work. I told them, well, that is kind of like saying to a rape victim she should be flattered because it was the captain of the football team who assaulted her. No thank you. I wasn't. And at each of these steps I am getting a little but more annoyed. Then they finally said, well, we are so poor, we really can't afford to pay anything for what we did. So I got some tax forms and found out that they are about $150 million a year operation making $50 million a year off their publications and paying their then CEO $300,000 a year. So I didn't accept their poverty plea, either.
Then finally they said, okay, we will give you $35,000. Yeah,
well, the value is a little more than $35,000. Oh, okay. I mean,
this is going on, well, $65,000. No thank you. $125,000. No, thank
you. Because, again, even if I had sold the rights to Nan Talese
at Doubleday for the work that the National Wildlife Federation
stole, Doubleday would have paid me a good $980,000.
Then they also damaged the rights. Now, when we talk about property, remember that intellectual property is real. That registered copyright is like a title or a deed. In some countries, creators of intellectual property are not even taxed. For example, in Ireland, because we are considered creators of wealth. It is like we find and buy a field and then we clear the boulders and we cut down the trees and we trim them into logs and boards and we build this house. The beautiful thing is that with the work that we do creates wealth for everybody, from printers and producers of paper and truck drivers and advertising media to distributors and bookstores. So, that is part of the joy I have in the work that I do. So this is real property. A registered copyright is the same as a title or a deed, and they just ran right over it. They seemed to have an arrogant attitude as though they are above the law. And I think they have been treated like that for some decades. They did offer to apologize, but I would have to pay for it. So I began to get an idea of what kind of organization I was dealing with.
So I decided to go public. I am a journalist, so I began talking
to the media and there were some newspaper articles about the
thing. I guess it kind of embarrassed them that I was going to
challenge this organization and that, frankly, I also stated,
by God, I am willing to go bankrupt in the process if I have to.
But this is a constitutional issue.
When I entered the United States military I took an oath to defend the Constitution of the United States, and no one has exempted me from that since that time. This is one of the most beautiful documents in the history of humanity, and we must fight for it no matter what the cost.
And then another publication, Writers' Digest, picked up the story and did a two-page spread on this under "Who is Stealing Your Work?" So we began to get some media attention, which is very important when you are coming up against these kinds of organizations or government agencies. Begin to talk to the media and use whatever opportunities to reach out. I cannot tell you how helpful Carol has been and the Property Rights Foundation being able, to first of all, get encouragement to hang in there and then also the kind of credibility that the Property Rights Foundation adds to the complaint.
But then, of course, the National Wildlife Federation had an answer. As media people began calling, they said this was just an accident. You know this accident there were nine times during which any novice in publishing would have asked the question, "Do we have the rights to do this?" And, as a matter of fact, they themselves have 563 registered copyrights. And while they were stealing ours, we have printed out some they were registering, diligently registering all this timetheir copyrights. So it was interesting that they had an accident that even a first day clerk at Kinko's would not make.
In the meantime, what they were doing was they were running up my legal costs, at $10,000 a crack. A person who is now a friend came into my office and said, you know, I was reading about what was happened to you. He was a CFO and a secretary for a large corporation, and he said, I would just like to let you know what you are up against. He said, the first thing they thought when you challenged them and they realized they had done something seriously wrong and they really had a problem on their hands, was contact their insurance company, Chubb Insurance. The first thing Chubb Insurance did was contact a big East Coast law firm. He continued, now, you've got a problem here, because that law firm isn't going to make any money unless they drag this thing out. Okay. Then he asked me, who is your lawyer? I said, well, I was referred to someone in Southern California who is from USC and is very good or was highly recommended for this kind of work. And he said, well, how do you pay him? I said, by the hour. Then he said, you are in deep trouble because your lawyer has no incentive for getting this thing taken care of.
It reminded me of what Ben Franklin said, "A business
person between two lawyers is like a fish between two cats."
It was coming true. So this CFO said, you know, there are 52 cards
in a deck and you have got 50 of them. The only two they have
are time and money. They will drag this out and they will run
you into bankruptcy. They will destroy you.
So what I decided to do was, okay, if that is their power, I am going to take it to my advantage. I started a website documenting all this stuff and also what they had said in both articles, as a matter of fact, that they really wanted to compensate Mr. Gile for what they did. So I just put out every day. Nobody called from the National Wildlife Federation. You have my phone number and all that is on my website. I have a website called nwfpiracy.com.
Then I decided that if this is the way it is going to be, then I am going to write a book about this. I am going to write a book to help others, first of all to expose the National Wildlife Federation for what it is, but also primarily to help others to defend their rights or at least to protect their rights and then to defend their rights if they ever get into this situation. The title of the book is The National Wildlife Federation Finds No Place to Hide in the First Forest. It is telling the whole story. At any rate, it is a way of keeping public pressure on them.
But then I received a call from someone in California who was monitoring my website, and said, I am the president of a large foundation out here, and I don't understand what is going on in your case. He said, who is your lawyer? I explained that it was somebody not too far from where this fellow was calling, and he said, well, is it a big company? I said, as far as I know it is a one-man law firm. And he said, you are in deep trouble because those big lawyers on the East Coast are taking a look at his letterhead and they are saying we are going to run this guy right off the road. They almost did. They even threatened to have him disbarred. I was speaking publicly, creating all kinds of furor, and then my lawyer would send me things and I would write a response, he would put it on his letterhead and send it to them. So they were accusing him of writing the text that I was delivering to the media. We got that straightened out. The bottom line was that they finally said, sue us. And I said, okay. I guess they thought we wouldn't, but I did.
We actually filed the lawsuit, because I was told that the philosophy of the lawyers is deny, delay, and don't pay. My response to that was you stole, you know, and you owe. We kept after them. But it was difficult. As one of the very well known prominent copyright attorneys at Stanford University pointed out, the only right that you have as a creator under civil law is the right to pay a lawyer about $450 an hour to defend your right. The bottom line is most people can't do that, so our rights have literally been effectively stripped away.
So I got a bigger law firm. We ended up going into what is called alternate dispute resolution, which is where the lawyers talk to each other. Now, I have a problem with the way the lawyers deal because I found out that so many of them are not advocates but they are deal makers. I became aware that, you know what, I am an individual with a small publishing company. These lawyers are talking to a big insurance company. Tomorrow I probably am not going to have another copyright infringement, but that insurance company is probably going to have another one. I began to think that these fellows know where their bread is buttered. I am not sure I have got the strongest type of an advocate on my behalf. And I also realized that they were talking most of the time about putting a gag order on me. Instead of saying, we have done something horribly wrong, let's restore this person to wholeness, their attitude was, how can we shut this guy up? And how can we take away his right to do something? I discovered that none of my lawyers, none of the lawyers I talked with, and I talked with lawyers all over the country, not one had said, do you realize this is a crime?
Copyright infringement is not a dispute to be negotiated. Copyright infringement is a crime to be prosecuted and punished under criminal law, but, for more than three decades, the Justice Department has been neglecting to enforce criminal copyright law on behalf of individuals and small publishers. If you are a big moviemaker, you are going to get action, but if you are a little publisher, which is the heart of this country, they turn a deaf ear to you. So, again, Carol has helped me in this regard, so has Mr. Smith, helping me work my way through the maze in Washington.
I was in a dispute with one of the attorneys. I look at this
as a moral issue and an ethical issue. This is stealing. But one
of my attorneys said no, no, there is nothing immoral or unethical
here. Here is what we have here. We have a situation where it
is the job of the plaintiff's attorney to maximize compensation
and it is the job of the defendant's attorney to minimize damages.
I asked, well, what happened to justice and what happened to right
and wrong? You know, under civil law he actually may be right,
and that is why the enforcement of criminal copyright law is vitally
important where there is right and there is wrong.
I did achieve a victory, as Carol mentioned, but it was a partial victory, and I am determined to stay the course. We received $350,000 for damages to the registered copyright. Now, remember, there were two problems here. It was as though they backed a semi into our warehouse, our locked warehouse. They entered our land and they backed this semi into the warehouse, knocking off the wall and destroying parts of the property. That is the registered copyright. But, also, while they had the warehouse exposed like that, they went in and took out 547,000 units of our primary product. So we have two causes of action-damages to our registered copyrights or our real property and unpaid royalties for using my work 547,000 times without paying for it.
I did have to stop under civil law. I would have gone further, but here is what I encountered when I got to the point where we were about $350,000. I decided I am going to stop the civil procedure and accept $350,000 for damages to my registered copyrights, transferable rights which are used as security for a publishing company, and I am going to pursue under criminal law the payment of these unpaid royalties. The reason that I made that decision is because, as I said, their strategy was to push me into bankruptcy. Now, fortunately, I had some friends who helped me. We did almost go through foreclosure. Some friends helped our family save our home. I have a building on North Main Street, and I was going to sell that building and then lease it back in order to have money to pay the lawyers, but again, someone in Chicago who has followed my programs and the work that I do said, no, please don't do that. Let me advance you the money and then later on, if we need to, we will take the building and we will make some arrangement to lease it back.
Well, my situation was I wanted to go to trial. I wanted to end this alternate dispute resolution. I asked the judge for an extension. I said, I want to go to trial now. I am tired of talking. All you are doing is talking about me and everybody else is paid here. The judge, you are paid, the lawyers here for the insurance company and for National Wildlife Federation they are all getting paid. My lawyer is getting paid. The only person in the room that is not getting paid is me and so I want to go to trial. I've had it. Well, at that point, and I said I need an extension now because my deal maker lawyers didn't want to go to trial. They were maximizing their income with a minimum of effort and so I had to get a new firm, but I needed an extension in order to accomplish that. However, the judge went ahead and scheduled the next session within 20 days and this was during the holidays, right around Thanksgiving. So I realized, oh my gosh, I am going to come up against this, and if I don't have an attorney, this whole case can be thrown out on some technicality, and believe me, these people are capable of grasping at any technicality.
I also was faced with the possibility that I couldn't pay back
the people who had helped me avoid bankruptcy, and that was my
primary obligation at the time. I felt that I have to pay these
people back. I can risk everything I have and our family has,
but I can't risk someone else's resources. I was also going to
have to come up with another $200,000 to $300,000 to pay for the
trial. I was also going to be faced with the reality, that, if
I did get new lawyers, it looked as though they were going to
be taking about 80 percent of any settlement. I was faced with
two to six years of appeals, and I also was aware of a case, a
famous case, in which eight publishers sued Kinko's for publishing
even some of their out-of-print materials, let alone a flagship
book for a small publishing company, and the final, the bottom
line was they received a $2.2 million settlement, but $1.7 million
went to the lawyers. The eight publishers had to split up the
So I decided to terminate it there and to pursue this under criminal law. My goal is to save others from going through the same thing that I have gone through. I want to create a deterrent. There is no deterrent when someone can pay ten percent of the value of something that they have stolen and get away with it. I want the Justice Department to do its job. I am using tactics that Carol outlined so beautifully this morning. About a month ago, I was in Baltimore, Maryland, addressing another group called the National Writers Union, which is an affiliate of the United Auto Workers, the AFL-CIO, 7 million people around the country, and I advocated and they passed virtually unanimously a resolution calling upon the Justice Department to establish a task force to enforce criminal copyright law on behalf of small companies and individual creators. Right now it is like the equivalent of eminent domain. A big publisher or someone can come in, steal your work, and then dictate to you what they are going to pay for it and when and if. So mostly it is an issue that involves a great number of persons in the property rights issue areaauthors, artists, business people making unique marketing materials that they want to have for exclusive use, independent publishers, computer programs, creators of games and educational programs, photographers, musicians, composers. It goes on and on.
And remember, copyright, intellectual property, is the driving force for our nation's economy. So it is vitally important for us to realize that this is also a major copyright issue.
Not long ago, I was on a plane coming back from Greensboro,
North Carolina, where I did a program for staff development for
educators. They were flying me back to O'Hara by way of Dulles.
I have a son serving in the military, so I asked for a 24-hour
layover, which I got and spent the day with my son. Then I got
on the plane late at night coming back to O'Hara. I thought I
would be the only one, since there were only nineteen passengers.
So I sat down, put my coat across a couple of seats, but wouldn't
you know, here comes some fellow talking on a cell phone and he
comes and wants to sit in the window seat in my row. But he is
speaking Russian. I was trained as a Russian interpreter for the
United States Security Agency years ago. We start to go back away
from the gate and this fellow is still chatting and the stewardess
had said, shut off your cell phones. So I said to him in Russian,
it was time to leave him, shut off the phone and the conversation.
He ended it and then we had a little talk.
He was a Ph.D. in computer science and biochemistry from the University of Moscow, and I was eager to know what is it like now with free enterprise. What is it like? What do they think of Gorbachev ? So we talked all the way back to Chicago-a two hour and five minute flight. It was so interesting because he said, one of the reasons I came to America was because in Russia, in the Soviet Union, I got no rewards for the work that I did. He said, but in America you reward this intellectual activity. And, he said, I decided to become a citizen and I started studying the Constitution and right there at the very beginning it says that authors and inventors have the exclusive right to their works. It is right in the Constitution. I said, I am very familiar with that. It is Article I, Section 8, clause 8. I am in the middle of a battle to defend that. And he said, no, think about it. We have a lot of Nobel Prize winners from America but many of them weren't even born here. They came here because of the rewards that were available to them. This just kind of inspired me to realize this is an important fight. We must keep up the fight.
Then he asked me a question. As we were talking about some of the problems that we have in America, he said, I have to ask you something. Imagine that you are lost and you have no food, you have no water and you have no hope of getting any. Then you come to this beautiful place and these people invite you in and give you a wonderful meal and beverages. But, while you are eating, you notice that the silverware pattern doesn't match. The fork and the knife don't have the same pattern. He asked me, would you complain? I replied, not after the way you described it. And he said, that's what it's like in America for me.
He inspired me to continue the fight, but he also helped me to realize that, despite some of these horrible things that are happening, like the court's recent renewed Dred Scott decision, frankly, it is the greatest country on the planet. It is worth the fight, and we have to think not only of ourselves, but we have to think of all the people who shed their blood so that we could have the rights to do what we are doing today, and we have to think about our children and our grandchildren. We are their hope. We must not fail. We must fight. Thank you very much.