<P> In a House Report, Congress said: </P> <P> The exclusive right to prepare derivative works, specified separately in clause (2) of section 106, overlaps the exclusive right of reproduction to some extent . It is broader than that right, however, in the sense that reproduction requires fixation in copies or phonorecords, whereas the preparation of a derivative work, such as a ballet, pantomime, or improvised performance, may be an infringement even though nothing is ever fixed in tangible form . </P> <P> The 9th Circuit, however, has resisted this expansive view of liability for derivative works by imposing its own quasi-fixation requirement . In Micro Star v. FormGen Inc . Judge Kozinski wrote: </P> <P> To narrow the statute to a manageable level, we have developed certain criteria a work must satisfy in order to qualify as a derivative work . One of these is that a derivative work must exist in a "concrete or permanent form,"... The requirement that a derivative work must assume a concrete or permanent form was recognized without much discussion in Galoob . </P>

He book publishing and motion-picture industries are both examples of