Arguments before the Committee on Patents of the House of Representatives Part 39

As to amendments of the bill, I see no alternative to the striking out of paragraph (g) of section 1. If the combine exists as is alleged it is obvious that the patents, inventions, machinery, and plants of all those manufacturers of mechanical records who are not inside of the combine, that is to say, of all the manufacturers of perforated music rolls excepting the aeolian Company, and all the manufacturers of talking machines and records excepting the two companies who are alleged to be members of another combination or trust for the exclusive manufacture of such machines, and of all without exception of the manufacturers and users and sellers of pianos and organs which are operated by perforated music sheets, will be rendered practically useless, the owners of such manufactories will be put out of business, and their workmen will have their field of labor and bread taken away.

If this will be the result of the bill, and especially of the paragraph section 1 (g), the bill is most unjust and cla.s.s legislation of the worst type. And that is just what the bill is intended to be, but I am thankful that its object can not be concealed.

It is no answer to the above objection to say that the bill provides only for the future. So do the contracts between the aeolian Company and its "satisfactory number" of copyright owners.

The said contracts are unlimited as to time, having been signed by the great bulk of the trade (meaning thereby almost all of the great music publishers of the country), they leave outside of the combination only small publishers, and the contracts provide as follows:

"Now, therefore, the publisher, for and in consideration of the premises, and of the sum of one dollar, lawful money of the United States, to him paid by the aeolian Company, receipt of which is hereby acknowledged, and for and in consideration of the true and faithful performance by the aeolian Company of its covenants hereinafter made, does hereby sell, a.s.sign, transfer, and set over unto the aeolian Company the exclusive right for all perforated music sheets of the kinds aforesaid in and to all the copyrighted compositions of which the publisher is the proprietor, or in the case in which he is the owner of any less rights, to the extent of said rights, and does hereby covenant and agree with the aeolian Company to give and secure to it the exclusive right in like manner for all perforated music sheets of the kinds aforesaid in and to all those other musical compositions which may hereafter be protected by copyright, and the copyrights or rights in which may be acquired by the publisher, except that if the aeolian Company do not accept any piece offered them within three months after said offer then the publisher may be at liberty to dispose of the same otherwise."

From the foregoing we arrive at this conclusion, and there is no escape from it, that there is in existence a combination whose design and effect upon very important business and laboring interests of this country will be injurious and unlawful if the bill should be pa.s.sed as proposed, which combination is of unlimited duration as to time, and which combination will control, for the purpose of producing perforated music sheets, all the copyrights or rights of production hereafter for such unlimited duration of time which may be acquired by the great bulk of the trade (music publishers) of this country. Your committees will see, therefore, that the bill provides for the profitable future of the members of the combination without limit as to time.

The result of this will be threefold:

1. The aeolian Company will secure for itself practically the entire business of the United States in the manufacture of perforated music sheets, and will be in a position to dictate the prices for such sheets to the trade, including the manufacturers and sellers of pianos and organs operated by said sheets as well as the sellers of the sheets alone, and to raise the price to the public generally for such sheets.

2. The publishers who have contracted with the aeolian Company to give the latter all the rights which the publishers have or may have in copyrighted music will receive from the aeolian Company certain royalties, which royalties will either be clear profit to the publishers or will be less than any extra royalties which the publishers will pay to the composers. It is practically certain that in the long run the composers will get no more royalties than they now receive, for the composer, for his own advantage in obtaining a large sale of his works, must go to one of the large publishers of music, and will be compelled by such publisher to accept in full payment of his copyright just such a royalty as he now gets under existing law, and all the extra profits which can be mulcted from the public under section 1 (g) of the bill will be divided between the members of the combination.

3. The public will foot all the bills without any more advantage to themselves than they have under existing law.

The a.s.sertion made in support of the bill, that it relates only to the future, is completely met with the reply that the bill does not provide for the future of anyone who is outside of the combination.

If the existing copyright law is bad or insufficient and anything like a revision of or a codification of the copyright statutes in a new law must be made in the interests of justice, let it be done. But let care be taken that you do not do injustice. If a new copyright law is to be enacted, and the pending bill is to be the foundation of such a law, the practical question is, how is it to be amended in order that it may not cause the evils above referred to.

Mr. Putnam in his introductory remarks indicated that your committees would find evidences of "selfishness" in the bill. He is undoubtedly right. It is, however, much more far reaching in this respect than Mr. Putnam had any idea of. It is extraordinary that the conference which advised Mr. Putnam adopted such radical legislation as is proposed in section 1 (g) without inviting the attendance at the conference of a single person interested adversely to this legislation. In fact it would appear that such persons were purposely kept in ignorance of what the conference was doing.

But I do not think that the selfishness of the interests which are opposed to the said new legislation, and who are now fully aware that it is proposed, extends beyond a rightful effort to prevent their own extinction.

In my opinion the manufacturers of mechanical music controllers or records are willing to pay a fair and reasonable royalty to composers of music which they use, or to other owners of copyrights for musical compositions, but this must be provided for otherwise than by an enactment which will give rise to the evils attending the said paragraph, section 1 (g) of the bill. That paragraph should be eliminated and other parts of the bill corresponding with this paragraph, and there should be subst.i.tuted for it, probably at some other more appropriate part of the bill, a provision like the following:

"Any person, firm, or corporation who shall make, use, or sell, or let for hire, any device, contrivance, or appliance especially adapted in any manner whatsoever to reproduce to the ear the whole or any material part of any work published and copyrighted after this act shall have gone into effect, shall pay to the author or composer of such work a fair and reasonable royalty to be determined according to the market price for such or similar royalties.

"And the author or composer of the work so used shall have the same remedies for the recovery from such person, firm, or corporation of such royalty or royalties as is provided in this act for the recovery of damages for the infringement of copyright.

"And after the amount of such royalty or royalties shall have been ascertained and become due by express contract between the parties, or shall have been ascertained and adjudged to be due by any circuit court of the United States, and is not paid, then the author or composer shall have the same remedy by injunction against such person, firm, or corporation, as is provided in this act in cases of the infringement of a copyright."

It is believed that such an enactment would give to the composers who have appeared before your committees all the rights and remuneration which is due them, and at the same time will defeat the unlawful combination which exists and is hereinbefore referred to.

I believe that it will not be at all difficult to arrive at the just value of such royalties, and in almost every instance they would be settled by contract between the owner of the copyright and the maker of the mechanical appliance for producing the music.

In the case of a composition of any value the composer will dispose of it for an agreed-upon royalty to some music publisher in the usual way. He will then dispose of his right to the composition for reproduction by mechanical means to some manufacturer of such mechanical means for a royalty agreed upon.

If any other such manufacturer, not in contractual relations with the owner of the copyright thereafter makes use of the composition, the amount of the royalty for which the owner of the copyright has contracted will aid in determining what royalty is fair and reasonable and is to be paid by such other manufacturer.

I suppose that in some cases litigation may be necessary to arrive at the amount of the royalty, but not more than is inevitable in human affairs. It is not to be supposed that a manufacturer will resist the payment of the royalty for a musical composition which he has utilized and pay to the complainant the cost of litigation rather than make a fair settlement upon terms which are well settled, or will soon become well settled under this act, in the trade.

A provision like that above suggested is a.n.a.logous to, and appears to be quite similar in its effect to, the compulsory-license provision of some of the foreign statutes. For instance, in the law of the Dominion of Canada, lately enacted, in 1903, we have the following:

"7. (_a_) Any person, at any time while a patent continues in force, may apply to the commissioner, by pet.i.tion, for a license to make, construct, use, and sell the patented invention, and the commissioner shall, subject to general rules to be made for carrying out this section, hear the person applying and the owner of the patent, and if he is satisfied that the reasonable requirements of the public in reference to the invention have not been satisfied by reason of the neglect or refusal of the patentee or his legal representatives to make, construct, use, or sell the invention, or to grant licenses to others on reasonable terms to make, construct, use, or sell the same, may make an order under his hand and seal of the patent office requiring the owner of the patent to grant a license to the person applying therefor, in such form and upon such terms as to the duration of the license, the amount of the royalties, security for payment, and otherwise, as the commissioner, having regard to the nature of the invention and the circ.u.mstances of the case, deems just."

I instance this foreign law to show that under a system of jurisprudence exactly like our own it has been found best to limit rights heretofore granted in the most exclusive form, and provide for compelling the owners of such rights to deal reasonably and fairly with the public. This Canadian law relates to exclusive rights to inventions under letters patent, where the ascertainment of what is a just license fee or royalty is always more or less complicated and difficult. In the case of copyrights much simpler conditions prevail, the value of musical compositions are more easily measurable and there would be far less difficulty in arriving at a fair royalty by a contract between the parties or by arbitration, or, in the last resort, by the judgment of a circuit court. I have mentioned a circuit court merely for purpose of ill.u.s.tration. It would probably be more convenient to confer this jurisdiction on a United States district court.

It seems to me that under the conditions which confront your committees, there being on the one hand a desire to recompense musical composers, and on the other hand the necessity of defeating the unlawful combination which will have entrenched itself most securely if the bill should become a law including the objectionable paragraph which I have discussed, an amendment of the bill in some such way as above indicated is inevitable.

SPECIFIC AMENDMENT OF THE BILL.

I submit that in the interest of the public it is far better to correct any evil in the existing copyright law, which was pretty thoroughly revised not very many years ago, than to pa.s.s a revision of the law which uses so many new terms and words which have not received judicial interpretation, and which bill evidently requires itself revision and amendment in almost every section. It requires such amendment in detail in the first place to eliminate those matters which have been embodied in the bill for the purpose of most thoroughly carrying out the provisions of section 1 (g), upon which I have already commented. If it is necessary to eliminate the paragraph specified, it is also necessary to revise the bill in many other sections where corresponding matter appears.

In the second place, the bill requires amendment as to the term of copyright proposed, as to the damages for infringement, as to the effect which the certificate of the filing of the entry shall have, as to the way in which and the terms in which the notice of copyright shall be given, and as to broad and uncertain expressions which are found in many sections, which can have no good effect and which will only be productive of uncertainty, confusion, and litigation.

I am informed that a subst.i.tute bill will be submitted to your committees in the nature of specific amendments to the existing law to cure any evils which may exist therein and, among other things, to give reasonable compensation to authors or composers for the use of their works by the manufacturers of automatic mechanical reproducing devices. I believe that it will be preferable to thus amend existing law, leaving the great bulk of the law in those words and terms and provisions which there is no necessity of changing and which have become well understood by years of judicial interpretation.

I will however proceed to discuss the pending bill and point out the specific amendments which appear to be necessary in the interest of the public, both as to clearness and certainty of expression and as to the relative just claims of the author and of the public.

Section 1, paragraph (f), should be amended by striking out the words "or for purpose" and the remainder of line 10 and to the end of line 13, and by inserting the words "or to make any variation, adaptation, or arrangement thereof."

It will be seen that to retain this paragraph in the present form would be equivalent to retaining paragraph (g), because it was the intent in framing paragraph (f) to have the word "performance"

cover the operation of an automatic mechanical device; and the words "arrangement or setting" were intended to include the production of a perforated music sheet.

Paragraph (g) should be eliminated for the reasons already given.

Paragraph (h) should be amended by inserting at the end thereof the words "amounting to a copy thereof."

It is obvious that this paragraph is altogether too broad and uncertain. The paragraph should only protect against infringements which are copies, and it must be left to judicial determination in the future as it has been in the past to say whether or not any particular abridgment, adaptation, or arrangement is a copy within the meaning of the law.

Section 2 appears to be substantially similar to section 36, and one of the two sections should be eliminated or they should be consolidated.

Section 3 should be amended by striking out "the copyrightable"

and the rest of line 4, and to the end of line 8, and subst.i.tuting "matters copyrighted after this act goes into effect."

So amended the section does not appear to be necessary in the bill, but on the other hand in its present form it will be seen at once that it is retroactive and very injurious, making in effect certain matters infringements of the copyright granted under existing law which are not infringements now and are within the public domain.

Section 4 is absurdly broad and indefinite and covers pastry or other works of a cook. It should be amended by inserting the word "literary" before the word "works," or by subst.i.tuting the word "writings," which is used in the Const.i.tution and is the preferable word to employ, or by inserting after the word "works"

the words "mentioned in section 5 hereof."

In section 5 paragraph (h) should be eliminated. This paragraph was intended to cover perforated music sheets or talking-machine records which are to be otherwise provided for. As to other matters it may be said that if the reproductions referred to are copies of things already copyrighted, they are infringements; if not copies, they are works of art in themselves under paragraph (g) of section 5.

On page 4 "The above specifications shall," in line 8 and line 9 and line 10, to and including the words "nor shall," should be canceled, and in line 11, after "cla.s.sification," insert the words "shall not."

It is obvious that an unlimited subject-matter of copyright is highly undesirable from the standpoint of the public.

In section 6, line 15, after "compilations," insert "or," and in the same line strike out "or other versions." These words are plainly unnecessary and are intended to have a capability of elastic interpretation unduly favorable to the author and prejudicial to the public.

In section 7, paragraph (b), the words "of a work" and the rest of line 6 and lines 7, 8, and 9, to and including the word "text,"

should be canceled. If a work has fallen into the public domain, even though subsequent to 1891, it would be retroactive to now bring it within the copyright law and deprive the public of its use.

Section 8, paragraph (a), in the interest of clearness should be amended by striking out the words "or cotemporaneously" in line 21, and by inserting after line 22 "shall publish his work within the limits of the United States cotemporaneously with its first publication elsewhere; or."

Section 9 should be amended by inserting after the word "Act,"

line 14, the words "and by the performance of the other conditions precedent mentioned in the act, and by entry of the t.i.tle of the work as hereinafter provided." It is plain that a person does not "secure" copyright by the publication with notice, which is all that is mentioned in this section.

Section 10, line 24, the words "and such registration shall be prima facie evidence to owners.h.i.+p" should be struck out. There does not appear to be sufficient reason for giving a mere a.s.sertion of claim the prima facie standing of absolute owners.h.i.+p.