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APPENDIX TO

STATEMENT OF JOHN SCHULMAN

PART I. THE NATURE OF COPYRIGHT

The copyright system is concerned with the content of writings. It is a system of law dealing with the communication of information, ideas, and entertainment, when reduced to a definitive form from which the material communicated may be perceived by a reader or viewer and from which it may be reproduced. Embraced within the copyright system are such intellectual products as books, plays, songs, newspapers, magazines, pictures, motion pictures, television programs, computer programs, and a host of other creations referred to generically as literary, artistic, and scientific works. The proprietary interest in these writings is often called literary or intellectual property.

The objective of a copyright system is to stimulate and encourage the creation and dissemination of material of this nature by enabling authors to profit from their labors, and by making it possible for industry to profit from the publication, distribution, and promotion of these products. An adequate copyright system insures widespread communication of these works by providing a legal basis which permits their distribution and dissemination without loss of dominion over the inherent literary property.

The copyright statute and the common law rules of literary property in unpublished works together presently constitute the copyright system under which this form of property is protected against invasion in the United States. It serves the same purpose in this area as that which a negotiable instruments law provides in financial transactions, and that a sales act or commercial code provides in respect of tangible personal property. They all provide the ground rules by which the pertinent activities are governed and judged.

The right secured by the copyright system is a highly sophisticated form of property. It is not capable of being possessed in the ordinary sense of physical possession, nor can it be measured in metes and bounds or surrounded by a fence. It finds its safeguard only in a general respect of the community for the legal rights established, the possibility of enforcement of these rights in the courts, and the sanctions which the law imposes for any trespass upon this property. The rights in this kind of property rest solely upon the concepts which the law supplies and the means of enforcement which it provides.

A significant attribute of this property is that it flows from an affirmative contribution to the common reservoir of property enjoyed by society, and not from any withdrawal of property from that reservoir. A book written by an author or a song of a composer could not have come into being except by his personal effort. Intellectual property does not exist in nature, nor is it a machine made product. It stems entirely from human ingenuity, initiative, effort and imagination.

It would be difficult to find more eloquent language to d'escribe this unique property than that which Drone, in his treatise on copyright (p. 82), quotes from Benjamin Disraeli:

"There are works requiring great learning, great industry, great labor, and great capital, in their preparation. They assume a palpable form. You may fill warehouses with them, and freight ships. And the tenure by which they are held is, in my opinion, superior to that of all other property; for it is original. It is tenure which does not exist in a doubtful title, which does not spring from any adventitious circumstances. It is not found; it is not purchased; it is not prescriptive. It is original. So it is the most natural of all titles, because it is the most simple and least artificial. It is paramount and sovereign, because it is a tenure by creation."

Although the copyright system had its origin in the privileges which were granted by the Crown in England prior to 1695 and by the kings of France prior to 1793, these conditions no longer prevail.

Under our law, and the same philosophy prevails in the Western World, copyright can no longer be considered a special privilege. It is available to every individual who can qualify by reason of his own talents and the exercise of his own initiative and ingenuity. The acquisition of this property is open to all on an equal basis under the law and therefore constitutes a legal right rather than a privilege.

Vor does the copyright system create a monopoly or stifle or impede the enjoyment, use or utilization of ideas or information. Copyright protection extends only to copying or other forms of reproduction. It does not establish a monopoly in the ideas which are expressed, but preserves the property right only in the manner and content of the expression,

Even though a work is protected by copyright, the facts recited or processes described are freely available to the public at large and may be freely utilized by it.

It should be borne in mind that the scope of both common law and statutory copyright is very limited. These rights are not like those which stem from a patent where the monopoly granted to the patentee is quite broad. Baker v. Selden, 101 V.S. 99, 101-104 (1879); Bobbs-Merrill ('0. v. Straus, 147 Fed. 15, 23, 24 (2d Cir. 1906), aff*d, 210 U.S. 339 (1908); Arnstein v. Edward B. Marks Jusic Corp., 82 F. 2d 275 (2d Cir. 1936); Berlach-Barklow v. Morris & Bendian, 23 F. 2d 159, 161 (2d Cir. 1927).

The owner of common law or statutory copyright may not usurp or appropriate any field of writing or literary subject. Having composed a song about moonlight, having written a book concerning life in New York, having painted a picture or taken a photograph, he may not claim a monopoly in any of those subjects. All he may do is prevent another person from copying or reproducing his work. Bobbs-Merrill Co. v. Straus, 210 U.S. 339, 347 (1908) ; Jeweler's Circular Pub. Co. v. Keystone Pub. Co., 281 Fed. 83, 94, 95 (2d Cir. 1922), cert. denied 259 U.S. 581; Chappell & Co. v. Costa, 45 F. Supp. 554, 556 (S.D.X.Y. 1942); M.G.JI. etc. v. Bijou Theatre Co., 50 F. 2d 908, 910 (1st Cir. 1931). He may prevent piracy of the exact words of his composition or the plagiarism of the sequence of the ideas expressed. Edwards & Deutsch Lithographing Co. v. Boorman, 15 F. 2d 35, 36 (7th Cir. 1926), cert. denied 273 U.S. 738. A photog. rapher who producers a photograph may prevent another person from copying that photograph. Bleistein v. Donaldson Lithographing Co., 188 U.S. 239, 249– 252 (1903); Burrow-Giles Lithographic Co. v. Sarony, 111 U.S. 53, 58, 60, 61 ; Gross v. Seligman, 212 Fed. 930, 931 (2d Cir. 1914); Altman v. New Haven Union CO., 254 Fed. 113, 117, 118 (D.C. Conn. 1918). He has no standing, however, to prevent that other person from placing a camera in the same position facing the same object, and producing an original picture almost identical with the earlier one. Gross v. Seligman, 212 Fed. 930, 931 (2d Cir. 1914). Although a publisher of a directory may prevent another publisher from copying that directory, Bleistein v. Donaldson Lithographing Co., 188 U.S. 239, 250 (1903); Jewelers Circular Publishing Co. v. Keystone Pub. Co., 281 Fed. 83, 85, 88, and cases cited p. 85 (2d Cir. 1922), cert. denied 259 U.S. 581, he has no legal right to prevent the second publisher from producing an original directory compiled by visiting the same householders or businessmen whose names appear in the earlier work. Jewelers Circular Pub. Co. v. Keystone Pub. Co., 281 F. 83, 91 (2d Cir. 1922), cert. denied 259 U.S. 581; Fred Fisher, Inc. v. Dillingham, 298 Fed. 145, 150, 151 (S.D.N.Y. 1924).

The law of copyright prevents only larceny, not legitimate use, independent creation or imitation.

The property represented in this system of law is of a kind which can have a value only in an industrialized capitalistic society, one which places its emphasis upon individual initiative and which has reached a stage beyond the mere satisfaction of primitive needs. It can flourish only in a climate wherein the ownership of private property is recognized and the profit motive is esteemed.

PART II. THE ORIGINS AND DEVELOPMENT OF COPYRIGHT IN THE UNITED STATES

A brief review of the origin of copyright in the United States and the inferences to be drawn therefrom may be of interest to this committee.

I need hardly mention that article 1, section 8 of the Constitution specifically delegates to Congress the power to enact copyright legislation in the following terms:

“The Congress shall have Power:

"To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries."

There is however an interesting history of copyright in the United States which antedates the adoption of the Constitution. It can be read in revised

Bulletin No. 3 issued by the Copyright Office in 1963, entitled "Copyright Enactments."

As early as 1672 the General Court for Elections of the Massachusetts Bas Colony in New England issued the following order :

"In ansr to the petition of Jon Vsher, the Court judgeth it meete to order, & be it by this Court ordered & enacted, that no printer shall print any more coppies then are agreed & pajd for by the ouner of the sajd coppie or coppies, nor shall be nor any other reprint or make sale of any of the same, without the sajd owners consent, vpon the forfeiture and poenalty of treble the whole charges of printing, & paper, &c, of the whole quantity payd for by the ouner of the coppies, to the sajd ouner or his assignes.”

That order was promulgated almost a half century before the enactment of the British Copyright Act of 1710, the statute usually said to be the first copyright legislation known to the world. In the half century which followed the adoption of the Statute of 1710, no copyright legislation appears to have been necessary in the colonies since the rights of authors were undoubtedly governed by the statute which had been enacted in Great Britain.

However, after the original States of the Union had achieved independence, legislation became necessary to fill the void which had resulted. Accordingly, we find that in January 1783, the State of Connecticut became the first to adopt a copyright statute. This act was followed by the State of Massachusetts on March 17, 1783, and by Maryland in April of the same year.

On May 2, 1783, a resolution adopted by the Continental Congress recommended to the several States that copyright legislation be enacted. The resolution of which the authors were Mr. Williamson, Mr. Izard, and Mr. Madison, recited :

Resolved, That it be recommended to the several States, to secure to the authors or publishers of any new books not hitherto printed, being citizens of the United States, and to their executors, administrators and assigns, the copy right of such books for a certain time not less than fourteen years from the first publication; and to secure to the said authors, if they shall survive the term first mentioned, and to their executors, administrators and assigns, the copy right of such books for another term of not less than fourteen years, such copy or exclusive right of printing, publishing and vending the same, to be secured to the original authors, or publishers, their executors, administrators and assigns, by such laws and under such restrictions as to the several States may seem proper."

Thereafter copyright laws were adopted in all of 10 of the remaining 13 original States, Delaware being the only exception.

The significance of this action lies not merely in terms of its chronology but also in the factor that the language employed explains the wording of article 1, section 8, of the Constitution. The preambles to the various State statutes serve to clarify the meaning which must be attributed to the phrase "to promete the progress of science and useful arts."

The preamble to the Connecticut statute recites :

"Whereas it is perfectly agreeable to the principles of natural equity and justice, that every author should be secured in receiving the profits that may arise from the sale of his works, and such security may encourage men of learning and genius to publish their writings; which may do honor to their country, and service to mankind."

The statute adopted in Massachusetts sets forth the legislative intent in the following language:

"Whereas the improvement of knowledge, the progress of civilization, the public weal of the community, and the advancement of human happiness, greatly depend on the efforts of learned and ingenious persons in the various arts and sciences: As the principal encouragement such persons can have to make great and beneficial exertions of this nature, must exist in the legal security of the fruits of their study and industry to themselves; and as such security is one of the natural rights of all men, there being no property more peculiarly a man's own than that which is produced by the labour of his mind :

"Therefore, to encourage learned and ingenious persons to write useful books for the benefit of mankind:".

The legislature of North Carolina said:

"Whereas nothing is more strictly a man's own than the fruit of his study, and it is proper that men should be encouraged to pursue useful knowledge by the

hope of reward ; and as the security of literary property must greatly tend to encourage genius, to promote useful discoveries, and to the general extension of arts and commerce :".

Rhode Island was even more explicit in its statement of purpose when it wrote:

"Whereas the improvement of knowledge, the progress of civilization, the public weal of the community, and the advancement of human happiness, greatly depend on the efforts of learned and ingenious persons, in the various arts and sciences; as the principal encouragement such persons can have to make great and beneficial exertions of this nature, must exist in the legal security of the fruits of their study and industry to themselves; and as such security is the natural right of all men, there being no property more peculiarly a man's own than that which is produced by the labour of his mind;".

There can be little doubt that all of these statements reflect the teachings of John Locke who wrote in his essay on “Civil Government":

“Though the earth and all inferior creatures be common to all men, every man has a property in his own person; this nobody has any right to but himself. The labor of his body and the work of his hands, we may say, are properly his. Whatsoever, then, he removes out of the state that nature hath provided and left it in, he hath mixed his labor with and joined to it something that is his own, and thereby makes it his property. It being by him removed from the common state nature hath placed it in, it hath by his labor something annexed to it that excludes the common right of other men. For, this labor being the unquestionable property of the laborer, no man but he can have a right to what that is once joined to; at least where there is enough, and as good, left in common for others.”

Those who urge that copyright in literary, artistic, and scientific works should not be treated as the property of their creators or who contend that the Congress, acting in the “public interest," should subordinate the interests of creators, and should authorize the taking of that property without compensation to their owners, would have it disregard this contemporary construction of the intent of the Constitution. They would also have Congress ignore the reasons advanced by James Madison for entrusting to the Congress the power to enact copyright legislation. In the 430 Federalist paper he wrote:

“The fourth class comprises the following miscellaneous powers.

"1. A power 'to promote the progress of science and useful arts, by securing for a limited time, to authors and inventors, the exclusive right, to their respective writings and discoveries'.

"The utility of this power will scarcely be questioned. The copyright of authors has been solemnly adjudged in Great Britain to be a right at common law. The right to useful inventions, seems with equal reason to belong to the inventors. The public good fully coincides in both cases with the claims of individuals. The States cannot separately make effectual provision for either of the cases, and most of them have anticipated the decision of this point, by laws passed at the instance of Congress.".

This coincidence of the economic interests of the author and the public interest was recognized by the Supreme Court in Mazer v. Stein (347 U.S. 201 (1954)) where the Court said at 219 :

"The economic philosophy behind the clause empowering Congress to grant patents and copyrights is the conviction that encouragement of individual effort by personal gain is the best way to advance public welfare through the talents of authors and inventors in science and the useful arts. Sacrificial days devoted to such creative activities deserve rewards commensurate with the services rendered."

In proceeding with the revision of the copyright law one must of necessity take into account not only the grant of power under the Constitution but also the objectives for which that power was granted.

The history of copyright legislation in the United States reveals that with each revision of the copyright law the rights secured to authors have been enlarged, the categories of works for which protection has been afforded have been extended, and the duration of copyright has been prolonged. The present revision proposed by H.R. 4347, I submit, follows the established tradition whereby at intervals of approximately 50 years apart the copyright system is brought into line with then current needs of our creators and of our society.

Earlier revisions and amendments of the Copyright Act have played a vital role in enabling the copyright system to keep pace with technological develop ments and the needs of society. Originally limited to books, maps, and charts, the copyright law was broadened to include such works as plays and music. Protection was extended to reproduction of works by performance as well as by copying. In 1952, for example, protection was accorded to literary works against unauthorized recording and performance, rights which had theretofore been limited mainly to dramatic and musical works. In 1909 musical works received limited rights in respect of phonograph recordings, and in 1912 some provision was made for motion pictures.

The original act provided an aggregate term of copyright of only 28 years which was later increased to 42 years, and finally to a 56-year term, all of these extensions resulting from a recognition of the increased life expectancy of our population.

These and other improvements in the copyright system have benefited our society. Authors, composers, and other creators have been enabled to enjor more fully the fruits of thir labors. That the widespread creation, production, communication, and dissemination of literary property has been stimulated, is indicated by the fact that it now contributes more than $7 billion annually to our gross national product.

The time has now come to give full recognition to the developments of the past half century, and the objective of the revision of the copyright system should be the assurance of continued progress in the creation and dissemination of literary, artistic, and scientific works.

PART III. THE EXISTING COPYRIGHT SYSTEM AND THE NEED FOR ITS MODERNIZATION

AND REVISION

In the United States we have a unique and sometimes perplexing dual system of copyright. An author by the mere fact of creation of his work is entitled to assert full ownership over it as a basic common law right of property until that work is published; namely until it is reproduced in visual copies which are sold, offered for sale, or generally distributed to the public.

Upon publication the work falls into the public domain and the author loses dominion over its use unless statutory procedures are followed. If the statutory procedures are observed, copyright in the work and the remedies for its enforre ment are governed solely by the provisions of the Copyright Act. In some limited categories of works such as music and dramatic works this transition from the common law to statutory status may take place prior to publication by the registration of a claim to copyright in the Copyright Office.

The broadest concept of copyright is that which is recognized at common law in unpublished works. Its doctrine is that anyone, whether a citizen or resident of the United States or a nonresident alien, merely by virtue of the creation of his work and without a formality of any kind, may exercise dominion orer its reproduction in any form. (Palmer v. DeWitt (47 N.Y. 532); Ferris v. Froh. man (223 U.S. 424); Thompkins v. Halleck (133 Mass, 32); Uproar Co. v. National Broadcasting Co. (81 F. 2d 373).) He may choose whether it shall be published or not, who shall publish it and what reproduction or other use may be made of it. This domination over the work is not limited to publication and copying alone, but entitles the author to the exclusive right of performance or rendition of the work. The author of a play may perform or authorize its performance upon the living stage; he may broadcast it or authorize its broadcast by radio or television subject to such restrictions as he chooses. This complete ownership and dominion over reproduction is perpetual and continues until the work is published or, if it falls within the limited category of works which may be copyrighted under section 12 of the Copyright Act prior to publication, until the author elects to secure a statutory copyright by registration of this claim.

The transition from common law to statutory copyright brings into play a different set of concepts, having their origins in cases such as Donaldson T. Beckett (4 Burr. 2108), and Wheaton v. Peters (33 U.S. 591). Although the nature of the works in which statutory copyright may be secured are substantially the same as those which the common law protects, and the tests of originality and infringement are substantially alike, the basic rights of the copre right proprietor and his remedies against infringement are only those provided by statute.

An essential requirement for statutory protection is that copyright must be secured ; i.e., claimed, as otherwise the work falls into the public domain upon

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