The final draft of the Shotwell bill, S. 3043,161 as introduced by Senator Thomas on January 8, 1940, did not contain a licensing provision. The session ended, before any action was taken on the bill. (a) H.R. 3456 9. The 77th Congress On February 18, 1941, Representative Martin J. Kennedy introduced a bill, H.R. 3456,162 which might be considered a variation of the earlier Moser bills.163 It provided that whenever two or more copyright proprietors of a musical composition refused to enter into an agreement to permit the public use or performance of the composition (especially by radio) upon payment of a reasonable and fair compensation, the Federal Trade Commission could fix a rate of payment and order permission to make use of the composition. Refusal to comply with the Federal Trade Commission's order would result in seizure for confiscation of the copyright. This proposed legislation never reached the hearing stage. (b) H.R. 3997 and H.R. 7173 A general revision bill, based on Representative Daly's earlier bill, but containing a number of changes relative to the rights of performing artists was introduced in this Congress by Representative Sacks as H.R. 3997 164 but no action was reported. During the second session, Representative Sacks on June 1, 1942, introduced H.R. 7173 165 which, among other things, proposed that copyright in an acoustical recording for which the 2-cent royalty had been paid could not be secured without the consent of the paramount copyright owner. 10. The 78th and 79th Congresses (a) H.R. 1571, H.R. 3190, and S. 1206 Three more acoustical recording bills,166 each identical with H.R. 7173,167 were introduced in these two Congresses, but without any action thereon. (a) H.R. 1270 11. The 80th Congress The requirement of securing the copyright owner's consent to the copyrighting of a record upon payment of the 2-cent royalty reappeared in a bill introduced in January 1947, H.R. 1270.168 Among the opponents to H.R. 1270 at hearings held between May 23 and June 23, 1947, Don Petty, of the National Association of Broadcasters, declared with respect to the compulsory license provision in section 1(e): 169 181 S. 3043, 76th Cong., 2d sess. (1940). 163 See notes 151, 157, supra. 104 H.R. 3997, 77th Cong., 1st sess. (1941). 105 H.R. 7173, 77th Cong., 2d sess. (1942). 166 H.R. 1571, 78th Cong., 1st sess. (1943); H.R. 3190, 79th Cong., 1st sess. (1945): S. 1206, 79th Cong., 1st sess. (1945). 167 See note 165, supra. 168 H.R. 1270, 80th Cong., 1st sess. (1947). 180 Hearings on H.R. 1269, H.R. 1270, and H.R. 2570, 80th Cong., 1st sess., pp. 78-79 (1947). This provision was designed to enforce the congressional policy against monopoly. While H.R. 1270 purports to leave this policy intact, it nevertheless makes possible the easy circumvention of it. This is so because the amendments proposed to sections 11 and 12 permit works to be copyrighted in the form of acoustic records. At the same time, section 1(f) gives the copyright owner of such works the exclusive right to make or authorize the making of records. This means that the policy of section 1(e) will be defeated if the creator of a musical composition chooses to copyright his work in the first instance as a record. Miss Isabelle Marks testified as to recording industry practice concerning the royalty fee scale on phonograph records in effect since approximately 1932 as follows: 179 It is a royalty of 14 cents for a 35-cent record, 11⁄2 cents for a 50-cent record, 14 cents for a 60-cent record, and 2 cents for 75 cents or more, and that has been universal. Each record that is made is made with a royalty at that price through a definite licensing agreement with the publisher. We either get a license from that publisher to issue the record at that price or we fall back on section 1(e), where we pay 2 cents. On July 19, 1947, the Subcommittee on Patents, Trademarks, and Copyrights recommended, during an executive session of the Judiciary Committee, that the bill be adversely reported, with the result that the bill was never reported out of the full committee.171 No further bills dealing with the compulsory license of copyrighted works have been introduced in the U.S. Congress.172 B. SUMMARY A review of the testimony contained in the hearings and the reports reveals the fact that between the mid-1920's and the late 1930's a number of attempts were made to eliminate or extend the compulsory license provisions. Each attempt, however, provoked considerable controversy. The development of radio and other electronic devices for the recording and reproduction of sound provided the motivation behind many of the proposals, while economic conditions affecting the phonograph industry exerted a counterbalancing influence. Conflicts arose between the creators and the users. The principle of compulsory license was attacked by the authors because it restricted their bargaining power; the benefits derived from the statutory royalties went to the music publishers as copyright owners, rather than to the authors; and the copyright owners frequently found their works being exploited by unscrupulous, financially irresponsible recording manufacturers. Consistently throughout the period, the manufacturers of piano rolls and phonograph records pleaded the economic necessity of having complete accessibility to all music and of restricting the payment of royalties to a relatively low percentage of the cost of production. When faced with the prospect of being required to pay fees for each performance of recorded music, the radio and jukebox industries threw their support to the recording manufacturers in opposing the introduction of a compulsory license for public performance rights of records and transcriptions. 170 Id., at p. 89. 193 Congressional Record D-406 (July 19, 1947). 172 Bills to eliminate the so-called "jukebox exception," strictly speaking, relate to public performance for profit. Public Law 743 (68 Stat. 1030), effective Sept. 16, 1955, eliminated the sec. 1(e) requirement of reciprocal treatment with respect to mechanical reproduction rights for Universal Copyright Convention works but did not affect the compulsory license provision. See note 55 supra. That the subject of compulsory license is a controversial one may be observed from the number of bills that were introduced in the 68th through the 80th Congresses and the comparatively small number ever reported out of committee or voted upon by either House. III. COMPULSORY LICENSE PROVISIONS IN THE LAWS OF OTHER Various types of compulsory license provisions are found in the copyright laws of certain foreign countries and multilateral copyright conventions." 173 A. NATIONAL LAWS 1. Great Britain There are several types of compulsory licenses in the British copyright law. 174 (a) The proviso of section 3 of the British Copyright Act contains a compulsory license to reproduce a published work after the expiration of 25 years from the death of the author. After that time the copyright is not deemed infringed by reproduction of the work for sale if the person reproducing the work proves that— (i) he has given the prescribed notice in writing of his intention to reproduce the work; 175 and (ii) the royalties have been paid.176 (b) Section 4 of the act contains a compulsory license for republication or performance of a work if after the death of the author of a literary, dramatic or musical work which has been published or publicly performed, a complaint is made to the Judicial Committee of the Privy Council that the owner of the copyright refuses to republish or allow republication or public performance of the work. In that situation the Judicial Committee may order the owner to grant a license for republication or public performance of the work." 177 The 1952 Report of the Copyright Committee 178 recommended repeal of the proviso in section 3 and of section 4. The British copyright bill of 1955 would repeal the proviso in section 3, and section 4 of the British Copyright Act, 1911.179 (c) Section 19 (2) of the act contains a compulsory license for mechanical reproduction of a musical work. Contrivances for mechanical performance of a musical work may be made upon proof that 173 See "Compulsory License" in 2 Pinner, "World Copyright," pp. 124-142 (1954). 174 Copyright Act, 1911, 1 and 2 Geo. 5, ch. 46. This act, with some slight modifications, has been adopted in Australia, Ceylon, New Zealand, and the Union of South Africa. Except for these self-governing dominions and Canada (see p. 38, infra), it applies throughout the British Commonwealth of Nations. Prior to the 1911 act, reproducing music on interchangeable parts of mechanical instruments was held to be not copying and therefore no infringement of a composition protected under the then-existing copyright statute. Boosey v. Wright (1899), 1 ch. 836 (1900), 1 ch. 122. 175 See "Copyright Royalty System (General) Regulations," 1912; Copinger, "Law of Copyright," app. B (8th ed. 1948). 176 See Copinger, op. cit., supra, note 175, at p. 88. 177 Id., at p. 86. No such cases are reported. 178 Report of the Copyright Committee (presented by the President of the Board of Trade to Parliament by Command of Her Majesty, October 1952), par. 23. 179 Explanatory Memorandum to Copyright Bill, H.L. 1955, fifth schedule 9, and sixth schedule 3, to copyright bill, 1955. (i) such contrivances have previously been made with the consent or acquiescence of the copyright owner; and (ii) the prescribed notice of intention to make the contrivances has been given and the royalties paid. The license includes words and music,180 but alterations not previously made or necessary for the adaptation are prohibited. 181 The royalties for records made and sold under the compulsory license were originally set, in the act of 1911, at 5 percent of the ordinary retail selling price of the contrivance, but not less than a halfpenny for each separate musical work reproduced therefor.182 However, the act of 1911 provided that after a period of 7 years the royalty rate could be changed by an order of the Board of Trade confirmed by Parliament.183 Accordingly, in 1928, the royalty rate was increased to 64 percent, with a minimum of 3 farthings (three-fourths of a penny) for each separate work. 184 The Copyright Committee recommended that no change be made in regard to the compulsory license provisions of section 19.185 Section 8 of the copyright bill of 1955 incorporates provisions similar to section 19 (2) of the present act. Section 8 of the bill would permit any record manufacturer to make records of a musical work or of an adaptation thereof, under the following conditions: (a) Records of the work, or, as the case may be, of a similar adaptation of the work, have previously been made for the purposes of retail sale, and were so made by, or with the license of, the owner of the copyright in the work; (b) Before making the record, the manufacturer gave to the owner of the copyright the prescribed notice of his intention to make it; (c) The manufacturer intends to sell the record by retail, or to supply it for the purpose of its being sold by retail by another person, or intends to use it for making other records which are to be sold or supplied; and (d) In the case of a record which is sold by retail, the manufacturer pays to the owner of the copyright, in the prescribed manner and at the prescribed time, a royalty of an amount ascertained in accordance with the following provisions of this section. The bill would fix the royalties at 64 percent of the ordinary retail selling price of the record.186 If, after the end of the period of 1 year after the section becomes effective, the rate ceases to be equitable, the Board of Trade may make an order changing it.187 In the case of a record which comprises two or more musical works, the minimum royalty is 3 farthings in respect to each work.188 Under section 8(5) words are included in the compulsory license. 150 Copyright Act, 1911, 1 and 2 Geo. 5, ch. 46, sec. 19 (2) (ii). The otherwise similar compulsory license provision in the United States Copyright Act of 1909 is limited to the music. See note 80 supra. The British act, unlike the American act (see note 56 supra), was retroactive. Monckton v. Pathe Freres, 30 T.L.R. 123 (C.A. 1913). 181 Id., sec. 19(2) (1). 15 Id., sec. 19(3)(6). In contrast, the American statutory royalty rate is 2 cents per "part" manufactured. In 1909, 2 cents was considered equivalent to 5 percent of the manufacturer's selling price. See notes 59 supra, 186-188 infra. Id., sec. 19(3) (b). Copyright Order Confirmation (mechanical instruments: royalties) Act, 1928, 18 and 19 Geo. 5, ch. 46, confirming an order by the Board of Trade. 106 Report of the Copyright Committee (op. cit., supra, note 178), par. 81. 186 Copyright bill, 1955, sec. 8(2). 1 Id., sec. 8(3). 18 Id., sec. 8(4) (a). 46476-60 2. Canada (a) Section 7 of the Canadian Copyright Act 189 contains substantially the same compulsory license as the proviso in section 3 of the British act. (b) Section 13 of the act provides that, upon complaint to the Governor in Council, substantially the same compulsory license as in section 4 of the British act may be granted. (c) Section 19 of the act contains substantially the same compulsory license as section 19 (2) of the British act. This license applies to motion pictures which are considered "other contrivances, by means of which sounds may be reproduced, and by means of which the work may be mechanically reproduced" as provided in section 19.190 (d) Section 14 of the act provides that any person may apply to the Minister for a compulsory license for the printing and publishing in Canada of a copyrighted book if the owner of the copyright fails— (i) To print the book in Canada; and (ii) To supply sufficient copies of such printing to the Canadian market. This license is granted by the Minister as an exclusive license not to exceed 5 years.191 (e) Section 15 of the act provides that a compulsory license may be granted for serial publication in Canada if publication of a book in serial form is begun outside the British Dominions or in a foreign country whose nationals are not entitled to the benefits of the Canadian act. This license is also granted by the Minister. 3. Germany Section 22(1) of the German copyright law 192 provides that the author of a musical work, who has authorized another to make mechanical reproductions of the work, must permit any other person domiciled in Germany to make mechanical reproductions of the work. The author is entitled to an equitable remuneration. If the parties cannot agree on an "equitable" remuneration, the courts, with the assistance of experts, may decide.193 This permission must be given, even if the first person had purportedly been given an exclusive license. Under section 22(1) the applicant must sue if the license is not forthcoming. To facilitate obtaining a license the German draft law of 1953 proposes that the applicant must inform the copyright 180 Copyright Act, 1921, ch. 32, R.S.C. 1927, as amended by ch. 8, 1931; ch. 18, 1935; ch. 28, 1936; ch. 27, 1938. 10 Fox, Canadian Copyright Law." pp. 169, 174, 187 (1944); cf. note 213, infra, and note 59, supra. Under the Canadian act, the royalty is 2 cents for the playing surfac of each record (apportioned among different owners of works involved) and 2 cents for each other contrivance. Mechanical reproduction rights apply to literary and dramatic as well as musical works. 101 Copyright Act (supra, note 189), sec 14(7). No counterparts to this section and sec. 15 are found in the British act. Secs. 14 and 15 apply only if the author is a Canadian or non-Berne Union country national. 192 Law Concerning Copyright in Works of Literature and Music, June 19, 1901, as amended. 193 Voigtländer-Elster-Kleine, "Urheberrecht," p. 127 (1952). The mechanical reproduction right remains exclusive even though the author exercises it himself. Only when he licenses its exercise by others does the compulsory license provision become operative. The voluntary license may function as a standard to a court when fixing equitable emuneration. |