10. Summary of provisions in foreign laws

The provisions of the foreign laws examined which most closely resemble the minimum and maximum damage provision of the U.S. law, are found in the British Fine Arts Act, 1862, in the "German Copyright Laws in Literary Works," and in "Works of Art," respectively, and in the Mexican copyright law. The British Fine Arts Act contains a minimum damage provision (10 pounds), but no fixed statutory maximum (double the value of the copies).166 The German laws have a maximum (penal damages of 6,000 marks). The Mexican law has what may be called a minimum damage provision (40 percent of the retail sales price).

Damages are frequently recoverable in criminal proceedings but they accrue to the aggrieved copyright proprietor, not to the State. Under some laws there is neither a minimum nor a maximum amount, but the proceeds from the sale of copies or from gate receipts seized in a criminal action are applied to compensate the copyright proprietor.167 In many foreign countries, actions for copyright infringement are, at least in part, criminal actions. The damage provisions do not always contain a sharp dividing line between civil and criminal proceedings, 168 and the copyright proprietor does not exclusively depend on a civil action for recovery. The effect of these provisions resembles to some extent that of the "in lieu" clause of section 101(b), title 17, United States Code.

IV. PREVIOUS REVISIONS OF THE DAMAGE PROVISIONS

Since the Copyright Act of 1909 was enacted, two amendments to its damage provisions have been passed: The first introduced a maximum damage provision of $100 in the case of innocent infringement of undramatized or nondramatic works by means of motion pictures 169 and the second limited damages to $100 in cases of innocent infringement of a nondramatic literary work by broadcasting. 170 These two amendments have much in common. Both concern damages for infringement by a medium of mass communication. Both provide for low maximum damages for innocent infringement.11

166 Supra, A, III, 1(a).

167 E.g., French Criminal Code, Art. 429; Art. 54, Swiss Copyright Law.

169 17 U.S.C. 104 provides a strict delineation: Willful infringement for profit is deemed a misdemeanor and punishable by fine. There is no possible advantage to the copyright owner in such a criminal proceeding. For a detailed analysis of the distinction between methods of enforcement here and abroad see statement by Gabriel L. Hess, on behalf of motion picture distributors, "Hearings Before Committee on Patents on Revision of Copyright Laws," 74th Cong., 2d sess., 1297 at 1321 (1936).

160 Amendment to act of Mar. 4, 1909, sec. 25, act of Aug. 24, 1912, 37 Stat. 489 (now 17 U.S.C. 101). 170 17 U.S.C. 1(c) as amended by the act of July 17, 1952, 66 Stat. 752.

171 Concerning the act of July 17, 1952, supra S. Rep. No. 1778, 82d Cong., 24 sess., 3 (1952) states as follows: "The attorney for the broadcasters also testified [Hearings Before Subcommittee No. 3 on the Judiciary on H.R. 3589, 82d Cong. 1st sess., 15 et. seq. (1951)] that his association recommends that the $250 minimum statutory damage clause be replaced by a provision whereby the infringer would be liable for actual damages. It is believed that the subject of damages which affects many of the other provisions of the copyright law requires study as a separate problem or in relation to a complete revision of that law." The statutory damages were assessed at a low figure for innocent infringement by broadcast of non-dramatic literary works, thereby creating a second instance of a distinction between innocent and willful infringement.

V. PREVIOUS PROPOSALS FOR THE REVISION OF THE DAMAGE

PROVISIONS

1. The Vestal bills 172

(a) The damage provisions

Section 16 of the 1926 and 1930 bills provided in part as follows: If any person shall infringe * *, such person shall be liable—

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(b) To pay such damages to the owner of the right infringed as he may have suffered due to the infringement as well as all the profits which the infringer shall have made from such infringement; and in proving profits the plaintiff shall be required to prove only sales, rentals, license fees and /or any other revenue derived from any disposition of an infringing work, and the defendant shall be required to prove every element of cost which he claims; (c) To pay, at the option of the owner of the right infringed, in lieu of actual damages and profits, such statutory damages as to the court shall appear to be just, and in assessing such damages the court may, in its discretion allow the amounts hereinafter stated; but such statutory damages shall in no case exceed the sum of $5,000, nor be less than $250, and shall not be regarded as a penalty, but this limitation *** shall not apply to infringements occurring after actual notice **

1. In case of an unauthorized newspaper reproduction of a copyrighted photograph such statutory damages assessed, in lieu of actual damages and profits, shall not exceed the sum of $200 nor be less than the sum of $50; * * *.

Section 14(b) of the 1931 bill was the same as section 16(b) of the previous bills. The provision on statutory damages varied considerably. Section 14 (c) reads as follows:

(c) To pay, at the option of the owners of the right infringed, in lieu of actual damages and profits, such statutory damages as to the court shall appear be just: Provided, That such statutory damages, in the case of an unauthorized dramatic performance, or of an unauthorized motion picture exhibition with or without sound and/or dialogue, or the unauthorized performance for profit of a musical work, shall not exceed the sum of $10,000 nor be less than $250; and in the case of an unauthorized newspaper or periodical reproduction of a copyrighted photograph, shall not exceed the sum of $200 nor be less than $10, and in any other case shall not exceed the sum of $5,000 nor be less than $100; * *

In the case of innocent infringement, section 16 of the 1926 and 1930 bills provided as follows:

(d) For the purpose of avoiding imposition and so-called literary blackmail, in any action for infringement of copyright in any dramatic work (including continuties, motion pictures and motion-picture photoplays), if defendent proves that he was not aware that he was infringing or has been subjected to fraud or substantial imposition by any third person or persons other than one of said defendant's employees and in either case that such defendant has acted in good faith, the plaintiff shall not be entitled to any remedy against such defendant other than an injunction in respect to future infringement: Provided, however, That this section shall not apply, in the event of registration of copyright or of an instrument relating to or affecting the same or any right therein, prior to such defendant's entering into or upon the undertaking which results in such infringement, or if the work alleged to have been infringed be a published work, if notice of copyright shall be affixed (on the reverse of the title page, or at the foot of the first page of the text), to each copy published by the copyright owner or under his authority; or if the work alleged to have been infringed be a dramatic work, if such work has had a first class public production in the United States of America.

The 1931 bill did not, like the preceding bills, rule out damages altogether in cases of innocent infringements without constructive

172 H.R. 10434, 69th Cong., 1st sess. (1926); H. R. 6990, 71st Cong., 2d sess. (1930); H.R. 12549, 71st Cong.. 3d sess. (1931). The hearings on these bills referred to are: Hearings Before the Committee on Patents, House of Representatives.

or actual notice; instead section 14(d) provided for special lower damages as follows:

(d) In any action for infringement of copyright in any work, if defendent proves that he was not aware that he was infringing or has been subjected to fraud or substantial imposition by any third person or persons other than one of said defendant's employees and in either case that such defendant has acted in good faith, the plaintiff shall not be entitled to any remedy against such defendant other than to recover an amount equivalent to the fair and reasonable value of a license, but not less than $50 nor more than $2,500: Provided, however, That this subsection shall not apply, in the event of registration of copyright or recordation of an instrument relating to or affecting the same or any right therein, prior to such defendant entering into or upon the undertaking which results in such infringement, or if the work alleged to have been infringed be a published work published with authority from the copyright owner, if notice of copyright be affixed thereto; or if the work alleged to have been infringed be a dramatic work, other than a motion picture, it such work has had a first-class public production in the United States of America of at least one week in a town of not less than one hundred thousand population.

The remedy against innocent secondary infringers, i.e., printers, binders, and manufacturers of copyrighted works (except musical and dramatico-musical works), was limited by all Vestal bills to an injunction against future printing. Section 16(e) of the 1926 and 1930 bills read as follows:

(e) In case of the infringement of any creation of an author (except a dramatico-musical or musical composition) by any person or corporation engaged solely in printing, binding, or manufacturing the same in printed form, where such infringer shall show that he was not aware that he was infringing and that such infringement could not have been reasonably foreseen, the person aggrieved shall be entitled only to an injunction against future printing, binding, and manufacturing the same in printed form, and to the delivery up of all such printed, bound, and manufactured material, and shall not be entitled to any profit made by such infringer from his contract or employment to print, bind, or manufacture in printed form, nor to damages, actual or statutory against such infringer: Provided, That in case such printer is also the publisher, distributor, or seller of such creation, or in partnership or regularly engaged in business with such publisher, distributor, or seller, or is in anywise directly or indirectly interested in the publication, distribution, sale, or exploitation of such creation (other than as derived solely from his contract or employment merely to print, bind, or manufacture the same in printed form) or in any profits to be derived from such publication, distribution, sale, or exploitation, then this subsection (e) shall not apply.

Section 14 (e) of the 1931 bill changed the proviso to read as follows: ***Provided, That any injunction against the continuation or repetition of such infringement in future issues of such newspaper, but not against the completion of the publication and distribution of any issue of such newspaper where actual printing of such issue has commenced; nor, where such actual printing has commenced, shall any order be granted to sequester, impound, or destroy the issue containing such infringing matter.

The 1931 bill contained an additional provision limiting liability of publishers of newspapers and periodicals in regard to advertisements. The following limitation seems to have been inserted on the insistence of magazine publishers: 173

SEC. 14. *** (f) In the event that any advertising matter of any kind carried by a newspaper or periodical shall infringe any copyright work, where the publisher of the newspaper or periodical shall show that he was not aware that he was infringing and that such infringement could not reasonably have been foreseen, the person aggrieved shall be entitled to an injunction only before work of manufacture of the issue has commenced and only against the continuation or repetition of such infringement in future issues of such newspaper or periodical,

173 See Hearings on H.R. 10434 (1926), statement by George C. Lucas, executive secretary, National Publishers' Association, 161 at 169.

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but shall not be entitled to any profit made by such publisher from his contract or employment to carry such advertising matter, nor to damages, actual or statutory against him: Provided, however, That no injunction shall lie against the completion of the publication and distribution of any issue of such newspaper or periodical containing alleged infringing matter where work of manufacture of such issue has commenced: Provided further, That this clause shall in no wise limit the remedies of the person aggrieved against the advertiser, advertising agency, or the person or corporation responsible for the infringement: Provided further, That if the publisher of the newspaper or periodical is in anywise interested in the commodity or subject matter advertised, or is the advertiser or advertising agency, or engaged in business with the advertiser or advertising agency, in such wise that the publisher is entitled to any profits or benefit from the sale of the subject matter advertised, or from the handling or placing of such advertising matter (other than profits derived by the publisher merely from his contract or employment to run such advertising matter in his newspaper or periodical), then the immunity granted by this subsection (f) shall not apply.

(b) The hearings 174

He

Mr. Solberg, then Register of Copyrights, strongly opposed the provisions of the 1926 bill to safeguard innocent infringers. 175 said in part:

All these proposals are virtually inroads upon the author's right to the protection of his exclusive privileges, and they have the regrettable effect of cutting down the powers of the courts to properly adjudicate the trespass committed.

If such provisions are enacted into law there seems to be no logical bar to the extent to which special classes of infringers may continue to claim special exemption until at length the sound legal maxim that "ignorance excuses no one" will, so far as copyright is concerned, be legislated out of existence.

And further: 176

*** the deliberate statement in the bill that the profits, which in the very language of the bill it is admitted have been made by the innocent infringer, shall not be divided with the author is the subject of criticism.

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Mr. Weil criticized Mr. Solberg's view which he considered based upon practical misconceptions or on a failure *** to see what was really intended, and I think that was due to the fact that after all all legislation is made for practical men, and however accurate theory may be theory when carried to its ultimate extreme is not fitted for the ordinary realities of life.177

In the 1931 hearings, the National Association of Broadcasters submitted a report 178 in which it was stated:

To be satisfactory a copyright law must provide maximum and minimum statutory damages which are reasonable and not excessive in amount. This applies to the case of both willful and innocent infringement. In fact a great deal is to be said for eliminating any mention of minimum damages so that in proper cases the damages may be purely nominal.

Mr. Caldwell, counsel for the NAB, objected to the minimum amounts of damages for both willful and innocent infringement:179

*** look at the amount of the statutory damages which are the sort which will usually be sought against broadcasters and practically all others except cases where there is an easily provable profit. A single performance for profit *** entails damages from $250 to $10,000 * * *. The cost of a license of such work based on annual licenses *** would be a few cents or less. Two hundred and fifty dollars is high as a maximum for such a case. Instead the maximum under the present law of $5,000 has been increased to $10,000. Yet the newspaper reproduction of a copyrighted photograph is to be subject to

174 Supra, note 172.

175 Hearings on H.R. 10434 (1926), statement by Thorvald Solberg, 226 at 237.

176 Ibid.

177 Hearings on H.R. 10434 (1926), statement by Arthur W. Weil, Counsel for MPPA, 248 at 249. See also, Hearings, statement of W. H. Osborne, chairman of the Copyright Committee of the Author's League of America, 290 at 293.

17 Through Mr. Hedges, supra, note 94.

179 Hearings on H.R. 12549 (1931) 52 at 78.

damages from $10 to $200. These are penalties and not damages in spite of the provisions to the contrary.

Mr. Caldwell proposed a minimum of $100.180 For innocent infringement his amendment to section 14(d) provided for recovery of an amount equivalent to the fair and reasonable value of a license. fee for the specific infringement, but not less than $10 or more than $1,000.181 The words "for the specific infringement or infringements complained of" were added in order to bring these statutory damages into relationship with the amount of ASCAP license fee for the performance of the work.182

Mr. Weil, for the Motion Picture Producers and Distributors, opposed the maximum of $10,000 statutory damages in view of the possibility that multiple performances in theaters would lead to an unjustified multiplication of that sum.183 He proposed to to limit the total responsibility for infringement in cases where no damage and no profits were shown, to $10,000.18 Mr. Weil approved the provision for reduced liability in the case of an innocent infringer, but considered that "he should pay something for the benefit that he has had.185

Mr. Burkan submitted a brief on behalf of ASCAP 186 in which he stated that the proposed section 14 (c) regarding innocent infringement made piracy "cheaper than a license", and was "without the slightest justification except to encourage wholesale piracy."

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2. The Sirovich and Duffy bills 188

(a) The damage provisions

Section 24 of the Sirovich bill provided in part as follows:

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Subject to the limitations provided in sections 25 and 26, the author or other owner of any right secured by this Act is entitled to the following remedies against any infringer of such right: ***.

(b) The recovery of (1) such damages as the owner of the right infringed has suffered from the infringement * * *; and (2) the part of the profits of the defendant to which such owner may be justly entitled; ***; but where the defendant establishes that he was an innocent infringer, recovery under this subdivision (b) shall be limited to an amount which shall justly compensate the owner of the right infringed for the use made of the copyright or any right therein * * *.

(c) In lieu of the remedies provided under subsection (b) the plaintiff may at any stage of the trial claim the statutory damages which he shall be awarded in an amount not in excess of $20,000 nor less than $250, except that in the case of an infringement of a musical composition which is not a component part of a copyrighted motion picture or dramatico-musical composition, the minimum statutory damages shall be $125, and such statutory damages shall not be regarded as a penalty, provided the limitation as to the maximum amount of recovery as statutory damages shall not apply to a willful infringement.

187 Reports on the Vestal bills (all on H.R. 12549), 71st Cong., 2d sess.: No. 1689, May 28, 1930 (majority); No. 1689, pt. 2, June 3, 1930 (minority); No. 1898, June 13, 1930; No. 2016, June 24, 1930. 71st Cong., 3d sess.: No. 1732, Feb. 17, 1931.

These reports stressed, as the main feature of a revised damage provision, the distinction between willful and innocent infringement. The innocent infringer was said to be soneone who violated a property right and had to suffer some consequences, but not the same consequences as a willful infringer or an infringer with notice. Still less liability was to be imposed on a printer who printed or bound an infringing work while acting in good faith.

185 Sirovich bill, H.R. 11420, 74th Cong. 2d sess. (1936); Duffy bill, S. 3047, 74th Cong., 1st sess. (1935); Daly bill, H.R. 10632, 74th Cong., 2d sess. (1936); the hearings on these bills referred to are: Hearings Before the Committee on Patents, House of Representatives, February, March, April, 1936.