Section 25 provided that a secondary innocent infringer such as a printer would be subject only to an injunction against future printing. The damage provisions of the Duffy bill 189 read in part as follows: SEC. 25. (a) That if any person shall infringe the copyright *** shall *** be liable: ***. such person (2) To pay such damages to the owner of the right infringed as he may have suffered due to the infringement, as well as all or such parts of the profits which the infringer shall have made from such infringement as the court may decree to be just and proper; ***. (3) To pay in lieu of the proved damages and profits***, such damages, not exceeding $20,000 for all infringements by any one infringer up to the day of suit, as shall in the opinion of the court be sufficient to prevent their operation as a license to infringe, and as shall be just, proper, and adequate, in view of the circumstances of the case ***: Provided * * *, That an unauthorized performance by radio broadcasting transmitted simultaneously by two or more connected stations shall be regarded as the act of one infringer. The exceptions from liability for secondary innocent infringers were similar to, but more elaborate than, those in the Sirovich bill. Both the Sirovich and Duffy bills contained provisions for reduced liability in cases of innocent infringement. (i) The Sirovich bill.-Under this bill, the court had discretion to hear expert testimony as to current prices and other pertinent matters, to determine actual damages. The amount of damages was not necessarily based on market value, but was to be sufficient to prevent their operation as a license.190 In the case of innocent infringement recovery was to be limited to just compensation for the use made of the infringed right, and the compensation was to be determined with the aid of expert testimony as to current rates.191 The minimum damages were to be reduced to $125 in the case of musical compositions not a part of a motion picture or dramaticomusical composition. The maximum damages were to be raised to $20,000 which could be exceeded in the case of willful infringement.192 An infringer who printed a work for others and established that he was an innocent infringer, was to be subject only to an injunction against future printing.19% Infringement by printing advertising matter in a periodical was to entitle the owner to an injunction and/or damages only against the advertiser and advertising agency; in the case of any innocent infringer who participated in publishing such advertising matter, the sole remedy was an injunction against future publication,194 and such injunction was not to be available in respect to an issue of a periodical in process of publication or to previous issues. 195 (ii) The Duffy bill.-The bill entitled the owner of a copyright to actual damages and profits made from the infringement, to be determined by the court as it thought just and proper.196 In lieu of proved damages and profits the court could award statutory damages not exceeding $20,000 for infringements committed up to the date of suit. The exact amount was to be determined by the court so as to be sufficiently high not to operate as a license to infringe and to be just, proper, and adequate. In the case of a newspaper reproduction of a photograph, maximum damages were to be $200, and an unauthorized performance by radio broadcasting over a network was to be considered a single infringement.197 In the case of architectural works statutory damages could not be assessed unless the infringer was "possessed of actual knowledge thereof" 198 There was no statutory minimum. In any action for infringement the plaintiff had to prove registration and, in the case of published works, notice of copyright, or he was limited to an injunction, or the fair and reasonable value of a license in a sum not more than $1,000 or both, as determined by the court.199 For innocent secondary infringers the Duffy bill made far-reaching exceptions from liability.200 Printers, binders or manufacturers of infringing works were to be subject only to an injunction against future infringement- where such infringer shall show that he was not aware that he was infringing and that he was acting in good faith, and that such infringement could not have been reasonably foreseen.201 The person aggrieved was not entitled to any profit made from the printing, or to damages, actual or statutory 202 There was no right to enjoin publication of an infringing periodical manufacture of which was commenced prior to the time when action was brought except upon proof to the satisfaction of the court that the manufacture was commenced with actual knowledge that copyright existed in the work alleged to have been infringed.203 Seizure of infringing articles was not permitted in cases of infringement by a publisher or distributor of a newspaper, magazine, or periodical, a broadcaster, or a motion picture producer or distributor, who acted innocently and in good faith.204 (b) The hearings 205 (i) In favor of the Duffy bill.-The Copyright Office did not express ts preference for any of the bills. 206 However, Mr. Wallace McClure, Assistant Chief of the Treaty Division, Department of State, and and chairman of the Interdepartmental Committee on Copyright, supported the Duffy bill.207 Mr. McClure was opposed to minimum damages in the copyright law because, in his opinion, they were penalties imposed without the safeguards of the criminal law and did not require affirmative proof of intent.208 Even constructive intent need not, and often could not, be present, especially in cases of infringement by broadMr. McClure said as to the elimination of minimum damages cast.209 in the Duffy bill: In providing *** for the elimination of the minimum statutory damage fee, there was no thought of leaving the copyright holder unprotected. Under the Duffy bill, the holder * * * has [in civil actions] effective injunctive relief, 201 Sec. 25(c). 202 Ibid. 303 Sec. 25(d). 104 Sec. 25(e). 305 Supra, note 188. 206 Hearings, 1075, statement by William L. Brown, Register of Copyrights. 207 Hearings, 260; Membership of Committee, Hearings, 1065. 209 Hearings, 1072. See also statement endorsed by Assistant Secretary of State Moore, Hearings, 265 at 266. 200 Hearings, 269. unlimited damages *** on proof of loss, and provisions for statutory damages on mere showing of infringement, regardless of loss, with a maximum of $20,000. The minimum statutory damage fixed by the Duffy bill is that the court must award, where infringement, though no loss, is proved, an amount sufficient to make it unprofitable for infringement to continue and such shall be just, proper and adequate ***. This should operate as full protection to the copyright holder, but is not calculated to give him subsidized bargaining power. The representative of the National Association of Broadcasters 210 stated: It is a curious paradox that the minimum fine [under the criminal provision of the copyright law] is $100 in a criminal proceeding, where willfulness is an essential ingredient, and $250 in a proceeding where intent is immaterial. On the distinction between willful and innocent infringement, Mr. Caldwell said: 211 When the Copyright Act of 1909 was enacted the line between innocent*** and willful infringement was clear. All the known methods of infringement involved using a published copy of the copyrighted work * Except in rare cases, the mere fact of infringement demonstrated automatically that it had been willful, and Congress was justified in acting accordingly. Scientific advances have changed all that ***. A deliberate, willful infringement, at least in radio, is a rare thing and, in the great majority of cases, any intent to infringe is completely absent. (ii) In favor of the Sirovich bill.-Mr. Burkan, in supporting the $250 minimum provision 212 stated the purpose of fixed statutory minimum damages as twofold: (1) to prevent the award of nominal damages and (2) to act as a deterrent to prevent the defendant and others from pirating. Mr. Burkan argued that the fine of from $100 to $1,000 and threat of imprisonment 213 was open to the same objection, namely that it might be used for bargaining purposes. He stated that the actual ASCAP license fees had no relation to the $250 minimum provision and were not based on it. Mr. Burkan quoted the case of Brady v. Daly 214 to the effect that a statutory minimum provision did not make the statute a penal one and that, in its absence, it would often be difficult to give any remedy where proof of damages was not possible. Mr. Burkan held that the lack of a general minimum damage provision before the act of 1909 eged piracy and discouraged intellectual production. As an example, Mr. Burkan mentioned the compulsory license clause: 215 The minimum damage provision is not extended to cover infringement by this means of reproduction of a work. In consequence composers were cheated and defrauded of the remuneration that the law entitled them to, and legitimate manufacturers suffered from keen and unfair competition because * the pirate made no payment whatsoever.216 Mr. Hess stated 217 that minimum damages were used from the time of the first copyright statutes because Congress realized that it was facing a unique problem in legislating for intangible property rights in intellectual creations. Mr. Hess was of the opinion that the drafters of the Duffy bill were unrealistic in hoping to enforce licensing of copyrighted works without 210 Statement by Louis C. Caldwell, Hearings, 465 at 481. 211 Hearings, 465 at 477. 212 Information furnished by Nathan Burkan, Hearings, 1093 at 1107. 213 17 U.S.C. 104. 214 175 U.S. 148 (1899) at 154. 215 17 U.S.C. 1(e). 216 Burkan, Hearings at 1109. 217 Statement of Gabriel L. Hess, in behalf of Motion Picture Distributors, Hearings, 1297 at 1312. a minimum damage provision.218 However, Mr. Hess was ready to agree to a minimum damage clause of $125 in the case of infringement of "small" rights in musical works.2 He said: 220 219 Statutory damages are compensatory damages, not primarily for the use made or the license fee withheld, but for the actual invariably existing indirect damages due to the expense of policing the copyright to detect and take action against those who will not negotiate licenses. This damage *** is not susceptible of allocation to the particular infringement *** under ordinary rules of evidence, so that Congress takes legislative notice of their existence by providing a minimum.221 Mr. Kilroe 222 stated that minimum damages did not control the bargaining for the price to be paid for the use of a work, but prevented unauthorized use made in the hope that, if discovered, only the actual value of the license would have to be paid: In other words, the specified minimum damage provision of $250 is a necessary alternative to "compulsory licensing." And further: Minimum damages are vastly more important as a guide to users contemplating infringement, than they are to any Court concerned with assessing damages in the rare case of a claim actually brought before it * * * An adequate minimum statutory damage serves to prevent abuses. Unspecified damages are an invitation to infringement and to litigation.223 8. The Shotwell bill (a) The views of the interests As part of the "Shotwell papers" 224 a comparative table was drafted setting forth the proposals of the various interest groups for a new copyright law. 225 This table contained drafts for a damage provision by the following groups: Authors, Book Publishers, Radio, Motion Pictures.226 The various proposals compare as follows: As to minimum and maximum damages: 1. Authors: (a) Minimum: $250; $50 for reproduction of photograph in newspaper. (b) Maximum: $25,000; $200 for reproduction of photograph in newspaper. 2. Book Publishers: (a) Minimum: None, except damages must be sufficient to prevent their operation as a license. (b) Maximum: $20,000; $200 for reproduction of a photograph in a newspaper. 221 For minimum damages in other laws see the list compiled by Edward A. Sargoy, Hearings, 1326 at 1329. 222 Statement by (the late) Edwin P. Kilroe, Memorandum in Behalf of the Motion Picture Producers and Distributors, Hearings, 1185 at 1187. 223 The committee report on S. 3047 (No. 896, May 13, 1935, 74th Cong., 1st sess.) pointed, as the principal invocation in the Duffy bill, to the elimination of statutory minimum damages: "So many palpable injustices have arisen from the present law that courts have acquired a dislike for handling such cases and have come to feel that the law is wrong." 224 Studies on the Shotwell bill were begun in 1938 by a Committee for the Study of Copyright of the National Committee of the United States on International Intellectual Cooperation and the bill was introduced as S. 3043 by Senator Thomas of Utah on Jan. 8, 1940, under the title "Act for the Protection of Literary and Artistic Works." No hearings were held and no action was taken on this bill. 225 The table probably was drafted in 1939. It is understood to represent only tentative views which were changed to some extent during the discussions on the Shot well bill. However, there seems to be no later comparative table. 226 The draft by the group called "Scholarship" is omitted here. 3. Radio: (a) Minimum: None, except damages must be sufficient to prevent their operation as a license. (b) Maximum: $20,000. 4. Motion Pictures: (a) Minimum: $250; $50 for reproduction of photograph in newspaper; special-presumably lesser-amount for infringement of musical composition not component part of motion picture or dramatico-musical work; same for infringement by mechanical reproduction. (b) Maximum: $5,000. As to multiple infringements: 1. Authors: No change from act of 1909. 2. Book Publishers: Unauthorized performance by network broadcasting considered single infringement. 3. Radio: Same as book publishers. 4. Motion Pictures: Increase of $50 over minimum for each similar act of infringement, not exceeding maximum of $5,000. However, all infringements by motion picture or by network broadcast considered single infringement. As to limitations on liability: 1. Authors: None. 2. Book Publishers: Plaintiff must prove registration and copyright notice, or be limited to injunction, and value of license not exceeding $1,000. A printer innocently infringing by printing infringing work, subject only to injunction, except where he is also publisher of the work. No liability for (1) charitable performances of music; (2) auditory reception by broadcasts, or coin-operated machine, or by a mechanical instrument or film made with the consent of the copyright owner, except where admission, cover, or minimum fee is charged; (3) incidental inclusion of copyrighted work in newsreel or news broadcast. 3. Radio: Plaintiff must prove registration and copyright notice, or be limited to injunction, and value of license not exceeding $1,000. Innocent infringer by including advertising matter in newspaper, periodical or broadcast, subject only to injunction against repetition. No liability for: (1), (2), and (3): Same as Book Publishers. Innocent infringer liable only for a sum which equitably compensates owner of right for use, but such sum to be sufficient to prevent its operation as a license, and to be just, proper and adequate; court may receive testimony as to current prices for like works. (b) The damage provisions of the Shotwell bill Section 19 of the Shotwell bill gave the copyright owner an option to recover (1) actual damages; or (2) all or such part of the profits as the infringer made from the infringement; or (3) statutory damages. For statutory damages the minimum was $250, and the maximum $10,000, except in the case of reproduction of a photograph the amounts were $50 and $250, respectively, and in the case of an infringing performance of a musical work the amounts were $150 and $2,500. The Shotwell bill had elaborate provisions regarding statutory damages |