COMMENTS AND VIEWS SUBMITTED TO THE COPYRIGHT OFFICE ON THE OPERATION OF THE DAMAGE PROVISIONS OF THE COPYRIGHT LAW

By John Schulman

APRIL 1, 1958.

Dr. Brown should be congratulated for his enlightening study on damages. It indicates that although the damage provisions of the statute are far from perfect, they have worked quite well and need little if any revision. As construed by the courts, these provisions do not seem to have worked any great hardship upon copyright proprietors or users of material, except perhaps in isolated cases. The study supports observations of those of us who have argued that although the Copyright Law in theory contains the seeds of a large volume of litigation, in actual practice the number of lawsuits are infinitesimal, especially in view of the number of copyrights which subsist and the number of uses of them which are made each day.

Another significant disclosure in the study concerns insurance coverage against copyright infringement. Liability for infringement is included under policies which also indemnify the assured against such torts as libel, invasion of the right of privacy, and the like. It seems apparent from the report that the insurance carriers do not consider that the statutory damage provisions constitute an unusual hazard.

Since we are seeking to effect a workable revision of the Copyright Law, not one which is ideally perfect, it is my recommendation that we do as little tinkering as possible with the damage provisions.

By Harry G. Henn

JOHN SCHULMAN.

APRIL 8, 1958.

Professor Brown should be complimented on the amount of worthwhile data which he and his assistants were able to compile on the operation of the damage provisions of the copyright law. The study is labeled "exploratory" and, because of the inherent nature of a survey based on questionnaires, personal interviews, and reported cases, suggests few if any definitive conclusions.

The Brown study, in my opinion, provides an excellent supplement to the earlier studies on the damages provisions by William Strauss and on the liability of innocent infringers of copyrights by Alan Latman and William S. Tager. It was particularly reassuring to note that the Brown study discussed several aspects which, as mentioned in my letters of May 13, 1957, and April 7, 1958, were not sufficiently treated in the two earlier studies. The Brown study, by its factual review of the operation of the damage provision in practice, appears to me to corroborate the tentative views which I expressed in my letters of May 13, 1957 and April 7, 1958.

While it would have been beyond the expressed scope of the Brown study, a similar analysis of the operation of other remedies for infringement (injunction, preliminary and permanent; impounding of infringing articles; delivery for destruction of all infringing copies or devices as well as all plates, moulds, matrices or other means for making infringing copies; importation restriction; and criminal sanctions) would have been helpful.

By way of one final general observation, it seems to me that if we are going to attempt to simplify the securing and maintaining of statutory copyright, we ought to attempt to simplify the enforcement thereof, by having relatively simple statutory provisions to be applied by the courts in the exercise of reasonable discretion. HARRY G. HENN.

By Edward A. Sargoy

APRIL 29, 1958. I have read with great interest the exploration into how the damage provisions of the Act of 1909 actually function in practice, as made by Prof. Ralph S. Brown, Jr., with the assistance of William A. O'Brien and Herbert Turkington.

This is a unique study of an important general aspect of copyright. Ralph Brown has turned in some very interesting observations which tend to put into more realistic perspective the practical problems of utilizing the copyright damage provisions to protect copyrighted works.

I note that at various points it is reiterated in the study that its observations do not generally apply to performance-right cases. While performance-right cases, particularly as to music, are briefly discussed, with an indication that the right to recover minimum statutory damages therefor has not been abused in practice, the study was primarily concerned with an examination of the typical treatment in practice of the more substantial type of infringement. These are usually rather isolated incidents for any given copyright, if they do occur at all. An unauthorized use of a performing right of a musical composition or, of a motion picture, which might have been licensed for a few pennies or a few dollars, is also a most substantial appropriation to the individual copyright owner concerned. Virtually his entire work is taken, in perhaps the only important market that he has, and even though it usually involves a very small monetary item in the total copyright economy, we must recognize the potentiality of like infringements of the same work being multiplied innumerable times.

Ralph Brown's study having treated with the practical problems involved in protecting the copyright against a substantial infringement, and the assertion and resistance of infringement claims in as well as out of court, for settlement purposes, I thought that I might supplement the observations of the study with my own observations of the very practical considerations that also have governed the application of minimum statutory damages to protect an entire industry's distribution system under copyright. This has been necessary, for example, to insure the availability of its mass market for performing uses of each copyrighted motion picture at thousands of theaters at which it will be licensed in the normal course of day-to-day business, and to deter unlicensed uses by the very licensees to whom the necessary weapons, the copyrighted film prints, are entrusted for other limited exhibition uses.

This, as you know, has been an experience of almost 30 years for me. Ralph Brown indicates, I gather, the necessity for retaining such minimum statutory damages to insure licensing of the small performing rights, without dwelling particularly upon the point. My purpose here is to supplement his paper by realistically pointing up some very practical considerations that call for such retention.

If I now relate experiences and statistics going back over 25 years, it should be remembered that what was done then and the conditions which were faced and for the most part overcome during the 1930's and early 1940's existed under the present law, and utilized its present remedies. The conditions for a reoccurrence exist today, were the law to be changed in this respect, and the existing vigilance relaxed. The observations are therefore still pertinent and timely.

It has seemed to me that where the individual appropriation involves any unlicensed use which would have had a license valuation of over $250, had it been licensed, the provisions of the statute for actual damages, or for the profits attributable to the infringement, are more likely to come into play. The study by Ralph Brown and his assistants indicates how various of these situations often work out in practice.

It is where the unauthorized appropriation involves uses of lesser license values that great difficulties would be encountered in this country to enforce licensing systems if we did not have minimum statutory damage provisions to deter mass infringements and to insure normal licensing. There are very important practical considerations in this regard.

In the motion picture industry, for example, hundreds of thousands-if not millions of dollars may have been invested in the production of a negative of which several hundred copyrighted positive film prints are made at a cost ranging from $250 to $1,000 per print. There is no basic market other than the right to project the shadow of the print on the screens of the 17,000 or so available theaters. Each of these exhibiting customers will enter into an agreement with the distributor, for a license, under the film print's copyright to exhibit it on one or more designated days at a specified theater for an agreed-upon flat or percentage license fee known colloquially as a film rental. While major licensees such as a large