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Dunlea, 41 USPQ 201 (1939). Following this decision in North Carolina, the legislature took action to abolish any common-law right in such records.
The same ruling was followed by the District Court in RCA Mfg. Co., Inc. v. Whiteman, 43 USPQ 114 (1939), but this was reversed by the Second Circuit Court of Appeals, 46 USPQ 324 (1940), which held that any common law right which an artist may have in his rendition of music ends with the sale of records embodying it; that the records themselves "cannot be clogged with a servitude” once they are released to the public; that any relief which practical consideration demands must be sought in extending statutory copyright to such renditions, not in recognizing perpetual monopolies however limited their scope. (Certiorari denied by Supreme Court, 47 USPQ 531.) All attempts at relief in Congress have so far failed.
Remedies for Infringement
Having secured valuable rights by pursuing strictly the statutory route, the next concern is, how to protect them in case of infringement, and this brings us to section 25 of the Copyright Act:
"That if any person shall infringe the copyright in any work . . . such person shall be liable:
(a) To an injunction restraining such infringement;' The term "infringement" is not expressly defined in the Act, but we have seen what are the various rights comprised in copyright and may therefore define it for ourselves as an unlawful invasion of any one or more of these exclusive rights. In this respect, at least, "the copyright" is to be regarded as "divisible". Injunctions
Injunctions to restrain copyright infringement are not automatic but are to be granted only "according to the course and principles of courts of equity, on such terms as said court or judge may deem reasonable” (section 36). While formerly a preliminary injunction was only issued in clear cases, the modern tendency is more liberal, especially where the consequences of withholding it are likely to be more serious to the plaintiff than they would be, if granted, to the defendant; as for example in the case of dramas, where delay in waiting for a final decree might be fatal to the plaintiff's protection. Chappell v. Fields, 210 F. 864 (CCA 2, 1914).
Whenever equity has jurisdiction to grant an injunction by final decree, it has jurisdiction to grant a preliminary injunction, the basis for which is the maintenance of the status quo. But the plaintiff is not obliged to make out such a case in the first instance as would entitle him to a decree on final hearing, Where he establishes a prima facie case as to existence of copyright and its infringement, a temporary injunction will as a general rule be issued. American Code Co. v. Bensinger, 282 F
829 (CCA 2, 1922) ; Houghton Mifflin Co. v. Stackpole Sons, Inc., 42 USPQ 96 (1939). Proof of actual damages is not necessary if infringement appears and damages may probably follow. Holt & Co. v. Liggett & Myers, 37 USPQ 449 (1938).
Such relief is not generally available unless actual infringement is continuing or is threatened for the future. But the courts are not in agreement as to the proper procedure in cases where the prayer for injunction is denied because the infringement has come to an end before suit is commenced and there is no likelihood of its being resumed. In some circuits the rule is to transfer the case to the law side of the court for the purpose of awarding damages and profits. See for example, Hutchinson v. Vitaphone Co., 36 USPQ 1 (CCA 1, 1937); Pathe Exchange v. Dalke, 49 F.2d 161 (CCA 4, 1931).
On the other hand, as remarked in the more recent case of Sheldon v. Moredall Realty Co., 37 USPQ 286 (CCA 2, 1938), "these decisions followed the rule in suits for patent and trade mark infringement, but, with all due respect, we are unable to do that to the same extent.” The court pointed out that both the patent law and the trade mark law expressly make the right to an accounting and assessment of damages conditioned upon the granting of an injunction, whereas the Copyright Act of 1909 differs from both these statutes in that section 25 provides for remedies (a) by way of injunction, and (b) by way of award of damages and accounting for profits, without making relief under (a) a condition precedent to granting relief under (b); and, furthermore, that section 27 expressly provides that “the proceedings for an injunction, damages and profits may be united in one action"; and that inasmuch as, in the instant case, equitable jurisdiction was invoked in good faith by suitable allegations in the bill, "we are not now prepared to say that the jurisdiction falls with the failure of proof on the merits of the exclusively equitable rights." “Any Party Aggrieved”
Section 36 provides that the court or judge thereof "shall have power, upon bill in equity filed by any party aggrieved, to grant injunctions to prevent and restrain the violation of any right secured by said (copyright) laws", and that any injunction so granted may be served on the defendant “anywhere in the United States”.
There is some diversity of views among the courts as to the legal significance of the term “any party aggrieved”, but the weight of authority appears to be that sections 25 and 36 must be construed together and also in connection with section 42 (relating to assignments), and that inasmuch as the Act seemingly provides for the assignment of the copyright only as a whole, it follows that the grantee of anything less than the entire sum of the rights comprised in "the copyright" is not a "party aggrieved" and therefore cannot bring suit for injunction solely in his own name. He must join the owner of the legal title as a party plaintiff, or as party defendant if he demurs or is himself an infringer. Goldwyn Pictures Corp. v. Howells Sales Co., 282 F. 9 (CCA 2, 1922); Stephens v. Howells Sales Co., 16 F.2d 805 (1926). Of course if the right granted is one the exercise of which brings into being another work, such as a dramatization or a translation of a story, the grantee himself then gains the status of proprietor of an independent statutory copyright and may bring suit for infringement directly in his own name.
This rigid application of legal principles has led to repeated efforts to amend the Copyright Act so as to enable the grantee of any exclusive right embraced in copyright to bring suit in his own name to the extent of his interest in the copyrighted work. The new Rules of Civil Procedure, now made applicable to copyright suits by order of the Supreme Court (effective Sept. 1, 1939), provide that "Every action shall be prosecuted in the name of the real party in interest" (Rule 17). This rule is taken verbatim from old Equity Rule 37, and so presumably does not change the status of a mere licensee. Service of Process
Section 35 provides that civil actions, suits or proceedings may be instituted "in the district of which the defendant or his agent is an inhabitant, or in which he may be found.”
Note that in the case of a defendant corporation, jurisdiction cannot be acquired in a district in which it has no place of business merely by serving process upon an executive officer temporarily therein with no established office. Lumiere v. Mae Edna Wilder, Inc., 261 U.S. 174 (1923). Even though he may be doing business for the company by way of placing orders for materials and therefore acting as its "agent", he is not deemed to be "found” there for the purpose of serving process. Cargill v. Marks Credit Clothing Co., Inc., 43 USPQ 78 (1939).
In Deutsch v. Times Pub. Co., 45 USPQ 642 (1940), the court remarked: "It seems fair to assume that when Congress enacted the copyright laws it used the word 'found' in section 35 as defined by the courts and in no other way ... The determination of the question depends upon whether the (foreign) defendant corporation is doing business' in the State of New York. Merely renting an office and solicitation of business is not sufficient. The foreign corporation must be doing business in the district in such manner and to such extent that its actual presence there is established.” To the same effect, see Carpenter v. Prentice-Hall, Inc., upon reargument, 51 USPQ 449 (1941). Award of Damages and Profits
Subsection (b) of section 25 provides that a copyright infringer shall be liable:
"To pay to the copyright proprietor such damages as the copyright proprietor 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 every element of cost which he claims, or in lieu of actual damages and profits such damages as to the court shall appear to be just" (within the limits thereafter specified).
The courts have not been in agreement as to what elements of cost the defendant may offset. In Dam v. Kirke La Shelle Co., 175 F. 902 (CCA 2, 1910) the court rigidly applied the doctrine of "confusion of goods" where a story had been infringed by a dramatization thereof, and allowed the plaintiff all the defendant's profits without deduction for the expenditure of time and money in the employment of actors, the preparation of scenery and costumes, the hiring of theatres, advertising, and many other purposes. In a more recent case, however, involving infringement of a play by a motion picture, the Circuit Court of Appeals for the same circuit refused to follow the ruling in the Dam case and, while admitting the difficulty of discovering a satisfactory basis of apportionment, allowed the defendants credit for substantially the very elements of cost denied in the earlier case, and reduced the plaintiff's share to one-fifth of the net profits. Sheldon v. MetroGoldwyn Pictures Corp., 42 USPQ 540 (CCA 2, 1939).