FRANKFURTER, J., dissenting. 337 U.S. statute." It did so despite the fact that the term “royalties" includes proceeds for the use of patents, 26 U. S. C. § 119 (a) (4), and that, as will be seen, the theory of the indivisibility of a copyright had its genesis in a doctrine first applied in the patent field. 5. Thus we are brought to the question which the Treasury, the courts and the parties here have regarded as determinative of this controversy: may serial rights under a copyright be sold in law as they constantly are sold in the literary market? Specifically, is there some inherent obstacle of law which precludes the sale of such serial rights from having the usual incidents of a commercial sale? If it were impossible to make a sale, then the proceeds arguably are "royalties" because in that event the transfer can have been only for the use. There would still remain the difficulty of getting the lump-sum payments within the reasonable meaning of § 211 (a) (1) (A). For, it is fair to recall, § 119 (a) (4) would only determine whether the payment is from a source within the United States, not whether it is taxable. There would be the further difficulty of calling a payment a "royalty" when its amount bears only that relation to the future proceeds obtained by the transferee in exploiting the literary product as would be reflected in the purchase price of any income-producing property. If, on the other hand, the valuable right that, commercially speaking, was in fact sold, may as a matter of law also be treated as a sale, the proceeds would not be included. This conclusion, derived from a reading of § 211 (a) (1) (A), is made explicit by the Regulations and the House and Senate Reports. See ante, pp. 410-411. 14 General Aniline & Film Corp. v. Commissioner, 139 F. 2d 759 (C. A. 2d Cir.); see also Commissioner v. Celanese Corp., 78 U. S. App. D. C. 292, 140 F. 2d 339. Both cases are under § 143 (b), the section with which § 211 (a) (1) (A) was made coterminous. 369 FRANKFURTER, J., dissenting. The notion that the attributes of literary property are by nature indivisible and therefore incapable of being sold separately, is derived from a misapplication by lower courts of two early cases in this Court. These were concerned with the right of the transferee of less than all the rights conferred by a patent to sue an infringer. The inherent nature of the interests in intellectual property and their commercial negotiability were not involved. The Court determined the procedural problem before it so that the infringer would not "be harassed by a multiplicity of suits instead of one," and would be not subjected to "successive recoveries of damages by different persons holding different portions of the patent right in the same place." Gayler v. Wilder, 10 How. 477, 494-95 (U. S. 1850); Waterman v. Mackenzie, 138 U. S. 252, 255. But in its bearing on the procedural point, one of these cases recognized the saleability of less than all of the patented rights so long as the transfer consisted of at least one of the three rights separately listed in the patent statute. Waterman v. Mackenzie, supra. We thus find scant illumination of the intrinsic and legal nature of property rights in a copyright in the procedural analysis of these cases. Keener insight into such rights has been given by Mr. Justice Holmes in a case involving substantive questions in the law of copyrights: "The notion of property starts, I suppose, from confirmed possession of a tangible object and consists in the right to exclude others from interference with the more or less free doing with it as one wills. But in copyright property has reached a more abstract expression. The right to exclude is not directed to an object in possession or owned, but is in vacuo, so to speak. It restrains the spontaneity of men where but for it there would be nothing of any kind to hinder their doing as they saw fit. It is a pro 837446 0-49- -31 FRANKFURTER, J., dissenting. 337 U.S. hibition of conduct remote from the persons or tangibles of the party having the right. It may be infringed a thousand miles from the owner and without his ever becoming aware of the wrong. It is a right which could not be recognized or endured for more than a limited time, and therefore, I may remark in passing, it is one which hardly can be conceived except as a product of statute, as the authorities now agree." White-Smith Music Co. v. Apollo Co., 209 U. S. 1, 18, 19; see also Learned Hand, J., in Photo Drama Motion Picture Co. v. Social Uplift Film Corp., 213 F. 374, 378 (S. D. N. Y.). The "right to exclude others from interference with the more or less free doing with it as one wills" is precisely the right that Wodehouse transferred to Curtis. To the extent that the Copyright Law gave Wodehouse protection in the United States, he transferred all he had in property of considerable value-the serial rights in his novels and Curtis acquired all of it. For the duration of the monopoly granted by the Copyright Law, Curtis could assert the monopoly against the whole world, including Wodehouse himself. Nothing in the law of copyrights bars or limits sale of any one of the numerous exclusive rights conferred by the various subdivisions of § 1. Congress has not disallowed such sales and nothing in the due enforcement of the Copyright Law suggests their disallowance. Quite the contrary. See II Ladas, The International Protection of Literary and Artistic Property, pp. 775–792 (1938). The scheme and details of the Copyright legislation manifest a separate treatment of the various exclusive rights conferred by the statute. 61 Stat. 652, 17 U. S. C. §§ 1 et seq. It segregates these rights into sepa 369 FRANKFURTER, J., dissenting. rately numbered paragraphs.15 In each paragraph there is listed, in the alternative, a more detailed subdivision of the various rights. Each of these rights is substantial and exists separately from the others,16 and has of course 15 Section one of the Copyright Law provides: "§ 1. EXCLUSIVE RIGHTS AS TO COPYRIGHTED WORKS.-Any person entitled thereto, upon complying with the provisions of this title, shall have the exclusive right: "(a) To print, reprint, publish, copy, and vend the copyrighted work; "(b) To translate the copyrighted work into other languages or dialects, or make any other version thereof, if it be a literary work; to dramatize it if it be a nondramatic work; to convert it into a novel or other nondramatic work if it be a drama; to arrange or adapt it if it be a musical work; to complete, execute, and finish it if it be a model or design for a work of art; "(c) To deliver or authorize the delivery of the copyrighted work in public for profit if it be a lecture, sermon, address, or similar production; "(d) To perform or represent the copyrighted work publicly if it be a drama or, if it be a dramatic work and not reproduced in copies for sale, to vend any manuscript or any record whatsoever thereof; to make or to procure the making of any transcription or record thereof by or from which, in whole or in part, it may in any manner or by any method be exhibited, performed, represented, produced, or reproduced; and to exhibit, perform, represent, produce, or reproduce it in any manner or by any method whatsoever; and "(e) To perform the copyrighted work publicly for profit if it be a musical composition; and for the purpose of public performance for profit, and for the purposes set forth in subsection (a) hereof, to make any arrangement or setting of it or of the melody of it in any system of notation or any form of record in which the thought of an author may be recorded and from which it may be read or reproduced: . . . ." 61 Stat. 652, 17 U. S. C. § 1. 16 "A man having general statutory dramatic rights like Kauffman might make a play and perform it under his common-law rights without publication, or he might copyright the play, and he would still not have copyrighted or published his moving picture rights. If he wrote such a scenario and made his film, he could get a separate copyright upon that. Of course, he could sell his statutory or com FRANKFURTER, J., dissenting. 337 U.S. been considered a property right. See Photo Drama Motion Picture Co. v. Social Uplift Film Corp., 213 F. 374, 377 (S. D. N. Y.); see Fulda, Copyright Assignments and the Capital Gains Tax, 58 Yale L. J. 245, 256 (1949). Moreover, the Copyright Office will record these partial assignments, thus protecting the transferee and thereby increasing the marketability of the separate rights. 61 Stat. 652, 17 U. S. C. § 30; see Photo Drama Motion Picture Co. v. Social Uplift Film Corp., 213 F. 374, 376–377; see II Ladas, The International Protection of Literary and Artistic Property, p. 802 (1938). Only the other day the House of Lords, dealing with a similar copyright law, held that the sums received from the transfer of the motion-picture rights in a novel were proceeds from a sale of property rather than a license and therefore not taxable as "annual profits or gains." Withers v. Nethersole, [1948] 1 All E. R. 400. There was there, as here, the need to determine if the proceeds were from a sale. The taxpayer had transferred for ten years "the sole and exclusive motion picture rights throughout the world." The House of Lords held that the proceeds were not "annual profits or gains" since the transaction was an outright sale, not a license to mon-law copyright of the play and keep the moving picture copyright, or he could sell each. "It seems to me clear that, if he could do this, he could sell separately the right to dramatize and the right to make a moving picture play, dividing his statutory dramatizing rights, and thus giving each assignee the right when he had exercised those rights to get his own copyright for a drama, or for a moving picture show." Learned Hand, J., in Photo Drama Motion Picture Co. v. Social Uplift Film Corp., 213 F. 374, 377 (S. D. N. Y.). See also Withers v. Nethersole, [1948] 1 All E. R. 400. "The effect of a partial assignment of copyright for a period less than the whole term is not to create any new right, but only to divide the existing right. In the result, there are two separate owners each with a distinct property. Neither holds under the other." At p. 404. |