Anyone receiving the copyrighted work by use of a radio receiving set, wired radio, or other reproducing or distributing apparatus, is also exempt unless an admission fee is charged at the door (bill, p. 22, line 17, p. 23, line 5).

The bill is so framed that any user who dispenses with live musicians can also avoid payment to the author whose works are used.

The elimination of the provision for minimum damages, the exemption of performances for profit by means of radio reception, and the exemption of all mechanical performances where no admission fee is charged-are all intended for the benefit of the proprietors of radio broadcasting stations, hotels, and motion-picture theaters.

ELIMINATION OF THE MINIMUM DAMAGE PROVISION

The existing law (sec. 25) provides that statutory damages for infringement shall not be less than $250. The Duffy bill eliminates this provision, and in its place, provides that the plaintiff may recover such damages "for all infringement by any one infringer up to the date 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" (bill p. 17, lines 17-24).

This would introduce chaos into copyright cases. No two courts would agree upon the amount that must be awarded as a sufficient sum to prevent the recovery from operating as a license to infringe. There is no indication of what "circumstances" must be taken into consideration by the court.

This amendment would seriously limit the rights of authors in cases of infringement. By taking away the minimum damage provision, it would make it virtually impossible for any author to sue for the infringement of a copyright because the probability of recovering only nominal damages would make it economically unprofitable to engage an attorney and defray the expense of a copyright suit in the Federal courts.

The present copyright law allows the plaintiff to recover a minimum of $250 for every infringing performance for profit of a musical composition. The right of a copyright owner to this recovery was established by the United States Supreme Court in the case of Westerman v. Dispatch Co., 249 U. S. 100, and was recently reiterated in the case of Lutz v. Buck, 40 Fed. (2d) 501 (C. C. A. 5, 1930) cert. den. 282 U. S. 880.

In the bill prepared by the State Department, it was proposed to leave in a minimum damage provision but to cut down the amount from $250 to $100. The explanatory comment issued by the State Department was as follows:

"Another feature of the amendatory provisions is the reduction of minimum damages from $250 to $100, and, in the case of photographs, from $50 to $10. These limitations were strongly contended for at hearings on various bills for revision of the copyright law during a number of years past.”

The bill as reported by the Senate committee contains no minimum.

Although it is true that would-be infringers strongly contended for a reduction. of the minimum damage provision at hearings for proposed bills, such reduction was also vigorously opposed.

The elimination of the provision for minimum damages was secured by Mr. Harry P. Somerville, chairman of the American Hotel Association Legislative Committee. The New York Hotel Review (Aug. 10, 1935) and the New York City Hotel Gazette (Aug. 17, 1935) both state:

"The changes which Mr. Somerville succeeded in incorporating in the new bill were the elimination of the arbitrary minimum $250 fine, so that minimum amount of damage will be left to the discretion of the court, and the exemption of radio from copyright exactions."

The proponents of the bill argue that in the case of any other tort, the favorite illustration being that of an automobile collision-there is no minimum liability imposed on the wrongdoer by the statute.

The illustration is poor. We are dealing with intangible incorporeal rights. No two uses or two works are alike. The nature, character and extent of the use, the manner, mode and means of the use, the celebrity and prestige of the work infringed and the author thereof, and many factors too numerous to mention, make it impossible to adopt a yardstick to measure the damages.

Justice Owen in the report of the Royal Commission on performing rights to the Parliament of Australia in 1933, stated:

"It seems impossible to assess in money the value of a musical work. Any valuation must depend on demand and must to an extent be arbitrary. To assess the value of a performing right in money is even more impossible; * *

The report of the Select Committee of the House of Commons of Great Britain in 1930 found:

"17. Your committee are agreed that a fixed fee can not be applied to all the varying circumstances of public performance if the composer is to receive a reasonable remuneration."

The important difference between ordinary torts and infringements of copyright is that people do not deliberately make a practice of running into automobiles belonging to others, whereas literary pirates, such as hotels, restaurants, night clubs and radio broadcasting stations would have no hesitancy in deliberately setting about to steal copyrighted works without making any payment.

A copyright may be infringed in thousands of places throughout the country simultaneously. It is impossible for an author or a publisher to detect these infringements. The difficulty of apprehending the theft of music or other forms of literature by means of broadcasting, or other performances, would make it a safe practice to pirate the intellectual property of these creations. The $250 minimum damage provision is the only deterrent against deliberate theft of this form of property.

The Senate committee attempted to justify the elimination of the minimum damage provision on the ground that no court should be compelled to grant any particular statutory minimum. But the Supreme Court itself has very recently recognized the necessity of awarding substantial statutory damages to deter infringers. This is necessary because the damage suffered in cases of copyright infringement is very difficult to prove, and if there is no statutory minimum, wilful and deliberate infringement will be encouraged.

In Douglas v. Cunningham (1935) 294 U. S. 207, Mr. Justice Roberts, speaking of the minimum damage provision in the existing law, said at page 209:

"The phraseology of the section was adopted to avoid the strictness of construction incident to a law imposing penalties, and to give the owner of a copyright some recompense for injury done him, in a case where the rules of law render difficult or impossible proof of damages or discovery or profit. In this respect the old law was unsatisfactory. In many cases plaintiffs, though proving infringement, were able to recover only nominal damages, in spite of the fact that preparation and trial of the case imposed substantial expense and inconvenience. The ineffectiveness of the remedy encouraged willful and deliberate infringement."

In spite of the recognition by the Supreme Court of the necessity of adhering to the minimum damage provision of the existing law, it is proposed in this bill to return to the days when authors had no protection against deliberate piracy. The proponents of the bill argue that the $250 statutory minimum damage is used by copyright owners for bargaining purposes.

This is a very vague and mystifying charge. If they mean that authors use that sum as a yardstick to measure the value of a license to use, then the charge is grotesque and fantastic.

The average sum paid for the entire repertory of the American Society by a user is hardly $150 per year.

The exhibitors, hotels and broadcasters are clamoring for elimination of the $25 minimum clause. The only one who can by an stretch of the imagination be affected by this provision is the pirate.

A person who respects the copyright rights of authors has no concern regarding damages. It is only the pirate or one who contemplates piracy that need be bothered about this question. Those operating under licenses are not in the remotest degree affected by it.

In reality, however, the exhibitors, hotels, and broadcasters hope to dictate the license fees that they will pay by using the works and bargaining for the license after the use.

They hope by this legislation to reduce to a minimum the amounts they will pay. It must be remembered that these same users had in times gone by resisted to the highest courts the claim of the composer that he was entitled to compensation for the public performance of his works for profit.

The issues should not be beclouded by the recent infringement suits brought by the Warner Bros. The Warner Bros. are motion-picture producers, operators of a circuit of motion-picture theaters, and operators since 1925 of a radio station, KFWB, located in Los Angeles, Calif.

Their position is more that of the user than of the creator. This group, through its Music Publishers Holding Corporation, has brought 25 suits against broadcasters. Among them is an action against Columbia Broadcasting Co. for damages totaling $895,000 and another against the National Broadcasting Co. for $995,000.

The society itself has never brought suit in any such extravagant, fantastic, and grotesque amounts. It has always limited itself to the statutory damage of $250. It has limited itself merely to establishing its right to charge. The best proof of this is established by the fact that despite its 20 years of existence the society has never collected the damages awarded in the infringement suits.

The usual result is for the defendant to take out a license from the society and adjustments made for the period during which the establishment operated, using compositions copyrighted by members of the society without payment.

In instances where judgments have been entered, it has been found that the proprietors of the establishments have gone out of business or have operated under the cloak of dummy corporations and fictitious entities.

The actual collections of judgments in infringement suits amount to very little. The amount paid has generally been received in the form of back payment on a license taken out by the defendant. The society is not interested in collecting the damages for the sake of damages, but it is the only effective deterrent to prevent the user from appropriating the corporation's property without payment and robbing him of his just due.

Under the

At the present time the maximum damage provision is $5,000. Duffy bill the amount will be quadruple, which is the light of the Warner Bros. suits, makes the entire situation even more ridiculous and fantastic.

HOTELS

The owners of hotels consistently refused to pay for the use of music until the United States Supreme Court decided that the performance of copyrighted music in hotels was a performance for profit, since the music was used as an inducement to bring patrons into the hotel (Herbert v. Shenley (1917) 242 U. S. 591).

In that case, Victor Herbert and his collaborators were the composers and owners of a comic opera called "Sweethearts", then given by Klaw & Erlanger, theatrical managers, at the New Amsterdam Theater under Herbert's license. The Shanley Co. operated a cabaret wherein they caused to be sung the leading song features of such opera accompanied by an orchestra. There was no charge at the door, but patrons were obliged to pay a so-called cover charge, which was fixed at $2 per head. As a matter of fact, this cabaret was competing with the licensed legitimate stage production.

Justice Holmes, declaring such performance an infringement of the copyright, said, at page 594:

"If the rights under the copyright are infringed only by a performance where money is taken at the door, they are very imperfectly protected. Performances not different in kind from those of the defendants could be given that might compete with and even destroy the success of the monopoly that the law intends the plaintiffs to have. It is enough to say that there is no need to construe the statute so narrowly. The defendants' performances are not eleemosynary. They are part of a total for which the public pays, and the fact that the price of the whole is attributed to a particular item which those present are expected to order, is not important. It is true that the music is not the sole object, but neither is the food, which probably could be got cheaper elsewhere. If music did not pay it would be given up. If it pays it pays out of the public's pocket. Whether it pays or not the purpose of employing it is profit and that is enough." Many of these hotels are in competition with legitimate productions. Their advertisements disclose the fact that there is no advertising with regard to the quality or merit of food or services or the desirability of their hostelry. The advertisements called to the attention of the public their floor shows, the cocktail hours, their New Year's sales. The interest of the public is sought to be stimulated and attracted by these facilities.

* * *

Submitted herewith are sample ads as to the New Year's rates charged by the various hotels. Where there is no cover charge, the requirement is that there be a minimum dinner charge just as in the night clubs. Thus, the Hollywood Restaurant, although claiming no cover charge, describes a minimum rate as follows:

"There is no cover charge at any time at the Hollywood Cabaret Restaurant, Broadway at Forty-eighth Street.

“A minimum amount of $2 per person is required to be spent on weekdays and Sundays, for which guests are invited to partake of food and beverages. "At ringside tables the minimum spending amount is $3 per person.

"On Saturdays, holiday eves, and holidays the minimum spending amount is $3 per person at all tables."

EXHIBITORS

After the decision in Herbert v. Shanley in 1917, while the hotel men made some effort to work out an agreement with the society, the motion picture theater owners, through their trade associations, refused to concede that the decision was applicable to the playing of copyrighted music in motion picture theaters. They declared that no direct admission fee was charged for hearing the music and that the music was incidental to the entertainment.

It was therefore necessary to test out the issue as to the applicability of the copyright law to that newer type of public amusement. The Motion Picture Theatre Owners of America challenged the rights of the society and a test suit was brought by Raymond Hubbell (a member of the society) against the Royal Pastime Amusement Co. (a motion picture exhibitor) for the playing of Mr. Hubbell's song, "Poor Butterfly", which was a feature and "hit" of the then current New York Hippodrome production, from which Mr. Hubbell had been deriving a performing royalty.

The action was defended by the local trade association. The case was decided in favor of the plaintiff, in a decision rendered May 31, 1917 (242 Fed. 1002), the court holding that the copyright law applied to motion picture theaters.

Although the motion picture exhibitors presented elaborate stage performances, which often took as much as an hour and more, and were advertised as the main attraction, they refused to pay anything to the authors.

The Motion Picture Exhibitors League of America went so far as to adopt, in April 1917, a resolution which read:

"That the organization undertake legal defense of any exhibitor against whom action is brought by the American Society of Composers, Authors, and Publishers, to apply to nonmembers as well as members."

The Motion Picture Exhibitors League of America's activities did not deal with the matter of procuring funds to combat the society only, but brought an action at its own cost and expense and with counsel supplied by it, in the name of one of its members, the 174th Street & St. Nicholas Amusement Company v. George Maxwell, as president of the Society and its Directors (169 N. Y. Supp. 895) to restrain the society from conducting its operations, from acting in concert to demand fees as a condition precedent to the playing of musical compositions, from using the funds of the defendant society in furtherance of its objects, and enjoining its directors and officers from meeting with any purpose to act in combination or concert, upon the ground that the defendants were a monopoly in restraint of trade. In this action if failed, the court saying:

66* * * The fact that the music of the authors who are members of the association is popular and in demand presents just so much more reason why it should be protected, and its unauthorized use at public entertainment given for profit prevented. Practically the exhibitors of moving pictures seek to obtain by injunction the right to publicly perform copyrighted musical compositions for profit, without a consent of the holder of copyright, and without compensation to him.' The Motion Picture Theatre Owners Association again tested the question without success.

RADIO BROADCASTERS

With the development of broadcasting in 1922, there was a new invasion of the rights of the authors, Radio took the most popular musical hits of the day, and by constant grinding and repetition of songs acted as a veritable inferno greatly shortening the life of a song and ruining the sale of sheet music and phonograph records, from which the authors had previously derived substantial royalties. In spite of this great injury to the author's works, the radio broadcasting stations refused to make any payment to authors. The National Association of Broadcasters issued the following proclamation:

"To publishers of dance, jazz, blue, and popular music: The members of this association maintain that they will not pay for licenses from any copyright owner or recognize the right to collect any tax until the law plainly states that such payment must be legally collected."

The challenge of the broadcasters was accepted by the society and a suit was brought in behalf of a member, M. Witmark & Sons, against Bamberger & Co., in the United States District Court of New Jersey, to restrain a department store dealing in radio products from broadcasting the plaintiff's copyrighted music. Judge Lynch in that case held that radio broadcasting was a public performance for profit (291 Fed. 776).

Notwithstanding the decision in the Witmark case, the broadcasters refused to respect the rights of authors. Thereupon Jerome H. Remick & Co. brought a suit in the District Court of Ohio against the American Automobile Accessories Co. (owned by the Crosley Manufacturing Co., which was engaged in selling radio accessories and equipment) for infringement of the musical composition by radio broadcasting. Although the district court dismissed the suit, the rights of the copyright owners were upheld by the Circuit Court of Appeals in an opinion by Judge Mack in 1925 (5 Fed. [2d] 411). Certiorari was denied by the Supreme Court.

Broadcasters and hotel owners continued to challenge the rights of copyright owners to be paid for the broadcasting of their works as late as 1931, when the United States Supreme Court held that a hotel which picked up a program of copyrighted music emanating from an unlicensed broadcasting station must pay the copyright owner (Buck v. Jewell-LaSalle (283 U. S. 191).

The users know that by removing the minimum damage provision, they will indirectly attain what they cannot achieve by direct appeal to Congress.

The hotel, theater, and broadcasting interests have taken credit for initiating the Duffy bill. In a letter sent by Harry P. Somerville, chairman of the American Hotel Association legislative committee, to Sir Francis Towle, of London, England, president of the International Hotel Alliance (published in the New York City Hotel Gazette, July 13, 1935), Mr. Somerville states:

At this

"For several years attempts have been made to have the United States become a member of the International Copyright Union, but without success. session of Congress when the subject was again brought up I, on behalf of the hotel business, requested that our own copyright law first be brought up to date. The Theatre Owners of America and the National Association of Broadcasters joined with the hotel men in this request. As a result the Senate Foreign Relations Committee requested the State Department to draft a bill that would accomplish that result. Such a bill was introduced in the Senate and I am enclosing, herewith, a copy, together with a report of the Senate Patents Committee recommending the adoption of such legislation. * We have hopes that it will be passed in both the Senate and the House of Representatives and that it will become a law in the near future, as we do not expect the President to veto it should it be adopted.

* *

"I feel that our adherence to the International Copyright Union will follow immediately thereafter through Senate action.

"The big stick that Ascap. has used in getting license fees has been the fact that our present law provides for a minimum statutory damage fee of $250, regardless of the amount of damages done, if any. You will note that this new bill eliminates that statutory minimum.'

In plain language, this means but for the $250 minimum damage clause, the users would resort to piracy, rather than operate lawfully under licenses.

Removal of the $250 damage clause means a species of compulsory license to be fixed by a court after the lapse of a considerable time and the expenditure of considerable moneys to bring the suit.

Claim has been made that courts have been reluctant to find in favor of the plaintiff in infringement suits because of this statutory minimum.

Courts who have been so inclined would have given an amount, in the absence of the fixed sum, that would have amounted to a license. That would mean legalized piracy.

If there be any reluctance on the part of courts to award any statutory damages to an aggrieved composer, then the one who should complain is the composer, and not the commercial user. The composer is willing to take his chances and chance

the risk of loss.

NO REASON IS GIVEN FOR DISCRIMINATION BETWEEN A PLACE THAT DOES AND A PLACE THAT DOES NOT CHARGE AN ADMISSION FEE

The bill provides (p. 22, line 17; p. 23, line 5):

"(2) The auditory reception of any copyrighted work by the use of a radio receiving set, wired radio, or other receiving, reproducing, or distributing apparatus, or the performance, other than by broadcasting, of any copyrighted work by a coin-operated machine or machine mechanically or electrically operated or by means of a disk, record, perforated roll, or film, manufactured by or with the consent of the copyright owner or anyone claiming under him, except where admission fees, other than for the ordinary occupation by a guest of a hotel or lodging-house room, are charged to the place of operation or, in the case of restaurants, cover charges distinct from the charges for food, or other minimum charges, are made."