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While the courts have not passed on the precise question whether the Berne Convention is self-executing, the principles governing this question are well settled. They have been summarized as follows: "Where, however, a treaty is incomplete within itself and requires subsequent legislation to render it effective, manifestly it does not become operative, and cannot be enforced by the courts, until such necessary legislation has been enacted. So, where the terms of a stipulation in a treaty import a contract, or when either of the parties engages to perform a particular act, the treaty addresses itself to the political and not the judicial department of the Government, and Congress must by legislation execute the contract before a rule of decision for that court exists." (Treaties, 63 Corpus Juris 841), citing a large number of cases. These principles have been uniformly followed since the opinion of Chief Justice Marshall in Foster & Elam v. Neilson (2 Pet. 253, 313). See Robertson v. General Electric Co. (32 F. (2d) 495 (1929)), in which a patent treaty was held to be not self-executing and the authorities bearing on the question are reviewed.

V. MISCELLANEOUS

In his testimony on April 15, Mr. Burkan, counsel for A. S. C. A. P., was understood to state that all broadcasters impose contracts on independent composers such as the contract which Mr. Burkan read into the record in his original testimony on February 26 (at pp. 56-57). This is not the fact. So far as known to the association, only one broadcaster employs this contract; no other broadcaster employs such a contract or anything like it, and the practice is not approved either by the association or the industry generally. In this connection, however, it should be pointed out that the contract is patterned very closely after the contract which the music publisher requires of the composer.

At present writing the printed transcript of Mr. Burkan's testimony is not available; and it may be that Mr. Burkan did not, or did not intend to, make the statement as understood by the writer.

The charge by Mr. Burkan that the phrase "in lieu of the proved damages and profits" is a joker, seems too captious to warrant serious attention. The corresponding phrase in the present law is "in lieu of actual damages and profits." Both phrases obviously have the same purpose, to provide a substitute for the proving of actual damages covered by the preceding subparagraph. Needless to say, the broadcasting industry has no objection to a return to the original phraseology, although the phrase in the Duffy bill is a more accurate use of the English language.

There are a number of other inaccuracies in the statements of various witnesses who appeared after the representatives of the association testified. So far as we can determine, however, these inaccuracies have either already been pointed out in the record or are not of sufficient importance to justify discussion of them in this statement. Respectfully submitted.

LOUIS G. CALDWELL,

Of counsel for the National Association of Broadcasters.

NATIONAL ASSOCIATION OF FURNITURE MANUFACTURERS, INC.,
Chicago, April 13, 1936.

Congressman LANHAM, of Texas,

Washington, D. C.

DEAR SIR: I am exceedingly sorry that it was impossible for me to appear before your committee on the hearing of the Duffy bill with the Vandenberg amendment, which hearing was advanced to April 9, after having been previously set for April 14. I was prepared to appear before your committee on the 14th, but previous engagements made it impossible for me to appear before your group on the 9th.

Our managing director, Mr. Albert P. Haake, has suggested that in view of my arrangement to appear on the 14th, your committee may be respectfully requested to permit my statement to be a part of the record of the hearing.

Your courtesy and kindness in using your good offices to assist me in this respect will be greatly appreciated.

Sincerely yours,

F. H. MUELLER.

STATEMENT OF F. H. MUELLER

My name is F. H. Mueller. I am a partner and general manager of the Mueller Furniture Co. of Grand Rapids and president of the National Association of Furniture Manufacturers.

It is my wish to place before you some typical facts concerning the losses in our industry due to piracy of design and to make clear to you how such losses are possible. It may be that other industries have very similar situations.

Until a decade or so ago there was very little truly copyrightable furniture produced in this country. There was no need for it, for the beautiful pieces already created by such designers as Sheraton, Adams, Duncan Phyfe, our own colonial adaptations, and many others, provided a great storehouse of beautiful designs from which we could manufacture furniture for the American people.

The so-called period designs, and their adaptations, mentioned in the previous paragraph, will probably live for a great many years, not because they are old, but because they are inherently in good taste, they are beautiful and conform to the consumer's inate ideas of what is desirable.

But, like every other industry, we have sought, and shall undoubtedly continue to seek, to satisfy the undying public want for something new or different. And, as in music or literature, while what has been done, to a great extent, is deserving of long life, and even immortality in some cases, the possibility of creation of still new forms and expressions of beauty is practically infinite. We shall continue to progress, as in our industry we have actively begun doing within the past decade and particularly since 1929.

It should be added that the truly beautiful and original designs number as wheat among a greater portion of chaff. Only a minority of the designs brought to us are worthy of application and even fewer can truthfully be called really original. Those which are original certainly deserve protection and they are of sufficient proportion to deserve attention. We secure and pay for designs in several ways:

To a large extent still, designers on the staffs of manufacturers use art books containing designs of period furniture and make adaptations and frequently extract copies of those drawings. It is our understanding that those designs belong to anyone who wants to use them and we should not expect any protection for anyone on those designs.

Occasionally the inspiration for a truly original and distinctive piece comes out of that grist, however, and the manufacturer has what is called in the industry "a hot number", which is called "hot" because it sells well.

If the design looks good to us, we may make a fairly large cutting at the outset. If this cutting sells, we are usually fortunate to break even on the total expense involved up to that point. The original expense for design, details, working models for this cutting will amount to a great deal of money. possibly over $1,000 for a dining-room or bed-room suite of character and refinement, and which represents usually more than the gross profit on that cutting. But it is on the second cutting that we have an opportunity to make some profit.

Such designs may be bought from a free-lance designer, and probably most of the furniture designs are so secured, for only a very few of the furniture manufacturers can afford to keep designers on their pay rolls. And it is this closs of designs and these smaller manufacturers who suffer most from piracy. Now and then a designer can be good enough to demand and secure a royalty on the use of his design. Of course, piracy cuts off his income immediately. When our new design is ready to sell, we take it to the "market", a display of furniture for dealers held four times in various parts of the country. The dealers come and make purchases of the new design among other pieces. The furniture is shipped to the dealer, and in the case of wood furniture in which most of the design pirating is done, delivery may be made within a period of from 30 to 90 days.

In the meantime at the market, other manufacturers, their salesmen, and particularly dealers have had an opportunity to see the new design. It is easy for any one of these to carry away a rough sketch of the design. Indeed, we know of examples of men who have openly boasted that they did not have to hire designers and pay for their designs, because they could "borrow" all the designs they needed at the markets.

The "borrower" can sometimes have the pirated furniture on the floor of dealers competing with him who bought the new design from the initiating manufacturer within a week or so of its original appearance on the floor of the other dealer.

Always the imitation has been cheapened in quality and finish, but usually kept with the same eye appeal and apparent value if not carefully examined. Savings can be made in places where they do not seriously affect appearance and yet very seriously affect wearing quality. The imitation immediately is sold at a sufficiently lower price so that the genuine article is put out of the market. The dealer who is angry demands restitution from his supplier, he cancels reorders if the sale has gone that far before the pirate is effective, and the new design is killed, with a serious and sometimes total loss to the criginator in production.

Offenders are found among both manufacturers and retailers. It may be the manufacturer who has stolen the design from the market exhibition or from the floor of the retailer who shows the article and offers the substitute to a dealer who buys it in good faith, and, now and then, to a dealer who knows he is about to undersell his competitor who has the genuine article.

It may be the dealer who has bought the article from the original producer, and then sends it to a factory which needs business or cash and has a cheaper substitute made. For example, in Cleveland a large dealer for years bought two samples of particularly fine new pieces from one of our better manufacturers, because he wanted to keep one sample on the floor for taking orders after the other had been bought by a rival dealer through a professional "shopper." The rival dealer invariably had an imitation made up for him at a much lower price.

There is a concern in Chicago which rents space in one of the exhibition buildings there. He is not a manufacturer, owns no factory, and has no investment outside his office and current sales and office expenses. He is literally a "broker-pirate", a self-confessed pirate. He operates in this

manner:

He secures actual samples of furniture purchased by retailers, which "takes well" in the market. A few weeks later he has a collection of those samples with the name of the real manufacturer often permitted to remain on the piece on his display floor. He tells dealers frankly that this is the table, or other article, made by "so and so", and sold for $10.75, and that he will furnish the identical piece, or practically the same piece in quality, for only $6.75. He has found a manufacturer who is willing to reproduce the piece with the same appearance, but cut sufficiently in quality of construction, material, and finish, to make the lower price possible, and even so, this latter manufacturer usually loses money on the transaction.

The result is illustrated in the experience of a Grand Rapids manufacturer who had brought out a very attractive table, novel and distinctive in design. He had sold all of his first cutting and had taken substantial orders for a second cutting, which second cutting was in process of manufacture when the imitation table was offered, even sold for delivery from his own sample.

The pirate-broker knew where the table was being sold and offered his imitation. Immediately, the reorders to the genuine manufacturer were canceled, and in the case of a Milwaukee dealer, the imitation stock was said to be delivered from sales made from the original sample on that dealer's floor. The manufacturer could dispose of his table only at a disastrous loss, which in turn affected the salability of other furniture in the same value class.

We have had a recent experience which we are trying to test in court. We had secured a design patent which was the only kind we could secure, the article was infringed, and we are now in litigation with the pirate. He has offered to settle for damages, but we are anxious to see whether we cannot make an example of this manufacturer and thereby deter others. We are informed that our chance of doing so is slight, because the courts are not likely to uphold a design which is not the result of invention, or associated with some mechanical feature, rather than pure art or design.

This particular infringement was called to our attention by a dealer in Toledo who had purchased a number of these pieces. He sent an advertisement of a Cleveland dealer offering the chair from a newspaper half tone at a price at retail which was practically the same as the price our Toledo dealer had paid us at wholesale. The newspaper half tone was made from a photograph of our original chair. The Toledo dealer inferred that we were giving this large Cleveland the benefit of a lower price and criticized us severely.

We assured him that the Cleveland dealer who had purchased 15 of these chairs had paid identically the same price and suggested that the Toledo dealer purchase one of the advertised chairs and ship it to us for identification. This he did, and we found upon receipt of the chair that it was an infringement made in a much lower quality, but, nevertheless, to the lay observer, sufficiently exact to be advertised from the photograph of our own chair.

This same pattern, while patented as to design and so designated on each and every piece, has been copied extensively all over the country, because of the apparent inability to validate design patents, which should be a basic principle of property rights.

I know an eastern manufacturer who, several years ago, because of economic conditions, was on the point of going out of business. Fortunately, he brought out a new design, novel and original. His first cutting went over exceedingly well with a great many substantial reorders. From all indications he was well on the road to recovery, his workmen employed at good wages, and the fear of bankruptcy eliminated. The pattern was well distributed and sold swiftly, and as seems inevitable in our industry, was copied at a lower price. This manufacturer suddenly found himself with canceled orders; goods being refused, because the pattern could be purchased cheaper elsewhere. As a final result, the manufacturer found himself by virtue of losses suffered in consequence of the pirating of his original design by an unscrupulous manufacturer, forced into closing his plant.

One of the trade practices most favorably looked upon under the N. R. A. was that of design legislation. The moral effect, without any real legal sanction, practically eliminated piracy during the code period. It is this recognition of the property right in design with a simple, workable method of declaration of originality that we desire for our industry.

I have a number of new and novel patterns at the present time which I am guarding with extreme care, so that no unscrupulous or profane manufacturer can possibly have a glimmer of their smartness and originality. Much time and money have been spent in their development.

The designs can be patented, but this is a slow and cumbersome process, and its necessary lapse of time defeats the protection which we believe we are entitled to.

The protection that would be accorded our industry by the passage of this copyright bill would be of great value to our industry. The administrative problems that such a law might bring to the manufacturer can easily be settled. The industry is convinced clearly that it has a constitutional right to such protection.

In its highest brackets, our industry is an art, and should be accorded the same measure of protection that literature, music, and other arts that have same, and which basic principle was intended for all who can qualify with creative labor in design.

STATEMENT OF E. L. KUYKENDALL, PRESIDENT, MOTION PICTURE THEATER OWNERS OF AMERICA, ON THE DUFFY COPYRIGHT BILL, S. 3047

Mr. CHAIRMAN AND GENTLEMEN OF THE COMMITTEE: I am Ed Kuykendall, of Columbus, Miss. I own and operate the Princess and the Dixie Theaters in Columbus, Miss., and for many years I have been an exhibitor of motion pictures in and around that city. I am also president of the Motion Picture Theater Owners of America, which is the oldest and largest trade association of theater owners in the United States. It includes in its active membership over 4.500 of the leading motion-picture theaters in the country, located in every State in the Union. I appear before this committee not only as an independent motion-picture exhibitor but also representing the Motion Picture Theater Owners of America, which includes more than 3,500 independent, unaffiliated theaters in its membership, and about 1,000 so-called affiliated theaters.

I would like to make it clear in the beginning that I am not a lawyer, that I am no expert on copyright law, and that I am not in a position to give technical advice on copyright matters. I can only discuss these matters from the point of view of a practical business man and of an experienced motion-picture exhibitor. My whole organization is composed of fellows like me, we speak for ourselves in these and all other matters to the best of our ability. The Motion Picture Theater Owners of America employs no highpriced legal talent, press agents, lobbyists, or professional organizers as our spokesmen or representatives.

We realize that our business is founded on copyright, that without adequate copyright protection there would be no motion pictures recorded on film that we could use to put on a show in our theaters. There are over 15,000 motionpicture theaters operating in the United States today. Nearly all of them use nothing in the way of entertainment except what is reproduced from motion-picture film. Very few of them use stage shows of any kind, orchestras, or other manual reproduction of music regularly, perhaps not over 100 theaters out of 15,000. Probably 14 out of every 15 never use vaudeville or other stage attractions that require any music, and those that do, use such attractions but a small part of the time they are operating.

We understand that when we "buy" or "rent" a motion picture that what actually happens is that we secure by a written agreement a license under copyright for the public performance for profit of what is recorded on the film, that this license under copyright entitles us to reproduce the photoplay on the screen of our theater and the sound that has been recorded in the auditorium of our theater. For it we pay a license fee or "film rental", and the distributor supplies us with a positive print of the motion picture to enable us to reproduce mechanically the photoplay or motion picture in our theater.

The reproduction of both the picture and the sound is entirely mechanical. The theaters are equipped with the apparatus for such reproduction. It is impossible to change the photoplay in any way in reproducing it, it can only be reproduced by us exactly as it was recorded by the producer, the dialogue cannot be changed or altered, the actions of the players on the screen cannot be changed, nor can the music that is recorded be changed. It is out of the question usually to even omit part of a photoplay, because of the continuity, plot, and dramatic action, without spoiling it as entertainment.

And all of these elements that are recorded on the film are inseparable. The dialogue and the actions of the players cannot be used separately, they must be synchronized together for either to have any value. You cannot remove the music from the words and dialogue. While the music itself is not usually an essential part of the photoplay, it is physically and mechanically impossible to separate the recorded music and the recorded words and dialogue on the film itself and reproduce the one without the other. The theater owner has no choice whatever, no selection of his own, on what music he will use with the picture. He is forced to use the music that is recorded on the film and cannot possibly avoid using it, as he cannot possibly separate it from the words, dialogue, and dramatic action.

For many years theater owners have complained of the music tax arbitrarily levied on all motion-picture theaters by the American Society of Composers, Authors, and Publishers. Since the introduction of motion pictures with sound recorded on the film with the picture the situation in this respect has completely changed. When we used silent films, the music, if any, was provided by the theater's own orchestra, organist, or other musicians. We at least had a theoretical chance to use music not controlled by the American Society of Composers, Authors, and Publishers combine. In the years 1927 to 1929 this was completely changed, the music is now entirely recorded with the dialogue and picture, we have no choice in the matter whatever. An unexpected technical development not only revolutionized our business but also under the present copyright laws, which were written many years before talking pictures were even thought of, placed un inescapably in the grip of the American Society of Composers, Authors, and Publishers combine.

I am not sure that I completely understand the operation of copyright on popular music in our business, as, frankly, I have only a casual acquaintance with the production of motion pictures. But, in general, we exhibitors understand the situation at the present time to be as follows:

The studio or producer of a motion picture who wants to include a copyrighted musical number, popular song, or any tune in a sound picture he is producing either hires a composer to write one or buys a completed tune from either the composer or the publisher. In this operation the producer does the same as he does to acquire the story, plot, and dialogue from the dramatist or author. Both the composer and the dramatist sell their work in the open market on its merit, each getting all he can for it. If one producer won't pay as much as they think they can get, they simply try to find a producer who will. The producer is in the same position; if the price is too high, he passes it up and gets a different tune, or gets along without copyrighted music.

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