While we are appreciative of the rights of an original designer to enjoy the fruits of his genius, we do not believe such legal protection should be extended to the point of penalty against distributors who buy and sell merchandise in good faith and whose functions are wholly removed from production.

It is quite illogical to place upon retailers any of the burden of responsibility for the wrongful acts of pirating manufacturers, of which they know nothing and, in the ordinary processes of distribution, cannot be expected to know. These views have already been presented by letter to each of the members of the committee.

Yours very truly,

HERBERT P. SHEETS,
Managing Director.

VIEWPOINTS OF THE NATIONAL RETAIL FURNITURE ASSOCIATION ON COPYRIGHT

DESIGN

The National Retail Furniture Association has authorized the Retailers' National Council to present its viewpoints as follows:

The National Retail Furniture Association is not opposed to some sort of a design protection but does feel strongly that the following points should be covered specifically:

1. Retailers, and particularly retailers of furniture, should be placed on an exempt list together with other exemptions to the end that no policing and no liability in the enforcement of copyrights should fall upon retailers who are normally presumed to be fundamentally innocent of the actual infringemeut. 2. We are in accord with the viewpoints expressed by the National Retail Dry Goods Association as to the need for changes in the proposed legislation in order to bring about satisfactory and equitable administration.

3. The National Retail Furniture Association appreciates the interest of furniture manufacturers for some sort of design protection and willingly cooperates in this program if it can be accomplished with reasonable legislation, not placing undue responsibilities or burdens upon innocent retailers. Respectfully submitted.

LOUIS ROTHSCHILD,

Assistant Secretary, Retailers' National Council. Mr. ROTHCHILD. In order not to duplicate in our statements, my discussion for this few minutes is going to be limited to certain legal aspects involved in the proposed legislation. Copyrights in the United States are not common-law rights but are statutory, coming within the sole jurisdiction of the Federal Government under section 8 of article I of the Constitution of the United States [reading]:

To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.

This power of Congress has been liberally construed by the courts. It was settled in the case of Bleistein v. Donaldson (188 U. S. 239), that the words "authors" and "writings" were not confined to literary writers and their works, but include among others designers, engravers, lithographers, and photographers. In this case the Supreme Court held that circus posters had a right to copyright, as being a useful art. In this and other cases, the Court has held that those arts not useful were the frivolous, the immoral, and the scandalous. The term "useful arts" has been more thoroughly considered in the patent law rather than in copyright decisions. [Reading:]

There is a wide distinction between a patent and a copyright. A copyrighted book or article describing what would be the proper subject of a patent does not protect the subject of the patent from use by other persons. The only effect of the copyright is to secure the exclusive right of printing and publishing the book, while the invention or discovery, if no patent is taken out, is given to the public.

That is taken from the Cyclopedia of U. S. Supreme Court Reports, column 9, page 149, quoting Baker v. Selden.

In the case of Cheney v. Doris Silk Corporation, relied upon by the proponents of this legislation, it is to be pointed out that the lower court expresses the doubt that designs may be subject of copyright in these words:

If the protection of copyright registration can constitutionally be given to designs of this character-and I express no opinion thereon-the plaintiff would have adequate protection.

The higher court in its decision in this case (reported in 35 Fed. 2d 279) upheld the lower court, but obviously ignored either the wisdom or the constitutionality of design copyright, as the court did say these pertinent things:

* to exclude others from the enjoyment of a chattel is one thing; to prevent any imitation of it, to set up a monopoly in the plan of its structure, gives the author a power over his fellows vastly greater, a power which the Constitution alone allows only Congress to create.

*

Judges have only a limited power to amend the laws when the subject has been confined to a legislature, they must stand aside, even though there be an hiatus in completed justice. An omission in such cases must be taken to have been as deliberate as though it were express, certainly after long-standing action on the subject matter. * * * Congress might see its way to create some sort of temporary right, or it might not. Its decision would certainly be preceded by some examination of the result upon the other interest affected. Whether these would prove paramount we have no means of saying; it is not for us to decide

From this language it is clear that the Court's decision was not recommending particular extension of copyright powers, but to the contrary the Court recognizes that there may be arguments, possibly the weight of the arguments, both factual and legal, against such extension.

Further extension of the term "useful arts" may tend to curb free and full competition and to promote monopoly. This thought was advanced by the United States Supreme Court in McClain v. Ortmayer, reported in 141 U. S. 419, a patent case, in which the decision stated [reading]:

If the generality of sales were made the test of patentability, it would result that a person by securing a patent upon some trifling variation from previous known methods might, by energy in pushing sales or by his superiority in finishing or decorating the goods, drive competitors out of the market and secure a practical monopoly, without in fact having made the slightest contribution of value to the useful arts.

Thus it is contended that while Congress has properly been liberal in its interpretation of the constitutional power that liberality has and should be to protect new methods and means of reproduction which were either unknown or impractical at the time of the adoption of the Constitution. Photography, for example, or more pointedly motion pictures, were unknown in colonial times and their inclusion in copyright would reasonably have been within the purposes and thoughts of the framers of the Constitution. To go further and include items of merchandise as would be the practical effect of this proposed law appears, from these decisions, to be exceeding the powers extended to the Congress by the Constitution.

Two avenues of protection are open under present law to those proponents of this legislation. First, are the present provisions of

the design patent laws, wherein the proponents contend the delays and costs make this protection impractical. Those delays and those costs are proper obstacles before any government should grant the right of monopoly. A monopoly no mattor how innocuous it may seem is a power for either good or evil as to the remainder of the people of the country. The second avenue of protection is through the equity courts where unfair competition has and will be curbed. Attention is called to the Cheney decision and reference is made to Nims' on "Unfair Business Competition."

With reference to patent right as compared with copyright, the courts have uniformly held that copyright applies to the picture, the writing, the etching, and otherwise, where the use is incorporial; that where the copyrighted product itself is to be used, where the item is corporial, then there may be a patent right, but not a copyright. This question would be of paramount importance and the basis of much litigation if the proposed bill were enacted in its present form. The leading case pointing out this distinction is Baker v. Selden reported in 101 U. S. 239 in which decision Mr. Justice Bradley said [reading]:

There is a clear distinction between the book as such and the article which it is intended to illustrate. The object of the one is illustration; of the other is the use thereof. The former may be secured by copyright. The latter by patent.

A recent case citing Baker v. Selden and being directly in point is the National Cloak and Suit Company v. Kaufman, decided in the United States Circuit Court in Pennsylvania reported in 189 Federal 215, which decision upheld copyright of illustrations of garments but pointed out that the garments themselves could not be copyrighted. The language of the court is as follows:

The fallacy in the argument that the complainant cannot copyright "productions of the industrial arts" lies in the confusion of the pictures with the things they depict in a particular way; that is, the wearing apparel which appears in the illustration as part of the picture * *. The complainant does not claim to monopolize the manufacture and sale of the wearing apparel depicted by reason of its copyright. It does, however, claim the right thereby to prevent others from copying and appropriating its exclusive property in such pictures, and to this it is entitled by reason of its copyright which appears to be valid.

A similar holding and viewpoint is expressed in Brief English Systems v. Owen (decided by the Circuit Court of Appeals in 48 Fed. 2, 555), in which the court said:

It may be said that the way to obtain the exclusive property right to an art as distinguished from a description of the art, is by letters patent and not by copyright.

Therefore, it is to be contended that so-called design copyright would not and should not protect the article of commerce itself and that the remedy, if there is any needed, should be in patent law. Certainly there is the further possibility of litigation with alleged infringers of design copyrights putting forth the defense that the copyright itself had no constitutional authority, and that copyright should not supersede patent protection.

I now come to the subject of design copyright and notice. There is the further practical as well as legal complication which would be involved in the event this legislation were enacted in its present

form into law. The notice of copyright must be reasonably prominent on each copy. In style items of merchandise to be covered by this proposed law-that is, furniture, glassware, ornaments, textiles, draperies-such notice will mar the beauty and injure the commercial possibility of the item of merchandise. The law has definitely stated in Dejonge and Company v. Breuker, 235 U. S. 33, "Every reproduction of a copyrighted work must bear the statutory notice", and this is for the protection of the innocent against unknowingly infringing.

There is the recent case of Alfred Decker Cohn Company v. Etchison Hat Company, 225 Fed. 135, wherein the defendant admittedly reproduced the illustration of a hat appearing in Men's Wear, a trade newspaper, but the court refused action because the notice of copyright was so small that it could have been reasonably overlooked. The same point of law was involved in the so-called Betty Boop case (reported in 72 Fed. 2d 555) where the notice of copyright was printed on the dress of a doll but failed to, after the name of the copyright owner, print the word "Inc." In this case the court held that this was sufficient notice and the lacking of the mark of incorporation was not material.

For protection of copyright design, it is clearly indicated by these and other decisions the design must be marked with the statutory notice and marked in such a way to give actual and reasonable notice. Certainly a removable sticker would not be sufficient. The question of proof would be a serious one in the resulting litigation, with the legal burden upon the owner of the copyright, but an unfair burden of protection upon retailers, because litigation, even successful, is expensive.

To prominently mark the item of merchandise with the notice would injure its marketability, particularly in style items. Certainly no housewife would want a piece of crystal glassware having a unique design to have indelibly marked on the fragile item the notice of copyright. Few merchants would stock such merchandise, and the manufacturer and the designer in turn would defeat their own ends.

Consequences almost humorous would result in the enactment of this present legislation. Let us take the hypothetical case of a merchant who receives a group of dresses which have buttons of a unique design, which buttons are infringing a design copyright. What in the enforcement would be open for seizure-the dresses or the buttons? Does the exemption planned for wearing apparel include all appurtenances to wearing apparel? And what would the decision be as to a fancy parasol to match a lady's beach outfit? Fancy jeweled clips to be worn upon a dress may or may not be copyrightable. Is a watch wearing apparel, and is there a distinction between a wrist watch and a pocket timepiece?

The proposed legislation exempts wearing apparel including dresses. Fabrics, of course, are included, and it is reasonable to presume that the statutory notice will be marked upon the selvage of the fabric. What, then, is the situation of the merchant who receives dresses made in whole or in part of fabrics violating one or more copyrights? The selvage has either been cut off or included in an inside seam and there would be no actual notice. Yet that re

tailer may face the hazard and the worry and the loss of time of litigation with intricate questions of law and fact.

Or, in the men's clothing field, a retailer has garments made up by the "cut, make, and trim" method, whereby he contracts with a manufacturer and the retailer buys the materials. Among the materials will be, for example, an imitation of a copyrighted design. Where is the liability-on the retailer, on the cut, make, and trim manufacturer, on the jobber of woolens, or on the manufacturer?

Furniture would be included under the proposed legislation and a multiplicity of similar questions would then be involved. A lamp, the pedastal of which is not copyrighted, but the shade having imprinted on the parchment a copyrighted design which is an infringement, presents again the question of what is liable for seizure.

These are all administrative questions which might arise depending upon the zeal of the enforcement authorities and copyright owners. The answers would come from the courts and added financial burden would fall upon the innocent retailer, who in most cases would be without actual notice because on such merchandise it is natural to assume that the statutory notice will be as inconspicuous as possible.

In conclusion, I want to revert to the question of constitutionality and call the attention of the committee to the very able legal brief inserted in the record of the hearings held before this committee in May of 1932 by the late H. A. Seymour, Esq., and appearing on page 36 of the printed hearing report. Particularly interesting and important are the historical facts covered in this brief, indicating that from 1842 to 1892 design patents were comparatively unrestricted, resulting in a legal decision commented upon "the practice of the (Patent) Office in granting design patents has been not only liberal but lax * ** Design Patent Act of 1902 was enacted for the purpose of obviating the 'endless confusion' and abuses that grew up under the patent law of 1870." The brief quotes reports of both the Senate and House Patent Committees of the Fifty-seventh Congress, indicating that the law of 1902 was purposely intended by the Congress to bar just the things that are contemplated in this legislation being considered in 1936.

*

In that same report, on page 64, is a brief submitted by Semmes & Semmes, attorneys of Washington, which warrants the attention of this committee, and particularly that quotation that "copyright should be liberally construed with a view to protect the just rights of authors and to encourage literature and art"-Ford v. Blaney (148 Fed. 642). This proposed legislation has for its purpose encouraging monopolistic commerce, not literature and art.

And finally are these often-cited cases of Kemp v. Hirsch, reported in 34 Fed. (2d) 291; Rosenbach v. Dreyfus, reported in 2 Fed. 217, and Smith v. Whitman, reported in 148 U. S. 672, which uniformly hold, as stated in the Kemp case, that "Things copyrighted be of artistic nature, and by judicial interpretation 'artistic nature' excludes designs for industrial purposes which are ulitarian in character."

I thank you.

Mr. LANHAM. Thank you very much, Mr. Rothschild. We will now hear Miss Bendelari.