The CHAIRMAN. You may submit that for the record. The next gentleman to be heard is Mr. Kilroe. STATEMENT OF EDWIN P. KILROE, ATTORNEY FOR THE FOX PICTURE CORPORATION AND ATTORNEY FOR THE MOTION PICTURE PRODUCERS' ASSOCIATION Mr. KILROE. I desire to bring up before your committee two matters. The first point I have in mind was the provision of the bill which provides that the right to produce a motion picture shall include the right to exhibit it. If that means that the motion-picture producer must deliver to the exhibitor all of the performing rights on everything in the picture, it is a very dangerous clause for the motion-picture industry, because some of those rights we cannot get except on the permission of certain associations. We have no trouble with the authors or with the dramatists, because we buy those rights anyway and pay good money, but when we come to put the music in, it is divided up. The music publishers have synchronization rights; that is, the right to record it in the picture, and if we pay for that and put it in the picture, then we cannot use it until we get further permission from the small owners. If we enter into the convention, various rights will be owned by other societies, because their rights will not come in here, and the music will be furnished good protection, and we will have to deal with four or five, making it sometimes impossible to get all of those rights. Senator DUFFY. Are you generally in favor of entering the Bern Convention? Mr. KILROE. I would say "yes", with certain restrictions; or "yes", generally. As I say, if this provision requires the producer of a picture to give to the exhibitor all of the performing rights, it throws us entirely on the mercy of the music publishers and the American Society, and they can dictate their own terms. Senator DUFFY. I understood they were kicking about it also a while ago. Mr. BUCK. We do not want it, we do not want to have them at our mercy. Mr. KILROE. The next point is the term of the copyright. I think as set forth in the bill it is confusing and misleading, and I think we should have it specifically fixed at a term of 50 years or whatever the Government agrees on, but that is the term usually adopted abroad. It is true there are certain restrictions in England, but not quite like Mr. Burkan stated. In England, if an author assigns his copyright then dies, at the end of 25 years those rights revert to his heirs, but if he lives they go on just the same as before. The next clause I want to talk about is of great importance, and which we discussed before; that is the moral-rights clause. Without restriction of the moral right of authors, our industry is lost. We must, by the very nature of the business, make changes in stories and plays. We have to meet censorship laws, and we have to meet various laws throughout the country, and unless we have the right to make those changes, we are completely at the mercy of the authors, who can demand money every time a change is made, and it will put us out of business completely. Senator DUFFY. What would you say about the provision in the bill now? Mr. KILROE. It is very good, and while we would like to have it a little better, yet this is very good. We do not want those rights unless we pay for them. We say we want what you have, what do you want for it, What do you charge for it, and once we buy it, we want the right to make changes. We do not want to be in the position like Warner Bros. were at one time, where on four different times they had to pay money for changes that had been made. Of course, there is some question whether or not that right can be assigned under the Bern Convention. Senator DUFFY. Your theory is that the motion-picture producer that is compelled to make the motion picture substantially as written, or something similar, would be entirely at the mercy of the authors? Mr. KILROE. Yes; we would be entirely at the mercy of the authors when we get abroad. We would probably have to restrict our motion-picture productions to home-made material; that is, material made by our own authors where we hire the authors and own the rights. I believe I have your permission to file a brief. STATEMENT OF GABRIEL HESS, ATTORNEY FOR THE MOTION PICTURE PRODUCERS AND DISTRIBUTORS OF AMERICA Mr. HESS. Mr. Chairman, I am general attorney for the Motion Picture Producers and Distributors of America, a membership organization which is representative of outstanding producers and distributors of motion pictures in the United States. Senator DUFFY. Is that the so-called Hays organization? Mr. HESS. Yes; it is the so-called Hays organization. Today, I am appearing particularly for the distributor members of that organization, and I want to address my remark to the remedy provisions of the proposed bill. What other points I have in the way of suggestions and amendments, I will incorporate in a brief to be filed with your permission at a later date. I think it is admitted by all interests in copyright that the motion-picture industry is the largest source of revenue to authors and composers. We do not get anything for nothing. Whatever we get we pay for, and having paid for it we seek the protection of a copyright law as copyright owners for that which we produce from the material which we buy. The whole structure of the motion-picture industry is based on the exact playing time of the theaters of the country or of the world. There are so many days in the year, and an exhibitor in order to keep open must have motion pictures, and he must buy or contract to exhibit under license in the copyright law the pictures that he exhibits. So, if one day of the time of an exhibitor is not contracted for, that is a loss of the market of the distributor of motion pictures, and we, as distributors, seek only to preserve that market. While we are strongly competing with each other for the business, we are agreed that the market should be kept open, and that the playing time should not be appropriated by the unauthorized use of our copyrighted material. It may be startling for you to realize that there are between 20 and 25 million users of our copyrighted material a year in this country alone, and from 50,000 to 75,000 uses per day of our copyrighted material; so, if the uses are abused it is just that much revenue which we are deprived of. Naturally, we feel that the remedy provisions of any copyright law should contain such a deterrent against unauthorized use that there will be no unauthorized uses. For 8 years now I have been engaged in the work, especially retained by the producers to prevent abuses arising out of unauthorized use of pictures. When I started in they were legion, and I am very happy to say that today they are very few. As distributors we are not interested in the amount of recovery. In the last 5 years I should say in actions under the penalty section of the law we have not recovered more than $20,000 in statutory damages, and we have spent hundreds of thousands of dollars to preserve that market which is the only market we have. All we ask is that a minimum sum be fixed so that it will act as a deterrent against a misuse of our copyrighted material. The purpose of a specific adequate minimum damage is a guide to the users. As I said, there are 50 to 75 thousand uses daily, or to put it this way, there are 25,000 miles of motion pictures used daily in this country, measure in length. Senator DUFFY. Your first objection is that there is not minimum damage. Mr. HESS. We say there should be an adequate minimum damage. The CHAIRMAN. Have you a figure to suggest? Mr. Hess. Yes; we think the figure in the present law is the lowest figure that will act as a deterrent. The CHAIRMAN. You think that is sufficient? Mr. HESS. At least it is satisfactory. The CHAIRMAN. Does this bill change that? Senator DUFFY. Yes; it does in certain cases. That is what is referred to as a racket. No matter how innocent the violation is, even a little piece over the radio, they get that minimum, and it is $250. Mr. HESS. We are not concerned with the infringing uses of other material. We would be satisfied if motion-picture, dramatic, and musical works were put in a class by themselves and the minimum fixed at $250 as to that class of work. As I said, we are not interested in recovery, we do not seek any money, and have nothing to support. The CHAIRMAN. You are interested in protection? Mr. HESS. We are interested in protection; that is all. There are some other points I have in mind, which I will cover in the brief. The CHAIRMAN. You may submit those other matters with your brief. I believe that closes the hearing. (Thereupon, at 12:05 p. m., the hearing was closed.) NATIONAL ASSOCIATION OF STYLE CREATORS, INC., HOUSE COMMITTEE ON PATENTS, Washington, D. C. New York, April 13, 1936. The CHAIRMAN: Enclosed you will find a brief submitted on behalf of the National Association of Style Creators, Inc., and the National Copyright Service, Inc. Kindly give this brief your consideration in rendering your findings upon conclusion of the hearings. Respectfully submitted. SAMUEL KAPLAN, Executor Director, National Association of Style Creators, Inc., BRIEF SUBMITTED ON BEHALF OF THE NATIONAL ASSOCIATION OF STYLE CREATORS, INC., AND THE NATIONAL COPYRIGHT SERVICE, INC. STATEMENT This brief is submitted by the National Association of Style Creators, Inc., a nonprofit organization formed for the protection of style, whose members comprise creators of ready-to-wear apparel, and the National Copyright Service, Inc., an organization formed to aid and advise the manufacturer in the method of marketing and protecting his creations. The aforementioned organizations are interested in manufacturing firms that create, originate, and produce original styles and have styling and designing departments for such origination. Broadly, the National Association of Style Creators, Inc., and the National Copyright Service, Inc., are in favor of the Vandenberg amendment to the Duffy bill (S. 3047). This brief will endeavor to review and clarify for this committee the evils now prevalent particularly in the dress industry and the benefits and detriments in the present laws, the proposed legislation under consideration by this committee, and the recommendations of these associations. PROPOSED LEGISLATION, PAST AND PRESENT, FOR DESIGN PROTECTION Briefly, touching upon the former proposed Vestal bill, many objectionable features were present and too many allied industries employing designs were dissatisfied. The Sirovich bill (H. R. 11420) is undesirable in its present form, since the field of textiles, the dress industry, and illustrations of original dress designs are specifically excluded. The Duffy bill (S. 3047) is objectionable, since there are no provisions for enforcement; the bill carrying no liability for reproducing, manufacturing, selling either designs, patterns, or illustrations of textiles or wearing apparel. The Vandenberg amendment to the Duffy bill (S. 3047), with minor modifications, it is firmly believed, will go a long way toward solving the evils of plagiarism in the design of manufactured products, particularly in the dress industry, and should be adopted as an aid to the protection of design creations. DESIGN LEGISLATION ABSOLUTELY NECESSARY TO SAVE THE STYLE INDUSTRY It is roughly estimated that the industry comprising dresses of every type and coats, represents almost $1,000,000,000 yearly. If the production of woven and printed textiles were included, and other allied industries where design is an essential feature in the sale of the manufactured product, the combined money value brings such industries among the chief industries of the country. The labor employed is well over 250,000 men and women annually. In confining our remarks to the apparel industry, the committee will get a true picture of the time, effort, and money necessary upon the part of a manufacturer to successfully create, produce, and market his wearing apparel and the danger that design piracy plays in the success of the business. There are two major seasons in the industry, the spring-summer season and the fall-winter season. For each season the average creating manufacturer produces through his styling and designing departments approximately 150 models, and from this number he selects about 40 for his line. During the run of each season the possibility of the success of his line dwindles to about five or six running numbers upon which he receives repeat orders which help him to pay the expense of creating his original models from which his line is selected. The cost of maintaining a styling and designing department runs well unto five figures for the average manufacturer. It is, therefore, absolutely necessary to protect the manufacturer's investment in his designing department, since the design pirate can save himself this large cost and thus undersell, destroying the value to the original producer. It cannot be argued that the manufacturer does not have an actual property right in his creation, since it represents a real money investment for each model produced, and pirating of a model, especially a best seller, is an actual theft representing a huge loss to a creating firm. It does not take many active numbers, the values of which have been destroyed by plagiarism, to destroy the possible profits of a season; and unless a manufacturer can weather several seasons, he must be faced either with liquidation, reorganization, or bankruptcy. The pirating manufacturers, of course, will only seek the "live" or "running models" of another, and such information is usually obtained by unethical business practice or immediately upon the first presentation of the line or the sale of the first production. After many years of trials and tribulations, most manufacturers have seen their salvation in design protection and have installed styling and designing departments. This is rapidly being spread to practically every price range in the dress industry today. DESIGN PROTECTION IS NECESSARY FOR LABOR, THE MANUFACTURER, THE RETAILER, AND THE GENERAL PUBLIC Since style is essential to the wearing-apparel industry and comprises a large factor of the cost of a garment, design protection is absolutely necessary to the life and stabilization of the industry. Past experience has proven that a copied style cannot last more than several days, while an uncopied well-styled dress has an active buying demand of over 2 months. Thus, by protecting styles, the life of a creation is extended so that production can tend to level the peak loads and reduce the slow periods. Extending the life of a model produces a compensating reduction in the cost of general overhead, such as maintenance, cost of fabrics through larger purchasing power, cost of trimmings and thread, and loss of time of labor because of the reduced number of garments of each model. Such savings are often the difference between failure and success. One often hears the objection that style changes rapidly. The evil of this rapid change is design piracy and not the change in the silhouette or trend during a particular season. It necessarily follows that because of style piracy, business casualties result in the loss of many working days to numerous employees. Practically every copy means a cheapening in the construction and the quality of the fabric and trimming, thus virtually destroying the value of the original and depriving both the buying public and the garment worker of the benefit of good workmanship and quality. Style protection will tend toward the use of a better grade of material for dresses, since the life of the garment is extended, therefore, the repeat orders will be more numerous. The textile manufacturer will thus produce a greater yardage of a design or color, thus reducing his cost and the cost to the dress manufacturer, who will ultimately pass such saving on to the public. Style piracy also deprives labor of desirable conditions, since the pirating manufacturer must exploit the worker, either by forcing him to increase his production giving him inferior working conditions or using oppressive methods to undersell the creator or other style pirates. Most retailers are in favor of style protection, for, by increasing the life of a creation, he is given a longer period of time in which to dispose of his stock to the public. He is thus spared the necessity of constantly being forced to close out his stock and run frequent sales. A retailer must absorb such losses by increasing his prices on new styles so that the buying public does not receive value upon such purchases. A customer is more pleased if the dress she wears is not sold in cheaper copies. THE CONSTITUTION PROVIDES FOR THE PROTECTION OF INDUSTRY-DESIGN SHOULD BE PROTECTED The Constitution gives Congress power to promote progress of science and the useful arts. The Constitution states: "That Congress shall have power * * to promote the progress of science and the useful arts by securing for a limited time to artists and inventors the exclusive right to their respective writing and discoveries" (art. 1, sec. 8, United States Constitution). * * * "Any person who has invented any new, original, and ornamental design for an article of manufacture, may obtain a patent therefor." (R. S., sec. 4929 (35 U. S. C. 73) (in part).) Unless the industries that depend on design creation can receive such protection, the manufacturer will be in constant danger of failure and cannot long survive. That some legislation protecting designs must be passed, and soon, is recognized by every industry dealing in styled products. There is little room for argument that style protection is not practical and cannot be definitely defined. In the dress industry, style is a definite addition to the features of lines of a garment. It is true that each season definite trends and silhouettes become the vogue, but the adaptation of unlimited changes of the major trends produce the particular model or style. The innumerable variety of changes possible in a garment, without departing from the spirit of the mode is comparable to the vast differences of feeling and expression in the allied arts of painting, sculpture, and music. Given a simple subject such as a view of a beach, some rocks and the rolling ocean and 50 artists painting the same scene and the result will be 50 individual and artistic creations. That individuality; that adaptation of the vogue; that interpretation and treatment of the dress should have the benefit of legal protection. In defense of a copying manufacturer, it can hardly be said that design is a vague and uncertain factor; that nothing is new under the sun, and style has been known for hundreds of years. It is a well-known fact that a copy appear ing in the dress market has not been produced by coincidence but by a deliberate, willful, and greedy attempt to make money upon the creation of another. The copying manufacturer is well aware of this theft and is conscious of the fact that there is little that the originator can do to stop him. This march to fortune over the ruins of creating manufacturers should be stopped as soon as possible. It does not take long for a manufacturer to realize that his model was copied since he is soon informed by buyers who cover the market. If a buyer can recognize a copy, it should be just as easy for those trained to look at styles to recognize one. DEFECTS OF PRESENT LEGISLATION The patent law covering design patents is absolutely inadequate for presentday business; is of little or no value to the style industry and totally ineffective as a means of protection. The application, to conform with the law, must have a petition, specification, and oath by the creator, drawings in black or white, and very often an assignment to the manufacturer. For practical purposes all these documents should not be necessary. Under a copyright law, a single form should be sufficient. The drawings also present many problems. It is often very difficult to picture the many views required to show the design, especially of a printed fabric, and to portray the colors by the method of lines and dots as specified by the Patent Office. A drawing of this type often loses the artistic quality which is the essence of the style; and it is, therefore, a simple matter to produce a colorable imitation, thus circumventing the spirit of the patent law. The element of time in securing patent protection is a chief factor in its value of the style industries. Because of the nature of the present patent law, 53579-3690 |