"An act to amend the act entitled 'An act to amend and consolidate the acts respecting copyright,' approved March 4, 1909, as amended, and for other purposes." I have also expressed interest in H. R. 10632 and, in a general way, upon the subject of copyright legislation.

I represent the Association of American Railroads, which is a voluntary organization, the membership of which is composed of practically all of the class 1 railroads of the United States.

Speaking of S. 3047 as illustrative, the railroads are particularly concerned with section 1, subsection (g). This subsection provides:

"That the author of any artistic model or design intended to be applied to or embodied in any manufactured product, except products intended to be applied to or embodied in motors, motor cars, motor-car accessories, and products employed in the design and manufacture of motors, motor cars, and motor-car accessories, may obtain copyright for such model or design under the provisions of the Copyright Act approved March 4, 1909 (U. S. C., title 17), as amended by this Act, and that upon compliance with the requirements of the said Act and of this Act shall thereby secure the rights and remedies of the said Act of 1909, and shall, in addition thereto, after the date on which this Act shall go into effect, secure the exclusive right to apply to or embody in any manufactured product, excluding the products hereinbefore excepted, the said copyrighted model or design: Provided, etc."

It will be noted that motor cars, motors, motor-car accessories, and the products employed in the design and manufacture of motors are excepted from the provisions of this subsection. It was my purpose, if I had been permitted to appear before the committee, to suggest that this subsection be amended by inserting in line 15 on page 4, after the word "accessories" and before the word "may", the following: "and products intended to be applied to or embodied in or employed as railway facilities, equipment, or accessories or in the design or manufacture of any of these."

I have not been able to understand why an exemption should be made in the case of motor cars, while the same exemption is denied to railroad cars. In the railroad industry, developments are rapidly occurring in the design of passenger cars and the inclusion of provisions in the law relating to artistic design would lead to hardships and embarrassments which I am sure the committee does not desire.

As I understand it, if existing law is amended in the way proposed and the provisions are made applicable to railroad equipment, almost anyone could obtain a certificate of copyright registration of any model or design which, in the opinion of the applicant, would be artistic and of which he might conceive himself to be the author. Having secured such a certificate, which is prima facie evidence of the facts recited, a registrant could, under many circumstances, institute court proceedings, from which there could be no escape without incurring very considerable expense and delay. Where resemblances are found, a defendant might be compelled to establish that he has not copied a registered design and this would be a matter difficult to establish in a court of law.

The existing patent laws and particularly Revised Statutes, sections 4929, 4930, 4931, 4933, and 4934, as I read these statutes, afford adequate protection to anyone who has produced a design beyond the reach of someone skilled in the art to which it pertains to produce at any time.

The committee is familiar with the difficulties which attend efforts to protect designs. It is impossible usually to define how much of any design is really novel and how much is not. This is particularly true in the case of designs relating to the shape of manufactured products. Here we have difficulty in determining whether the shape is functional or whether it is essentially artistic. Litigation dealing with this question has not been entirely satisfactory because of this element of vagueness, which seems to be unavoidable.

I have no doubt that there are fields within which design protection is proper. As an illustration, surface designs for textile fabrics and for wallpaper are certainly not functional and invention in this type of design should be protected. The appropriate committee of the American Bar Association, namely, the one dealing with protection of designs, has long struggled with this question, without reaching any very definite conclusions. Certain members of the committee have advocated copyright protection for a relatively short time, limited to textile designs.

Without attempting to cover this controverted field, it seems to be clear that no reason can be given why motor cars should be exempted and railroad cars included. It is true perhaps that the author of this bill recognized the difficulty of determining how much of the shape of a motor car is good engineering design and how much merely artistic. However, in these days when the railroads are putting into service stream-lined trains, with every known modern device to add to the comfort, safety, and speed of travel, the consideration which controlled the author of the bill in omitting motor cars should be equally effective in the case of railroad cars.

Mechanically, railroad transportation is going through a transition stage. Confronted as it is with severe competition from other forms of transportation it is endeavoring to meet competitive conditions by increasing the speed of passenger and freight transportation and by adding to the comfort of passengers. The railroads should be free to develop designs for modern, fast transportation, without being subject to trouble in some litigation, which would inevitably follow the enactment of a statute of the kind we are discussing.

I am taking the liberty of attaching hereto a copy of a statement prepared by Mr. Joseph Rossman, patent attorney for the Marathon Paper Mills Co., Rothschild, Wis., in an article published in the Journal of the Patent Office Society of December 1935. I think the committee would be interested in Mr. Rossman's discussion of this question of copyright design.

I renew my request for an opportunity to present my views to the committee, unless the committee should be of opinion that the brief discussion herein contained is sufficient for its purposes.

Very truly yours,

R. V. FLETCHER.
Vice President and General Counsel.

STATEMENT PREPARED BY JOSEPH ROSSMAN, PATENT ATTORNEY FOR THE MARATHON PAPER MILLS Co.

(Published in the Journal of the Patent Office Society of December 1935)

First of all, the value of examination of designs as to novelty and originality lies in the assurance that it gives the manufacturer to proceed with his article and place it on the market after issuance of the design patent without fear of having competitors copy his design. A design patent carries a primafacie right, and gives to the manufacturer assurance of originality whereas a mere copyright registration which is issued pro forma without examination as to merits, can obviously give no such assurance.

The value of an examination system consists in informing manufacturers at the outset whether or not a proposed design is sufficiently meritorious to warrant legal protection and which can be adopted with the right to exclude competitors from copying the design. Thus at a comparatively small expense the manufacturer can ascertain the merits of a particular design before he actually manufactures his product and placed it on the market. After installation of machinery and manufacturing the article in vast quantities and putting it on the market, and educating the public by expensive advertising to accept the product, it would manifestly be very disturbing and costly to a manufacturer if he were to find later that he had no exclusive right to his design, and that competitors may also use it freely. The burden of ascertaining originality in copyright registration would be imposed on the courts, and only by long drawn out and expensive litigation could exclusive rights to such copyrighted designs be established. The cost of court litigation which even in minor cases runs into thousands of dollars would certainly outweigh any advantage that may be urged for design registration,such as low initial registration fee and no official opposition to registration.

The lack of examination would also, it is believed, become a great evil since no manufacturer could ascertain just what designs he may safely adopt without infringing any claimed rights of others. The present design patent system is not without its difficulties in this respect, but they would be vastly increased in proportion to the number of designs which would be registered that are not original and which would be rejected under the present examination system.

It therefore seems in the long run that the present design patent system is much more desirable than any heretofore proposed registration system. The

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cost of securing a design patent, the short time incident to an examination on the merits-a matter of a few days are mere trifles as compared with the difficulties which would be encountered in a registration system.

The registration system would obviously result in many conflicting and overlapping claims to the same property rights in designs since any design whether it be original or not could be registered. A design patent on the other hand demarcates definite enforceable rights and therefore serves to inform manufacturers of the forbidden territory. Under a registration system with no examination the definition of forbidden territory would entirely disappear and chaos would result in attempting to protect new designs or enforcing rights thereunder.

The recent administrative improvements in the Patent Office in passing upon design applications and the formation of a separate Design Division, have substantially removed the ancient cry of delay and prolonged prosecution. STATEMENT OF HOMER E. CAPEHART, BUFFALO, N. Y., ON BEHALF OF THE AUTOMATIC MUSICAL INSTRUMENT ASSOCIATION

Mr. CAPEHART. Mr. Chairman and gentlemen; my name is Homer E. Capehart, of Buffalo, N. Y. I am vice president of the Rudolph Wurlitzer Manufacturing Co., of North Tonawanda, N. Y., manufacturers of and dealers in all kinds of musical instruments. I am likewise vice president of the Association of Automatic Musical Instrument Manufacturers, and this association is composed of 90 percent of the manufacturers of automatic coin controlled phonographs. Most of the members of our association are here today and I have been delegated to speak for this association and this group.

Those present today are Mr. D. W. Donohue, of the Mills Novelty Co., Chicago; N. Marshall Seeburg, of J. P. Seeburg Corporation, Chicago; D. C. Rockola, of the Rockola Manufacturing Corporation, Chicago; Herman Fleer, of the J. P. Seeburg Corporation, Chicago; W. D. Nance, attorney for Automatic Musical Instrument Association, Chicago; Sydney S. Siegel, representing Rudolph Wurlitzer Co.; C. S. Darling, of the Automatic Musical Instrument Association, Chicago.

It is our understanding that the purpose of these hearings is to gather facts and information for the writing of a new copyright law, or the amending of the present law. Our association is interested in only one phase, generally speaking, of any new copyright legislation, and that has to do with the mechanical reproduction of music and particularly as it applies to coin-automatic phonographs. Of course, indirectly, we are interested in the entire copyright bill, and we do not want to leave the impression with this committee or with anyone else that we are not in sympathy with what they are trying to do, or that we are not in sympathy with the entire bill, because we are; and we are not coming in here talking about our respective subjects and trying to leave the impression that we have no interest in anyone else, because we do. But, in order to save your time and to save our time we are going to confine our remarks to the specific subject of coin-controlled automatic phonographs as they apply to our industry.

Prior to 1909 the right of the composer to musical works to control the mechanical reproduction of music through copyright did not exist. I think that is a known fact by all of the members of the committee. However, in 1909. Congress enacted a copyright law extending the right of copyright with certain restrictions

that should be remembered, with certain restrictions-to cover the mechanical reproduction of music. And the problems of Congress at that time were expressed by the Committee on Patents as follows, and I would like to read that to you, if I may:

The main object to be desired in expanding copyright protection accorded to music has been to give to the composer an adequate return for the value of his composition, and it has been a serious and a difficult task to combine the protection of the composer with the protection of the public and to so frame an act that it would accomplish the double purpose of securing to the composer an adequate return for all use made of his composition and, at the same time, prevent the formation of aggressive monopolies which might be founded upon the very rights granted to the composer for the purpose of protecting his interest.

That was one of the problems back in 1909 as expressed by the committee. The committee further discussed the matter and here is another thought that was brought out by the Congress in 1909, and this is very, very important:

The Constitution does not establish copyrights.

Notwithstanding the fact that in these hearings to date there has been a lot of talk that the Constitution did.

The Constitution does not establish copyrights, but provides that Congress shall have the power to grant such right if it thinks best. Not primarily for the benefit of the author, but primarily for the benefit of the public such rights are given-not to any particular class of citizens, however, where they may benefit, but because the policy is believed to be for the benefit of the great body of the people in that it will stimulate writing and invention to give some bonus to authors and inventors.

The problem at that time, as far as automatic mechanical music was concerned, was solved by Congress in the enactment of the 1909 statute and was particularly solved as far as automatic coin-controlled musical instruments were concerned. At that time, of course, the only automatic musical instruments that were made were pianos, on which were played perforated rolls. You remember the old automatic piano. There was possibly no coin-controlled automatic phonograph at that time. I may be wrong in that and there possibly may have been one manufacturer of coin-controlled phonographs at that time; but it was primarily the coin piano that was involved. In 1909, the Congress protected the user and the copyright owner and the manufacturer by this portion of the 1909 statute which will be found in section 1 (e) of the Copyright Law of 1909 and which reads as follows:

The reproduction or rendition of a musical composition by or upon coinoperated machines shall not be deemed a public performance for profit unless a fee is charged for admission to the place where such reproduction or rendition occurs.

So one can see that in 1909 Congress settled the matter by the enactment of that law and that has been the law of the land since 1909. The copyright law possibly has been amended in that time, I do not know; but the matter of the changing of that particular section has been discussed, as the chairman knows, on many, many occasions; but Congress in its wisdom, up to this time, some 27 or 28 years, has seen fit to permit that particular section of the copyright law to remain in the law.

Here is what Congress did in 1909. They did not deny the copyright owner the right to compensation on his copyrighted music;

they simply said to him, "You must secure your compensation at the source, or in the form of a royalty on the record or perforated roll, or whatever it might be." That, in brief, is exactly what the clause I have just read says "we want you compensated, but you inust be compensated at the source."

The big fear we have is that that portion of the 1909 statute in any new legislation might be eliminated and it is to that end that we want to discuss this with you, that is the thing that we want to give you, if we possibly can, as many facts and as much information about and call your attention to what we believe is the right and the fair thing. I wish it were possible for me to have a blackboard here on which I could put down some seven or eight of the chief or main subjects we would like to discuss with you. But we have not a blackboard and it is impossible, so I have had these subjects mimeographed and, with your permission, Mr. Chairman, I would like to hand one copy to each member of your committee and we would like also, if you please, to have this put in the record.

Mr. LANHAM. Without objection, it will be placed in the record. (The paper above referred to is as follows:)

POINTS TO BE CONSIDERED IN ANY NEW COPYRIGHT LEGISLATION AS APPLIES TO THE USERS OF MECHANICAL MUSICAL DEVICES

(Presented by H. E. Capehart in the interests of secondary and incidental users of music, and the manufacturers of automatic coin-controlled phonographs.)

1. There are now four bills pending before this committee, known as "Duffy" bill, "Daly" bill, "Sirovich" bill, and "Bloom" bill.

2. As a possible result of the bills now pending, we are fearful of a multiplicity of licenses, fees, and royalties, because there has been discussed, there has been proposed, and there is a possibility that a law might be enacted, which would permit the following multiplicity of licenses: (1) Royalty on the record; (2) license fee to A. S. C. A. P.; (3) license fee to Warner Bros.; (4) license fee to the Associated Music Publishers; (5) license fee to the Society of European Authors and Composers; (6) the copyright license to the manufacturer of records for the use of such records, as suggested by the record manufacturers several days ago in these hearings; (7) the proposed copyright to be given to an artist for an individual rendition or interpretation of a piece of music, as proposed by Mr. Fred Waring, president of the National Association of Performing Artists.

3. Thought must be given to the secondary and incidental users of copyrighted music.

4. The possibility of a law which might entirely eliminate our industry, or at least seriously handicap it.

5. We are opposed to no group in the formation of a new copyright law, and it is our understanding that no group opposes us; and we make this statement after having discussed the matter with several of the interested parties.

6. There is nothing in either the Berlin convention or in the Rome convention, so far as we are able to discover, which prohibits the adoption of our suggested amendment, but on the contrary, both conventions leave the mechanical reproduction of musical compositions entirely up to each country. 7. The utter impossibility and impracticability of compensating copyright owners on any basis other than by paying them on each record, which is at the source, as it applies to our specific industry and to the incidental and secondary users of music.

8. We propose the attached amendment to the Sirovich bill, and suggest a similar provision be included in any proposed legislation by this committee.