tected in his property rights from the piracy of the Japanese or other foreigners who say, in effect, "You have something good there and without costing me anything I will send it abroad and have it copied and import it here and sell it at half of your price", which they do. We cannot proceed in the courts, as there are no common-law rights, and cases of this nature have been thrown out with the suggestion to proceed under the statutory rights given by the patent law. Hundreds of designs are gotten out annually, and it would cost a considerable sum to have grants issued in every case, even if such could be obtained from the Patent Office. And if so, such grants only assure the originator that he is the first to apply. The validity of the patent would have to be proved in court, and by the time action was had the domestic manufacturer would have no market for the article. The Federal Trade Commission has no jurisdiction in such cases, as it is resolved into a controversy between two parties in which the public is not interested. Action before the United States Tariff Commission would be a long drawn out process under “unfair practices in import trade" and not decisive. The Commission, while a quasi-judicial body, has not the power to determine the validity of a patent which in the end would have to be passed on by the Federal court. The Commission has held in several cases that merely because an imported article can undersell you in the market, no matter how cheap that price may be and whether or not it ruins your market completely, that does not come within the prohibition of "unfair practices in trade." If you have a patent, anyone who produces the same thing or substantially the same thing is an infringer. Under the copyright, he must copy the design. But the mere fact a copyist seeks to evade the issue in using a different color or some minor change—that should not be a defense. The department stores which have been opposed to copyrighting design patents can be protected by affording them a given period of time to dispose of the goods on hand after notification by the copyright proprietor, but it should be mandatory on them to disclose the source of their supply so that proper steps could be taken to exclude from entry further importations. The principle of search should not apply to copyrights, first, on account of the long delay involved and as designs are pirated within a few weeks' time after being put on the market; and second, that while it is applicable to patents, it is not to copyrights, owing to the distinction between the two. In the case of patents it is necessary, because the patentee is given the right to stop anyone who produces the same thing, even though he never saw your patent or took it from you. An infringement of a patent may be unintentional, may be purely a coincidence, but the copying of a copyrighted article is the deliberate act of filching the original. Copyright has to do with someone who deliberately steals the copyrighted article and makes copies of it to his enrichment and your expense. There should not be a search made where the penalty is imposed on someone, who deliberately and with intent to harm you, copies your original design to sell at a cheaper price. Copyrighting designs simply means stopping one from taking another man's work and copying it. Only by amending the copyright law to admit of registration of these industrial designs can the potters be adequately protected against infringements here and in having the Secretary of the Treasury exclude all pirated imported copies from entry. To that end we respectfully urge the action of this committee.. (Mr. Dowsing submitted the following brief:) BRIEF OF THE UNITED STATES POTTERS ASSOCIATION, EAST LIVERPOOL, OHIO, ON COPYRIGHT OF INDUSTRIAL DESIGNS, S. 3047 To the COMMITTEE ON PATENTS, House of Representatives: The United States Potters Association, representing 98 percent of the manufacturers of china and earthenware tableware in the United States, employing some 20,0000 workmen in plants located in 12 States of the Union, respectfully registers its approval and endorsement of S. 3047, passed by the Senate of the United States on July 29, 1935 (calendar day of Aug. 7), and referred to the Committee on Patents, House of Representatives. This bill, containing the amendment offered by Senator Vandenberg, gives sorely needed protection to the American manufacturers of china and earthenware, as well as to glass and other industries, of their original decorations and designs applied to the manufactured products. The existing Copyright Act of March 4, 1909, as amended by the various acts of August 24, 1912; March 2, 1913; March 28, 1914; December 18, 1919; July 2, 1926; and May 23, 1928, provides: "SEC. 30. That the importation into the United States of any article bearing a false notice of copyright when there is no existing copyright in the United States or of any piratical copies of any work copyrighted in the United States is prohibited. "SEC. 32. That any and all articles prohibited importation by this act which are brought into the United States from any foreign country (except in the mails) shall be seized and forfeited by like proceedings as those provided by law for the seizure and condemnation of property imported into the United States in violation of the customs revenue laws. Such articles when forfeited shall be destroyed in such manner as the Secretary of the Treasury or the court, as the case may be, shall direct. * * * "SEC. 33. The Secretary of the Treasury and the Postmaster General are hereby empowered and required to make and enforce such joint rules and regulations as shall prevent the importation into the United States in the mails of the articles prohibited by this act. ** * Proceeding under this authority the Secretary of the Treasury issued regulations (art. 481, Customs Regulations of 1923), articles 523 and 524, Customs Regulations of 1931, as follows: “ART. 523. (b) United States Code, title 17, section 30: "The importation into the United States of any article bearing a false notice of copyright when there is no existing copyright thereon in the United States, or of any piratical copies of any work copyrighted in the United States, is prohibited. (Mar. 4, 1909, c. 320. sec. 30, 35 Stat. 1082.) "Art. 524. (a) 'Piratical copies' are defined to mean either actual copies or substantial representations of legally copyrighted works, produced and imported in contravention of the rights of the copyright proprietor." Section 5, subsection (g), of the Copyright Act of 1909, with amendments, providing for "Works of art; models or designs for works of art", does not, as hereinafter set forth, give adequate protection to the pottery industry nor to other industries of the United States. In fact, it gives none whatever to designs applied to manufactured products. Under the proposed bill, S. 3047, as passed by the Senate, subsection (g), on page 4, line 10 of said bill, amends the present Copyright Act as follows: "(g) 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, 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 * Under the quoted subsection (g), section 5, of the Copyright Act of 1909, the designs, floral designs, border decorations, etc., used in the embellishment and decoration of china and earthenware tableware manufactured by the American potters may not be copyrighted and thus the proprietors protected in having the Secretary of the Treasury prohibit the entry of all piracies, and so keep such piratical reproductions from entering the domestic market. The text of the language used in S. 3047 amending the existing act is unambiguous and the intent and purpose clear to correct existing conditions in permitting the copyrighting of designs intended to be applied to or embodied in a manufactured product and thus to protect the American manufacturers from acts of piracy by foreign manufacturers who, through the lack of any prohibition to the contrary, promptly copy the designs of the American potters and other industries and place such foreign-made products on the American market at from one-third to one-half of the domestic price. The manufacturers of pottery in the United States employ highly paid artists and spend thousands of dollars annually in laboratory, research, experimental, and development work-on occasions requiring from 3 to 12 months to perfect a design and shape-only to find in practically every instance that within a few weeks after such expensive creation has been placed on the market it is pirated without any cost to the foreign manufacturer and the reproductions imported and placed on the American market in instances below the actual cost of the American production. The net result, after spending additional hundreds of dollars through advertising, etc., to popularize a given design, is to have the market ruined through the importations of the cheaper imitation. This not only affects the domestic manufacturer, but the American workmen as well, as it is reflected in their pay envelopes and having to be laid off through lack of employment. As well said by John Ruskin "There is hardly anything in the world that some man cannot make a little worse and sell a little cheaper, and the people who consider price only are this man's lawful prey." The Japanese in particular are not creative but copyists, and by filching the work of the American producers not only do irreparable damage to the domestic industry and American labor, but thus save themselves thousands of dollars of expenses which would be required in developing original designs. This adds to their advantage of depreciated yen, governmental subsidies, cheap and child labor, etc., in competing more ruinously with the domestic manufacturers. True, the manufacturers in the United States have available the application for design patent which may probably be obtained for all industrial designs and shapes used by the chinaware manufacturers, as well as other manufac turers. But recourse to this when hundreds if not thousands of designs, decorations, and shapes are produced annually by the pottery industry alone is not only a very expensive proposition but involves much delay. Then after receiving the required certificate it would be necessary to bring action in the district courts against hundreds of individual stores and retailers to enjoin the sales of the pirated designs to protect proprietorship. Long before that could be accomplished the market would be broken and the instant design so cheapened that its marketability would be greatly damaged. In the aggregate such damage can easily run into hundreds of thousands of dollars annually. After receiving a design patent it is in many instances not worth the paper it is printed on so far as protecting the manufacturer against the foreign manufacturer pirating his design and exporting reproductions to this country. There is no law under which the Secretary of the Treasury can act to prohibit importations of pirated copies of designs patent. The Secretary of the Treasury can act, in fact it is mandatory that he does act in proper cases where a copyright has been pirated and he can prohibit the entry of such ware. Thus the ware cannot get into the American market and be sold in competition at a much lower price, and so ruin an established market. Under the fifth clause referred to the only recourse of the American manufacturer or proprietor would be to proceed by injunction. The expense and impracticability of such actions may be visualized in considering a certain popular decoration owned by an American manufacturer upon which a design patent has been obtained and which has been pirated and reproduced abroad, and such foreign-made ware imported and sold in great or less amounts to dozens of retailers in hundreds of cities and towns of the United States by either the foreign manufacturer or his agents or importers here. To start proceedings of injunction in each case would not only involve prohibitive expense in both time and money but would, from business expediency, be impossible of consideration. The only practical and adequate protection is set forth in S. 3047 and under proper safeguards and regulation to deny importations of pirated copyright designs at the ports of entry in the United States. The statute authorizing the grant of patents for a new, original, and orna mental design is found in section 4929 of the Revised Statutes, reading "A design patent may be obtained by any person who has invented any new, original, and ornamental design for an article of manufacture, not known or used by others in this country before his invention thereof, and not patented or described in any printed publication in this or any foreign country before his invention thereof, or more than 2 years prior to his application, and not caused to be patented by him in a foreign country on an application filed by him more than 4 months before his application in this country, and not in public use or on sale in this country for more than 2 years prior to his application, unless the same is proven to have been abandoned.” It will be noted that a design patent is only granted for "an article of manufacture." This expression "article of manufacture" includes a vast number and variety of articles. The design must be "new" and "ornamental." Again, because of the use of the word "invented" the design must involve invention. The term "ornamental" has been given a broad significance-anything that would appeal to the artistic or esthetic taste being held ornamental. An article may have beauty such as would appeal to the esthetic tastes because of simplicity or symmetry of its outlines. Consequently we find designs patents being granted for such articles as wrenches and for machinery. A design patent may be granted for surface ornamentation on all sorts of articles such as chinaware, wall paper, silk, or cotton textiles, etc. Under the design patent law the inventor is required to particularly point out and distinctly claim his invention. It is practically impossible to point out the distinctive features embodied in an original industrial design, such as the decorations used on tableware. The patent law does not assure originality of design and does not claim to. All it assures the manufacturer is that someone has not registered that design in the Patent Office. The validity of the design has to be established, if questioned, by court action. Patent law is too involved for the designs here referred to, and even after a design patent is granted such does not provide for the exclusion from importation of the pirated design. It is necessary that the industries have immediate protection, as afforded by S. 3047, so that the moment an article appears on the market the copyright protection applies, and copying is not only prohibited in the United States but, what is by far of greater importance, may be prohibited from importation and thus entering into our markets. The design patent statute treats designs as a matter of invention and not authoriship. The copyright law and the patent law are two different statutes, but the law of presumption is the same for both. Every designer or manufacturer has to create or take from past history the particular pattern of the design and put it on his ware, and this originality should have been and should be adequately protected. Copyright law is not concerned with novelty or newness-purely originality. The presumption of validity attaches to the filing of the design. The manufacturers making the applications know whether it is original with them or not. Under the construction of the patent law providing for designs patent, it has been held that an original design may be copyrighted, but the application of the design to the manufactured product has to be patented. Therefore an author of a design is protected at the present time so long as his design is not reproduced in the manufactured article. The United States Potters Association respectfully urges upon this committee the necessity of the statute outlined in S. 3047, permitting the copyrighting of designs applied to the manufactured articles of tableware, etc. Such a bill will insure the protection of copyright designs, prohibit importations by foreign manufacturers of pirated copies and will eliminate the evil now existing. The ingenuity and creative ability of the American manufacturer should be fully protected by copyrghting the original designs applied to or embodied in the manufactured article. He is as much the author and creator as the one who writes a book, a drama, or a sheet of music. Respectfully submitted. THE UNITED STATES POTTERS ASSOCIATION, Mr. LANHAM. Thank you very much, Mr. Dowsing. We will now hear Mr. Haake, with reference to the furniture industry. STATEMENT OF A. P. HAAKE, ON BEHALF OF THE NATIONAL ASSOCIATION OF FURNITURE MANUFACTURERS, INC., CHICAGO, ILL. Mr. HAAKE. I am A. P. Haake, managing director of the National Association of Furniture Manufacturers, Inc., of Chicago. In order to establish authority for saying some of the things I say, unusual as the procedure may seem, because I am going to speak from direct knowledge which enables me to suggest errors in some statements that have been made and may be made, may I point out that what I say is based not merely on my experience as a trade-association secretary, but I have been in manufacturing, in charge of sales, for the largest furniture manufacturer in the country, have been the advertising agent, and in that period of something more than 30 years, have been active in the business. I have just completed the trusteeship of an upholstery manufacturer which was to pay 15 percent when he got into difficulties, and I have just cleaned up and paid 80 percent, and left a substantial net for the owners of the business. You will pardon my saying that, but I say that because back of this statement is more than sometimes may be back of what is said by a trade-association executive. Now why do we ask for this Duffy bill with the Vandenberg amendment, or for the Daly bill, which has the same protection for us? Either would be acceptable to us. It is not in order to secure a monopoly. And may I interpolate there the suggestion that Mr. Fox is in error when he points out that this design protection would provide us with a monopoly under which the larger manufacturers might survive, and the smaller manufacturers pass out. That is not correct. In the first place, we have very few large manufacturers in the industry. The average sales for the manufacturers is $388,000 a year. That is not a large manufacturer. There are less than a dozen of our people who have sales of as much as a million dollars a year. Macy themselves are larger than a large percentage of the total manufacturing industry. It is an industry of small units, and the desire for this protection comes not from the large manufacturers, but comes from the small manufacturers and there is no thought of monopoly there whatever. The point is we have been losing our shirts, not only through normal competition, but because this design piracy is so frightfully expensive. A manufacturer will lose as high as 10 percent of a year's sales, due to the piracy of a few designs. While I will not take the time now to do it, I will point out in my brief what those losses amount to. It is a frightful thing for us, and this desire for design copyright comes from our industry as a whole in order to protect themselves against this piracy. I respectfully suggest if there is danger of monopoly the danger comes in that in the absence of design protection a monopoly is created for the large retailers. As I will indicate to you, on authority that is better than mine in that respect, in a few minutes, the larger retailer is the one who very often has these designs deliberately copyrighted, and he can offer a sufficient volume to make an inducement worth while for the manufacturer to do it for him. The smaller dealer cannot do that. It happens time and time again that the smaller dealer who is buying from a legitimate creator of designs, finds his sales destroyed because |