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The resolution shows that some of these broadcasters are brazen pirates and unscrupulous; yet by this bill payment for the use of our works is dependent entirely on the integrity and honesty of the reports furnished us by broadcasters, made up from the daily record of all compositions broadcast at the stations.
A class of people that has such little regard for the rights of others as to undertake to seize, appropriate, and make use of a program by rebroadcasting it for the purpose of gain would not be expected to have such scruples as to impel them to give us honest, true, and accurate statements of the number of renditions of our copyrighted compositions, or to pay us in accordance with those renditions.
Our bitter experience with crooked, irresponsible, and “fly-bynight” phonograph record and roll manufacturers has made us sadder but wiser men in that regard.
This resolution condemns a group of broadcasters as pirates and without conscience, principle, or scruple.
With that evidence before you, I am very confident that a bill to deprive us of our property and to turn it over to them and to leave us entirely at their mercy for pay will receive but scanty consideration at your hands.
We are all conversant with the case of the Zenith Radio Corporation, which involved the seizure of a wave length not assigned to that company but allocated to Canada, and the use of it over the objection of and in defiance of the Department of Commerce.
Under these circumstances the bill is viscious in that it is lacking in proper security and protection to the composers with respect to their securing accurate accountings and prompt and faithful payment under such accountings by responsible parties.
Representative Bloom. It is a little after 5 o'clock. What is the pleasure of the committee?
Representative Goodwin. I think the committee should rise until 9.30 to-morrow morning.
Representative BLOOM. I think so.
(Whereupon, at 5.15 o'clock p. m., the committee adjourned to meet on the following day, Wednesday, April 21, 1926, at 9.30 o'clock a. m.)
TO AMEND THE COPYRIGHT ACT
WEDNESDAY, APRIL 21, 1926
COMMITTEES ON PATENTS OF THE UNITED STATES,
Washington, D.C. The committee met, pursuant to adjournment, at 9.30 o'clock a. m., in room 412, Senate Office Building, Senator William M. Butler (chairman) presiding.
Present: Senators Butler (chairman) and Dill; and Representatives Vestal, Bowles, Bloom, and Goodwin.
Mr. VESTAL. Before Mr. Burkan begins I should like to ask him how long he thinks it will take him to complete his statement.
Mr. BURKAN. About an hour.
Mr. VESTAL. Mr. Klugh informed me this morning that he must leave this afternoon. He would like to have half an hour some time and I would like to have that worked in at any time to-day so that he can get away at that time.
Mr. Buck. I think, Mr. Chairman, we can wind up in about an hour and a half. If Mr. Burkan takes an hour, I do not think we have more than one-half hour after that.
STATEMENT OF NATHAN BURKAN, COUNSEL FOR THE AMERICAN
SOCIETY OF COMPOSERS, AUTHORS, AND PUBLISHERS—Resumed
Mr. BURKAN. Gentlemen, yesterday I argued and I think demonstrated conclusively from a reading of the cases decided by the Supreme Court of the United States that the proposed bill is unconstitutional, for the reason: It takes away from existing copyrights the radio-broadcasting rights which are secured to them under the present laws; that the Congress is empowered to grant to an author an exclusive right as a monopoly for a limited time in the work made the subject of copyright, and that Congress can do no more and no less; and that the freeing of a copyright work for use by others upon the payment of an arbitrary fixed price is not securing to the author a monopoly for a limited period and is not securing to him an exclusive right to his work as guaranteed to him by the Constitution.
That a copyright is private property. That it is the absolute property of the author of the work, and as such Congress has no power to fix the price for which it shall be sold to third parties for Their private use.
Senator Dill. Let me ask you this question: Could Congress revoke a copyright if it saw fiti
Mr. BURKAN. Congress can not revoke a copyright. Congress can repeal a copyright act just as it can enact one.
Senator Dill. Then let me ask you this question. If a copyright is granted for a certain number of years, is it your opinion, if Congress saw fit on account of the abuse of the use of thať right, it could revoke the right?
Mr. BURKAN. It could not revoke the right with respect to existing copyrights. That it has no power to do because the Supreme Court of the United States, Chief Justice Marshall writing, held a copyright is a contract between the people of the United States and the copyright holder, and for the period of that copyright it is his absolute property. Congress can not revoke or take away from him that which was granted to him under the Constitution and laws of the United States. An attempt had been made by a statute to take away from the inventor his patent. Chief Justice Marshall held that a patent is a contract between the people and the patentee, and that in consideration of his agreeing at the end of the patent period to give the people the free use of his work, the Constitution guaranteed him the exclusive right to the use of his creation for the time limited by the patent.
Senator DILL. I just wanted to get that in the record. I knew there was a decision along that line.
Mr. BURKAN. The Supreme Court held that a copyright is private property and that the United States can not take that property away from him for the use of any private third party. Broadcasters are private third parties operating broadcasting stations for their own private purposes and for their own enrichment.
Congress has the power to appropriate private property for public uses. It may determine what property shall be appropriated, when and how taken, but Congress has not the power to fix the price at which it shall be taken. That power is a judicial one. The question of the ascertainment of the value of property taken for public use is a judicial question. In the Monongahela case the Supreme Court held that Congress can not fix the price; that the question of the price must be determined by a judicial inquiry where the parties are under oath, subject to the scrutiny of examination and cross-examination; where the productiveness of the property about to be taken can be determined in accordance with judicial procedure and from an examination of their records, books, and papers.
You are asked to fix a price, but no evidence is presented here to determine whether “it is just compensation.” Somebody comes along and says, “I prepared a schedule to earn $1,000,000 for a group of people.” Congress is asked to accept that schedule and bind all the authors of the world to it.
Senator DILL. Of course, that would only apply to the part of the contract that was made in the form of a patent or a copyright.
Mr. BURKAN. Congress has not the power
Senator DILL. If Congress laid down as a condition of the granting of the copyright, which is termed a contract between the people or the Government and the copyright holder, and put in that copy; right the provision that for certain purposes a fixed price should be charged, then it would be
Mr. BURKAN (interposing). You could do that no more than you could say that the authors must have beefsteak for their breakfast every morning. Yesterday I read decision after decision and author
ity after authority holding that the only thing. Congress can do under the Constitution is to secure the 46 exclusive right
to the author and to exclude others from using that which he created for a limited time.
Senator Dill. That applies to the patents or copyrights already issued.
Mr. BURKAN. Not at all, sir. The decisions hold, one after another, along and a very formidable parade of them, from the time of Chief Justice Marshall down to Chief Justice Taft of the Supreme Court, that the Government creates nothing; the property is created by the author. He has an absolute right of property in that creation until he publishes it to the world. He can use it himself or he may keep it out of use. If I have a secret preparation, I can use it to the exclusion of the world until it learns my secret. It is in the interest of the American people that I should some time or other make known to the world that secret. The contract is this: The United States will exclude all others from making use of that preparaion for a limited time, upon condition that when the limited time is over it becomes the absolute property of the United States.
Senator Dill. Then you take the position that the present mechanical provision is unconstitutional!
Mr. BURKAN. Absolutely and unqualifiedly unconstitutional.
In United States v. United Shoe Machinery Co. (247 U. S. at p. 58), the contract is expressed as follows:
Or to put in another way, the inventor does not get from the law a right to a use that he did not have before, but he gets the right to an exclusive use. Take this from him and you take all that the law gives him and to secure which the public faith is pledged. (Chief Justice Marshall in Grant v. Raymond, 6 Pet. 218, 242).
The nature of the restraint is stated at page 57, as follows:
Of course, there is restraint in a patent. Its strength is in the restraint, the right to exclude others from the use of the invention, absolutely or on the terms the patentee chooses to impose. This strength is the compensation which the law grants for the exercise of invention.
The nature of the control is stated at page 65, as follows:
Let us guard against confusion and not confound things which must be kept in distinction. A patentee is given rights to his device, but he is given no power to force it on the world. If the world buy it or use it the world will do so, upon a voluntary judgment of its utility, demonstrated, it may be, at great cost to the patentee. If its price be too high, whether in dollars or conditions, the world will not refuse it; if it be worth the price, whether of dollars or conditions, the world will seek it. To say that the world is not recompensed for the price it pays is to attack the policy of the law, is to defy experience and to declare that the objects of inventive genius all around us have contributed nothing to the advancement of mankind. This comment is applicable here.
The Supreme Court has held that a patentee or a copyright owner is not a quasi trustee for the public. During the life of his patent or copyright he can do anything he likes with it. The public has no right to it because the bargain is that only after the term of the copyright, the public right comes in and from that time the public interest must be considered. Neither the broadcaster nor anybody else is entitled to the work any more than I am entitled to your watch.
Senator DILL. You maintain then, of course, that Congress has not any right to put any limitations whatsoever upon a patent or copyright which it grants.
Mr. BURKAN. Not the slightest except to impose conditions with respect to formalities, to insure to the people that at the expiration of the statutory period the public will become the absolute owner. The proposition has been stated by Presiding Judge Baker in the Circuit Court of Appeals for the Sixth Circuit, that the copyright holder or the patentee gives a deed to the United States. He is to have possesion for 17 years. The United States guarantees it will exclude from his possesion for 17 years the whole world; at the expiration of the 17 years the deed comes into force and effect and the work then becomes the absolute property of the United States. During the 17 years of his exclusive possession he is not concerned in the interests of the American people at all. They are not entitled to use it. They have not any right to use it. He may grant it to some and withhold it from others, a right of selection of persons and terms. He can make any use of it he likes and impose any price upon it he likes. It is like a suit of clothes you may have on. Îf I like your suit of clothes, I have got to come to you and dicker with you, and if you want to sell it, it is up to you.
Senator Dill. "Is it not a fact that there are laws in other countries that if a patentee sells his patent to another party and that party fails to use it for a certain period of time, the patent then becomes void ?
Mr. BURKAN. Because the other countries have the right to impose any conditions they like, in as much as they are not bound by à fundamental law such as we have here. The Constitution of the United States has preserved our rights and liberties and has made us the greatest Nation under God's footstool. It is because of that wonderful document that there is assured to everybody his rights of property, liberty, and the right to pursue happiness.
Senator DILL. You do not think such a law would be constitutional in the United States?
Mr. BURKAN. It would be absolutely unconstitutional. Your sole power--
Senator DILL (interposing). Then a patentee has a right to patent a thing and turn it over to a third party and that third party can hold it out of use the life of the patent.
Mr. BURKAN. That is just what I read into this record yesterday. Chief Justice Taft said that; Justice Bradley said it. There is a long and honorable parade of great judges who have said that very thing. (See U. S. v. United Shoe Co., 247 U. S. at p. 58.)
Senator Dill. I am asking you the question, assuming the patent is in the hands of a third party.
Mr. BURKAN. Absolutely in the Paper Bag Patent case (210 U. S. 405, 424).
Senator DILL. I know they have decided that with respect to the patentee himself.
Mr. BURKAN. The United States brought suit against the Bell Telephone Co. to declare invalid certain patents because of their non