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chosen for the reason that it repeats the language of the existing copyright act, and it was thought better to adhere to that language which has been construed by the Supreme Court and given a meaning which is a meaning we desire to follow in this act, than to change it even in the hope of making it clearer. The language of the section, “In lieu of actual damages and profits, such damages as to the court shall appear just,” would appear to put into the court the absolute right where it was an equity case to decide what should be allowed in the way of liquidated damages, subject of course to the limitations that it must not be less than $250 nor more than $5,000; and that the amount which the court should determine should be decided by a computation of so much per copy according to the number of copies found. Section 4966, Revised Statutes, the dramatic act, provides:
Such damages in all cases to be assessed at such sum, not less than $100 for the first, and $50 for every subsequent performance, as to the court shall appear to be just. Now, the danger in drawing a clause of this kind is that it may be
. construed to be penal in its character, and therefore an interpretation may be applied to it which will be exceedingly strict and rigid, and which will be objectionable for the purpose for which we desire it. We want to make it so that it will not be penal, so that it will only be liquidated damages, so that we can recover on the evidence what the court may decide to be proper, and this language, as to the court shall appear to be just,” coupled with a certain amount for each
per: formance has been construed by the Supreme Court of the United States in the case of Brady v. Daly (175 U.S., 151), and it has been held that that language is not penal, that that is liquidated damages, and that that is a proper mode of expression to get liquidated damages into a statute. Now, in order to save ourselves from making any possible mistake in the matter, we have, at possible risk of being a little ambiguous, used the very words of the old statute as they have been construed by the Supreme Court, in order that we might be sure that under no subsequent construction would that language be held to be penal rather than liquidated damages. Now, Mr. Wilcox has suggested this change:
Or in lieu of such damages and profits the plaintiff may elect to claim and thereupon may recover, as liquidated damages, and not as a penalty, an amount to be assessed as hereinafter stated, but such damages shall not in any case be less than $250 nor more than $5,000, except that where a willful or intentional infringement is found the court may, in its discretion, double or treble the liquidated damages, even though this may raise the amount above $5,000.
That is a perfectly clear section, which will convey exactly what we want to do. Whether it will be as safe to accomplish what we desire as the language which has been used, because of its failure to use the very language which has been construed by the courts, is a question for the committee to decide. I have no objection to the language. I think it is very good language and will certainly express what we desire.
Mr. Wilcox. If the chairman will permit, I would desire to make a few suggestions here.
The CHAIRMAN. Certainly.
Mr. Wilcox. In the friendliest spirit and a desire to arrive at a common understanding, I desire to say that the section which the gentleman relies upon as a precedent for the language used in the
bill as drafted is a section relating to damages for infringement of dramatic copyrights. Is that section equally applicable, in his judginent, to infringement of other kinds of copyrights, which are not based upon a single production and with a considerable amount of damage, like $100 or $50, but where the productions are numerous and the infringement in a single instance is slight and the damage in any one instance for a single reproduction may be very trifling, a few cents only, and where the conditions are quite different? Has he ever worked out in his own mind the manner in which the court would apply its discretion to a case of infringement of an ordinary cheap book where a hundred thousand copies might be produced, or several thousand copies of a lithographic print, such as I gave an illustration of this morning, where the profits were very small and the damage in case of a single infringement would be very trifling, but where the wrong is a substantial wrong, and where the present statute gives a fixed penalty of $1 a copy? How would the court apply its discretion to such a case as that? How could it do it, unless it acted as a jury and assessed damages? Is not that likely to be confusing in the draft suggested ?
Mr. STEUART. It does not seem to me there will be any difficulty about that at all. It does seem to me very desirable that in this section in which we are trying to preserve the discretion of the court, the independent judgment of the court, we are trying to give to the court the power to assess liquidated damages, which will not be penal and will not be fixed. The court ought to have absolute discretion as to how much will be allowed as liquidated dainages in order that we may avoid all possible danger of creating a penal provision for the punishment of this kind of infringement. It seems to me that the words as they are used in the dramatic section, “such damages as to the court shall appear just,” will certainly preserve the discretion of the court and give to the court the entire control over the whole question in a way that will avoid any possible danger of the act being construed to be penal. Whereas I think there is a possible doubt that even with the words in the section as proposed by Mr. Wilcox, that it shall not be regarded as a penalty-even with that language in the act, if the court should find, after construing it, that the act was penal, that the act did as a matter of fact provide for a penalty or as a matter of fact contain all the requirements and definitions of a penalty except in that one particular, it becomes a very serious question as to whether Congress could change a penalty into liquidated damages by merely calling it by another name.
Mr. Wilcox. If I may be permitted one other question- if thc plaintiff sought his remedy on the equity side of the court and asked for an injunction and incidentally for the assessment of profits and damages, or for the substituted damages which are provided for ini the second half of that section, then it would be for the court to assess the damages unless it referred that section of assessment of damages to a jury, which is what in many jurisdictions the court would do; the court would refuse to assess the damages if there were any discretion about it at all. But suppose the plaintiff did not seek his remedy in that way, suppose he proceeded directly to try to seize the infringing articles and sought his remedy on the law side of the
court, then how could the court exercise its discretion? That is what I am at a loss to find out. The case then would be tried before a court and a jury, and it would be a matter for the jury to pass upon. I do not see how the court could exercise its discretion at all.
Mr. STEUART. Of course, such questions as were submitted to the jury would have to be passed upon by the jury, and whatever verdict the jury found would leave the court in the position where the court could increase that if the court saw fit to do so, if the judgment were too small. I think it quite proper, a very good suggestion, that we should provide in the section that the court should have the power to increase the verdict of the jury. Now, with reference to the question of penalties and amount of penalties, I fully agree that they ought to be made not very large, but rather small.
Mr. O'CONNELL. May I ask a question at this point, Mr. Chairman?
The CHAIRMAX. Yes.
Mr. O'CONNELL. Is there anything in any existing sections or decisions of the court which provides that a plaintiff in an action of this kind in seeking to establish profits need only prove gross sales of the defendant?
Mr. STEUART. No.
Mr. O'CONNELL. And that the defendant must then show every item of cost ?
Mr. STEUART. No.
Mr. STEUART. Not in the copyright law. Yes, there is in the trade-mark law, but not in the copyright law. The language which is here with reference to the burden of proof is copied from the trademark law of 1905, and that was done for the reason that in the proof of profits from infringement it has been found almost impossible to recover where all the evidence had to be gotten out of the defendant and where the plaintiff was charged with the burden of proving not only all the gross sales which the defendant had made, but all the costs to which the defendant had been put. Because of the impossibility of reaching that item the committee and Congress thought wise when passing this trade-mark law to shift the burden onto the defendant.
Mr. BONYNGE. It is a very easy matter to the defendant to show the cost of making the sale in mitigation of damages.
Mr. STEUART. Yes; and in order that justice might be had and a miscarriage prevented, this provision was incorporated into the trademark law, and it has been repeated here.
Now, with reference to the impounding clause, you have heard it said, very properly, that that is no more harsh than the present law. It is not, and it provides also that the impounding shall be made upon such terms and conditions as the court may prescribe. That certainly is not a hardship. Impounding is not going to do any hardship to any defendant where the defendant has the careful supervision and observation of the court. The court is not going to allow the defendant to be put into any unfortunate position of oppression. If the plaintiff wants the goods of the defendant impounded, he can give such a bond as the court will consider amply sufficient to protect the defendant or submit to any other terms which the court thinks equitable under the circumstances. There is an objection which has been made to this subsection, that it leaves a great deal for the practice of the future to settle. There is doubt and difficulty as to how that is to be done. If the law is passed in this form, it is left so that it will have to be worked out in its ultimate detail as to the practice, and it is likely the practice will vary in different parts of the country. If the committee would care to go into it, I have made an elaborate scheme of practice which I should be glad to submit, but it has been left out of this bill because it was thought to be too cumbersome for the present act.
Mr. Wilcox. May I make one suggestion right there? Since I spoke this morning it has occurred to me on looking the matter over that the simplest and safest thing to do is to add a clause there directing the Supreme Court to make rules covering the practice applicable to the entire country. Those would then be similar to other rules in a great many other cases, as, for instance, the practice in bankruptcy matters, supplemented by the rules of different circuits and districts, each making rules for itself, subject, of course, to the rules of the Supreme Court. That has worked extremely well in bankruptcy cases.
Mr. STEUART. That is a very excellent suggestion.
Mr. Wilcox. I think a clause of that kind should be inserted to work out the matters contained in these two sections and the subsequent sections beginning with 32 and up to 36, and I thought that sections 23 and 24 and then sections 32 up to 36, if I am right in my numbering, instead of being separated there one from another by intervening sections on another subject, ought to be placed together, and at the end of that a distinct clause added directing the Supreme Court to make the rules.
The CHAIRMAN. Will you submit that suggestion in writing, Mr. Wilcox?
Mr. Wilcox. Yes; I will do so later.
Mr. STEUART. Yes; that is a very good suggestion. Now, let us take up section d:
d To deliver up on oath for destruction all the infringing copies or devices, as well as all plates, molds, matrices, or other means for making infringing copies.
I think that clause might be improved by a slight change in phraseology. That also ought to be put within the discretion of the court, and it ought not to be left quite without, or rather, I will say it ought not to be made as positive as it is there.
Mr. CURRIER. You would change that, would you not? Mr. STEUART. I would change that in this way: To deliver up on oath for destruction all such infringing copies or devices, as well as all plates, molds, matrices, or other means for making such infringing copies as the court may order.
That will leave the entire question as to what is to be destroyed or delivered up to the discretion of the court, and, as one of the gentlemen said this morning, when a court of equity takes jurisdiction of a controversy of this kind it ought to be free to do complete justice to the full extent that may be necessary. .
Mr. WALKER. Permit me to ask one question there, as to whether you know of any authority that the court can have or Congress can have to authorize a court to deprive persons of property, the character of which did not infringe any copyright or patent?
Mr. STEUART. This clause is designed to cover all those things which could with propriety be considered as elements contributing to infringements, and it would go no further, I am sure, when it came to be construed, than to give the court the power to enjoin and destroy all those things which were necessarily an inherent part of the infringement of copyright or which contributed to the infringement.
Senator Smoot. You are in favor of the destruction of property!
Mr. STEUART. I think that everything which contributes to the infringement ought to be destroyed, the copies themselves, so that it could not be repeated.
Mr. GEORGE HAVEN PUTNAM. That would not necessarily include the printing press:
Mr. STEUART. Not at all.
Mr. CHANEY. The court would determine just what the elements were that contributed to the infringement.
Mr. STEUART. If the court were given that power it would decide and order just what should be destroyed and what not.
Mr. WEBB. In section 22 you provide that every reproduction without the consent of the author or copyright proprietor of any work or any material part of any work in which copyright is subsisting shall be illegal and is hereby prohibited. Now, in the beginning of section 23 you say that if any person shall infringe the copyright in any work protected under the copyright laws of the United States by doing or causing to be done, without the consent of the copyright proprietor first obtained in writing, etc., and in that section you leave out the word "author.” Why do you leave out that word in one section and include it in another.
Mr. STEUART. I really don't know why the word was used in one section and not in the other. I take it the words “ copyright proprietor” are all that are necessary in either section. The owner of a copyright is the only person who has a right to complain. The author may have parted with his right.
With reference to the question of jurisdiction, that is a question which of course the committee must decide. When this question of jurisdiction was before the Congress—this is in section 32—there were very many of those present who had been greatly harassed, and whose business had been greatly interfered with, by the infringement by irresponsible people, venders, people who would take a piece of music and make a thousand copies of it, or have 10,000 copies of it made in some remote place, and then take those copies out on the street and sell them, or scatter them all over the country by mail and have them sold by fakers on the street or in stores; and it was stated at that time that it would be utterly impossible to reach the infringement and stop it if the jurisdiction of the courts were limited to the place of residence or State or district of which the infringer was an inhabitant. If the suit is to be brought against the seller, against the person who has the thing in his possession, why it must be brought wherever the act of infringement is discovered. A man is found on the street selling music by the sheet at a few cents, which under the copyright would bring a dollar, and if the person who buys from this vender on the street is to be compelled to inquire the residence of that individual and then go all the way back to the State from which