31 Report, p. ix.

22 “Compulsory license" actually is a misnomer with unfavorable connotations, which we use for purposes of identification only because it has become a standard designation. The mechanical recording license, for example, is not "compulsory" in the sense of the compulsory licensing under patents which has been imposed in some antitrust decrees, e.g., United States v. National Lead Co., 332 U. S. 319 (1947); Hartford-Empire Co. v. United States, 323 U. S. 386 (1945). A more neutral term that also would be a better description is “statutory license" or "legal license.' The French expression is "licence legale." See, e.g., Le Droit d'Auteur, 1962, p. 83. The term "compulsory license" does appear, however, in §101(e) of the U. S. Copyright Act.

33 The two-cent royalty must be multiplied by the number of separately copyrighted musical works on the disc; phonograph records ordinarily contain at least two compositions (one on each side); long-playing records commonly contain a total of 12. The record manufacturer therefore frequently pays copyright royalties of 24¢ per record. By industry custom, payment for long musical works (e.g., most classical compositions) is made at the rate of 4¢ per minute of playing time. When the statute was adopted, a two-cent rate was considered to be the equivalent of 5% of the manufacturers' selling price. Henn, n. 21, supra, pp. 10; 17, n. 60. It has been argued in connection with the current revision program that a two-cent rate established in 1909 is obviously inadequate today; this argument has been rebutted vigorously on the ground, among others, that the consumer today pays less per minute of recorded sound than he did in 1909 and that reproduction quality today is incomparably higher. See e.g., Comments of Ernest S. Meyers in Henn, n. 21, supra, at pp. 77, 79-80.

34 "A very popular composition may be issued in as many as 15 or 20 different recordings by different record producers under the compulsory license system, but without ever specifically activating the statutory compulsory licensing provisions as such."-Blaisdell, The Economic Aspects of the Compulsory License (1958), Copyright Law Revision Study No. 6, Senate Committee Print, 86th Cong., 1st Sess. (1960), p. 100. "The statute also prescribes certain formalities to be followed by a manufacturer who wishes to invoke the compulsory license clause, but these rarely are carried out in practice. Both the music publisher and the record manufacturer know that the publisher cannot prevent subsequent recordings because of the compulsory license clause. As a result, the record manufacturer ordinarily goes ahead with the release of his record and then requests a license from the publisher, who generally issues it as a matter of routine."-Diamond, "Copyright Problems of the Phonograph Record Industry," 15 Vanderbilt L. Rev. 419, 422 (1962). See also Henn, n. 21, supra, at p. 56.

35 See n. 16, supra.

36 17 U. S. C. §1(e); see also the proviso in §104 exempting certain performances of oratorios, cantatas, etc. The statutory license concept in copyright law is not limited to the field of sound recordings. The Register's Report, for example, recommends a statutory approach to the problem of photocopying

by libraries that amounts to a royalty-free compulsory license (although not called by that name). Report, 150. A recent address by Luther H. Evans, former Librarian of Congress, included a discussion of the practical necessity of recognizing the growing use of photocopying in industry and charging a royalty for it-which also would be a compulsory license to use copyrighted material. The Universal Copyright Convention, to which the United States is a party, includes a provision permitting domestic legislation to allow a nonexclusive translation license. UCC, Art. V, par. 2. And the laws of numerous foreign countries contain a variety of compulsory license provisions affecting fields in addition to the recording of musical compositions.

87 Edward B. Marks Music Corp. v. Foullon, 79 F. Supp. 664, 667 (S. D. N. Y. 1948), aff'd, 171 F. 2d 905 (2d Cir. 1949). The "right to record anew under the compulsory license... must envisage some minimal change and new arrangement if only to conform to the range and style of the licensee's performers." Nimmer, "The Nature of the Rights Protected by Copyright," 10 U. C. L. A. Law Rev. 60, 102-3 (1962). "It would seem, in this connection, that any arrangement which would not constitute a violation of the rights of an owner of a musical composition when made for the purpose of giving a public performance for profit should be lawful when embodied in a recording under a compulsory license." Comments of Joseph A. McDonald in Henn, n. 21, supra, at p. 75.

88[I]t can be contended that the reiteration of the right of arrangement in Section 1(e) was intended to permit the reasonable exercise of such right as incident to the making of parts under the compulsory license provision of that subsection." Henn, n. 21, supra, at p. 14.

89"A third type of taking which is generally recognized as permissible is the taking of the liberty to make and perform (but not to make and sell) special arrangements of popular musical compositions. The fact is that the owner of a musical copyright and everyone connected with him love to have the music performed frequently-but not monotonously. On top of this it is well known that each group of instrumentalists and most vocalists have distinctive styles of presentation and delivery. A principal ingredient of this style is the nature of the special arrangement of the music, that is, the emphasis and. phrasing and extent of embellishment and feeling with which the essential musical message of the composition is modified and embroidered for delivery. To reverse a well-known quotation:-'A melody is like a pretty girl'. The copyright owner usually presents her in only one dress, his arrangement, and hopes she will be widely admired. But what girl wants to be seen in the same dress all the time? As a result, as long as the girl remains recognizable as his and is not held up to ridicule the owner cannot successfully object to others providing her with a change of wardrobe, more to their liking, for her performances." -McDonald, "Non-Infringing Uses," 9 Bull. Coprt. Soc. 466, 469 (1962). See, also, Burton, "Business Practices in the Copyright Field” in 7 Copyright Problems Analyzed (CCH 1952) 87, 111.

40 See, generally, Latman, Fair Use of Copyrighted Works (1958), Copyright Law Revision Study No. 14, Senate Committee Print, 86th Cong. 2d Sess. (1960); Yankwich, "Fair Use," 22 U. of Chic. L. Rev. 203 (1954).

41 Hearings on H. R. 11258, 68th Cong., 2d Sess. (1925) 233-275.

43 H. R. 17276, 69th Cong., 2d Sess. (1927).

43 Report, p. 33; reprinted in Appendix A.

44 Ibid.

45 Ibid.

46 Even the authors of the Revision Studies which presumably formed the basis of the Register's recommendation do not agree that it must be eliminated or that it may not be effective in avoiding monopoly problems. "To the extent that the present compulsory license provision is of doubtful application with respect to certain uses or operates unfairly under certain circumstances, improvement is possible, as discussed below, without necessarily abandoning the compulsory license principle." Henn, op. cit. n. 21 supra, p. 54. "It has been suggested that, in the absence of compulsory license, the large and financially powerful recording companies which largely control the leading recording artists would purchase recording options to entire catalogs or entire repertoires of musical publishing firms, with the result that they would assume a strategic control of the entire record business, to the detriment of smaller and less powerful record producers. In the confused organization of the music business it cannot be categorically denied that this possibility might eventuate."- Blaisdell, op. cit. n. 34 supra, p. 107.

47 Report, p. 34; reprinted in Appendix A.

48 Ibid.

49 Ibid.

80 Ibid.

51 Ibid.

53 It may be indicative of the lack of care this portion of the Report received that the Register, in describing the history of the compulsory license provisions, refers to "one dominant record company" which "had contracted with the leading music publishers.' Report, p. 33. As we have seen, it was not a record company but the Aeolian Company, a manufacturer of player-piano rolls. See Appendix G.

53 Report, p. 35; reprinted in Appendix A.

54 Report, p. 36; reprinted in Appendix A.

55 See n. 84, infra, and accompanying text.

56 United States v. Paramount Pictures, Inc., 334 U. S. 131 (1948).

57 Henn, op. cit. n. 21 supra, p. 83.

58 Blaisdell, op. cit. n. 29 supra, p. 120.

5 Tournier, "General Considerations on the Report of Copyright Office Towards A Revision of American Legislation on the Protection of Literary and Artistic Works" (Part II), Le Droit d'Auteur (English insert), 1962, p. 49, at p. 55.

co Henn, op. cit. n. 21 supra, p. 83.

61 Cf. Edwin H. Morris & Co. v. Warner Bros. Pictures, S. D. N. Y. Civ. No. 56-182, in which an independent music publisher claimed that its works were being excluded from use on the sound tracks of Warner Bros. motion pictures by a discriminatory combination between Warner Bros. and its own subsidiary music publishing corporations. The case was settled without any adjudication. See Timberg, "The Antitrust Aspects of Merchandising Modern Music," 19 Law & Contemp. Prob. 294, 300, n. 22 (1954).

62 Henn, op. cit. n. 21 supra, p. 66.

63 One phonograph record manufacturer (not then a member of RIAA) recently was quoted in the trade press to the effect that the elimination of the statutory license system "could conceivably put most independent record companies out of business. Without the existence of the statutory license proviso, the copyright owner could make a deal with one record company and freeze the other companies out of business. Because the copyright holder would have the choice of not granting a license at all or of imposing an arbitrary royalty fee, no matter how excessive, it is conceivable to project into the future and see only a handful of record companies surviving." Variety, May 2, 1962, p. 165; Billboard Music Week, May 19, 1962, pp. 4, 30. Cf. Ball, The Law of Copyright and Literary Property (1944), pp. 460-461: "The object of these [mechanical license] provisions is to prevent the copyright owner from using his special statutory privileges for the purpose of creating a private monopoly in the business of manufacturing devices designed for the mechanical reproduction of music, which result might follow were he permitted to favor one manufacturer with an exclusive license, while discriminating against the others." See, also, Copinger and Skone James, The Law of Copyright (1958), p. 273: "[I]f composers were allowed unlimited powers either to permit or prohibit the reproduction of their works..., the result might be that the largest and wealthiest firms engaged in the [phonograph record] industry would be able to obtain a monopoly in the most popular works to the prejudice of their smaller competitors in business."

04 17 U. S. C. § 1(e) grants the right "To perform the copyrighted work publicly for profit if it be a musical composition." (emphasis supplied.)

65 See Finkelstein, "Public Performance Rights in Music and Performance Right Societies," in 7 Copyright Problems Analyzed (CCH 1952) 69, at p. 84.

e United States v. American Society of Composers, Authors and Publishers, CCH 1940-43 Trade Cases [56,104 (S. D. N. Y. 1941).

67 Op. cit. n. 28, supra, Case No. 585.

68 CCH 1950-51 Trade Cases [[62,595. See Timberg, op. cit. n. 61, supra. Alden-Rochelle, Inc. v. ASCAP, 80 F. Supp. 888 (S. D. N. Y. 1948). 70 One recently reached the United States Supreme Court, Shenandoah Valley Broadcasting, Inc. v. American Society of Composers, Authors and Publishers, 371 U. S. 540 (1963). ASCAP also has been plagued with numerous attempts by private parties to intervene in the proceedings, e.g., United States v. American Society of Composers, Authors and Publishers, 11 F. R. D. 511 (S. D. N. Y. 1951), CCH 1956 Trade Cases ¶[68,524 (S. D. N. Y. 1956), CCH 1960 Trade Cases 169,657 (S. D. N. Y. 1959).

71 CCH 1950-51 Trade Cases ¶[62,594.

72 CCH 1960 Trade Cases ¶[69,612.

73 See, generally, Harris, "Small Composer Representation and Remedies in ASCAP," 6 Patent, Trademark, and Copyright Journal of Research and Education 117 (1962).

74 Section VI of the ASCAP decree "universalizes the principle of compulsory licensing." Timberg, n. 61, supra, at p. 309.

75 United States v. Broadcast Music, Inc., CCH 1940-43 Trade Cases ¶[56,096 (E. D. Wis. 1941). In addition, BMI has been involved in private antitrust suits, e.g., Smith v. Broadcast Music, Inc., CCH 1952-53 Trade Cases [67,308 (S. D. N. Y. 1952); Life Music, Inc. v. Broadcast Music, Inc., 23 F. R. D. 181 (S. D. N. Y. 1959); Schwartz v. Broadcast Music, Inc., 180 F. Supp. 322 (S. D. N. Y. 1959).

76 To take one example, a phonograph record company might own a music publishing subsidiary and also have under exclusive contract a particular artist who had performed a certain musical composition; that company could prevent a rival phonograph record manufacturer from producing a record of the same composition, even though that specific musical composition was an important part of the live repertoire of an artist who was under contract to the rival manufacturer.

77 Cf. 2 Ladas, The International Protection of Literary and Artistic Property, 792: "Obviously, records manufactured outside the United States cannot be imported or sold in the United States, unless the requirements of sub-section (e) are complied with."

78 See n. 14 supra.

T Article 13 of the Berlin Revision, after recognizing the right of authors of musical works to authorize "the adaptation of those works to instruments which can reproduce them mechanically," continues: "Reservations and conditions relating to the application of this Article may be determined by the domestic legislation of each country in so far as it is concerned; but the effect of any such reservations and conditions will be strictly limited to the country which has put them in force."