369 FRANKFURTER, J., dissenting. The passage of the Internal Revenue Code, including § 211 (a) (1) (A), is hardly a ground for implying legislative adoption of the construction placed on § 119 (a) (4) by the Court of Appeals for the Second Circuit. Helvering v. Hallock, 309 U. S. 106, 120-21, n. 7. When the entirely distinct problem involved in § 211 (a) (1) (A) came before the Court of Appeals for the Second Circuit, it based its decision on the determination that the proceeds were for the use of the copyright rather than a sale. That decision, like the Sabatini case, was based primarily on the doctrine of the indivisibility of a copyright.13 When that doctrine is rejected, it has been held to follow, as we have seen, that the proceeds are not included. That was the basis of decision in the Fourth Circuit, now under review. Moreover, the Court of Appeals for the Second Circuit has reached a result contrary to its copyright cases when dealing with the proceeds from the transfer of some but not all of the rights conferred by the patent 12 12 This case was not decided until 1946. Rohmer v. Commissioner, 153 F. 2d 61 (C. A. 2d Cir.). Molnar v. Commissioner, 156 F. 2d 924 (C. A. 2d Cir.), is not such a case. The court there dealt solely with the apportionment problem involved in computing taxpayer's income when the copyright was to be used in both the United States and other parts of the world. 13 In Rohmer v. Commissioner, 153 F. 2d 61 (C. A. 2d Cir.), the court said: "Where a copyright owner transfers to any particular transferee substantially less than the entire 'bundle of rights' conferred by the copyright, then payment therefor, whether in one sum or in several payments, constitutes royalties within the meaning of § 211 (a) (1) (A). For such a transfer is the grant of a license. Payment for the grant of such a license is measured by reference to the future use or expected use of the license by the licensee .... It is like interest paid for several years." P. 63. That the doctrine of indivisibility determined decision appears from Standard Oil Co. v. Clark, 163 F. 2d 917, 936, 939 (C. A. 2d Cir.). The decision in Sabatini v. Commissioner, 98 F. 2d 753, 755 (C. A..2d Cir.), also turned on the doctrine of the indivisibility of a copyright. FRANKFURTER, J., dissenting. 337 U.S. statute." It did so despite the fact that the term “royalties" includes proceeds for the use of patents, 26 U. S. C. § 119 (a) (4), and that, as will be seen, the theory of the indivisibility of a copyright had its genesis in a doctrine first applied in the patent field. 5. Thus we are brought to the question which the Treasury, the courts and the parties here have regarded as determinative of this controversy: may serial rights under a copyright be sold in law as they constantly are sold in the literary market? Specifically, is there some inherent obstacle of law which precludes the sale of such serial rights from having the usual incidents of a commercial sale? If it were impossible to make a sale, then the proceeds arguably are "royalties" because in that event the transfer can have been only for the use. There would still remain the difficulty of getting the lump-sum payments within the reasonable meaning of § 211 (a) (1) (A). For, it is fair to recall, § 119 (a) (4) would only determine whether the payment is from a source within the United States, not whether it is taxable. There would be the further difficulty of calling a payment a "royalty" when its amount bears only that relation to the future proceeds obtained by the transferee in exploiting the literary product as would be reflected in the purchase price of any income-producing property. If, on the other hand, the valuable right that, commercially speaking, was in fact sold, may as a matter of law also be treated as a sale, the proceeds would not be included. This conclusion, derived from a reading of § 211 (a) (1) (A), is made explicit by the Regulations and the House and Senate Reports. See ante, pp. 410-411. 14 General Aniline & Film Corp. v. Commissioner, 139 F. 2d 759 (C. A. 2d Cir.); see also Commissioner v. Celanese Corp., 78 U. S. App. D. C. 292, 140 F. 2d 339. Both cases are under § 143 (b), the section with which § 211 (a) (1) (A) was made coterminous. 369 FRANKFURTER, J., dissenting. The notion that the attributes of literary property are by nature indivisible and therefore incapable of being sold separately, is derived from a misapplication by lower courts of two early cases in this Court. These were concerned with the right of the transferee of less than all the rights conferred by a patent to sue an infringer. The inherent nature of the interests in intellectual property and their commercial negotiability were not involved. The Court determined the procedural problem before it so that the infringer would not "be harassed by a multiplicity of suits instead of one," and would be not subjected to "successive recoveries of damages by different persons holding different portions of the patent right in the same place." Gayler v. Wilder, 10 How. 477, 494-95 (U. S. 1850); Waterman v. Mackenzie, 138 U. S. 252, 255. But in its bearing on the procedural point, one of these cases recognized the saleability of less than all of the patented rights so long as the transfer consisted of at least one of the three rights separately listed in the patent statute. Waterman v. Mackenzie, supra. We thus find scant illumination of the intrinsic and legal nature of property rights in a copyright in the procedural analysis of these cases. Keener insight into such rights has been given by Mr. Justice Holmes in a case involving substantive questions in the law of copyrights: "The notion of property starts, I suppose, from confirmed possession of a tangible object and consists in the right to exclude others from interference with the more or less free doing with it as one wills. But in copyright property has reached a more abstract expression. The right to exclude is not directed to an object in possession or owned, but is in vacuo, so to speak. It restrains the spontaneity of men where but for it there would be nothing of any kind to hinder their doing as they saw fit. It is a pro FRANKFURTER, J., dissenting. hibition of conduct remote from the 337 U.S. persons or It may be tangibles of the party having the right. The "right to exclude others from interference with the more or less free doing with it as one wills" is precisely the right that Wodehouse transferred to Curtis. To the extent that the Copyright Law gave Wodehouse protection in the United States, he transferred all he had in property of considerable value-the serial rights in his novels and Curtis acquired all of it. For the duration of the monopoly granted by the Copyright Law, Curtis could assert the monopoly against the whole world, including Wodehouse himself. Nothing in the law of copyrights bars or limits sale of any one of the numerous exclusive rights conferred by the various subdivisions of § 1. Congress has not disallowed such sales and nothing in the due enforcement of the Copyright Law suggests their disallowance. Quite the contrary. See II Ladas, The International Protection of Literary and Artistic Property, pp. 775-792 (1938). The scheme and details of the Copyright legislation manifest a separate treatment of the various exclusive rights conferred by the statute. 61 Stat. 652, 17 U. S. C. §§ 1 et seq. It segregates these rights into sepa 369 FRANKFURTER, J., dissenting. rately numbered paragraphs.15 In each paragraph there is listed, in the alternative, a more detailed subdivision of the various rights. Each of these rights is substantial and exists separately from the others,10 and has of course 15 Section one of the Copyright Law provides: "§ 1. EXCLUSIVE RIGHTS AS TO COPYRIGHTED WORKS.-Any person entitled thereto, upon complying with the provisions of this title, shall have the exclusive right: "(a) To print, reprint, publish, copy, and vend the copyrighted work; "(b) To translate the copyrighted work into other languages or dialects, or make any other version thereof, if it be a literary work; to dramatize it if it be a nondramatic work; to convert it into a novel or other nondramatic work if it be a drama; to arrange or adapt it if it be a musical work; to complete, execute, and finish it if it be a model or design for a work of art; "(c) To deliver or authorize the delivery of the copyrighted work in public for profit if it be a lecture, sermon, address, or similar production; "(d) To perform or represent the copyrighted work publicly if it be a drama or, if it be a dramatic work and not reproduced in copies for sale, to vend any manuscript or any record whatsoever thereof; to make or to procure the making of any transcription or record thereof by or from which, in whole or in part, it may in any manner or by any method be exhibited, performed, represented, produced, or reproduced; and to exhibit, perform, represent, produce, or reproduce it in any manner or by any method whatsoever; and "(e) To perform the copyrighted work publicly for profit if it be a musical composition; and for the purpose of public performance for profit, and for the purposes set forth in subsection (a) hereof, to make any arrangement or setting of it or of the melody of it in any system of notation or any form of record in which the thought of an author may be recorded and from which it may be read or reproduced: . . . ." 61 Stat. 652, 17 U. S. C. § 1. 16 "A man having general statutory dramatic rights like Kauffman might make a play and perform it under his common-law rights without publication, or he might copyright the play, and he would still not have copyrighted or published his moving picture rights. If he wrote such a scenario and made his film, he could get a separate copyright upon that. Of course, he could sell his statutory or com |