lutely at the mercy of a combine that say, "We have found a way to combine and get around the Sherman antitrust law." I speak of the Composers, Authors & Publishers Society. If you would refer to the decision of the court--the Whitmark case-you would see that the court sidesteps that point which was raised about the Sherman antitrust law because of other grounds. I appreciate your hearing me, and I know any suggestion that I have covered the bill is entirely beyond the facts. I have not, but my idea is that this bill should go back to the Committee on Patents, and I will then do everything I can to help get the facts and figures and data together and bring out a proper bill to protect all of the rights the people who are clamoring for the bill have, and all the rights of the people who are making the records and rolls, and, incidentally, I would like to see the public considered. The CHAIRMAN. If there are any other gentlemen here on this bill and they will note their attendance to the reporter, we will be glad to have that included in the record. STATEMENT OF HON. ERNEST R. ACKERMAN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW JERSEY Mr. ACKERMAN. Mr. Chairman, may I file a copy of a bill that would be, as I understand, acceptable, with the reasons therefor, as an extension of my remarks? The CHAIRMAN. If it is not too long, that will be all right. (The matter above referred to is as follows:) SUGGESTED AMENDMENTS TO H. R. 13452 AND REASONS THEREFOR 1. Page 2, line 7, change date from "July 1, 1909" to "July 1, 1929." Reason: These provisions of this bill should not be retroactive. In the act of 1909, by which mechanical copyright rights were created, the principle of nonretroactive legislation which is so well established was recognized and should be followed now. 2. Page 2, lines 13, 14, and 15. Eliminate the words for the manufacture and sale of ordinary commercial phonograph records or perforated musical roll ". Reason: The language stricken out is inconsistent with that used in the existing copyright act and other parts of this bill and restricts mechanical licenses to certain forms only of mechanical reproduction. 3. Page 2, line 19, strike out "promptly." Reason: The word "promptly is indefinite and bound to cause confusion in determining rights of parties under this bill. See note to amendment No. 7. 4. Page 2, lines 19 and 20. Strike out words "by the copyright proprietor ". Reason: Either party at interest should have the right to file the grant ; otherwise the grantee would suffer if his grantor willfully, negligently, or inadvertently fails to file the grant. 5. Page 2, lines 22 and 23, strike out words "ordinary commercial phonograph record or perforated music roll" and insert words "part of instruments serving to reproduce mechanically the musical work." Reason: To make the language conform to that in other parts of this paragraph. 6. Page 2, line 24, strike out words “ of the copyright proprieter." Reason: To make the language conform to amendment No. 4. 7. Page 2, line 24, strike out the word "promptly." Page 3, line 1, before the word "shall," insert the words "before any manufacture and/or sale by the grantee therein subsequent to the execution of such grant." Reason: This is the original grant under which all statutory mechanical licenses are obtainable, and hence it is vitally important that the grant be made of record prior to any use by the grantee in order that others may have the right to take statutory licenses without delay so as to be able to use the musical composition while it is still in popular demand. 8. Page 3, line 2, strike out the word "like." Reason: The failure to record a grant should constitute a defense against infringement by means of any part. 9. Page 3, line 11, insert after the word " grant" the word "and." Reason: The whole or parts of the original agreement may be in effect notwithstanding the subsequent agreement. 10. Page 3, line 12, strike out the word "like." Line 13, insert after word "composition" the words "upon parts of instruments serving to reproduce mechanically the musical work." Reason: A grant given for mechanical reproduction in any form should permit the use of the composition under statutory license for mechanical reproduction in any other form. For example, if the original grant relates to phonograph records, the composition should be available under statutory license to music-roll manufacturers also. 11. Page 3, line 17, insert the word "and" before the word "or." 13. Page 3, line 21, strike out the word "like." Reason: Same as for amendment 8. 16. Page 4, line 5, insert the following: "Provided, however, That no such subsequent agreement shall be binding upon any other person who shall have previously used such copyrighted work under this paragraph, unless he shall so elect. And provided further, That if the copyright proprietor himself manufactures, uses, or sells parts of instruments serving to mechanically reproduce his copyrighted musical composition, he shall prior thereto file notice thereof, accompanied by a recording fee, in the Copyright Office, and in such event, or if the copyright proprietor shall have acquiesced in the use of the copyrighted work upon the parts of instruments serving to reproduce mechanically the musical work, then any other person may make similar use of the copyrighted work upon the payment to the copyright proprietor of a royalty of 5 per cent of the manufacturer's selling price of each such part upon which such work is recorded, computed upon the basis of such parts sold by the manufacturer; and the copyright proprietor may require, and if so the manufacturer shall furnish a report under oath on the 20th day of each month of the number of such parts sold during the previous month, and royalties shall be due on such parts sold during any month upon the 20th of the next succeeding month: And provided further, That failure to file such notice as herein provided shall be a complete defense to any suit, action, or proceeding for any infringement of such copyright. That whenever any person, in the absence of a license agreement, intends to use Provided also, a copyrighted musical composition on parts of instruments serving to reproduce mechanically the musical work, relying upon the provision of this subdivision (4) of this act, he shall serve notice of such intention by registered mail, upon the copyright proprietor, at his last address disclosed by the records of the Copyright Office, sending to the Copyright Office a duplicate of such notice; and in case of his failure so to do, or in case of the failure of such manufacturer to pay the copyright proprietor within 30 days after demand in writing, the total sum of royalties due at said rate, at the date of such demand, such manufacturer shall be deemed guilty of an infringement of the copyright in such work, and shall be liable for such infringement in the manner prescribed in subdivisions 25 and 28 of this act." Reason: This will protect the user from the imposition of a higher royalty than the royalty in effect at the time he commenced to manufacture under this paragraph and on the basis of which he made his heavy investment in artists' services, recording expenses, cost of matrices, and sales-promotion expenses. At the same time this amendment makes it entirely possible for the copyright owner to reduce the royalty rate whenever he believes a reduction is to his interest, which we understand to be the reason for the provision in paragraph 3, allowing modification of the original grant. The underlying principle of statutory mechanical license is that whenever the owner of a musical copyright has used or permitted or knowingly acquiesced in the use of the copyrighted work upon the parts of instruments serving to reproduce mechanically the musical work, then such work should be available for mechanical use by any other person. The bill, through inadvertence, we believe, fails to provide for the case where the copyright owner himself makes such use or acquiesces in such use. has been recognized by Mr. Vestal. This serious deficiency in the bill 17. Page 4, line 7, strike out the word "like." Reason: Same as amendment 8. 18. Page 4, lines 10 and 11, strike out the words "except in the case of public performance for profit." Reason: The imposition of multiple copyright royalties on the same phonograph record or similar device is obviously obnoxious. Furthermore, the ultimate consumer has a right to expect that when he buys a phonograph record or similar device he shall be free to use it without being subject to the annoyance and expense of paying further tribute to the copyright proprietor. 19. Page 5, line 7, insert as a new paragraph, “(8),” the following words "parts of instruments serving to reproduce mechanically the copyrighted work," shall not include plates, molds, matrices, or other means designed for use solely in manufacturing processes, nor parts used for testing or experimental purposes only." Reason: These preliminary processes are necessary to enable the manufacturer to determine the suitability of the music for mechanical purposes and the desirability of negotiating a grant or taking out a statutory license. 20. Page 5, line 15, change the words "July 1, 1928" to the words "July 1, 1929," and add the words, "Provided, That nothing herein contained shall be construed to deprive any person of any right which he may have acquired under previous copyright acts." [H. R. 13452] A BILL To amend the act entitled "An act to amend and consolidate the acts respecting copyright," approved March 4, 1909, as amended, in respect of mechanical reproduction of musical compositions, and for other purposes Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That subsection (e) of section 1 of the act entitled "An act to amend and consolidate the acts respecting' copyright," approved March 4, 1909, as amended (United States Code, title 17, section 1 (e)), is amended to read as follows: "(e) (1) To perform the copyrighted work publicly for profit if it be a musical composition, and to make any arrangement of 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: Provided, That the provisions of this act, so far as they secure copyright controlling the parts of instruments serving to reproduce mechanically the musical work, shall include only compositions published and copyrighted after July 1, 1929, and shall not include the works of a foreign author or composer unless the foreign state or nation of which such author or composer is a citizen or subject grants, either by treaty, convention, agreement, or law, to citizens of the United States similar rights. "(2) If the proprietor of the copyright of a musical composition grants to any person the right to use the whole or any part of such copyrighted musical composition upon the parts of instruments serving to reproduce mechanically the musical work, such grant shall be in writing and shall not be effective unless and until recorded in the Copyright Office. Royalties under any such grant, or under any subsequent agreement made under paragraph (3), shall be payable at a specified rate per part of instruments serving to reproduce mechanically the musical work. The failure to record such grant before any manufacture and/or sale by the grantee therein subsequent to the execution of such grant shall be a complete defense to any suit, action, or proceeding for any infringement of such copyright by means of parts of instruments serving to reproduce mechanically the musical work in a similar manner. "(3) Any such grant may be altered, modified, extended, or canceled by subsequent agreement between the copyright proprietor and the grantee, but no such subsequent agreement shall be effective until ninety days after being recorded in the Copyright Office by the copyright proprietor. "(4) After any such grant and/or subsequent agreement has become effective. any other person may make use of such copyrighted musical composition upon parts of instruments serving to reproduce mechanically the musical work upon the same terms and conditions in respect of the royalty payable, the time, mode, and manner of such payment, and the security for the payment thereof, as are prescribed in such grant and/or subsequent agreement in effect at the time he makes such use of such copyrighted musical composition, if he first serves notice upon the copyright proprietor at his last address, as disclosed by the records of the Copyright Office, of his intention to make such use of such copyrighted musical composition. Such notice of intention shall be subscribed by the intending user under his hand and seal, and duly acknowledged, agreeing that his use of such copyrighted musical composition shall be upon the same terms and conditions in respect of the royalty payable, the time, mode, and manner of such payment, and the security for the payment thereof, as are prescribed by such grant and/or subsequent agreement in effect at the time of his use of the copyrighted musical composition: Provided, however, That no such subsequent agreement shall be binding upon any other person who shall have previously used such copyrighted work under this paragraph, unless he shall so elect: And provided further, That if the copyright proprietor himself manufactures, uses, or sells parts of instruments serving to mechanically reproduce his copyrighted musical composition, he shall prior thereto file notice thereof, accompanied by a recording fee, in the Copyright Office, and in such event, or if the copyright proprietor shall have acquiesced in the use of the copyrighted work upon the parts of instruments serving to reproduce mechanically the musical work, then any other person may make similar use of the copyrighted work upon the payment to the copyright proprietor of a royalty of 5 per cent of the manufacturer's selling price of each such part upon which such work is recorded, computed upon the basis of such parts sold by the manufacturer; and the copyright proprietor may require, and if so the manufacturer shall furnish a report under oath on the 20th day of each month of the number of such parts sold during the previous month, and royalties shall be due on such parts sold during any month upon the 20th of the next succeeding month: And provided further, That failure to file such notice as herein provided shall be a complete defense to any suit, action, or proceeding for any infringement of such copyright: Provided, also, That whenever any person, in the absence of a license agreement, intends to use a copyrighted musical composition on parts of instruments serving to reproduce mechanically the musical work, relying upon the provision of this subdivision (4) of this act, he shall serve notice of such intention by registered mail, upon the copyright proprietor, at his last address disclosed by the records of the Copyright Office, sending to the Copyright Office a duplicate of such notice; and in case of his failure so to do, or in case of the failure of such manufacturer to pay the copyright proprietor within thirty days after demand in writing, the total sum of royalties due at said rate, at the date of such demand, such manufacturer shall be deemed guilty of an infringement of the copyright in such work, and shail be liable for such infringement in the manner prescribed in subdivisions 25 and 28 of this act. "(5) The payment of royalty by any grantee, or any person making use of the copyrighted musical composition under the provisions of paragraph (4), shall free the articles or devices for which such royalty has been paid from further contribution to the copyright. "(6) Any manufacture and sale of such parts of instruments serving to reproduce mechanically such copyrighted musical work, in violation of the provisions of this act, as amended, shall be deemed to be an infringement of the copyright of such musical work. "(7) It shall be unlawful for any person (A) to change, alter, or deviate from the terms of a grant or subsequent agreement made under this subsection, with respect to the royalty payable for such use of the copyrighted musical composition, or with respect to the time, mode, and manner of payment and security for the payment thereof, except in the manner provided in paragraph (3); (B) to give, grant, or concede to any person any refund, rebate, discount, preference, benefit, or advantage whatever from the royalty fixed in such grant or subsequent agreement; or (C) to accept or receive any such refund, debate, discount, preference, benefit, or advantage. Any person violating any provision of this paragraph shall be deemed guilty of a misdemeanor, and upon conviction thereof shall be punished by a fine of not less than $500 nor more than $5,000. "(8) Parts of instruments serving to reproduce mechanically the musical work shall not include plates, molds, matrices, or other means designed for use solely in manufacturing processes, nor parts used for testing or experimental purposes only." SEC. 2. The first paragraph of subsection (e) of section 25 of such act of March 4, 1909, as amended (United States Code, title 17, section 25 (e)), and any other provision of such act of March 4, 1909, as amended, in respect of the royalty of 2 cents on each part manufactured of instruments serving to reproduce mechanically a copyrighted musical composition are hereby repealed. SEC. 3. This act shall take effect on July 1, 1929: Provided, That nothing herein contained shall be construed to deprive any person of any right which he may have acquired under previous copyright acts. STATEMENT OF HON. GEORGE A. WELSH, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF PENNSYLVANIA Mr. WELSH. Mr. Chairman, I wish to note my appearance and my objection to the granting of this rule. STATEMENT OF HON. CHARLES A. WOLVERTON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW JERSEY Mr. WOLVERTON. Mr. Chairman, there were several Members who desired to appear this morning. I realize that in the few minutes that remain it would be impossible to answer what I consider important questions that have been raised. The CHAIRMAN. We can not go any further with the hearing this morning. We will just note your appearance at the present time, and if there is anything new we will take it up later. Mr. WOLVERTON. The question Mr. Michener asked and the question asked by the gentleman from Alabama I feel have an answer that would appeal to the committee. There are other features that should be answered, and I would like to do so if the committee will give another opportunity to be present. The CHAIRMAN. We will take up the matter of deciding whether we will have more hearings or not. We will discuss that later. Mr. WOLVERTON. In view of the fact that we have had no opportunity to appear before the Patents Committee since the introduction of this bill, and, having in mind that this legislation is of such a character that its effect is far more widespread than would appear on the surface, and in view of the fact that extraordinary relief in the form of the rule has been asked for by the proponents, that it would entitle the opponents of the measure to be fully heard in the matter, and it would be greatly appreciated if this committee could see its way clear to give us half an hour or an hour more to present further arguments. Mr. Merritt, of Connecticut, desired to be present this morning in opposition to the rule but is detained by illness. Mr. Lehlbach also desired to be heard. Mr. Fort, who is a member of this committee, is interested in the matter. He is away this morning, not knowing that a hearing was to be held to-day. This would seem to indicate that we should have additional time. If you can see your way clear to grant us more time it will be appreciated. The CHAIRMAN. Mr. Taber, of New York, wanted to be noted as desiring to be here. He was unable to be here, but he wanted to be recorded as opposed to the bill. (Thereupon the committee proceeding to the consideration of executive business, after which it adjourned.) |