Arguments before the Committee on Patents of the House of Representatives Part 33

Eminent counsel were retained, and those eminent counsel, after an examination of the existing copyright laws and decisions, made this discovery: That in what is known as the McTammany case, decided by Judge Colt in the United States circuit court for the district of Ma.s.sachusetts some twenty years ago, that jurist held that the perforated music sheet used in a hand organ was not an infringement of the copyright music sheet covered by the statute. When they had reached this point it became necessary to develop a new line of action, and this was the new line of action:

Now, there existed at that time an a.s.sociation of music publishers, and that a.s.sociation included and includes practically all of the big publis.h.i.+ng houses which turn out the cla.s.sical as well as the modern and popular compositions of the day. They said to themselves: Let us make contracts with all of these houses whereby we will get from these houses the exclusive right to reproduce the compositions which they handle in music rolls and other mechanical devices. Then we will go ahead and we will inst.i.tute suits and try to obtain a reversal of the decision of Judge Colt in the McTammany case, and if we fail in that, then, holding exclusive contracts as we do with the vast majority of the publis.h.i.+ng houses, we will go before the Congress and get from it what the courts refused us.

Mr. Chairman and gentlemen, I am not speaking in the air about this. I have here with me a copy of two contracts made with one house in Chicago by this monopoly, and I now offer in evidence those two contracts.

Mr. CURRIER. What is this monopoly? You have not mentioned the name of it.

Mr. O'CONNELL. The aeolian Company, of New York, which is a Connecticut corporation.

DEFENDANT'S EXHIBIT aeOLIAN-SUMMY CONTRACT.

_Doc.u.ment No. 1._

Memorandum of agreement, made and entered into this 30th day of April, 1902, by and between Clayton F. Summy Company, of Chicago, in the State of Illinois, party of the first part, hereinafter called the publisher, and the aeolian Company, a corporation organized under the laws of the State of Connecticut, and having a place of business in the city of New York in the State of New York, party of the second part, hereinafter called the aeolian Company, witnesseth:

That whereas, the publisher is the proprietor of certain copyrights for musical compositions and the owner of rights in copyrights for other musical compositions; and

Whereas, the aeolian Company is engaged in the business of manufacturing and selling automatic musical instruments controlled by perforated music sheets, and in manufacturing and selling machines for playing keyboard musical instruments, which machines are controlled by perforated music sheets, and in manufacturing and selling perforated music sheets for such automatic musical instruments and machines; and

Whereas, the aeolian Company is desirous of acquiring the exclusive right for such perforated music sheets in and to all the copyrighted musical compositions of which the publisher is the proprietor, or as to which he is the owner of any rights, and of all those other musical compositions which may hereafter be protected by copyright, and the copyrights for which or rights in which may be acquired by him;

Now, therefore, the publisher, for and in consideration of the premises, and of the sum of $1, lawful money of the United States, to him paid by the aeolian Company, receipt of which is hereby acknowledged, and for and in consideration of the true and faithful performance by the aeolian Company of its covenants hereinafter made, does hereby sell, a.s.sign, transfer, and set over unto the aeolian Company, the exclusive right for all perforated music sheets of the kinds aforesaid in and to all the copyrighted musical compositions of which the publisher is the proprietor, or in the case in which he is the owner of any less rights, to the extent of said rights, and does hereby covenant and agree with the aeolian Company to give and secure to it, the exclusive right in like manner for all perforated music sheets of the kinds aforesaid in and to all those other musical compositions which may hereafter be protected by copyright, and the copyrights or rights in which may be acquired by the publisher.

And the publisher for the consideration aforesaid hereby covenants and agrees, so far as it may be reasonably in his power, to protect the aeolian Company against any claim of any third person in respect to any and all copyrighted musical compositions which may be involved in this agreement, and the copyright of which may be owned by the publisher.

And the aeolian Company for and in consideration of the premises hereby agrees that it will keep correct and true books of account in which it will set down or cause to be set down entries of all perforated music sheets made by it for playing the copyrighted musical compositions owned or controlled by the publisher; that it will on the 20th day of each and every January and July, during the continuance of the manufacture and sale by it of the perforated music sheets for playing such musical compositions, render unto the publisher a correct and true statement of the number, names, and other designations of such perforated music sheets sold by it during the six preceding calendar months, and that at the time of rendering each and every such statement it will well and truly pay unto the publisher a license fee or royalty of 10 per cent of the list prices made by the United States publishers of the printed scores or copies of such musical compositions, but never more than 50 cents for any one of such perforated music sheets.

And the parties hereto mutually covenant and agree that nothing herein contained is to obligate the aeolian Company to pay any license fee or royalty upon such perforated music sheets as shall be made by it in the United States and sold or s.h.i.+pped to any other country, unless it shall have been decided by a court of competent jurisdiction of such other country that the copyright laws of that country shall be applicable to perforated music sheets of the kind herein mentioned.

And the parties hereto mutually agree and covenant that the term "perforated music sheets" is not to be construed as covering the controllers of those musical instruments which are generally known as phonographs, or music boxes, or hand organs.

Anything herein to the contrary notwithstanding at the expiration of thirty-five years from the payment of the first license fee hereinbefore provided, the aeolian Company shall not be ent.i.tled to license under the copyrights thereafter acquired by the publisher, but all licenses existing under copyrights theretofore acquired by him shall remain in force until the expiration of the terms of the copyrights under the terms hereinbefore provided.

During the existence of this contract, after the payment of the license fee hereunder, the aeolian Company obligates itself to prosecute diligently, at its own expense and by its own counsel, in the name of the proprietors of the copyright, all infringers of the rights granted to it, the aeolian Company.

And the parties hereto mutually covenant and agree that all provisions of this agreement shall be binding upon and enure to the successors, executors, administrators and personal representatives of both the parties hereto.

In witness whereof the publisher has on the day and year first hereinabove written hereunto set his hand and seal and the aeolian Company has caused its name and corporate seal to be hereunto affixed by its proper officer thereunto duly authorized.

CLAYTON F. SUMMY CO. [SEAL.]

THE aeOLIAN CO. [SEAL.]

By E. S. VOTEY, _Director_.

Signature of publisher witnessed by--

J. F. BOWERS.

THEODOR WILD.

_Doc.u.ment No. 2._

Memorandum of agreement, made and entered into this 30th day of April, 1902, by and between Clayton F. Summy Company, of Chicago, in the State of Illinois, party of the first part, hereinafter called the publisher, and the aeolian Company, a corporation organized under the laws of the State of Connecticut, and having a place of business in the city of New York, in the State of New York, party of the second part, hereinafter called the aeolian Company, witnesseth

That whereas the parties hereto have, of even date herewith, entered into an agreement whereby the aeolian Company is to have the exclusive right for all perforated music sheets intended for use in controlling-automatic musical instruments or machines for playing musical instruments, in and to the copyrighted musical compositions of which the publisher is the proprietor or as to which he is the owner of any rights, and in and to all those other musical compositions which may hereafter be protected by copyright and the copyrights or rights in which may be acquired by him; and

Whereas the parties hereto are desirous of entering into a further agreement with reference to the matters and things expressed in the above-mentioned agreement of even date herewith;

Now, therefore, the publisher, for and in consideration of the premises and the sum of $1 lawful money of the United States, to him by the aeolian Company in hand paid, receipt whereof is hereby acknowledged, does hereby covenant and agree that no charge shall be exacted from or be due from the aeolian Company for the manufacture or sale by it, or any of its customers, of any perforated music sheets of either of the kinds aforesaid, for playing any of the copyrighted musical compositions which are owned or controlled, or which shall be hereafter owned or controlled in whole or in part by the publisher, until a decision of the court of last resort in a suit which is to be inst.i.tuted against some manufacturer or user, other than the aeolian Company, of such perforated music sheets, for the purpose of testing the applicability of the United States copyright laws to such perforated music sheets, and not then unless such decision shall uphold the applicability of the United States copyright laws to perforated music sheets of the kinds aforesaid.

And for and in consideration of the premises the aeolian Company hereby covenants and agrees to pay all proper expenses of conducting said suit for the purpose of testing the applicability of the United States copyright laws to perforated music sheets of the kinds aforesaid and that if the court of last resort shall in such suit decide that the United States copyright laws are applicable to such perforated music sheets, then and in such case and from that time forward the aeolian Company will keep books of account, render statements, and pay royalties as provided by the aforesaid agreement of even date herewith, but shall be free from obligation to make payments for the past.

And it is mutually understood and agreed by the parties hereto that neither party hereto is to be obligated in any way by any other provisions of this agreement, or of the aforesaid agreement of even date herewith, until the aeolian Company shall notify the publisher that a number of copyright owners satisfactory to the aeolian Company have made similar agreements with said company.

And the parties hereto mutually covenant and agree that all the provisions of this agreement shall be binding upon and enure to the successors, executors, administrators, and personal representatives of both the parties hereto.

In witness whereof the publisher has on the day and year first hereinabove written hereunto set his hand and seal, and the aeolian Company has caused its name and corporate seal to be hereunto affixed by its proper officer thereunto duly authorized.

CLAYTON F. SUMMY. [SEAL.]

THE aeOLIAN CO. [SEAL.]

By E. S. VOTEY, _Director_.

Witnessed by--

J. P. BOWERS.

THEODORE WILD.

Both of those contracts are dated April 30, 1902. After the making of those contracts, the action known as the White-Smith suit against the Apollo Company was commenced in the circuit court of the United States for the southern district of New York. That case went to a hearing before Judge Hazel. Right at this point I may interpolate that I now ask the chairman and the members of this committee to investigate, if they feel they have the power, into those contracts, to summon witnesses, if necessary, to determine what contracts have been made, with what music-publis.h.i.+ng houses, by this particular concern, so that the committees may be able to determine for themselves whether this concern and the publis.h.i.+ng houses with which they are affiliated can, in the event that this bill becomes a law, have an absolute monopoly of the vast majority of the publications, in so far as they may be reproduced into perforated music rolls or other mechanical devices for reproducing the sounds.

Mr. CURRIER. I want to ask you the question that I asked Mr. Davis a moment ago: Would the people whom you represent object to paying a reasonable royalty to the author or proprietor of the musical composition if that right was given to all upon the same terms?

Mr. O'CONNELL. Primarily, I appear, sir, for the independent manufacturers of automatic piano players. Here, to-day, as I understand, I am expected to speak for the interests of the independent cutters of music rolls as well. Speaking for the clients that I originally and personally represent, I answer that provided you have the power to pa.s.s such a law we have no objection to paying a reasonable royalty to the composers, provided we are put on an equal basis with everybody else and provided our business interests are protected. That is our att.i.tude. We do not wish to be unfair to anybody.

The CHAIRMAN. Protection in what way? How far do you wish that protection to extend?

Mr. O'CONNELL. In this way: It is difficult to devise a plan--in answer to the question of Mr. Currier--which will protect us, and for this reason----

Mr. CURRIER. I realize the difficulties.

Senator SMOOT. You have no idea of being protected any more than any other concern?

Mr. O'CONNELL. No, sir; we want to have only the same rights as anybody else.

You must understand, Mr. Chairman, that the aeolian Company is by far the largest manufacturer of automatic piano players. If they control the output of the device, without which those players can not be operated, it is perfectly clear that it is the easiest thing on earth for them to put one after the other of the independent manufacturers down and out. I have not thought up a plan which could be devised to protect them, because that is a very difficult thing to do, and the time given for preparation has been extremely brief.

In line with what Mr. Herbert said a few moments ago, we are perfectly clear that neither Mr. Herbert nor Mr. Sousa can be controlled by this combination. They are too big. But they are the only composers in the United States to-day of whom that can be said.