Arguments before the Committee on Patents of the House of Representatives Part 37

Mr. CHANEY. Evidently that is what has been intended. There was no purpose of anybody to take all the fellows out of New York, because that is a splendid place to live, you know. [Laughter.]

Mr. O'CONNELL. But we have to come to the fountainhead occasionally.

[Laughter.]

Mr. WEBB. The act distinctly says "In the district where any violation of this act has occurred."

Mr. O'CONNELL. Under the old provision with regard to infringement, you could only sue a defendant where you found him, in the district where he resided. That is the provision in relation to patents, and the provision of the bill as the old act stands. Why should this new provision be inserted? Perhaps the members of this committee will be able to determine.

Mr. CHANEY. I take it that that was for the purpose of making it convenient to the person injured, or the parties injured.

Mr. O'CONNELL. That might be all right, if the party injured was a resident of the Philippines.

Mr. CHANEY. Yes.

Mr. O'CONNELL. Or of the Sandwich Islands, or Porto Rico?

Mr. CHANEY. That is the idea.

Mr. O'CONNELL. I think you will find that there are none of the owners of any of these copyrights living in any of those districts; none of them. I do not suppose that Mr. Sousa intends to change his residence just at present, or Mr. Herbert either. I think they will be found doing business here right along. [Laughter.]

Section 34 provides--

That no action shall be maintained under the provisions of this act unless the same is commenced within three years after the cause of action arose.

Why not leave that the old two-year limit? What is the necessity for three years? There is no reason for that.

Then, look at the provision in section 35.

Mr. CHANEY. Is there a disadvantage in putting it three years?

Mr. O'CONNELL. Why should it be extended to three years?

Mr. PUTNAM. Is it not true that the present limitation is only for actions for penalties or forfeitures, whereas this is a general limitation on all actions, including civil actions for infringement, so that although it enlarges by one year the criminal action, it reduces the term that the complainant at present has in his civil action? This now applies to all actions. Did you notice that, Mr.

O'Connell?

Mr. O'CONNELL. I think that the present provision relating to kindred actions of this kind is a two-year statute of limitations, and it has been found ample for a great many years, for all purposes, to protect patentees, inventors, and everybody else.

Look at section 35:

That in all recoveries under this act full costs shall be allowed.

That is to say, where the complainant recovers he must get from the defendant, and the court must allow the complainant, full costs. Let us a.s.sume a case where the defendant gets the bill dismissed. That is not a recovery. He does not get a recovery, but there is no provision giving the defendant in that case full costs. Oh, no. They are only careful of the complainant where he recovers; but where his action fails there is no provision giving the defendant full costs.

Mr. WEBB. You would strike out "recoveries" and insert "suits?"

Mr. O'CONNELL. If you want to do it that way. You will not be then giving one side any more than the other. But I think that provision should not be in there at all. I think the court should have full discretion in the award of costs, these actions being mostly equitable actions, and the general rule being that in a court of equity the awarding or denial of costs is in the discretion of the court.

I see no reason why the jurisdiction of the courts should be limited by a provision of this kind. I think it should be left to the courts to say in all cases whether costs should be awarded or withheld, and how much costs should be awarded; although I think there should be a provision to the effect that in the case of an action wilfully brought, and where there is no recovery--brought simply for the purpose of intimidation, where there is no reasonable ground for recovery, simply to get hold of the man's business and keep him from doing business--that there should be some provision in there giving a penalty against the complainant in such an action as that. I have only thought of that at this moment, but I think it is a good suggestion to make to the committee.

Gentlemen, I thank you for the time you have given me, and I have no more to say on the subject. I again ask, however, as I did at the outset, that on these contracts and on the question of the monopoly in the hands of this concern and its a.s.sociates, the committee should take proofs such as may be necessary to determine what the situation is. All I ask on behalf of the independent manufacturers of automatic musical instruments in the United States is that we should have a fair show, that our business should have the same protection as any other business has, and that you gentlemen may not do anything which will help this great centralization and put it in the power or a monopoly to ruin our business.

Mr. PUTNAM. I understand that Mr. H. N. LOW is by agreement to speak next.

STATEMENT OF H. N. LOW, ESQ., OF WAs.h.i.+NGTON, D.C.

Mr. LOW. I appear for the manufacturers of the music rolls and of instruments operated by such rolls.

Mr. CURRIER. I understood that the music-roll people had had over two hours now.

Mr. LOW. Pardon me. My remarks will be very brief.

Mr. CURRIER. The talking-machine people are to have thirty minutes, and the committee can not sit here a very great while.

Mr. LOW. My suggestions will be very brief.

The ACTING CHAIRMAN. We have to adjourn in a little while, and the gentleman who preceded you exceeded his time.

Mr. LOW. Then to merely supplement the remarks of the gentleman who has preceded me, I ask leave of the committee to submit two more contracts, similar to the ones that he has submitted, with the aeolian Company in the carrying out of the agreement that we allege. My information is that that agreement now embraces practically the whole music-publis.h.i.+ng trade, and those outside of that agreement are very small manufacturers, and the trust or combination is just about complete and ready for this legislation. I submit that this legislation is most dangerous, and that this pretended revision of the copyright law is a cloak for something that is very wrong.

[The contracts referred to by Mr. LOW are as follows:]

Memorandum of agreement made and entered into this 30th day of April, 1902, by and between Chicago Music 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, except that if the aeolian Company do not accept any price offered them within three months after said offer, then the publisher may be at liberty to dispose of the same otherwise.

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 kinds 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 licenses 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 the provisions of this agreement shall be binding upon and inure 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.