U.S. Supreme Court
Bobbs-Merrill Co. v. Straus
210 U.S. 339
1908
MR. JUSTICE DAY delivered the opinion of
the court.
The complainant in the Circuit Court,
appellant here, the Bobbs-Merrill Company, brought suit against the
respondents, appellees here, Isidor Straus and Nathan Straus, partners trading
as R.H. Macy & Company, in the Circuit Court of the United States for the
Southern District of New York, to restrain the sale of a copyrighted novel,
entitled "The Castaway," at retail at less than one dollar for each
copy. The Circuit Court dismissed the bill on final hearing. 139 Fed. Rep. 155.
The decree of the Circuit Court was affirmed on appeal by the Circuit Court of
Appeals. 147 Fed. Rep. 15.
The appellant is the owner of the
copyright upon "The Castaway," obtained on the eighteenth day of May,
1904, in conformity to the copyright statutes of the United States. Printed
immediately below the copyright notice on the page in the book following the
title page is inserted the following notice:
"The price of this book at retail
is one dollar net. No dealer is licensed to sell it at a less price, and a sale
at a less price will be treated as an infringement of the copyright.
"THE BOBBS-MERRILL COMPANY."
Macy & Company, before the
commencement of the action purchased copies of the book for the purpose of
selling the same at retail. Ninety per cent of such copies were purchased by
them at wholesale at a price below the retail price by about forty per cent,
and ten per cent of the books purchased by them were purchased at retail, and
the full price paid therefor.
It is stipulated in the record:
Defendants, at the time of their
purchase of copies of the book, knew that it was a copyrighted book and were
familiar with the terms of the notice printed in each copy thereof, as above
set forth, and knew that this notice was printed in every copy of the book
purchased by them.
The wholesale dealers, from whom
defendants purchased copies of the book, obtained the same either directly from
the complainant or from other wholesale dealers at a discount from the net
retail price, and at the time of their purchase knew that the book was a
copyrighted book and were familiar with the terms of the notice printed in each
copy thereof, as described above, and such knowledge was in all wholesale
dealers through whom the books passed from the complainants to defendants. But
the wholesale dealers were under no agreement or obligation to enforce the
observance of the terms of the notice by retail dealers or to restrict their
sales to retail dealers who would agree to observe the terms stated in the
notice.
The defendants have sold copies of the
book at retail at the uniform price of eighty-nine cents a copy, and are still
selling, exposing for sale and offering copies of the book at retail at the
price of eighty-nine cents per copy, without the consent of the complainant.
Much of the argument on behalf of the
appellant is based upon the alleged analogy between the statutes of the United
States securing patent rights to inventors and the copyright acts securing
rights and privileges to authors and others. And this analogy, it is contended,
is so complete that decisions under the patent statutes in respect to the
rights claimed in this suit under the copyright act are necessarily
controlling.
In the main brief submitted by the
learned counsel for the appellant it is said:
"All of the argument has been upon
the assumption that the very numerous decisions of the Circuit Courts and
Circuit Courts of Appeals, such as the Heaton-Peninsular case [Button-Fastener
case], 77 Fed. Rep. 288, the Victor Talking Machine case, 123 Fed. Rep. 424,
and others along the same line, as well as the Cotton Tie case in this court,
upholding this restriction, with reference to sales of patented articles,
express the law; and we have been especially confident that such must be the
case, for the reason that this court, in Bement v. National Harrow Company, 186
U.S. page 70, has given its sanction to the broad doctrines laid down in the
Heaton-Peninsular case, 77 Fed. Rep. 288."
The present case involves rights under
the copyright act. The facts disclose a sale of a book at wholesale by the
owners of the copyright, at a satisfactory price, and this without agreement
between the parties to such sale obligating the purchaser to control future
sales, and where the alleged right springs from the protection of the copyright
law alone. It is contended that this power to control further sales is given by
statute to the owner of such a copyright in conferring the sole right to
"vend" a copyrighted book.
A case such as the present one,
concerning inventions protected by letters patent of the United States, has not
been decided in this court, so far as we are able to discover. In the so-called
Cotton Tie case (Cotton Tie Co. v. Simmons, 106 U.S. 89), the complainant
company owned patents for improvements in metallic cotton-bale ties, and these
cotton-bale ties were manufactured by the patentee, and stamped in the buckles
were the words: "Licensed to use once only." After the bands had been
severed at the cotton mill the respondent bought them and the buckles as scrap
iron, rolled and straightened the pieces of the bands, and rivetted their ends
together. He then cut them into proper lengths and sold them, with the buckles,
to be used as ties.
The report of this case in the Circuit
Court for the District of Rhode Island is found in 3 Banning & Arden, 320;
S.C., 1 Fed. Cases, No. 293, p. 623. The report shows that Judge Shepley
dismissed the bill on the ground that the attempted restriction to a single use
by the words stamped on the buckle was not one which the patentee was entitled
to impose, as the sale of the patented article, as an ordinary article of
commerce, had taken it outside of the limits of the patent monopoly, and that
the purchaser took unrestricted title to the buckle, without any reservation in
the vendor. This court reversed that decision, holding that the reconstructed
ties were not a repair of the old article, but a recreation of the subject of
the patent, and, therefore, an infringement. Mr. Justice Blatchford, in
delivering the opinion of the court, said:
"Whatever right the defendants
could acquire to the use of the old buckle, they acquired no right to combine
it with a substantially new band, to make a cotton-bale tie. They so combined
it when they combined it with a band made of the pieces of the old band in the
way described. What the defendants did in piecing together the pieces of the
old band was not a repair of the band or the tie, in any proper sense. The band
was voluntarily severed by the consumer at the cotton mill, because the tie had
performed its function of confining the bale of cotton in its transit from the
plantation or the press to the mill. Its capacity for use as a tie was
voluntarily destroyed. As it left the bale it could not be used again as a tie.
As a tie the defendants reconstructed it, although they used the old buckle
without repairing that."
That the case was not decided as one of
restricted license, because of the words stamped on the buckle, is shown by the
language of Mr. Justice Blatchford in concluding his opinion:
"We do not decide that they are
liable as infringers of either of the three patents, merely because they have
sold the buckle considered apart from the band or from the entire structure as
a tie."
We cannot agree that any different view
of the Cotton Tie case was indicated in the comments of the learned justice,
speaking for this court, in Morgan Envelope Co. v. Albany Paper Co., 152 U.S.
425, 433. What was there said in connection with the quotation from the opinion
of Mr. Justice Blatchford in the Cotton Tie case enforces the view that the
case was one of infringement, because of the reconstruction of the patented
device.
In Bement v. National Harrow Co., 186
U.S. 70, the suit was between the owners of the letters patent as licensor and
licensees, seeking to enforce a contract as to the price and terms on which the
patented article might be dealt with by the licensee. The case did not involve
facts such as in the case now before us, and concerned a contract of license
sued upon in the state court, and, of course, does not dispose of the questions
to be decided in this case.
The question was supposed to be involved
in the recent case of Cortelyou v. Johnson, 207 U.S. 196, where a patented
machine, known as the Neostyle, was sold with a license, printed on the
baseboard of the machine, limiting the use thereof to certain paper, ink and
other supplies, made by the Neostyle company. While the question as to the
validity of such license restriction was fully and ably argued by counsel, the
case went off upon the finding that notice of the license restriction was not
brought home to the defendant company.
If we were to follow the course taken in
the argument, and discuss the rights of a patentee, under letters patent, and
then, by analogy, apply the conclusions to copyrights, we might greatly
embarrass the consideration of a case under letters patent, when one of that
character shall be presented to this court.
We may say in passing, disclaiming any
intention to indicate our views as to what would be the rights of parties in
circumstances similar to the present case under the patent laws, that there are
differences between the patent and copyright statutes in the extent of the
protection granted by them. This was recognized by Judge Lurton, who wrote a
leading case on the subject in the Federal courts (The Button Fastener Case, 77
Fed. Rep. 288), for he said in the subsequent case of Park & Sons v.
Hartman, 153 Fed. Rep. 24:
"There are such wide differences
between the right of multiplying and vending copies of a production protected
by the copyright statute and the rights secured to an inventor under the patent
statutes, that the cases which relate to the one subject are not altogether
controlling as to the other."
We therefore approach the consideration
of this question as a new one in this court, and one that involves the extent
of the protection which is given by the copyright statutes of the United States
to the owner of a copyright under the facts disclosed in this record. Recent
cases in this court have affirmed the proposition that copyright property under
the Federal law is wholly statutory, and depends upon the right created under
the acts of Congress passed in pursuance of the authority conferred under
Article I, § 8, of the Federal Constitution: "To promote the progress of
science and useful arts, by securing for limited times to authors and inventors
the exclusive right to their respective writings and discoveries."
American Tobacco Co. v. Werckmeister, 207 U.S. 284; White-Smith Music Co. v.
Apollo Co., 209 U.S. 1; following the previous cases of Wheaton v. Peters, 8
Pet. 590; Bank v. Manchester, 128 U.S. 244-253; Thompson v. Hubbard, 131 U.S.
123-151.
The learned counsel for the appellant in
this case in the argument at bar disclaims relief because of any contract, and
relies solely upon the copyright statutes, and rights therein conferred. The
copyright statutes ought to be reasonably construed with a view to effecting
the purposes intended by Congress. They ought not to be unduly extended by
judicial construction to include privileges not intended to be conferred, nor
so narrowly construed as to deprive those entitled to their benefit of the
rights Congress intended to grant.
At common law an author had a property
in his manuscript and might have redress against any one who undertook to
realize a profit from its publication without authority of the author. Wheaton
v. Peters, 8 Pet. 591, 659.
In Drone on Copyright that author says,
page 100:
"As the law is now expounded, there
are important differences between the statutory and the common-law right. The
former exists only in works which have been published within the meaning of the
statute, and the latter only in works which have not been so published. In the
former case ownership is limited to a term of years; in the latter it is
perpetual. The rights do not coexist in the same composition; when the
statutory right begins the common-law right ends. Both may be defeated by
publication. Thus, when a work is published in print, the owner's common-law
rights are lost, and, unless the publication be in accordance with the
requirements of the statute, the statutory right is not secured."
While the nature of the property and the
protection intended to be given the inventor or author as the reward of genius
or intellect in the production of his book or work of art is to be considered
in construing the act of Congress, it is evident that to secure the author the
right to multiply copies of his work may be said to have been the main purpose
of the copyright statutes. Speaking for this court in Stephens v. Cady, 14 How.
528, 530, Mr. Justice Curtis said:
"The copyright is an exclusive
right to the multiplication of the copies, for the benefit of the author or his
assigns, disconnected from the plate, or any other physical existence. It is an
incorporeal right to print and publish the map, or, as said by Lord Mansfield
in Miller v. Taylor, 4 Burr, 2396, `a property in notion, and has no corporeal,
tangible substance.'"
This fact is emphasized when we note the
title to the act of Congress, passed at its first session — "An act for
the encouragement of learning, by securing the copies of maps, charts, and
books, to the authors and proprietors of such copies, during the times therein
mentioned." 1 Stat. at Large, by Peters, chap. 15, p. 124.
In order to secure this right it was
provided in that statute, as it has been in subsequent ones, that the authors
of books, their executors, administrators, or assigns, shall have the
"sole right and liberty of printing, reprinting, publishing, and
vending" such book for a term of years, upon complying with the statutory
conditions set forth in the act as essential to the acquiring of a valid
copyright. Each and all of these statutory rights should be given such
protection as the act of Congress requires, in order to secure the rights
conferred upon authors and others entitled to the benefit of the act. Let us
see more specifically what are the statutory rights, in this behalf, secured to
one who has complied with the provisions of the law and become the owner of a
copyright. They may be found in §§ 4952, 4965 and 4970 of the Revised Statutes
of the United States, and are as follows:
"SEC. 4952. Any citizen of the
United States or resident therein, who shall be the author, inventor, designer
or proprietor of any book, map, chart, dramatic or musical composition,
engraving, cut, print or photograph or negative thereof, or of a painting,
drawing, chromo, statue, statuary, and of models or designs intended to be
perfected as works of the fine arts, and the executors, administrators or
assigns of any such person, shall, upon complying with the provisions of this
chapter, have the sole liberty of printing, reprinting, publishing, completing,
copying, executing, finishing and vending the same." U.S. Comp. St. 1901,
p. 3406.
"SEC. 4965. If any person, after
the recording of the title of any map, chart, musical composition, print, cut,
engraving, or photograph or chromo, or of the description of any painting,
drawing, statute, statuary, or model or design intended to be perfected and
executed as a work of fine arts, as provided by this chapter, shall within the
term limited, and without the consent of the proprietor of the copyright first
obtained in writing, signed in presence of two or more witnesses, engrave,
etch, work, copy, print, publish, or import, either in whole or in part, or by
varying the main design with intent to evade the law, or knowing the same to be
so printed, published, or imported, shall sell or expose to sale any copy of
such map or other article, as aforesaid, he shall forfeit to the proprietor all
the plates on which the same shall be copied, and every sheet thereof, either
copied or printed, and shall further forfeit one dollar for every sheet of the
same found in his possession, either printing, printed, copied, published,
imported, or exposed for sale; and in case of a painting, statue, or statuary,
he shall forfeit ten dollars for every copy of the same in his possession, or
by him sold or exposed for sale, one-half thereof to the proprietor and the
other half to the use of the United States." U.S. Comp. St. 1901, p. 3414.
Section 4970 is as follows:
"The Circuit Courts, and District
Courts having the jurisdiction of Circuit Courts, shall have power, upon bill
in equity filed by any party aggrieved, to grant injunctions to prevent the
violation of any right secured by the laws respecting copyrights, according to
the course and principles of courts of equity, on such terms as the court may
deem reasonable." U.S. Comp. St. 1901, p. 3416.
Section 4965 undertakes to work a
forfeiture of copyrighted articles, and confers a right of action for a
penalty. Relief is given in a single suit, one-half of the money recovered
going to the United States. Werckmeister v. American Tobacco Company, 207 U.S.
375.
As this is a suit in equity for relief
under § 4970 of the U.S. Revised Statutes, giving to the Circuit and District
Courts of the United States the right to grant relief by injunctions to prevent
the violations of rights secured by the copyright statutes, we are not
concerned with rights and remedies under § 4965.
It is the contention of the appellant
that the Circuit Court erred in failing to give effect to the provision of §
4952, protecting the owners of the copyright in the sole right of vending the
copyrighted book or other article, and the argument is that the statute vested
the whole field of the right of exclusive sale in the copyright owner; that he
can part with it to another to the extent that he sees fit, and may withhold to
himself, by proper reservations, so much of the right as he pleases.
What does the statute mean in granting
"the sole right of vending the same"? Was it intended to create a
right which would permit the holder of the copyright to fasten, by notice in a
book or upon one of the articles mentioned within the statute, a restriction
upon the subsequent alienation of the subject-matter of copyright after the
owner had parted with the title to one who had acquired full dominion over it
and had given a satisfactory price for it? It is not denied that one who has
sold a copyrighted article, without restriction, has parted with all right to
control the sale of it. The purchaser of a book, once sold by authority of the
owner of the copyright, may sell it again, although he could not publish a new
edition of it.
In this case the stipulated facts show
that the books sold by the appellant were sold at wholesale, and purchased by
those who made no agreement as to the control of future sales of the book, and
took upon themselves no obligation to enforce the notice printed in the book,
undertaking to restrict retail sales to a price of one dollar per copy.
The precise question, therefore, in this
case is, does the sole right to vend (named in § 4952) secure to the owner of
the copyright the right, after a sale of the book to a purchaser, to restrict
future sales of the book at retail, to the right to sell it at a certain price
per copy, because of a notice in the book that a sale at a different price will
be treated as an infringement, which notice has been brought home to one
undertaking to sell for less than the named sum? We do not think the statute
can be given such a construction, and it is to be remembered that this is
purely a question of statutory construction. There is no claim in this case of
contract limitation, nor license agreement controlling the subsequent sales of
the book.
In our view the copyright statutes,
while protecting the owner of the copyright in his right to multiply and sell
his production, do not create the right to impose, by notice, such as is
disclosed in this case, a limitation at which the book shall be sold at retail
by future purchasers, with whom there is no privity of contract. This
conclusion is reached in view of the language of the statute, read in the light
of its main purpose to secure the right of multiplying copies of the work, a
right which is the special creation of the statute. True, the statute also
secures, to make this right of multiplication effectual, the sole right to vend
copies of the book, the production of the author's thought and conception. The
owner of the copyright in this case did sell copies of the book in quantities
and at a price satisfactory to it. It has exercised the right to vend. What the
complainant contends for embraces not only the right to sell the copies, but to
qualify the title of a future purchaser by the reservation of the right to have
the remedies of the statute against an infringer because of the printed notice
of its purpose so to do unless the purchaser sells at a price fixed in the
notice. To add to the right of exclusive sale the authority to control all
future retail sales, by a notice that such sales must be made at a fixed sum,
would give a right not included in the terms of the statute, and, in our view,
extend its operation, by construction, beyond its meaning, when interpreted
with a view to ascertaining the legislative intent in its enactment.
This conclusion renders it unnecessary
to discuss other questions noticed in the opinion in the Circuit Court of
Appeals, or to examine into the validity of the publisher's agreements, alleged
to be in violation of the acts to restrain combinations creating a monopoly or
directly tending to the restraint of trade.
The decree of the Circuit Court of
Appeals is
Affirmed.