G. Ricordi & Co. v. Columbia Graphophone Co.

HOUGH, Circuit Judge (after stating the facts as above). While nothing in the statute prevents the owners of copyrighted musical works from granting licenses by private treaty, as in other cases, it is plainly said that protection from mechanical reproduction of musió is only granted on condition of what the act itself calls “compulsory” .license; that is to say, that if the owner is willing to license anybody he must-license everybody at the statutory rate of royalty. Infringers are those who copy without license, and it makes no difference whether the license is voluntary or compulsory, except as to the rate of payment; for we discover no prohibition upon (e. g.) an owner granting licenses at one cent a record. This relation between copyright holder and his customers has been substantially recognized in Feist v. American, etc., Co., 251 Fed. 245, 163 C. C. A. 401. It is true that the statutory machinery for obtaining license prescribes the sending of notice by registered mail, and the filing of a duplicate thereof in the Copyright Office. It has not been urged that neglect of these procedural directions invalidates the notice, or renders ineffectual the effort to obtain a license. We therefore assume, without discussion, that what governs is the intent of the party serving the notice, which intent is,' as usual, to be ascertained solely from the paper writing itself, if its words are clear. [ 1 ] Appellant’s counsel naturally^ insists that the sending of the notice of July 3d was a mistake; this is true, in the sense that it was done without counsel’s advice or knowledge, and that it would not have happened, had he been consulted. But infringement, whether of copyright, patent, or trade-mark, is the act of the principal, not of the attorney, and so is contract making. The reason for the defendant taking what is now the usual step in respect of phonograph records of popular copyrighted music is plain, viz. to secure the lowest rate of royalty. When such a reason as this exists, a reason suggested by the law itself, the sending of such a notice cannot be regarded as inadvertent. [2, 3] Furthermore, it has been accepted, and royalties paid under it by defendants plaintiff, pending this appeal. Of these facts we are entitled to take notice “aliunde the record” (Keely v. Ophir, etc., Co., [357] 169 Fed. at page 605, 95 C. C. A. at page 103), and they appear conclusively to establish the fact that defendant has become plaintiff’s licensee pending this action, and is therefore estopped from further denying its licensor’s title. We have not overlooked the fact that defendant refused to execute plaintiff’s (presumably) usual form of license agreement, when requested so to do after the service of the notice of July 3d, nor that, as soon as counsel learned what defendant had done, he treated the matter with the utmost fairness. But it remains obvious that either that notice meant something or nothing. That it meant something when it was given is incapable of denial, viz.: It was an endeavor to keep down to the statutory minimum the royalties payable in the event of defeat in the then pending suit. But the only way that such royalties could be kept at that minimum was by availing of the compulsory license feature of the Copyright Law, and that is what defendant tried to do as to its violin record, while continuing litigation as to its earlier voice record. [4, 5] There is no legal difference, at least where the copyright covered both words and music, between the two records, for purposes of infringement. A majority of this court is therefore compelled to hold that this question has become wholly moot. Whether there might not remain a question of damages, we need not consider, for the record before us discloses the fact that the minimum award of royalty damages was given by the court below, with the result that for all the infringements of the defendant, whether by one record or the other, defendant owes plaintiff two cents a record and no more. The defendant having become plaintiff’s licensee pending this appeal, the appeal is dismissed, without costs, and without expressing any opinion as to the questions of fact or law suggested by the record on appeal. But the lower court will be advised by the mandate of the circumstances leading to this disposition of the cause, and showing that an injunction is no longer either necessary or proper, and it will therefore vacate the injunction, while permitting the accounting to proceed.