Source: https://caselaw.findlaw.com/us-supreme-court/210/339.html
Timestamp: 2019-04-25 12:58:16+00:00

Document:
Messrs. W. H. H. Miller, C. C. Shirley, and Samuel D. Miller for appellant. [210 U.S. 339, 340] Messrs. John G. Carlisle and Edmond E. Wise for appellees.
Mr. Stephen H. Olin on behalf of Charles Scribner's Sons.
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 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 $1 for each copy. The ciruit court dismissed the bill on final hearing. 139 Fed. 155. The decree of the circuit court was affirmed on appeal by the circuit court of appeals, 77 C. C. A. 607, 147 Fed. 15.
The price of this book at retail is $1 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.
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 [210 U.S. 339, 342] 40 per cent, and 10 per cent of the books purchased by them were purchased at retail, and the full price paid therefor.
Defendants, at the time of their purehase 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 89 cents a copy, and are still selling, exposing for sale, and offering copies of the book at retail at the price of 89 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.
'All of the argument has been upon the assumption that [210 U.S. 339, 343] the very numerous decisions of the circuit courts and circuit courts of appeals, such as the Heaton-Peninsular Button-Fastener Co. v. Eureka Specialty Co. 35 L.R.A. 728, 25 C. C. A. 267, 47 U. S. App. 146, 77 Fed. 288, the Victor Talking Mach. Co. v. The Fair, 61 C. C. A. 58, 123 Fed. 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 E. Bement & Sons v. National Harrow Co. 186 U. S. page 70, 46 L. ed. 1058, 22 Sup. Ct. Rep. 747, has given its sanction to the broad doctrines laid down in the Heaton-Peninsular Case, supra.
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' ( American Cotton Tie Co. v. Simmons, 106 U.S. 89 , 27 L. ed. 79, 1 Sup. Ct. Rep. 52), 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 riveted their ends together. He then cut them into proper lengths and sold them, with the buckles, to be used as ties.
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 Perforated Wrapping Paper Co. 152 U.S. 425, 433 , 38 S. L. ed. 500, 503, 14 Sup. Ct. Rep. 627. What was there said in connection [210 U.S. 339, 345] 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 E. Bement & Sons v. National Harrow Co. supra, 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 , ante, 105, 28 Sup. Ct. Rep. 105, 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 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 1, 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 , ante, 72, 28 Sup. Ct. Rep. 72; White-Smith Music Pub. Co. v. Apollo Co. 209 U.S. 1 , ante, 319, 28 Sup. Ct. Rep. 319; following the previous cases of Wheaton v. Peters, 8 Pet. 591, 8 L. ed. 1055; Banks v. Manchester, 128 U.S. 244 -253, 32 L. ed. 425-429, 9 Sup. Ct. Rep. 36; Thompson v. Hubbard, 131 U.S. 123 -151, 33 L. ed. 76-86, 9 Sup. Ct. Rep. 710.
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 anyone who undertook to realize a profit from its publication without authority of the author. Wheaton v. Peters, 8 Pet. 591- 659, 8 L. ed. 1055-1080.
'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 Millar v. Taylor, 4 Burr. 2396, 'a propeety 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 L. by Peters, chap. 15, p. 124.
'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, statue, statuary, or model or design intended to be perfected and executed as a work of the 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 [210 U.S. 339, 349] 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, statute, 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. Stat. 1901, p. 3414.
'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. Stat. 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 Co. 207 U.S. 375 , ante, 124, 28 Sup. Ct. Rep. 124.
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 violation 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 [210 U.S. 339, 350] 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 $1 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 [210 U.S. 339, 351] 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.

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