Bobbs-Merrill Co. v. Straus

• Decision Date: 16 June 1906
• Docket Number: 189.
• Citation: 147 F. 15
• Parties: BOBBS-MERRILL CO. v. STRAUS et al.
• Court: U.S. Court of Appeals — Second Circuit

147 F. 15

BOBBS-MERRILL CO. v. STRAUS et al.

No. 189.

United States Court of Appeals, Second Circuit.

June 16, 1906

Frank H. Platt and W. H. H. H. Miller, for appellant.

John G Carlisle and Edmund E. Wise, for appellees.

Before WALLACE, TOWNSEND, and COXE, Circuit Judges.

TOWNSEND Circuit Judge.

The material facts herein are undisputed, and are as follows Complainant is an Indiana corporation engaged in the business of publishing and selling books; it was the owner and proprietor of a novel entitled 'The Castaway,' by Hallie Erminie Rives, which it caused to be duly copyrighted and published. On each copy of the published book was printed, on the page following the title page, 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.'

The defendants purchased copies of said book for sale at retail, 90 per cent. of which were purchased at wholesale at a rebate from the retail price of about 40 per cent., the wholesalers and the defendants knowing that the book was copyrighted and knowing of the printed notice. It is admitted that none of the wholesalers were required to enforce a compliance with the terms of such notice by retail dealers or to restrict their sales to such retail dealers only as would agree to observe the terms of said notice. The defendants sold copies of said book at the uniform retail price of 89 cents a copy. Complainant has brought this suit, claiming infringement of its copyright, to restrain defendants from selling the book at any price other than that fixed in the notice, and asking for an accounting.

The defenses material to this discussion are that the acts complained of do not constitute a violation of the rights secured to complainant by the statutes relating to copyright, and that complainant's remedy, if any, is at law, and not in equity.

The general question argued is as to the right of a proprietor of a copyright book, by affixing to each copy sold, a notice that no dealer is licensed to sell it as less than a specified price, and that 'a sale at a less price will be treated as an infringement of the copyright,' to maintain an action in equity against a defendant who buys the book, with knowledge of the restrictive terms, for the purpose of selling it at a reduced price and who actually sells it below the price specified in the notice.

The argument, on the one hand, is that the copyright statute gives to the proprietor the exclusive right of 'vending' the book and, consequently, empowers him to exercise that right, under such restrictions as he chooses to affix to its exercise, by a general notice of rights asserted under the copyright law, and that a purchaser who buys the book with notice of the restriction acquires only a qualified right, and becomes an infringer when he disregards the restriction. In other words, the argument is that the purchaser becomes merely a licensee, and, when he disregards the terms of his license, becomes a user without authority, and may be enjoined against infringement of copyright.

The argument, on the other hand, is that the copyright statute only gives to the proprietor the exclusive right of vending which inheres at common law to every owner of property, whether tangible or incorporeal, and when he exercises it confers on the purchaser the ordinary incidents of ownership of personal property, among which is the right of alienation or to do what he pleases with his own; and that the owner of the copyright cannot by such a notice separate the right of alienation from the property so that it will remain in him, while the general right of property passes to a purchaser from his vendee, and especially when the original vendee is under no obligation to enforce said terms upon subsequent purchasers, and in the absence of proof of assent by such purchasers to said terms.

The contention by complainant of a right of restricted publication, such as is here sought, disregards the fundamental distinction between the common-law right of literary property, commonly called common-law copyright, and copyright under the statute. 'A copyright is an incorporeal right to print and publish. Ager v. Murray, 105 U.S. 126, 26 L.Ed. 942. It is a property in notion, without corporeal, tangible substance. Millar v. Taylor, 4 Burr. 2303. This property is a different and independent right, detached from the corporeal property out of which it arises. Stephens v. Cady, 14 How. 528, 14 L.Ed. 528. Each of these is capable of existing and being owned and transferred independent of the other. Stevens v. Gladding, 17 How. 447, 15 L.Ed. 155. ' Werckmeister v. American Lithographic Co., 134 F. 321, 323, 324, 69 C.C.A. 553, 555, 68 L.R.A. 591. 'The property of an author in his intellectual production is absolute until he voluntarily parts with all or some of his rights. There is no principle of law by which he can be compelled to publish it or to permit others to enjoy it. He has a right to exclude all persons from its enjoyment; and, when he chooses to do so, any use of the property without his consent is a violation of his rights. He may admit one or more persons to its use, to the exclusion of all others; and, in doing so, he may restrict the uses which shall be made of it. He may give a copy of his manuscript to another person, without parting with his literary property in it. He may circulate copies among his friends, for their own personal enjoyment, without giving them or others the right to publish such copies. ' Drone on Copyright, 102, 103.

The argument of complainant rests upon an assumed identity of common-law rights and statutory copyright. But in this view we think it is in error. 'The two rights do not co-exist in the same composition; when the statutory right begins, the common-law right ends. Both may be defeated by publication. ' Drone on Copyright, 100.

The owner of the common-law copyright has a perpetual right of property and the exclusive right of first general publication, and may, prior thereto, enjoy the benefit of a restricted publication without forfeiture of the right of general publication. Thus, he may communicate the contents of his work under restrictions without forfeiture of the right. This communication of contents under restriction, known as a restricted or limited publication, is illustrated by lectures to classes of students, dramatic performances before a select audience, exhibitions of paintings in private galleries, private circulation of copies of manuscript, etc. Werckmeister v. American Lithographic Co., supra. 'The copies which were given to the members of the committee on ceremonies and to a so-called 'Literary Committee' were delivered to them solely to enable them to decide whether the poem was one suitable and worthy of their acceptance as the ode to be delivered at the opening exercises. Such a delivery of copies of a literary production is not a publication, and could not prejudice the owner's common-law rights. Bartlette v. Crittenden, 4 McLean, 300, Fed. Cas. No. 1,082; Bartlette v. Crittenden, 5 McLean, 32, Fed. Cas. No. 1,076. ' Press Publishing Co. v. Monroe, 73 F. 196, 19 C.C.A. 429, 51 L.R.A. 353.

On the other hand, the surrender of the perpetual right is a condition precedent to the enjoyment of statutory copyright. The common-law right is lost by the general publication or unrestricted sale of a single copy. The statute protects the owner in the unrestricted publication and sale of all copies during the term of the copyright.

The right to copyright, which exists at common law, has been superseded by statute. Holmes v. Hurst, 174 U.S. 82, 19 Sup.Ct. 606, 43 L.Ed. 904. Where the owner of the common-law copyright elects to substitute the protection of the statute for that of the common law, he, upon publication, abandons or surrenders his common-law rights, including said right of limited publication, in exchange for the statutory right, the exclusive right to multiply copies. He 'cannot have at the same time the benefit of the copyright statute and also retain (his) common-law right. No proposition is better settled than that a statutory copyright operates to divest a party of the common-law right. ' Jewelers' Mercantile Agency v. Jewelers' Publishing Co., 155 N.Y. 241, 247, 49 N.E. 872, 41 L.R.A. 846, 63 Am.St.Rep. 666.

The statute does not permit the owner of the copyright, by attempted restrictions upon the use of copies, to retain in himself forever the common-law right of first publication. Jewelers' Mercantile Agency v. Jewelers' Publishing Co., supra. The peculiar right conferred by statutory copyright is to multiply copies after publication, to the exclusion of others. Palmer v. DeWitt, 47 N.Y. 532 536, 7 Am.Rep. 480. 'Copyright may be defined as the sole and exclusive liberty of multiplying copies of an original work of composition. ' Coppinger, Law of Copyrights (3d Ed.) 1. This right was not reserved by the common law. Wheaton and Donaldson v. Peters and Grigg, 8 Pet. 591 (append. 725) 8 L.Ed. 1055. The common-law right of first publication and its incident of restricted publication were sufficient for the protection of authors prior to the invention of printing. Thereafter, when the substantial profit to be derived from literary property consisted in the multiplication of copies by printing, the statutory protection was substituted for the common-law protection, upon the condition precedent of the surrender of the common-law right. That this is the sole right conferred by statute, as distinguished from such common-law rights as inhere in the ownership of other property, is evident from the language of the statutes, and...