497 F.2d 285 (10th Cir. 1974), 73-1395, Edward B. Marks Music Corp. v. Colorado Magnetics, Inc.

Docket Nº:73-1395.
Citation:497 F.2d 285, 181 U.S.P.Q. 129, 182 U.S.P.Q. 13
Party Name:EDWARD B. MARKS MUSIC CORPORATION, Plaintiff-Appellant, v. COLORADO MAGNETICS, INC., d/b/a Sound Values, Inc., et al., Defendants-Appellees.
Case Date:February 28, 1974
Court:United States Courts of Appeals, Court of Appeals for the Tenth Circuit
 
FREE EXCERPT

Page 285

497 F.2d 285 (10th Cir. 1974)

181 U.S.P.Q. 129, 182 U.S.P.Q. 13

EDWARD B. MARKS MUSIC CORPORATION, Plaintiff-Appellant,

v.

COLORADO MAGNETICS, INC., d/b/a Sound Values, Inc., et al., Defendants-Appellees.

No. 73-1395.

United States Court of Appeals, Tenth Circuit.

February 28, 1974

Submitted Nov. 13, 1973.

Page 286

Simon H. Rifkind, New York City (James D. Fellers, Frank A. Gregory, Fellers, Snider, Baggett, Blankenship & Bailey, Oklahoma City, Okl., and of counsel, John C. Taylor, III, Stuart Robinowitz, Sidney S. Rosdeitcher, Steven B. Rosenfeld, Paul, Weiss, Rifkind, Wharton & Garrison, New York City, Robert C. Osterberg, John S. Clark, Abeles, Clark & Osterberg, Charles B. Lutz, Jr., Speck, Philben & Fleig, Oklahoma City, Okl., on the brief), for plaintiff-appellant.

Jerry J. Dunlap, Oklahoma City, Okl. (Charles A. Codding, Dunlap, Laney, Hessin & Dougherty, Oklahoma City, Okl., on the brief), for defendants-appellees.

Before LEWIS, Chief Judge, and MURRAH and McWILLIAMS, Circuit Judges.

McWILLIAMS, Circuit Judge.

This is a so-called tape piracy case. Edward B. Marks Music Corporation, hereinafter referred to as Marks, is an independent music publisher and, as such, is the owner of copyrights in numerous musical compositions. Marks, through its licensing agent, the Harry L. Fox Agency, Inc., has authorized various record companies to make recordings of compositions in which it, Marks, owns the copyright. The recording companies thus licensed by Marks to reproduce or record its copyrighted musical compositions have hired artists who have made recordings of the musical compositions here involved. Such recordings are then offered for sale to the general public.

Colorado Magnetics, Inc., hereinafter referred to as Magnetics, with no authorization from Marks, has also made recordings of musical compositions in which Marks owns the copyrights and has offered its recordings for sale to the general public at a price well below the retail price of the recordings produced by those recording companies licensed by Marks to record its copyrighted compositions. Magnetics' modus operandi is to first purchase on the open market individual 'hit' records thus made by those recording companies licensed by Marks to use its copyrighted compositions. Magnetics then duplicates or copies the recording with its own sound equipment on magnetic tape and offers for sale to the general public its duplicated or copied cassette tape recordings. Magnetics, of course, is able to undersell because, by simply copying the records made by others, it avoids the considerable expense incurred by the licensed recording companies in the hiring of arrangers, an orchestra, and the featured recording artists incident to their recordings.

It was in this general setting that Marks brought a copyright infringement action against Magnetics, seeking damages and injunctive relief. The gist of Marks' complaint is that Magnetics is making an unauthorized and unlawful use of musical compositions in which it, Marks, owns the copyrights. Magnetics, by answer, denied copyright infringement, and alleged that its use of Marks' copyrighted compositions is authorized by the so-called 'compulsory license' provisions of the Copyright Law, namely, 17 U.S.C. §§ 1(e) and 101(e). Additionally, and alternatively, Magnetics alleged that Marks was guilty of certain anti-trust violations which preclude it from enforcing its copyrights.

The case was initially set down for hearing on Marks' request for a preliminary injunction. However, before such hearing was held, the parties agreed that a hearing on the merits would be combined with the hearing on the preliminary injunction. Upon trial, the only witness called was the president of Marks. Additionally, four depositions were offered, and received into evidence, the two principal owners of Magnetics having been among those thus deposed. Also, considerable documentary material was offered, and received, without objection. And this was the extent of the evidentiary matter before the trial court.

At the conclusion of the trial, the trial court asked the respective parties

Page 287

to submit proposed findings and conclusions. Thus the parties did and the trial court elected to adopt, virtually without change, the findings and conclusions submitted by Magnetics, all of which, needless to say, resulted in a smashing victory on all fronts for Magnetics. In this regard, we note that the Supreme Court in United States v. El Paso Natural Gas Co., 376 U.S. 651, 84 S.Ct. 1044, 12 L.Ed.2d 12 (1964), observed that findings and conclusions prepared by counsel and adopted, more or less verbatim, by a trial court are less helpful on review than findings and conclusions drawn with the 'insight of a disinterested mind.' We agree.

In any event, the trial court specifically found that Magnetics in its use of Marks' copyrighted musical compositions did not infringe on Marks' copyrights and that Magnetics' duplication of records playing Marks' copyrighted compositions was authorized by the compulsory license provisions of 17 U.S.C. §§ 1(e) and 101(e). Alternatively, and additionally, the trial court went on to find that Marks was guilty of certain anti-trust violations which precluded recovery; that because of its 'misuse' of the copyrights in question Marks was estopped; and that Marks' 'unclean hands' also barred recovery. In line with such findings and conclusions, the trial court dismissed the proceedings and awarded Magnetics its costs and attorneys' fees. The complete findings and conclusions of the trial court are reported in Edward B. Marks Music Corp. v. Colorado Magnetics, Inc., 357 F.Supp. 280 (W.D.Okl.1973). In this regard, we note that though the trial court made written findings and conclusions, it did not render, as such, an opinion. From such judgment Marks now appeals. We reverse.

COMPULSORY LICENSE

In our view, the central issue in this case relates to the compulsory license provisions of 17 U.S.C. §§...

To continue reading

FREE SIGN UP