Fonotipia Limited v. Bradley

• Decision Date: 07 August 1909
• Citation: 171 F. 951
• Parties: FONOTIPIA LIMITED et al. v. BRADLEY. VICTOR TALKING MACH. CO. v. SAME.
• Court: U.S. District Court — Eastern District of New York

171 F. 951

FONOTIPIA LIMITED et al. v. BRADLEY.

VICTOR TALKING MACH. CO. v. SAME.

United States Circuit Court, E.D. New York.

August 7, 1909

Ralph L. Scott (Philip Mauro and C. A. L. Massie, of counsel), for Fonotipia Limited and Columbia Phonograph Co.

Horace Pettit, for Victor Talking Mach. Co.

Waldo G. Morse, for defendant.

CHATFIELD District Judge.

The present cases have been heard upon a record consisting of pleadings and affidavits presented originally upon a motion for preliminary injunctions and by stipulation made the record and testimony on final hearing. The two actions involve substantially the same principles and can be disposed of together, the slight differences between the positions of the parties, and certain questions peculiar to the allegations of each complainant, being capable of statement and determination in connection with the main issues, which are alike in the two suits.

The complainants at the present time are producing and putting upon the market records of vocal and instrumental music, for use upon machines for the reproduction of sound, and constructed in a form suitable for operation with these records in the flat and circular or disc form described in the patent to Berliner, No. 534,543, February 19, 1895 (Victor v. Amer. Grapho. Co., 145 F. 350, 76 C.C.A 180), and Jones, No. 688,739, December 10, 1901 (Amer Grapho. Co. v. Universal Co., 151 F. 595, 81 C.C.A. 13 9).

It is unnecessary to consider in detail the machines made by either company, further than to say that those manufactured by the complainant the Victor Talking Machine Company are known generally as the 'Victor talking machines,' and those put upon the market by the Columbia Company are called 'graphophones,' and the discs described can be interchangeably used upon either type of instrument.

The discs themselves, as at present made, are of some such substance as hard rubber, and are said to be made by causing the music to be sung or played into a receiving instrument which records the waves of sound upon a disc properly prepared, which, in turn, by an electroplating process, is used to yield a matrix of metal. From this matrix numberless reproductions, substantially duplicates even in minute details of the original record, are produced by processes perfected by each company, and these reproduced discs, when used upon the talking machine or graphophone, turn back, by means of the diaphragm of the instrument, the lines of the record into sound waves, which are the equivalent of those originally sung or played.

In the case of the Victor Company, the discs sold by it within the United States are plainly marked with notice of the patent, and also with notice that the disc is sold for use only upon a talking machine, for the reproduction of sound. The price at which the discs are to be sold is also printed upon each disc, and the maintenance of this price is made a condition of the sale under license. Thus actual notice is given to each purchaser or user of the Victor Company's discs, of the conditions under which they have been sold, and that the article has to do with a patented product. It also appears that a company was organized in Canada by Berliner, who had previously assigned his patent to the Victor Company, and the Berliner Company, Limited, of Canada, has for a number of years been furnished with matrices of the Victor records, and has put upon the market and sold discs reproduced from these matrices, bearing similar license notices to those used by the Victor Company of this country.

The Fonotipia Limited is a British corporation, and the Columbia Phonograph Company is a corporation organized under the laws of West Virginia; the Fonotipia Limited conducting business in England, and in Italy, Germany, and other places on the Continent of Europe, while the Columbia Phonograph Company carries on its business within the United States.

It appears that both companies produce sound records in disc form, and manufacture and sell the duplicates or commercial records in large quantities. By agreement the Fonotipia Limited has contracted with the Columbia Phonograph Company that the latter should have within the United States and Canada the exclusive right to make, or cause to be made, to use, and to sell discs originally recorded by the Fonotipia Limited in Europe. The Fonotipia Limited furnish matrices for this purpose; the Columbia Phonograph Company paying a royalty therefor according to the number of duplicates manufactured, and in addition paying the royalty to be accounted for to the artist originally making the record, at the rate of the contract by that artist with the Fonotipia Limited.

The Columbia Phonograph Company further agreed not to export any of its records out of the United States or Canada. It also appears that all three of the complainant companies have invested large sums of money in building up their business, and in connection with their business the Victor Company has established a very large plant at Camden, N.J. Each of the companies named has advertised extensively and at great expense.

Particular attention has been called to the trade-mark of the Victor Company, which, both as a trade-mark and as an advertisement, in the shape of a dog listening to the sounds from a talking machine horn, and labeled 'His master's voice,' has become familiar to the public. The methods employed by all of the complainant companies, the uniform care and excellent reproducing qualities of their products (both machines and records), has educated the public to expect the successful reproduction of music of a high standard of quality in the reproduction, and, as shown by the record, the grade of goods produced by the complainant companies upholds the standards which they have established. The public is protected in its purchases by the evenness and excellence of the output.

In addition to the expense and the rights represented by the business indicated, all three of the complainant companies have entered into separate contracts with individual singers and musicians, and particularly in the case of singers under contracts with the so-called 'Grand Opera Companies' of New York, Paris, London, Berlin, Milan, etc. Under these contracts with artists able to command large prices, the initial cost of producing the record is great, and the companies are under an agreement to pay a royalty for each record produced from the original matrix, thus furnishing a continuing contract and expense, of which the benefit is going to the singer.

It may be remarked that the defendant has answered, claiming that each of these singers is a necessary party to this suit, inasmuch as their contracts are affected; but it need only be said that they are neither necessary nor indispensable parties, for the reason that their contracts are entirely dependent upon sales, and they are interested in the present questions only in the sense that their profits would be greater or less as sales increase or diminish. The court must also take into account, in any such matter as the present, not only questions of public policy, but questions of public benefit, and it is evident, from the common use of various forms of talking machines or phonographs and graphophones, that the better class of music is brought within the observation and study of many persons who would have neither time nor opportunity to become familiar with it in other ways. The reproduction of songs by famous singers and artists is both educational and beneficial to the people as a whole, and the court cannot but take notice of the fact that such music has an educational side, and appeals to substantially every one, even though they be unconscious of this result.

The defendant has been connected with the business of selling phonographs and sound producing machines for a number of years. He is shown by the record to be more or less familiar with the business and to be at present acting as sales agent for a corporation called the Continental Record Company, which is stated in the papers of incorporation to have its home office at New Baltimore, N.Y.

The records show that at New Baltimore no plant or office is maintained, but that the company has a local attorney or representative to comply with the requirements of the law. In New York City the only address shown by the testimony as that of the Continental Record Company is the address contained in a bill for certain discs purchased by a representative of one of the complainants; the general literature of the Continental Record Company giving merely New York City as its location. The address shown upon the bill referred to, No. 147 West Thirty-Fifth street, is an office building occupied by a storage company, and the testimony does not show that any sign or other indication of occupancy by the Continental Record Company is displayed. The defendant Bradley, the agent for this company, claims in his testimony to have no interest in the business of the Continental Record Company except as its selling agent; but all allegations as to the history of the business, the production of the records in question, and the source from which these records were purchased, is dependent upon the testimony and affidavits of Bradley alone, he being the only affiant or witness. We have therefore no more information about the Continental Record Company and its business than that which its selling agent has furnished, and what has been discovered by those investigating on behalf of the complainants as above set forth.

The defendant has been for some months advertising by circular letter and in other ways his ability to sell records of the Continental Record Company, stating in these advertisements that the records are sold at prices not more...