# Appendix — Heilman v. Bell > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385005_2249%3A2 ## Record - **Collection:** Supreme Court brief - **Document type:** Appendix - **Published:** January 1, 1979 - **Citation:** 440 U.S. 959 ## Text j @ t, U. & ' E i D 20 1978 rptaneen oe ig a Ee | THE L_Micaet 2, CLER SUPREME COURT of the UNITED STA OCTOBER TERM, 1978 DAVID L. HEILMAN and E-C TAPE SERVICE, INC., a Wisconsin Corporation, Petitioners, GRIFFIN B. BELL, Attorney General of the United States of America, his agents, servants, employees, attorneys, successors and all those persons in active concert) or participation with them. Respondents. Appendix to Petition for Writ of Certiorari RICHARD L. CATES BRUCE F. KHLKE LAWTON & CATES 110 East Main Street Madison, Wisconsin 53703 Attorneys for Petitioners GUILD PRINTING SEZ MADISON WIS INDEX TO APPENDIX PAGE ra gigs pre Ns esc tos ob 0 be as ws lO] ay Cara a a ale ie oes aoe ok A 8 108 PLAIN TIFE’'S MOTION FOR SUMMARY ii a sk bo hs ola Cor seas pass ss 109 AFEIDAVTEE IN SUPPORT OF MOTTON FOR SUMMARY JUDGMENT................ 110 DEFENDANT'S MOTION FOR SUMMARY Ne el sey eke sae vd ves ese 114 PLAIN TIFE’S MOTION FOR PRELIMINARY ey oocig sais eX neve pas wv aves a) AFFIDANVTE IN SUPPORT OF MOTION FOR PRELIMINARY INJUNCTION................ 116 DISTRICT COURT ROMUPUEPTM PRIMED CITIEIELER os leeds nese ees 122 ORDER DISMISSING PLAINTIFFS’ MOTION FOR PRELIMINARY INJUNCTION........... 129 JUDGMENT DISMISSING THE ACTION........ 130 APPENDIX 101 PAGE IN THE UNITED STATES DISTRICT COURT OPINION OF COURT OF APPEALS ........... 131 FOR THE EASTER DISTRICT OF UISCUNSEe JUDGMENT AFFIRMING DISTRICT COURT... 140 eee ae E-C TAPE SERVICE, INC., a Wisconsin corporation, ORDER DENY PETITION FOR | Plaintiffs, = our O° CLL REHEARING EN BANG ........cccceceeeees 141 vs. EDWARD H. LEVI, Attorney General of the United States of America, [Equitable Relief Sought] his agents, servants, employes, attorneys, successors and all those persons in active concert or participation with them, Civil Action File No.: Defendants. The plaintiffs DAVID L. HEILMAN and E-C TAPE SER- VICE, INC. by their attorneys SAMSON, FRIEBERT, FINERTY & BURNS by ROBERT H. FRIEBERT allege and show to the Court as follows: 1. This action is brought for declaratory and in- junctive relief for a threatened prosecution of the plaintiffs for alleged violations of 17 U.S.C. §101(e) and §104 which threatened prosecution violates rights guaranteed to the plain- tiffs by the First, Fourth and Fifth Amendments to the United States Constitution. The amount in controversy exceeds the sum of $10,000 exclusive of interest and costs. 2. Jurisdiction is founded upon 28 U.S.C. §§1331, 2201 and 2282. 3. The plaintiff DAVID L. HEILMAN resides in the Eastern District ef Wisconsin and is the President of the plaintiff corporation E-C TAPE SERVICE, INC. 4. The plaintiff E-C TAPE SERVICE, INC. is a cor- APPENDIX 102 poration duly organized and existing under and by virtue of the laws of the State of Wisconsin with its principal place ef business with respect to the matters involved in this case at Lake Villa, Illinois and is in the business of, among other things, manufacturing and selling phonograph records and magnetic tapes throughout the United States and in for- eign countries. Its corporate headquarters and other busi- ness is conducted at 3695 North 126th Street, Brookfield, Wisconsin in the Eastern District of Wisconsin. 5. The defendant EDWARD H. LEVI is the Attorney General of the United States of America whose principal place of business is in the District of Columbia. This suit is brought against the Attorney General in his official capacity and his agents, servants, employes, attorneys, successors and all those persons in active concert or participation with them are made defendants herein. 6. The plaintiffs are engaged in the business of making and selling sound recordings in the form of records and tapes. The plaintiffs have purchased records and tapes on the open market which contain recordings which have been “fixed" prior to February 15, 1972 and which have been manu- factured and sold through usual commercial channels by record companies. The plaintiffs then make compilation records and tapes from these sound recordings by grouping individual sides or cuts by classification and year, manufacture addi- tional copies of their compilation and market and sell the compilations after affixing to each a label which contains the titles of the original sec: the recording artists whose performances have been copied. In accordance with the provisions of Public Law 92-140 (a APPENDIX 103 copy of which is attached hereto as Exhibit "A"), plaintiffs affix to the aforesaid compilations, in either tape or re- cord form, the [P] oqyretens notice and register said compil- ation with the United States Copyright Office. 7. With respect to each and every song so used, plaintiffs have paid or tendered to the publisher the full statutory royalty to which it is entitled under the copyright law. 17 U.S.C. §lle). (Copies of 17 U.S.C. §l(e), §101(e) and §104 are attached hereto as Exhibit "B"). Certain of the publishing companies (27 in number) have accepted said pay- ments, while others (127) have refused to accept said pay- ments. At all times, the plaintiffs have made all reasonable efforts to fully comply with all applicable provisions of the copyright law of the United States. 8. Prior to 1909 composers did not have any copy~ right interests in mechanical reproductions (records) of their songs. White-Smith Music Publishing Company v. Apollo Company, 209 U.S. 1 (1908). 43 Cong. Rec. 3765-3767 (March 3, 1909). 9. By Public Law 349, Chapter 320, 35 Stat. 1075, Act of March 4, 1909, as codified at 17 U.S.C. §l(e), Congress granted to the composer of songs a copyright interest in re- cords. Congress conditioned that copyright grant with a proviso known as the compulsory license law whereby the com- poser must yield up his copyright interest upon receipt of a royalty of two cents per record which can be tendered to him by any manufacturer after the initial use of the song. 17 U.S.C. §lle), 10. From 1909 until sometime in late 1974 or early 1975, it had been the position of the Department of Justice APPENDIX 104 of the United States of America as well as all other inter- ested federal agencies that this statutory provision author- ized duplicators of records such as the plaintiffs herein to pay the statutory royalty of two cents per record and thereby to obtain the right to duplicate compositions of com- posers which had been made into records. Prior to the enact- ment of Public Law 92-140 on October 15, 1971, composers could only resort to civil remedies for the coll ction of their two cents compulsory license royalty. ll. Public Law 92-140 at §2 created criminal sanc- tions for the first time for failure to remit the compulsory license royalty of two cents per record. 17 U.S.C. §10l(e). 12. Throughout the proceedings which led to the enactment of §2 of Public Law 92-140, it was conceded by every- body that record duplicators such as the plaintiffs herein, could duplicate recordings upon payment of the two cents per record compulsory license royalty fee to the composers. Cri- minal sanctions were deemed necessary because many duplica- tors, other than the plaintiffs herein, did not remit the two cents and, therefore, civil sanctions were inadequate to meet the situation. 13. On June 29, 1971, the Department of Justice of the United States of America in a letter to the Chairman of the Judiciary Committee of the House of Representatives, the tinorebie Emanuel Celler, stated the following with respect to this proposed bill: “However, since the bill provides that the amend- ment to 17 U.S.C. §10l(e) will taxe effect im- mediately upon enactment, criminal sanctions would seem to be available to prevent further piracy of existing recordings where copyrighted music was used and the pirate does not pay the statutory royalty to the holder of the musical copyright." APPENDIX 105 14. The defendant through his agent, servant and employe, John Murphy, Chief of the Regulations Section of the Justice Department, publicly repudiated the prior posi- tion of the government as presented to Congress and announced that it is now the position of the Justice Department that persons such as the plaintiffs herein who duplicate sound re- cordings fixed prior to February 15, 1972 wiil be prosecuted pursuant to 17 U.S.C. §10l(e) even though they pay or tender the two cents compulsory license fees to composers. This public announcement and threatened prosecution is contained in an issue of Billboard magazine dated March 8, 1975. A copy of the article is attached hereto as Exhibit "C". 15. The defendant by John Murphy also announced that property will be seized by the Federal Bureau of Investi- gation such as the property owned by the plaintiff corpora- tion herein. 16. As a result of these threats of seizure and prosecution, the plaintiffs herein have ceased doing business as described above and now seek a declaration of the meaning of 17 U.S.C. §l(e), §10l(e) and §104 and seek a declaration that the copyright laws do not prohibit the activities of the plaintiffs as described in any respect with respect to dupli- cating sound recordings fixed prior to February 15, 1972. 17. The proposed seizure of sound recordings and tapes as threatened by the defendant violates rights guaran- teed to these plaintiffs by the First, Fourth and Fifth Amendments to the United States Constitution as a prior re- straint on the freedom of speech as well as threats of ille- gal searches and seizures upon assertions that the products of the plaintiff corporation are contraband when Congress APPENDIX 106 has not declared the possession of such items to be illegal or the items themselves to be contraband. 18. The threatened prosecution of the plaintiffs by the defendant upon a recently changed interpretation by the Justice Department of laws which had received a differ- ent interpretation within all concerned branches of the gov- . ernment from 1909 until 1975, constitutes a denial to the plaintiffs of their right to due process of law in violation of the Fifth Amendment to the United States Constitution be- cause the statutes involved, if subject to such wide vari- ance in interpretations and meaning within the government is necessarily void for vagueness because men of reasonable ability, intelligence and experience must guess as to the meaning and application of said statutes. Furthermore, the plaintiffs are being denied notice with respect to what con- duct of theirs is proper and what conduct is improper. WHEREFORE, your plaintiffs pray for the following: 1. For a declaration of the rights, privileges and immunities of the plaintiffs, declaring that 17 U.S.C. §ll(e), §10l(e) and §104 are inapplicable to duplicators of songs fixed prior to February 15, 1972 who tender the two cents compulsory license fee or those sections are inapplicable to the duplicators of songs fixed prior to February 15, 1972 be- cause such duplications do not constitute a use of the compo- sers' copyright or the copyright interests of anyone else. 2. For a declaration that any interpretation which makes the plaintiffs criminally liable for duplicating sound recordings of songs fixed prior to February 15, 1972 upon tendering the two cents compulsory license royalty to com- posers would render the statutes involved unconstitutional. APPENDIX 107 3. For interlocutory and permanent injunctive re- lief enjoining the defendant and his agents, servants, em- ployes, attorneys, successors and all those persons in ac~- tive concert or participation with them from seizing records and tapes and other property owned by the plaintiffs in con- junction with their business activities involving recording and duplicating records and tapes and enjoining them from prosecuting the plaintiffs for alleged violations of 17 U.S.C. §l01(e) or §104 when the plaintiffs have duplicated sound recordings of sonqs fixed prior to February 15, 1972 upon tendering the two cents compulsory license royalty fee to composers. 4. For such other further legal and equitable re- lief. 5. For costs and disbursements. SAMSO, | FRIEBERT, FINERTY & BURNS “By ROBERT H. FRIEBERT Attorneys for Plaintiffs P.O. ADDRESS: 710 North Plankinton Avenue Milwaukee, Wisconsin 53203 (414) 271-0130 APPENDIX | APPENDIX 108 | 109 UNITED STATES DISTRICT COURT IN THE UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WISCONSIN FOR THE FASTERN DISTRICT OF WISCONSIN DAVID L. HEILMAN and E-c.__ 8 kahekReRReRR RRR RHR HR HR RR ARR RRR RR KH RR HH RHR KR KR KR TAPE SERVICE, INC., a : Wisconsin corporation, : DAVID L. HELLMAN and : L-C TAPE SERVICE, INC., Plaintiffs, : a Wisconsin corporation, VS. Plaintiffs, EDWARD H. LEVI, Attorney General Case No. 75-C-117 vs. Case No. 75-C-117 of the United States of America, his agents, servants, employes, EDWARD fi. LEVI, Attorney Géneral attorneys, successors and all those persons in active concert or participation with tham, of the United States of America, his agents, servants, employes, attorneys, successors and all those persons in active concert or participation with then, Defendantse ee ee ee ee ee ee eee ee -<—<-= Defendants. Now Comes Edward Il. Levi, Attorney General of the i ee tt ene ee ee eke eRe eR RMR RRNA AKAN R United States of America, defendant above named, by his MOTION FOR SUMMARY JUDGMENT attorneys William J. Mulligan, United States Attorney for ee tt Ltt ee ee ee ee Ree eke ke eRe ke eM) We eheea the Eastern District of Wisconsin by Joseph P. Stadtmueller, First Assistant United States Attorney for said District, NOW COME the Plaintiffs, David L. Heilman and E-C and as and for his answer to plaintiff's complaint admits Tape Service, Inc., by their attorneys, Lawton & Cates and and denies as follows: Pruce F. Ehlke, and move the court to enter judgment in their 1. Defendants admit the allegations contained in favor pursuant to Rule 56, Federal Rules of Civil Procedure. paragraphs 3, 4, 5, 6, 8, 13 and 15 of the complaint. Dated this l2th day of July, 1976. aa h 2. Defendants deny each and every other allegation of the complaint and puts the plaintiffs to their proof thervon . { \ IS MA ——— WHEREFORE, defendant demands judgment dismissing “wrued ina w Ao fast ny eee 7 plaintiff's complaint together with the costs and disburse- — ee ae ments in this action. Attorneys a Plaintiffs. fv) Dated at Milwaukee, Wisconsin this G =~ day of May, 1975. 1am os WILLIAM J. MULLIGAN ae Gist Viz United States Attorney MAY = 7 1975 ° 73 Asef p ~J CaN; “ee SAMSON, FRIEKERE. f JOSEPH Pf ft ’ INTRIY & Luang First Assistant United States ATiUn? ORNEYS AT LAW Attorney APPENDIX 110 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF WISCONSIN tata Rie NM BL, at a ie ee ee eo oe ae ee DAVID L. HEILMAN and e E-C TAPE SERVICE, INC., . | a Wisconsin corporation, ~ } ed Plaintiffs, ft Case No, 75-C-117 EDWARD H. LEVI, Attorney General of the United States of America, a4 his agents, servants, employes, attorneys, successors and all those persons in active concert Or participation with then, Defendants. Bh te te OE Ee ar Bl ie er ek, a eg - AFFIOAVIT IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT ce eae eee Ae eee Bee ee eng ee ee STATE OF WISCONSIN) : ss MILWAUKEE COUNTY ) DAVID L. HEILMAN, after being first duly sworn, on Oath deposes and says as follows: 1. That he is one of the Plaintiffs in the forepoing action and that he resides Mt 2172 Korth abth Street, Milwaukee, Wisconsin. 2. That he was president of the Plaintiff corporation, E-C Tape Service, Inc. at al] times naterial hereto, until April of 1976 when he resignec that position, 5. That the Plaintiff, E-c Tape Service, Inc., is a corporation organized anc existing under the laws of the State of Wisconsin and had its eerporate headquarters at 3695 North booth Street, Brookfield, tisconsin, mms section 7. APPENDIX 111 4. That E-C Tape Service, Inc. has engaged in the business of producing and marketing Original anthologies of musical compositions previously recorded by others. This is accomplished by conceiving a theme and format for an anthology, obtaining records and tapes containing the desired selections, duplicating the desired selec- tions, and finally re-recording them in an Original format, sequence and combination. That although the individual selections in a given anthology are all reproduced from records and tapes, previously made by others, the anthologies themselves are new and original presentations of the material. All anthologies so created and produced by Plaintiffs are the subjects of compilation copyrights owned by E-C Tape Service, Inc. pursuant to 17 U.S.C. 5. That said anthologies are marketed on the basis of the appeal generated by their own themes and formats. 6. That many of the individual selections contained in the anthologies are not otherwise commercially available in any form, and those that are otherwise commercially available are frequently unavailable in the same form--that is, reel-to-reel tape, Cassette, 8-track stereo, or record--as the anthologies. 7, That the anthologies created, produced and sold by Plaintiffs, were priced at $5.77 01 $6.98 for cassettes and 8-track tapes, and at $4.98 or $5.98 for records. 8. That the anthologies produced by Plaintiffs contain duplications only of selections which were recorded or "fixed" prior to February 15, 1972, 9. That such recordings "fixed" prior to February 15, 1972, are not themseives protected by any copyright. 10, That the underlying musical compositions of such selections are protected by composition copyright subject to the compulsory license provision of 17 U.S.C. section l(e). APPENDIX 112 ll. That with respect to all selections used by Plaintiff —s, Plaintiffs have paid or tendered te the composition copyright holder the two cent royaity as required ty 17 U.S.C. section lle). 12. That of the composition copyright holders whose compositions have been used in Plaintiffs’ anthologies, 27 have accepted saiag royalty payments while 127 have refused to accept said payments. 13. ‘That affian't's experience in the record industry spans a period of over six years, during which time he has produced records and tapes and marketed records and tapes throughout the United States. 14. That based on affiant's experience in the recording industry, it is common practice for an individual composer to sell his composition to a publishing company. The publishing company in turn attempts to induce a recording company to record the composi- tion. Commonly a recording company will own, as subsidiaries, one or more publishing companies. Thus, frequently, as to a given recording, any rights in the recording itself and the composition copyright are subjects of common ownership. 15. That based on affiant's experience in the recording industry, typical contracts between recording companies and recording artists are seven year contracts. These contracts cenmerally provide that the recording costs--advertising, promotion, studio costs and other production costs--are charged to the recording artist and are collected from royalties payable to the artist. Generally, these contracts provide that if a given record is unsuccessful and the artist's royalties are insufficient to cover the recording costs, those costs are simply carried forward and charged against royalties from subsequent records by that artist. One of the few costs not usually charged to the artist is the cost of pressing the records. y § & APPENDIX 113 Typically, that cost varies from about thirty-two cents per long play altun to about thirty-nine cents per long play album, depending on yolune. Typical contracts between recording companies and recording artists are attached hereto as Exhibit A and in- corporated herein. Dated this 12th day of July, 1976. in LT. HETLMAN Subscribed and sworn to before me this 12th day of July, 1976. bitary Public, Silwaukee County, FI My Commission [Exhibit Ato Affidavit — not printed.) APPENDIX 114 | UNITED STATES DISTRICT COURT bd EASTERN DISTRICT OF WISCONSIN RRR ee DAVID L. HEILMAN and E-C TAPE SERVICE, INC., Plaintiffs, MOTION FOR SUMMARY JUDGMENT vs. EDWARD H. LEVI, et al., Civil No. 75-C-117 be Defendants. NOW COMES defendant, Edward H. Levi, by William J. Mulligan, United States Attorney for the Eastern District, by William E. Callahan, Jr., Assistant United States Attorney for said District, and, pursuant to Rule 56(b) of the Federal Rules of Civil Procedure, moves this Court for an Order granting, summary judgment in his favor on the grounds that there is no genuine issue as to any material fact and he is entitled to judgment as a matter cf law. In support of this motion, said defendant relies on the attached memorandum of law, together with all other matters presently on file with this Court. Dated at Milwaukee, Wisconsin, this fae day of July, 1976. WILLIAM J. MULLTGAN United States Attorney ; / ® By: / P af J , J. Ge Ae Oe a (QITLTAN ES CALLAIIAN, JR. Assistant United States Attorney H | | | ' APPENDIX 115 UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF WISCONSIN DAVID L. HEILMAN and E-C TAPE SERVICE, INC., A Wisconsin Corporation, Plaintiffs, i MOTION FOR PRELIMINARY INJUNCTION EDWARD H. LEVI, Attorney General of the United States of America, his agents. servants, employees, attorneys, successors and all those persons in active concert or participation with them, Defendants. Case No. 75-C-117 NOW COME the Plaintiffs, David L. Heilman and E-C Tape Service, Inc., by their attorneys, LAWTON & CATES and Bruce F. Ehlke, and move the Court to grant a preliminary injunction against prosecution in the Northen District of Illinois, Eastern Division, or any other forum for alleged violations of 17 U.S.C. 88), 101(e) and 104; and 18 U.S.C. §1341, pendina final disposition of the above captioned action which was filed by Plaintiffs on March 7. 1975, in the United States District Court for the Eastern District of Wisconsin asking for a declaratory ruling and injunctive relief against threatened prosecution of Plaintiff for alleaed violations of 17 U.S.C. 88101(e) and 104. et Madison, Wisconsin 53703 Attorney For Plaintiffs APPENDIX 116 UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF WISCONSIN SS ees ssseteensessesesssuumnsesiensetensteoeemne DAVID L. HEILMAN and E-C TAPE SERVICE, INC., A Wisconsin Corporation, Plaintiffs, “¥e~ AFFIDAVIT IN SUPPORT OF MOTION FOR EDWARD H. LEVI, Attorney PRELIMINARY INJUNCTION General of the United States of America, his agents, servants, employees, attorneys, successors and all those persons in active concert or participation with them, Defendants. Case No. 75-C-117 STATE OF WISCONSIN ) )ss COUNTY OF MILWAUKEE) DAVID L HEILMAN, being first duly sworn, on oath deposes and says as follows: 1. That he is one of the Plaintiffs in the foreqoing action and that he resides at 15660 Pomona Road, Brookfield, Wisconsin, 2. That he was president of the Plaintiff corporation, E-C Tape Service, Inc., at all times material hereto, until April of 1976 when he resigned that position. 3. That the Plaintiff, £-C Tape Service, Inc., is a corporation organized and existing under the laws of the State of Wisconsin and had its corporate headquarters at 3695 North 126th Street, Brookfield, Wisconsin. 4. That E-C Tape Service, Inc, has engaged in the business of producing and marketing original anthologies of musical compositions previously recorded by others, 5. That the anthologies produced by Plaintiffs contain duplications only of selections which were recorded or "fixed" prior to February 15, 1972, APPENDIX , 117 6. That prior to entering into said business activity, affiant sought the advice of counsel concerning the legality of said business, namely John Gower of Green Bay, Wisconsin, and the firm of Whyte and Hirschboeck, S.C. of Milwaukee, Wisconsin, and that each of them advised him that if he tendered for payment the statutory compulsory license fee to the copyright proprietor that the re-recording of said music was not in violation of any federal statute. 7. That the underlying musical compositions of selections used in affiant's anthologies are protected by composition copyright subject to the compulsory license provision of 17 USC §1(e). 8. That with respect to all selections used by Plaintiffs, Plaintiffs have paid or tendered to the composition copyright holder the two cents royalty as required by 17 USC §1(e). 9. That of the composition copyright holders whose composi- tions have been used in Plaintiff's anthologies, 27 have accepted said royalty payments while 127 have refused to accept said payments. 10. That 17 USC was amended by P.L. 92-140, 17 USC 101(e) on October 15, 1971, and became effective on February 15, 1972, and created a limited copyright in sound recordinas. 11. That after passage of P.L. 92-140, affiant sought the advice of Whyte and Hirschboeck, S.C, who advised him that sound recordings originally made prior to February 15, 1972, were not afforded copyright protection under federal law and that P.L. 92-140 did not change this and that E-C Tape's activities were still not in violation of any federal law. 12. That the Government Requlations Section, Criminal Division of the United States Department of Justice, was of the same opinion when it published a pamphlet entitled, "Copyright Protection of Sound Recordings", dated April, 1973, and that a copy of the text of said pamphlet and P.L. 92-140 are attached hereto as Exhibit "A" and made a part hereof as if set forth at length. APPENDIX 118 That within Exhibit "A" it is stated in part as follows: a) Page 3: "A sound recording is eligible for copyright protection only if the sound recording is fixed and first published with the required statutory copyright notice on or after February 15, 1972. P.L. 92-140, Section 3." Fixation, "A series of sounds constituting a sound recording is fixed when that complete series is first produced on a final mester recording from which copies can be made," 37 C.F.R. 202.15a(b). b) Page 4: "Effective date. The enactment does not apply retroactively and does not affect in any way rights with respect to sound recordings fixed before February 15, 1972. Thus, P.L. 92-140 does not prohibit the unauthorized copying of sound recordings fixed before February 15, 1972 " c) Page 9: “First no Federal copyright violation can exist under P.L. 92-140 unless the sound recording copied was fixed and published on or after February 15, 1972. This automatically excludes such albums as 'Golden Hits of the 60's','Frank Sinatra's Greatest Hits' and ‘White Christmas’ by Bing Crosby, etc., which were obviously fixed and published before February 15, 1972." 4d) Page 13: “To receive Federal copyriqht protection, a sound recording must be finally fixed and published with proper notice of copyright on or after February 15, 1972. Supra, Section c(1). Proof of fixation and publication may he provided by a recording industry representative,” 13, That affiant's experience in the recording industry spans a period of over six years, during which time he has produced records and tapes and marketed records and tapes throughout the United States. 14, That based on affiant's experience in the recording industry, it is common practive for an individual composer to sell his composition to a publishing company, The publishina company in turn attempts to induce a recording company to record the composition, Commoniy, a recording company will own, as subsidiaries, one or more publishing companies. Thus, frequently, as to a given recording, any rights in the recording itself and the composition copyriaht are subjects of common ownership. APPENDIX 119 15. That in the last ten years the major recording companies have gained control of 80% of the major copyrights of musicai composi- tions by purchasing the large publishing houses or exercising control in other ways. 16. That many of the major recording companies intentionally conceal evidence cf their control over the publishers. 17. That the above captioned action was commenced on March 7, 1975, for declaratory and injunctive relief enjoining any criminal prosecution for alleged violations of 17 USC S§101(e) and 104. 18, That on February 11, 1977, Assistant U.S. Attorney William —. Callahan, Jr., in response to a question from this Court. indicated that no criminal action would be brought against affiant for alleged violations of 17 USC $1, 101(e) and 104. 19, That an indictment was filed on March 31, 1977, in the Northern District of Illinois, Eastern Division, chargina affiant with twenty-six counts in violation of 17 USC $81, 101(e) and 104; and an additional, related ten counts in violation of 18 USC $1341, and that a copy of this indictment is attached hereto as Exhibit "B" and made a part hereof. 20. That there was a delay of twenty-two and one-half months between May 15, 1975, the date of the alleged offenses and March 31, 1977, the date on which the indictment was returned, which delay was unnecessary and attributable solely to the government. 21. That a result of the delay on the part of the government to prosecute him, affiant has suffered substantial prejudice for the following reasons: a) That his assets have been depleted during said period of time by civil litiqation with the record industry and he no longer has funds with which to defend himself which would have been available to him had the prosecution been brought on without unreasonable delay. oe APPENDIX APPENDIX 120 121 b) That he believes said delay was part of a deliberate, 26. That affiant faces a possible fine of $1,000 or five purposeful and oppressive design for delay on the part of the government years of imprisonment for alleged violations of 18 USC $134). to hinder him in his defense of this action. 27. That as a result of said pending Prosecutions, affiant c) That he would have appealed the decision in E-C Tape v. has incurred large expenses for attorneys fees. Kelly, (N.0. I11, 1975) 412 F. Supp. 249, had he known that the govern- 28. That as a result of said pending prosecutions, affiant ment intended to prosecute him criminally in the future. has had to spend much of his time in court and in preparation for 22. That the following publishers listed in the indictment litigation. are owned or controlled by the following record companies: | 29. That as a result of said pending prosecutions and a) Jobete Music Company is owned or controlled by possible penalties, affiant and his family have suffered mental anguish. Motown Records. 30. That this Affidavit is in support of a Motion For b) Warner-Tamberlane Publishing Corp. is owned or ee : . controlled by Warner-Electra-Atlantic Records, Preliminary Injunction. c) Chapel Music Co. is owned or controlled by Dated this TW cay of June, 1977. Polygram Records, Inc. d) Warner Bros., Inc., is owned or controlled by Warner-Electra-Atlantic Records. e) Viva Music, Inc. is owned or controlled by A & M Records. f) Jondora Publishing Co. is owned or controlled by Fantasy-Prestige Records. Subscrib and sworn to before me g) Elvis Presley Co. is owned or controlled by this MM day of June, 1977. RCA Records. h) Hill and Range Songs, Inc. is owned or controlled by RCA Records. Ndtary Public, State of Wisconsin . . My Commission @& # 23. That at the present time, there is no motion for preliminary injunction pending before this Court. 24. That there is no motion for a preliminary injunction pending before this Court because affiant has relied on the represen- tation of the Office of the United States District Attorney as referred to in Paragraph 18 above, as wel] as on the government pamphlet entitled { "Copyright Protection of Sound Recordinas" as referred to in Paraqraph 12 above. ' 25. That affiant faces a possible fine of $25,009 and one year of imprisonment for alleged copyright infringements under 17 USC §104. APPENDIX 122 U. S. Dist. Court Eost Dit W: sFa = en UNITED STATES DISTRICT COURT . MUL 14 i977 EASTERN DISTRICT OF WISCONSIN ct O'clock ‘ RUTH W. LA FAVz, Cla. DAVID L. HEILMAN and E-C TAPE SERVICE, INC., a Wisconsin corporation, Plaintiffs, Vv. DECISION AND ORDER GRIFFIN B. BELL, Attorney General Civil Action of the United States of America, No. 75-C-117 his agents, servants, employes, attorneys, successors and all those persons in active concert or participation with them, Defendants. In this action, plaintiff duplicators seek the follow- ing relief: a declaration that 17 U.S.C. §§ l(e), 10l(e), and 104 are inapplicable to duplicators of songs fixed prior to February 15, 1972, who tender the two-cent royalty to the compo- sition copyright holder; a declaration that an interpretation of those statutes which make the plaintiffs criminally liable for duplicating sound recordings of songs fixed prior to February 15, 1972, renders the statutes unconstitutional; and an injunction restraining the defendant U. S. Attorney General, his agents and successors, from seizing the records and tapes of the plaintiffs and from prosecuting the plaintiffs for alleged violations of 17 U.S.C. §§ 10l(e) or 104. Jurisdiction is present under 28 U.S.C. §§ 1331 and 2201. The matter is before the court on cross motions for summary judgment. For the reasons which follow, the defend- ants' motion will be granted and the plaintiffs’ motion will be denied. Both the facts in this matter and the position of the Court on the legal issues raised herein have already been fully detailed in the decision and order of this Court rendered April 28, APPENDIX 123 1975. At that time, this Court denied plaintiffs' motion for a temporary restraining order and a preliminary injunction and plaintiffs' request for the convening of a three-judge court. See Heilman v. Levi, 391 F.Supp. 1106 (E.D. Wis. 1975). There this court relied on four circuit euses” and determined that tape duplicators are not entitled to avail themselves of the compulsory licensing provision of 17 U.S.C. § 1(e) because such duplication does not constitute a "similar use" of the composition and there- fore their activities constitute infringement of the composition copyright. The Court also determined that 17 U.S.C. § 101(e), which imposes criminal sanctions pursuant to 17 U.S.C. § 104 as to cases of "willful infringement for profit," embraces tape dup- licators who tender the compulsory licensing fee. Furthermore, the Court concluded that the meaning of "unauthorized" as used in § 101(e) is not so uncertain as to render the statute unconstitu- tionally vague, and that the public notice given the plaintiffs in January of 1975 through the trade press of the prospective op- eration of the defendants’ decision to prosecute tape duplicators did not violate any of plaintiffs’ due process rights. The Court is mindful that the mere fact that a plain- tiff's motion for a preliminary injunction is denied does not in itself entitle the defendant to summary judgment. See 6 Part 2 Moore's Federal Practice % 56.17[30] (1976). However, the Court in its earlier decision made an exhaustive study of the develop- ment, amendments, and interpretation of the federal copyright statutes involved. An examination of plaintiff Heilman's affida- vit and the various exhibits and briefs filed in support of and in opposition to the motions for summary judgment indicate that there has been no change in the facts of this case nor in the ap- plicable law which would warrant a.change in the Court's position. In fact, recent developments in the law with reyard to cases seek- ing to enjoin the Attorney General from prosecuting tape duplicators for copying recordings fixed prior to February 15, 1972, have APPENDIX 124 reinforced the defendants' position. See International Tape Distributors, Ltd. v. Levi, 188 U.S.P.Q. 539 (D. D.C. 1975); Stereo Tape Associates v. Levi, No. G 75-167 (W.D. Mich., May 14, 1976); Stereo Tape Associates v. Levi, No. 5-70687 (E.D. Mich., April 7, 1976); E-C Tape, Inc. v. Kelly, 412 F.Supp. 245 (N.D. Ill. 1975); and Gramuglia v. Levi, No. 75-CV-549 (N.D. N.Y. July 13, 1976). | At the preliminary injunction stage of this litigation, there were no genuine issues of material fact, nor are any such factual disputes presented at this time that would preclude the granting of summary judgment. See Rule 56(c), Fed. R. Civ. P. Then, as now, plaintiffs admitted copying recordings fixed prior to February 15, 1972, without authorization of the composition copyright holder. The plaintiffs' principal argument at this time is that the decisions of the four circuits previously relied upon--Fame, Jondora, Marks, and Duchess (cited in footnote "1")--are in error, and as they are not binding on this court, plaintiffs urge ‘he Court to re-evaluate its prior position. Plaintiffs argue that they are not tape pirates in the usual sense of the term because they copy only older record selections, many of which are commer- cially unavailable, and because they offer the records in an an- thology form centered around a particular theme. Plaintiffs contend that because they offer the customer something new, and because their customers are interested in the anthology rather tuan the individual selection, they are not depriving other manufacturers of a portion of their profit on successful records. Even assuming that the customer is more interested in the anthology than in the individual selection$, and that in fact other manufacturers are not deprived of profits because the records are commercially un- available otherwise, plaintiffs have misstated the issue. The issue is not whether the plaintiffs are original or creative in their arrangement of record anthologies, nor whether plaintiffs APPENDIX 125 directly or indirectly compete with other recording companies. The issue is whether the plaintiffs in the first instance have the right to copy sound recordings fixed prior to February 15, 1972, without the authorization of the composition copyright holder. This Court finds no relevance to the plaintiffs' later arrangement of the duplicated songs. Originality of the anthologized arrange- ment, that is, of the sequence of the various recordings, does not negate the requirement of first obtaining authorized permission from the copyright holder before duplicating the recording. Whether, once the anthologizer has obtained the requisite permission to copy the various recordings contained in the anthology, he is then en- titled to copyright protection as to the original arrangement of the anthology is a separate matter which need not be considered here. Secondly, plaintiffs have argued that this Court's in- terpretation of 17 U.S.C. § l(e), the compulsory licensing section, thwarts the purpose of compulsory licensing by fostering monopoly in the recording industry. The granting of any copyright does create a limited monopoly which is designed to benefit long-term competitive interests. One commentator has remarked: "* * * The Constitution's authorizativn to Congress to grant patent and copyright protection represents a judgment that, although short-range competitive interests would benefit from immediate and free public access to technological and ar- tistic innovation, to permit such access would destroy incen- tive to innovate; new products and works would not be intro- duced into the market and consequently the long-range competi- tive situation would decline. The patent and ee statutes, each in its own way, strike a balance etyeen these long- and short-range competitive interests. * * *" Accordingly, the compulsory license provision has been interpreted to permit numerous artistic interpretations of a single written composition, but not to permit the use of a recording of the com position. See Shaab v. Kliendienst, 345 F.Supp. 589, 590 (D.D.C. 1972); Jondora Music Publishing Co., Inc. v. Melody Recordings, Inc., 506 F.2d 393, 395 (3rd Cir. 1974), cert. denied 421 U.S. 1012 (1975). APPENDIX 126 Along the same lines, the plaintiffs argue that because frequently the large record companies own the publishing houses which have control of the composition copyright, impermissible tying arrangements result akin to those condemned under antitrust laws. Plaintiffs assert that due to an oligopolistic recording industry, the uncopyrighted product--the performance--is tiled to the copyrighted product--the composition. This argument is an- swered in the same way as the prior argument: new renditions of the copyrighted composition are permitted, but mere copies of past performances are prohibited. There is no analogy to impermissible tying. To the extent that the plaintiffs attack the recording and publishing industries as oligopolistic, the proper remedy lies in an action for violations of the antitrust laws. Thus, the plaintiffs have advanced no arguments or facts which have persuaded this Court to depart from its earlier an- nounced conclusion that ae a matter of law plaintiff duplicators may not avail themselves of the compulsory licensing provision of 17 U.S.C. § l(e) to avoid civil or criminal sanctions under the Copyright Act, and that criminal sanctions imposed pursuant to 17 U.S.C. §§ 101(e) and § 104 embrace tape duplicators who ten- der the compulsory licensing fee. Plaintiffs admit that they were given public notice in January of 1975 via the trade press of the defendants’ decision to prosecute tape duplicators. The defend- ants' decision to prosecute operated prospectively and was based on the unanimous interpretation of the four circuit courts of ap- peal which considered the question of the availability of 17 U.S.C. § 1(e) to tape duplicators. The defendants have not violated any of the plaintiffs’ constitutional rights. IT IS THEREFORE ORDERED that defendants' motion for summary judgment be and it hereby is granted. IT IS FURTHER ORDERED that plaintiffs' motion for summary APPENDIX 127 judgment be and it hereby is denied. Dated at Milwaukee, Wisconsin, this 1Y day of pa 1977. w-SSS e . we strict Judge APPENDIX 128 FOOTNOTES Fame Publishing Co., Inc. v. Alabama Custom Tape, Inc., 507 F.2d 667 (Sth Bie 1975), cert. denied, 423 U. Ty 841 (i975); Jondora Music Publishin Co., Ine. Vv. Melod Recordings, Inc., 506 F.2d 393 (3rd Cir. foray: cert. denied, 421 U.S. Foi2 (1975); Edward B. Marks Music Corp. v. Colorado Magnetics, Inc., 497 F.2d 285 (10th Cir. 197k, cert. denied, 419 U.s T1720" (1975); and Duchess Music Corp. v. Stern, 458 F.2d i305 (9th Cir. 1972), cert. denied, E05 U.s. 847 71972) Goldstein, "The Competitive Mandate: From Sears to Lear," 59 Calif. L. Rev. 873 (1971). APPENDIX 129 * S. Diss. ag — ou. Vou. io? K Ht it, & UNITED STATES DISTRICT COURT JUL 14 1977 EASTERN DISTRICT OF WISCONSIN ot o'clock RUTH W. LA FAVE, Clerk DAVID L. HEILMAN and E-C TAPE SERVICE INC., a Wisconsin corporation, Plaintiffs, Vv. GRIFFIN B. BELL, Attorney General of the United States ORDER of America, his agents, servants, employes, attorneys, C.A. No. 75-C-117 successors and all those persons in active concert or partici- pation with thea, Defendants. Plaintiffs have filed a motion for a preliminary injunction seeking to enjoin prosecution of the plaintiffs in the Northern District of Illinois, Eastern Division, or any other forum for alleged violations of 17 U.S.C. §§ l, 10l(e) and 104, and 18 U.S.C. § 1341, pending final disposition of the above-captioned action, in which plaintiffs sought a declaratory ruling and injunctive relief against threatened prosecution of the plaintiffs for alleged violations of 17 U.S.C. §§ 101(e) and 104. In view of the granting of defendants’ motion for summary judgment and the denial of plaintiffs' motion for summary judgment on July 14, 1977, the plaintiffs' motion for a preliminary iajunaction is dismissed as moot. IT IS THEREFORE ORDERED that plaintiffs' motion for a preliminary injunction be and it hereby is dismissed as moot. Dated at Milwaukee, Wisconsin, this (X day of fob