Reply Brief Petitioner — Sheldon v. Metro-Goldwyn Pictures Corp. (No. 482)

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Ae ee es ee Ree Uttice - Suprema Court, U, a {

- ; i O10)". a ; FILED g

4 ‘NOV 17 1939

[

IN ay Ike ert '

Supeeme Court nf the United States

OCTOBER TERM, 1939,

No. 482.

ad - . bo i a

a c a

E bW. ARD SHELDON and MARGARET roe R: BARNES, |

eke Petitioners, ra

—against—

Merko-GoLtpwyn | Pictures) -Cornroration, = Merrro-

GoLDWYN-MAYER — DISTRIBUTING | CORPORATION,.

~ Loew's, Inc ., anid CULVER Export ‘Corvoration,

| f » Respondents.

PETITIONERS’ REPLY‘ BRIEF IN. SUPPORT OF ©

_ PETITION FOR WRIT OF CERTIORARI.

Slee bee

Arruurn Fr. Driscoun,

Counsel for Petitioners. |

‘THE Cov RT Paras; n..3. ¢,

)

TABLE OF CASES CITED

——, |

ah a PACH

i ford ¥. Neribuer, 144 7. B. 4IBRo 3... Se. Sehes aae eaes te yO.

Callaghan Vv. Myers, eee |_| SRR Mania gee +, 8.9, 12

Christensen \. National Bo&° BR Company, 10> Bed.

(2nd) S56 ieee eee eg ies eae ee eae ee acme. 3

Cofield Moter, Washer Company ve Wayne Mfy. Cow

ee WOR TA. os cab eeeie lis er CoRe rere 2,4

Computing Seale ¥. Téatedo, 279 Fed. GAS... 0.0... - 4

Dhiw Vv. Wirk LaShelle V5 Ped. 902.2... pss eer eer aM

Darvitla vo Brunswick, 4 Fed. (zd) mon 1, ¢*, A. ate

Louglas ¥. Cunningham, Os ULM, 207 (10RD)... S

Duplate Corporation ¥. Teipeer, ete. 208.0. 448... 12

Rmersow v. Daries, & Ted. Cas, 615. eo al OE Ue 10

[iris Vanufacturing € om pany Ve Link Be i" (0. 635 Bed,

(ED eee ee bs oe ee eee eee ee ke rae ba 3

linmilton- Brown Shoe Co. v. Wolf Bros. & Co, 240

iy | a SEP iy eng ieee tem eget LW

Harold Lloyd Corporation ¥. Witwer, 65 ed. ida

“yak. lit AL SHAME Os OO.0o Ceeee os EUR EERE AT Te cee s

Neentler Aenold Hinge Last Company. Le mtn, 24 . ‘ed.

Juels $28"... : ERTELTE PEE TERETE TL Te eee 3

Lavecu Ne Wrigley, 27 UR WT cee. eee ae

LO) Page & Company vo Faw Film Corp. 83) Fed.

(ow). TRS A OA Sh... ce, ees Tere Tee carey

levin Brothers \, Dar in, Matiorjactug Hy hy OM pany, [a

i ek ee ne eee dt

oom: Cooper Tay, beTS LL. Re: ING. Pat ree mae, 1a

Vetallic Ribhgarhire Company. Hartford Ruther —

Works i P45 Uh. MLS oul siren seo wares Wed a >

gs PAGE

National Folding Bor & Nia Cym pany \ ¥. Huytoy

Nore ley Company, 9) Fed. OOD... .. Ws eaaudie cost - Sa

Philadelphia Rubber Works vo 0. 8. Rubber Reclama-

tion Works, 276 Fed. 600 (D.C) NL YE 1920) 0000.. 3

Naot-y, Reilicay, Wis UM. FMB. oo soc os ccc cece ve deis (

Ruth Vv. Stearns-Rogers Manufacturing Company, VW

ee” SR Ey bss kode sedaees a Sarah aha Wala oe

Nlerenus Vv, Gladding; ye. he ° + pn ee ate "

Witnechestey ganged tris Conv. American Buckle &

YT Oetg TE. a CI Os + x oss eine KEN See ”

Orukke AtcTinontrres Crrep:

etn © cbs vce OP eer ee ee > me pe ey ee ee

Section 2 o......, pa aes nie a tea ae eevae aaah ee S

oe: eA, OE hes sic acs, eure 4 oe.

LS Fe BR ce tede hee eee ee ae rae iD

a *.

IN THE

cee Court of the United States

OCTOBER TERM, 1939,

No. 482.

“

Epw ARD SHELDON and Mancarer Ayer BARNES, _

: ; Petitioners,

—against— Y |

Misyro-GoLtpwyn Pierures Corporation, © MrvrRo-

Gotpwyx-Mayer © Disrripevinc Corporation,

Lorw’s, Ixc. and CULVER Export Corroration,

Respondents,

a it

PETITIONERS’ REPLY BRIEF IN SUPPORT OF

PETITION FOR WRIT OF CERTIORARI. |

The purpose of the petition “is net as stated) in

respondents” briefepage 1 ‘tto review solely the bases

takén by the Court below for its award ‘of profits’.

Our position is that. there can be ioe apportionment

on any basis—that the statute avs Wwe are entitled to

“all profits’’—that even though: there, eam be. a basis

for doing less than required by the plain anandate of

Congress, the basis employed below is erroneous and

injustitied even’ by the patent “eases* to which the.

_ Court below had reeourse,

Infringement has been? found. Respondents Sare

couvieted of being “deliberate plagiarists. We ques-

tien the propriety. therefore, of references to the

prior record in nowise invelved by the present peti-:

tion. The respondents by these prior references seek

to extennate their deliberate. plagiarism.

2 -

The pro tanto appropr iation Which the responde nis?

Vafforded to themselves of) the petitioners’ work: can

hest be gleaned from the opinion of the Cirenit Court”

(81 Fed: (2d) 49, 56). where the ( ‘ourt said ;

‘3

We cannot braid: the “eouviction that, if the

Jpietiire was not an infringement of the play. there

can be none short of’ taking the dialygue.’

The award: given to. the copyright owners hy the

Speeial Master and confirmed by the Distriet Cour

ix Im essenee no mere disproportionate than the re-

covery by the plaintiff in Dawe ve Nirk LaShell,

1 Bed, 902. There the short story thit was iufringes!

upon had been sold) for $85, This was net sufficient

— ground to defeat plaintiff's recovery of g/l] the profits.

~The presenter ‘Opyright Law has been on the hooks

for thirty years. It is significant that-there have | een

one recoveries by the copyright owner of profits oul.

of proportion with the original value of the Proper! >

stofen. . Defendants” argument in effect 4s that a

though they stole plaintiffs’ -property, nevertheless

| they should not be made te account for allo at tle

profits, and thereby comply with the plain qandat:

of the statute because the. profits made were large. -

Ou page 3 of their brief defendants quote from

Judge heibell’s decision i the Distriet Corrt

“whieh Judge Leibell said (Ro 102):

‘Tt’ we ape “to avoid Instances of Lrotesq iv

injustice’ then ‘we must adopt some works

rile’ similar to that emmplowed ii patent infin:

~ reat cuses,”"

Defendants week le iphasize the thought that thh "

has Hered) grotesque injns stiee die the present Cue,

What is injustice ? | :

Whiat is grotesque ?

Is it grotesque injustice to take. from deliberate

infringers the profits they have made after allowing

them to deduct all items of expense, including the

enormous salaries and compensation of the individuals

directly anyvolved ? , mi 7 ee

Ix it grotesque injustice when deliberate infringers

wre made to account for their profits only after every

item of expense is: allowed them, including overhead,

“ade ‘prec lation, and even interest) on the investine nt

viade by them in.the infringing werk ? pegs

Ts it gretesque injustice heeause an infringer who —

makes but small profits is compelled to disgorge all

without allowance for such items as special salaries to

offiters (Philadelphia Rubber Works vo US. Rubber

Rechamation, Works, 276 Fed. 600° (1D ©) NY.

1920)); Overhead ( Winehester Repeating Arius Co,

OY. binerican Buckle & Cartridge Co., 62 Fed. 278,

Hiss Manufacturtug Company \V. Lik Belt Co, 6

Bed. (2nd) 479°C. CL AL 8 Wrentle r- Arnold Minge

Lust Company Vv. Leman, 24 Fed. (2nd) 423, Levin

Brothers ¥. Davis Manufacturing Company, 72 Fed:

(2nd) 163): Taxes and Insurance Paid (Melallic

Rubber Tire Company v. Hartford Rubber Works.

Co, 245 Fed. 860. Christensen -v. Nation! B od& BE -

Company, 1 Fed. (2b) ob, National Folding Bow

Paper Company V. Dayton Novelty Company, 9

Fed, 991); Repairs, Building, Machine and Plant

Depreciation (Metallic Rubber Tire Co. ve Martford

Rubber Works Company, 245 Fed. 860) 5, Dnterest on

livested Capital. (Rath v. Stoarns- Rogers Manufac-

luiing Company, VS Fed. Supp. 697); Expenses of

Experimental Work. (Cyfficld Motor Washer Co. Vv.

Wayne Mfg. Co., 255 Fed. 598); Mxpenses of Litiga-

tion and of Patents (Com pating Seale yo Toledo, 279

Ped. G48); Cost of advertising “not, actually ‘idein-

ified with infringing article (Ce ffiele Motor Washer

ie a

Company NV. ow ayne Mfy. (o., 2S Bed. 558), and

other ‘iain items, while in the case at Bar, beeause

defendants are: clever enough to make large | “profits,

the ‘Voare allowed to ‘Keep 80%, thereof?

Does irotesque injustices depend pon the. sue-

eess made by delibrrate plagiarists ? . Does it become :

mere grotesque as profits iPerease ? 3 |

Reeprene nts in their brief. page 6, under, the head-

big of “The Question Presented (a), urge that the

factors Whieh they contributed were o separate anid

apart” from the copyrighted property. Did anyone

ever see or hear of a play being prodtced without a.

producer, actors and a director? Are these factors

“separate and apart’ from “the copyrighted proep-

erty? Plays are net written to be read but) te he

enacted. How else eda play be infringed unless: it

he produced, enacted and directed? The. prodteer,

actors and ditrectar are nothing but) ‘haber and

material’. fer whieh credit. iste be- taken before

arriving at a Heure of profit.

Again on page 6 of the Teaponde Nts" brief, Hiwler

the heading. The Question Presented Ch)". the re

spondents speak of an award of profits as being a

Sremedy “whieh equity itself devised and controls’

That is only a haif truth in this instanee. Equity diel

not devisé nor does it control Section 2@ of thie Cops

right Statute. ‘Congress devised Séetion 25, - Equity

administers it but that administration must be in ae

cordanee with and not coutra to the plain mianedat:

of (Congress, ' ;

Historically? in the absenee of al statute, equits

might have devised and controlled an award of protit-

cen plain common law, equifable principles. — Her

equity. is confronted with a statute. The 1909 Ae

provides ino plain terms that an infringer’ shall

liable forall profits made by him out of the infringe-

ment, and, Congress niust. have intended that a suit:

in equity, in preference to an action at Jaw, might

he maintained for an, accounting of profits.

Under the act now in force the remedy of aceeunt-

ing for profits is not ate nF -the remedy of in--

junetion. The prior copyright — had made no.

mention of an infringer’s : liability Aor profits made —

by him. They provided ‘only’ for -damages ‘and, for

Injunction. Relief by way of an accounting’ for

profits had heen added. by the courts but. only as an.

incident to the issuanic e of an injunction.

ooNfarens V. Gladding, 17 How. 447.

In the 1909° Aet liability for: profits was made one

ofthe consequences of infringement by express pro-

vision and there is nothing in the text-to“indicate that

the copyright proprietor shold recover profits -of.

an infringement only in cases where he might win an

injunction. On the contrary, the present act makes it.

clear that the remedy of injunction and thie remedy

oof accounting for: profits are indepe ‘ndent of one an-

othe 7. : \

;

Page & Conipany v. For Film Corp. 83 Fed.

(2d), 196, 200, GAL.

The ¢operight statute is unlike \the patent “statute

ini this respect. Under the eerie statute a naked -

‘hill for accounting of profits will not lie, since such

ah accounting is purely incidental bo the. injunetion

provided for in the patent act. Under the present:

patent act the courts 7 /

“shall-have power to grant injunctions decording

to the course and principles of courts /of equity,

to prevent. the violation of any rights secured.

by the patent, on such terms was the -eourt may

deem reasonable ¢ and iron a deeree being ren-

>. deredsin any such case for an infringement. the.

complainant shall be entitled to recover in addi-

lion to the pretits to be accounted for by the

- defendant, the peachy pi — as’ SUS-

tained thereby." 35 Clos. CG. AL See. 70.

The recovery of profits in a suit in equity fox pat-

eut infringement is thus made to depend on the plain-

tiff’s right | to an injunction; Root ve Railway, 105

LS. 189" The same is true of trademark mnt rite.

went under the trade inark statutes.) 15 U. S.€ oe. ¥

See, 99. But the present: copyright: act snide he

such qualifieation on the right to hold° an infkinger

of copyright” for profits made,

Itomay be said, therefore, that under the present

act a court of equity while it administers: the act, id

not devise hor does it control it.

The respondents on page 8 of their brief. spe ak wf

the motion picture as ‘ta distinetly new, artistic ere:

ation’. While that question may be a mooted. one.

nevertheless if true, it would seem to eall-for a special

aet oof Congress aif the motion - picture: is such a

“alistinetl® new artistic creation’ that it-cam not he

comprehended , along with all: the other works of :

Which the present copyright statute is 5 rahin ta

votect, @ 42d : ‘ : : is

Qiu page S,- emphasis is placed” on ‘the: drawing

. power of the stars wha appeared in the picture. |

o may be asked if the public would: have attended tie:

theatre merely to see. these stars functioning. Without

a play as a background against which their thespian’,

talents-might have been thrown?

On page 9, “emphasis is. place ‘ed on the purchase

price of 30,000 bia ‘ed upon wre motion pic ture rights

of petitioners” plays, All this: is “post hoe.

— Any wrongdoer! a) gladly pay the price of the —

article which he has appropriated in order to escape

‘the mandate of the law on, his apprehe usion. [It is all,

quite. immaterial. \

“The ‘value: which the’ “plaintiff put upon its.

rights in incompleted negotiations with the le- X

fendants will be wholly immaterial.”

LOC. Page & Co. Ine. \ ‘ 7 oO File Gorp, *

83 Fed. (2d) 196, 200, %. | es |

“Likewise, “Ht is net a case of an’ established li-

-eense fee or reyalty™ ; |

L; > Page é: Co. luce ve For Filin Corp.,

supra.

On pages 10 and 11 of responde ints’ Drief they. men-

tion “ta comparison made of the play and the ~pie-

‘ture’ as being a suitable basis for apportionment.

This argunent overlooks the fact that their infring-

ing pieture is an integral, literary, dramatic unit. any

portion-of which is incapable of separation from the

wholé and it therefore falls within the rule of Cdi-

Jaghan v. Myers, 128 U. S. 617, and Belford v. Serib-

ver, 144 U.S. 488, wherein this court refuséd. to at-

tempt any sinestinnninik’ where the matter was in-

extricably blended,

‘Further than that the court below did not attempt

iuy apportionment on this suggested basis, but rather

proceeded on the erroneous basis of apportioning on

the “Jabor and materials’? furnished ly. the respond-

vuts in making the péeture, all ef which is fully dis-

elissed-in the brief submitted with our, petition under |

Moint TUT,

On page 12 of respondents” hriet it is said that,

Judge MeCormick in igre —~— Corporation \.

~ Witwer, 6) Fed. (2d) 1 (C. ©. AL 9), *tdee lared that

of actual damages and profits,”

the profits might be and pe : apgprtioned”. ~The

opinion of Judge MeCormick is pure dicta* since the

majority court found there was no infringement cand

anvway he made uo such rages He erronegusly

(we think) concluded that Section 25 ef the Copyright

Net gave the court, power to award damages ‘in dien

‘contrary to the rule as:

later announced? in Davilla vy. Brunswick, 94 Fed.

2d) 967° (C. ©. A. 2), cert. denied 304 U.S. 572.

wherein it was held that when actual profits are

ascertainable the plaintiff mast take them and canuet

eleet to take the statutory awards mentioned in Neet.

2”. ° aia

It ix also coimter to the rule of this Court an-—

nouneed in Douglas Vv. Cunningham, 29£ UL 8. 207

(1935), where’ the statutory: damages were confined

to cases “where thettles of law render diffientt -or

impossible proof of damages or discovery of profits”.

MN ix said oft page 13. of respondents’ brief that

“the likely explanation of the dearth of English

authority on the subject is that in England: the cops-

right. proprietor must eleee between damages -atid

profits: . He cannot sue for both” |

We understand it to be the law of this country that

a plaintiff cannot Wave both damages and profits if

the profits exceed the damage.’ The greater of course

Seludes the lesser, :

~ te ;

~ Ender Point il. page 14, of respondents’ brief thes

Attempt to distinguish the Callaghan and: Belford

* Jude McCormick's opinion was a. dissenting one.

a . @ °

cases. The. effort leaves considerable: ran be desired.

It) is said on page 14, a8

in both cases there were factual findings that -

the ‘infringers’ work. was as an entirety an in.

. fringement of the copyrighted work”

No reference is made to support that statement,

At-any rate, if that statement, is true, it is diffie ult,

to explain’ why the court in both the Callaghan and

Belford cases undertook to discuss the possibilities

of an apportionment. If the infringement was ‘an

entire infringement, aby iously it was futile to diseiss ”

any apportionment,

In diseussing the Callaghan ease, respondents say

(Pp. 15), “the opinions were lifted bodily’, and thiit

“there was no basis for apportionment solely “Because

of the inclusion of the opinions’. The opinions of

the court. were common or epublic property. They

Were not susceptible of copyright, and even though

the defendant in the’ Callaghan case had ‘lifted them

bodily’ he was not liable since the plaintiff had ne

proprietory interest in. them. They awere ‘publici

Juris, ; ' we. . me

— On page 17 of respondents’ brief, in dise USSINE the

Belford case, respondents savy :

“Naturally -the Supreme Court made no ref-

— erence. to any claim ef: apportionme nt in the face

fa finding that the defendant’ s work in ‘matter

and language’ “was substantially the s same as the’:

plaintiff's. i ee

But the epee Court did ake ‘reference to.

claim of apportionment” in the Belford case and dis-

esses it fully at page 508.

It is diffic ult to understand the fortgoiig statement

_found in the respondents’ brief.

10 .

4 * ° \ -

Respondents atte Inpt to distinguish, on page 18, the

casesof Hawillon- Brow N Shoe Co. V. Wolf Bros. At

Co, 240 UL S. PAA, the tra: demark case: in which the:

~ court held ancapportionment was. ‘inherently impos-

sible. Phe. distinetion respondents miurke is that it

Wis only ‘inberently. impossible’? for ‘the plaintiff.”

every much difference who’ attempted to overcome “the

the ‘ent impossibility,

On page D5 the’ ‘vesponle nts refer toa stajeme nt wt

ies court. he low, as Follows :

‘

Noboily can say how far tliis basic plot is to

he credited with whatever the play contributed

toe the drawing powel ry of. the picture. That con-

sideration must therefare: count toward reducing

the percentage of profits reeeived GR. 1264).7°

The court below did not Iuake any apportionment

con the basis of that statement, ‘but if it had,-it is'sth-

Initted that itgwas jar comptete error, ar

A copyright, unlike a patent, does net need to be

new and original, The‘only. originality required of a

story, plot or subject inatter may be ancient and equ

qnon-but the author is, nevertheless, entitled to copy:

right. 7 be

ln Kmerson Vv. Davics*® & Fed. Gas. 615 and 620.

*Jndge Story said:

“Tteis a great mistake to suppose, becatise all -

of the materials of a work or some parts ‘of 1.

ylan or arrangements and modes of illustration.

may be found separately, or in a different form.

. Approved ‘by Lord Atkinson in Macmillan ¥. Cooper \VW92

10 TA R86. a :

es . , +.

‘

$ ‘ ; , :

e ° 6. . . e

: . , - uF

cee: in

or in a different arrangement, in other distinet.

works, that. therefore. if the plan or arrangement

or combination of these materials in other wor 2

ix new, or for the first time made, the author

compiler or framer of. if (call Him what: ae

please ) ‘Is not entitled toa copyright. The reverse

is the’ truth ia law, and, as | think, in connyon ) y

SeLISe also. iad 5 we fags ; ie (/

— Therespondents ave not charged with or convicted — . \

of having copied the trial of Madeleine Smith, They ioe

liad a perfect right-to do that and to dramatize it if;

they wished. "They have heen, charged with: and con-

virted of, copying our dramatization of the trial of

Madeleine Smith, which isa clear violation of peti-

tioners’ right under Section 6 of the Aet, which

paee ifically gives protection to 7 +

“abridgements, ad: iptatiois, ann age me Mts, dra--

watizations, translations or other versions . of

works in the public domain’ ae

What the trialbof Madeleine Smith may or may ‘not

have contained is irrelevant. hat was “edpied wis :

petitioners’ dramatization of ‘it. - :

Petitioners in writing their pres did not need to

turn to Madeleine Smith for inspiration. History at

any stage would have furnixhed the’ same material, as

\ Paina ye the headlines of most any netropolitan

‘daily. ‘The skeleton (it is said) was already in the ,

public demesne’? (CR. 1264 )—as what is not—hefore

Madeleine Smith was ever born, and will probably a,

continue to remain so till+te ‘end of time, ee

If the defendants’ Yreasoning is right, and if Polti*

ix also right that there are but: thirty-six: possible

‘ The Thirty “SIX Dramatic Sit tat ionses by ean Polti pub-

=e by Writers Digest 1931; James Knapp Reeve 1921; The

ney C ‘ommpany 1916, 1917. . ;

dramatic sitnations, an authot's protection would. is

indeed seant were he to undertake to dramatize veal

othe life of Tinceoln or Napoleon, me |

“Surely. if the court below is correct in its state:

ent that “tthat “consideration should: have courte:

toward redimwing the percentage ef profits recover

cable’ then the ease of Callaghan Vv. Myers where win

‘tenths of the Volumes, of the copyrighted work wis

in the public domain Cin the fermur of the couris’

OP EEELOMS ) Is Olle of “ forhiori, As We knew the coy!

in the Callaghan ease awarded afl profits to the Copy:

right owner pnd ‘that eousideration’’ did mot count s+

toward reducing the percentage of profits recoverable. |

Oi pages 25 and 26 of respondents” brief respond

eHis attempt te distinguish the decision of this Cerin

itt Drarplate Corporation ¥. Tripli role, 298 VOSS. AS:

ejted and quoted fromoincour brief, page 24. Tile

attempt leaves considerable to be desired. Respond

ents say ‘the only allowance that respondents. regen e

Statement would be equally applicable to the dufringe

ith the Diplate CaS, whe “Wiaibs ~nerely cOmne vi

the plaintiff's patent inte a sneeessful inetbianies!

produet, , |

The responderits are at patins to eseape the stays

of deliberate plagiamsin and they say. page 20:

There has never. been anv suggestion bye thi

Master or by either of the ourts. below that tls

defendants have ‘heen guilty. of grass wrong.”

lf a deliberate plagiarism is net a gross wrens

/would be diffienlt to coneeive: what antght be or

‘sy yy i ee , a Pe ’

Plagiatisin is the most subtle and despreable form!

yan

wrong. | One may have ae healthy respect for the

courage of a brigand by whieh he carries cout. his

erude“o poration, but a plagiarist can ondy be viewed

with coutempt, ;

— On pages 3O-and 31 respondents complain of the :

finding of the eourt below that there was a deliberate

plagiarism and of the court's comment that “ne new

light has come’. They say. ‘where was this new

light to come from * * * cand even if such additional.

evidence had been offered before him (the Master),

weiure confident it would wot have been reecived

The sete of respohdents: vontidence inthis re>

spect is tliffieult to fathom, sinee. there was directly:

invelved before the Master the good faith of the

responde hts on the qiestion of allowatee or disallow:

hee of ineome taxes opaid, a deduetion jgaiist

profits. The ineome i cain Was expressly dis-

allowed by the Cireuit, Court upon its finding the

defendants guilty CRS 1271). The respondents were

ait all tinnies familiar with the rule of Larson vw

Wrigh yo 277 US. O97, aid. similar cases wherein an

allowance of ineome tax as a deduction is expressly

thencdid thev net produce their witnesses before the

Master te sdiow this. good faith ? |

_ It is respectfully submitted that the petition: tor a

writ of certiorari should be granted.

Dated. November 16. 1939.

Arrave bo Driscour

Couusel for Petitioners.

rn tos

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