4 Week 4: Mechanics of Copyright 4 Week 4: Mechanics of Copyright
4.1 Video lectures 4.1 Video lectures
4.2 US Readings 4.2 US Readings
4.2.1 Stewart v. Abend 4.2.1 Stewart v. Abend
James STEWART, et al., Petitioners
v.
Sheldon ABEND, DBA Authors Research Company.
Syllabus
In 1945, author Cornell Woolrich agreed to assign the motion picture rights to several of his stories, including the one at issue, to petitioners' predecessor in interest. He also agreed to renew the copyrights in the stories at the appropriate time and to assign the same motion picture rights to the predecessor in interest for the 28-year renewal term provided by the Copyright Act of 1909. The film version of the story in question was produced and distributed in 1954. Woolrich died in 1968 without a surviving spouse or child and before he could obtain the rights in the renewal term for petitioners as promised. In 1969, his executor renewed the copyright in the story and assigned the renewal rights to respondent Abend. Apparently in reliance on Rohauer v. Killiam Shows, Inc., 551 F.2d 484 (CA2)—which held that the owner of the copyright in a derivative work may continue to use the existing derivative work according to the original grant from the author of the pre-existing work even if the grant of rights in the pre-existing work lapsed—petitioners subsequently re-released and publicly exhibited the film. Abend filed suit, alleging, among other things, that the re-release infringed his copyright in the story because petitioners' right to use the story during the renewal term lapsed when Woolrich died. The District Court granted petitioners' motions for summary judgment based on Rohauer and the "fair use" defense. The Court of Appeals reversed, rejecting the reasoning of Rohauer. Relying on Miller Music Corp. v. Charles N. Daniels, Inc., 362 U.S. 373, 80 S.Ct. 792, 4 L.Ed.2d 804—which held that assignment of renewal rights by an author before the time for renewal arrives cannot defeat the right of the author's statutory successor to the renewal rights if the author dies before the right to renewal accrues—the court concluded that petitioners received from Woolrich only an expectancy in the renewal rights that never matured, and that his executor, as his statutory successor, was entitled to renew the copyright and to assign it to Abend. The court also determined that petitioners' use of Woolrich's story in their film was not fair use.
Held:
1. The distribution and publication of a derivative work during the copyright renewal term of a pre-existing work incorporated into the-[208] derivative work infringes the rights of the owner of the pre-existing work where the author of that work agreed to assign the rights in the renewal term to the derivative work's owner but died before the commencement of the renewal period and the statutory successor does not assign the right to use the pre-existing work to the owner of the derivative work. Pp. 216-236.
(a) The renewal provisions of the 1909 and 1976 Copyright Acts, their legislative history, and the case law interpreting them establish that they were intended both to give the author a second chance to obtain fair remuneration for his creative efforts and to provide his family, or his executors absent surviving family, with a "new estate" if he died before the renewal period arrived. Under Miller Music, although the author may assign all of his exclusive rights in the copyrighted work by assigning the renewal copyright without limitation, the assignee holds nothing if the author dies before commencement of the renewal period. This being the rule with respect to all of the renewal rights, it follows, a fortiori, that assignees such as petitioners of the right to produce a derivative work or some other portion of the renewal rights also hold nothing but an unfulfilled and unenforceable expectancy if the author dies before the renewal period, unless the assignees secure a transfer of the renewal rights from the author's statutory successor. Pp. 216-221.
(b) Petitioners' contention that any right the owner of rights in the pre-existing work might have had to sue for infringement that occurs during the renewal term is extinguished by creation of the new work is not supported by any express provision of the Act nor by the rationale as to the scope of protection achieved in a derivative work, and is contrary to the axiomatic principle that a person may exploit only such copyrighted literary material as he either owns or is licensed to use. Section 7 of the 1909 Act and § 103(b) of the 1976 Act made explicit the well-settled rule that the owner of a derivative work receives copyright protection only for the material contributed by him and to the extent he has obtained a grant of rights in the pre-existing work. Pp. 221-224.
(c) Nor is petitioners' position supported by the termination provisions of the 1976 Act, which, for works existing in their original or renewal terms as of January 1, 1978, empowered the author to gain an additional 19 years' copyright protection by terminating any grant of rights at the end of the renewal term, except, under 17 U.S.C. § 304(c)(6)(A) (1988 ed.), the right to use a derivative work for which the owner of the derivative work has held valid rights in the original and renewal terms. No overarching policy preventing authors of pre-existing works from blocking distribution of derivative works may be inferred from § 304(c)(6)(A), which was part of a compromise between competing special inter-[209] ests. In fact, the plain language of the section indicates that Congress assumed that the owner of the pre-existing work continued to possess the right to sue for infringement even after incorporation of that work into the derivative work, since, otherwise, Congress would not have explicitly withdrawn the right to terminate use rights in the limited circumstances contemplated by the section. Pp. 224-227.
(d) Thus, the Rohauer theory is supported by neither the 1909 nor the 1976 Act. Even if it were, however, the "rule" of that case would make little sense when applied across the derivative works spectrum. For example, although the contribution by the derivative author of a condensed book might be little as compared to that of the original author, publication of the book would not infringe the pre-existing work under the Rohauer "rule" even though the derivative author has no license or grant of rights in the pre-existing work. In fact, the Rohauer "rule" is considered to be an interest-balancing approach. Pp. 227-228.
(e) Petitioners' contention that the rule applied here will undermine the Copyright Act's policy of ensuring the dissemination of creative works is better addressed by Congress than the courts. In attempting to fulfill its constitutional mandate to "secur[e] for limited Times to Authors . . . the exclusive Right to their Respective Writings," Congress has created a balance between the artist's right to control the work during the term of the copyright protection and the public's need for access to creative works. Absent an explicit statement of congressional intent that the rights in the renewal term of an owner of a pre-existing work are extinguished when his work is incorporated into another work, it is not the role of this Court to alter the delicate balance Congress has labored to achieve. Pp. 228-230.
(f) Section 6 of the 1909 Act, 17 U.S.C. § 7 (1976 ed.)—which provides that derivate works when produced with the consent of the copyright proprietor of the pre-existing work "shall be regarded as new works subject to copyright . . .; but the publication of any such new works shall not affect the force or validity of any subsisting copyright upon the matter employed . . .," or be construed to affect the copyright status of the original work—does not, as the dissent contends, give the original author the power to sell the rights to make a derivative work that upon creation and copyright would be completely independent of the original work. This assertion is derived from three erroneous premises. First, since the plain meaning of the "force or validity" clause is that the copyright in the "matter employed"—i.e., the pre-existing work when it is incorporated into the derivative work is not abrogated by publication of the derivative work, the dissent misreads § 7 when it asserts that only the copyright in the "original work" survives the author's conveyance of derivative rights. Second, the substitution of "publication" for "copy right" [210] in the final version of the force or validity clause does not, as the dissent contends, establish that it was the publication of the derivative work, and not the copyright, that was not to "affect . . . any subsisting copyright." Since publication of a work without proper notice sent it into the public domain under the 1909 Act, the language change was necessary to ensure that the publication of a derivative work without proper notice, including smaller portions that had not been previously published and separately copyrighted, would not result in those sections moving into the public domain. Third, the dissent errs in interpreting § 3 of the 1909 Act—which provides that a copyright protects all copyrightable component parts of a work and "all matter therein in which copyright is already subsisting, but without extending the duration or scope of such copyright"—as indicating, when read with § 7, that the copyright on derivative work extends to both the new material and that "in which the copyright is already subsisting," such that the derivative work proprietor has the right to publish and distribute the entire work absent permission from the owner of the pre-existing work. When § 7 states that derivative works "shall be regarded as new works subject to copyright," it simply confirms that § 3's provision that one can obtain copyright in a work, parts of which were already copyrighted, extends to derivative works. More important, § 7's second clause merely clarifies what might have been otherwise unclear—that the § 3 principle of preservation of the duration or scope of the subsisting copyright applies to derivative works, and that neither the scope of the copyright in the matter employed nor the duration of the copyright in the derivative work is undermined by publication of the derivative work. Pp. 230-236.
2. Petitioners' unauthorized use of Woolrich's story in their film does not constitute a noninfringing "fair use." The film does not fall into any of the categories of fair use enumerated in 17 U.S.C. § 107 (1988 ed.); e.g., criticism, comment, news reporting, teaching, scholarship, or research. Nor does it meet any of the nonexclusive criteria that § 107 requires a court to consider. First, since petitioners received $12 million from the film's re-release during the renewal term, their use was commercial rather than educational. Second, the nature of the copyrighted work is fictional and creative rather than factual. Third, the story was a substantial portion of the film, which expressly used its unique setting, characters, plot, and sequence of events. Fourth, and most important, the record supports the conclusion that re-release of the film impinged on Abend's ability to market new versions of the story. Pp. 236-238.
863 F.2d 1465 (CA9 1988), affirmed and remanded.
[211] O'CONNOR, J., delivered the opinion of the Court, in which BRENNAN, MARSHALL, BLACKMUN, and KENNEDY, JJ., joined. WHITE, J., filed an opinion concurring in the judgment, post, p. 238. STEVENS, J., filed a dissenting opinion, in which REHNQUIST, C.J., and SCALIA, J., joined, post, p. 239.
Louis P. Petrich, Los Angeles, Cal., for petitioners.
Peter J. Anderson for respondent.
Justice O'CONNOR delivered the opinion of the Court.
The author of a pre-existing work may assign to another the right to use it in a derivative work. In this case the author of a pre-existing work agreed to assign the rights in his renewal copyright term to the owner of a derivative work, but died before the commencement of the renewal period. The question presented is whether the owner of the derivative work infringed the rights of the successor owner of the pre-existing work by continued distribution and publication of the derivative work during the renewal term of the pre-existing work.
I
Cornell Woolrich authored the story "It Had to Be Murder," which was first published in February 1942 in Dime Detective Magazine. The magazine's publisher, Popular Publications, Inc., obtained the rights to magazine publication of the story and Woolrich retained all other rights. Popular Publications obtained a blanket copyright for the issue of Dime Detective Magazine in which "It Had to Be Murder" was published.
[212] The Copyright Act of 1909, 35 Stat. 1075, 17 U.S.C. § 1 et seq. (1976 ed.) (1909 Act), provided authors a 28-year initial term of copyright protection plus a 28-year renewal term. See 17 U.S.C. § 24 (1976 ed.). In 1945, Woolrich agreed to assign the rights to make motion picture versions of six of his stories, including "It Had to Be Murder," to B.G. De Sylva Productions for $9,250. He also agreed to renew the copyrights in the stories at the appropriate time and to assign the same motion picture rights to De Sylva Productions for the 28-year renewal term. In 1953, actor Jimmy Stewart and director Alfred Hitchcock formed a production company, Patron, Inc., which obtained the motion picture rights in "It Had to Be Murder" from De Sylva's successors in interest for $10,000.
In 1954, Patron, Inc., along with Paramount Pictures, produced and distributed "Rear Window," the motion picture version of Woolrich's story "It Had to Be Murder." Woolrich died in 1968 before he could obtain the rights in the renewal term for petitioners as promised and without a surviving spouse or child. He left his property to a trust administered by his executor, Chase Manhattan Bank, for the benefit of Columbia University. On December 29, 1969, Chase Manhattan Bank renewed the copyright in the "It Had to Be Murder" story pursuant to 17 U.S.C. § 24 (1976 ed.). Chase Manhattan assigned the renewal rights to respondent Abend for $650 plus 10% of all proceeds from exploitation of the story.
"Rear Window" was broadcast on the ABC television network in 1971. Respondent then notified petitioners Hitchcock (now represented by cotrustees of his will), Stewart, and MCA Inc., the owners of the "Rear Window" motion picture and renewal rights in the motion picture, that he owned the renewal rights in the copyright and that their distribution of the motion picture without his permission infringed his copyright in the story. Hitchcock, Stewart, and MCA nonetheless entered into a second license with ABC to [213] rebroadcast the motion picture. In 1974, respondent filed suit against these same petitioners, and others, in the United States District Court for the Southern District of New York, alleging copyright infringement. Respondent dismissed his complaint in return for $25,000.
Three years later, the United States Court of Appeals for the Second Circuit decided Rohauer v. Killiam Shows, Inc., 551 F.2d 484, cert. denied, 431 U.S. 949, 97 S.Ct. 2666, 53 L.Ed.2d 266 (1977), in which it held that the owner of the copyright in a derivative work[1] may continue to use the existing derivative work according to the original grant from the author of the pre-existing work even if the grant of rights in the pre-existing work lapsed. 551 F.2d, at 494. Several years later, apparently in reliance on Rohauer, petitioners re-released the motion picture in a variety of media, including new 35 and 16 millimeter prints for theatrical exhibition in the United States, videocassettes, and videodiscs. They also publicly exhibited the motion picture in theaters, over cable television, and through videodisc and videocassette rentals and sales.
Respondent then brought the instant suit in the United States District Court for the Central District of California against Hitchcock, Stewart, MCA, and Universal Film Exchanges, a subsidiary of MCA and the distributor of the motion picture. Respondent's complaint alleges that the re-release of the motion picture infringes his copyright in the story because petitioners' right to use the story during the renewal term lapsed when Woolrich died before he could register for the renewal term and transfer his renewal rights to them. Respondent also contends that petitioners have interfered with his rights in the renewal term of the story in other ways. He alleges that he sought to contract with Home Box [214] Office (HBO) to produce a play and television version of the story, but that petitioners wrote to him and HBO stating that neither he nor HBO could use either the title, "Rear Window" or "It Had to Be Murder." Respondent also alleges that petitioners further interfered with the renewal copyright in the story by attempting to sell the right to make a television sequel and that the re-release of the original motion picture itself interfered with his ability to produce other derivative works.
Petitioners filed motions for summary judgment, one based on the decision in Rohauer, supra, and the other based on alleged defects in the story's copyright. Respondent moved for summary judgment on the ground that petitioners' use of the motion picture constituted copyright infringement. Petitioners responded with a third motion for summary judgment based on a "fair use" defense. The District Court granted petitioners' motions for summary judgment based on Rohauer and the fair use defense and denied respondent's motion for summary judgment, as well as petitioners' motion for summary judgment alleging defects in the story's copyright. Respondent appealed to the United States Court of Appeals for the Ninth Circuit and petitioners cross-appealed.
The Court of Appeals reversed, holding that respondent's copyright in the renewal term of the story was not defective, Abend v. MCA, Inc., 863 F.2d 1465, 1472 (1988). The issue before the court, therefore, was whether petitioners were entitled to distribute and exhibit the motion picture without respondent's permission despite respondent's valid copyright in the pre-existing story. Relying on the renewal provision of the 1909 Act, 17 U.S.C. § 24 (1976 ed.), respondent argued before the Court of Appeals that because he obtained from Chase Manhattan Bank, the statutory successor, the renewal right free and clear of any purported assignments of any interest in the renewal copyright, petitioners' distribution and publication of "Rear Window" without authorization infringed his renewal copyright. Petitioners responded that [215] they had the right to continue to exploit "Rear Window" during the 28-year renewal period because Woolrich had agreed to assign to petitioners' predecessor in interest the motion picture rights in the story for the renewal period.
Petitioners also relied, as did the District Court, on the decision in Rohauer v. Killiam Shows, Inc., supra. In Rohauer, the Court of Appeals for the Second Circuit held that statutory successors to the renewal copyright in a pre-existing work under § 24 could not "depriv[e] the proprietor of the derivative copyright of a right . . . to use so much of the underlying copyrighted work as already has been embodied in the copyrighted derivative work, as a matter of copyright law." Id., at 492. The Court of Appeals in the instant case rejected this reasoning, concluding that even if the pre-existing work had been incorporated into a derivative work, use of the pre-existing work was infringing unless the owner of the derivative work held a valid grant of rights in the renewal term.
The court relied on Miller Music Corp. v. Charles N. Daniels, Inc., 362 U.S. 373, 80 S.Ct. 792, 4 L.Ed.2d 804 (1960), in which we held that assignment of renewal rights by an author before the time for renewal arrives cannot defeat the right of the author's statutory successor to the renewal rights if the author dies before the right to renewal accrues. An assignee of the renewal rights takes only an expectancy: "Until [the time for registration of renewal rights] arrives, assignees of renewal rights take the risk that the rights acquired may never vest in their assignors. A purchaser of such an interest is deprived of nothing. Like all purchasers of contingent interests, he takes subject to the possibility that the contingency may not occur." Id., at 378, 80 S.Ct., at 796. The Court of Appeals reasoned that "[i]f Miller Music makes assignment of the full renewal rights in the underlying copyright unenforceable when the author dies before effecting renewal of the copyright, then, a fortiori, an assignment of part of the rights in the underlying work, the right to produce a movie version, must [216] also be unenforceable if the author dies before effecting renewal of the underlying copyright." 863 F.2d, at 1476. Finding further support in the legislative history of the 1909 Act and rejecting the Rohauer court's reliance on the equities and the termination provisions of the 1976 Act, 17 U.S.C. §§ 203(b)(1), 304(c)(6)(A) the Court of Appeals concluded that petitioners received from Woolrich only an expectancy in the renewal rights that never matured; upon Woolrich's death, Woolrich's statutory successor, Chase Manhattan Bank, became "entitled to a renewal and extension of the copyright," which Chase Manhattan secured "within one year prior to the expiration of the original term of copyright." 17 U.S.C. § 24 (1976 ed.). Chase Manhattan then assigned the existing rights in the copyright to respondent.
The Court of Appeals also addressed at length the proper remedy, an issue not relevant to the issue on which we granted certiorari. We granted certiorari to resolve the conflict between the decision in Rohauer, supra, and the decision below. 493 U.S. 807, 110 S.Ct. 47, 107 L.Ed.2d 16 (1989). Petitioners do not challenge the Court of Appeals' determination that respondent's copyright in the renewal term is valid, and we express no opinion regarding the Court of Appeals' decision on this point.
II
A.
Petitioners would have us read into the Copyright Act a limitation on the statutorily created rights of the owner of an underlying work. They argue in essence that the rights of the owner of the copyright in the derivative use of the pre-existing work are extinguished once it is incorporated into the derivative work, assuming the author of the pre-existing work has agreed to assign his renewal rights. Because we find no support for such a curtailment of rights in either the 1909 Act or the 1976 Act, or in the legislative history of either, we affirm the judgment of the Court of Appeals.
[217] Petitioners and amicus Register of Copyrights assert, as the Court of Appeals assumed, that § 23 of the 1909 Act, and the case law interpreting that provision, directly control the disposition of this case. Respondent counters that the provisions of the 1976 Act control, but that the 1976 Act reenacted § 24 in § 304 and, therefore, the language and judicial interpretation of § 24 are relevant to our consideration of this case. Under either theory, we must look to the language of and case law interpreting § 24.
The right of renewal found in § 24 provides authors a second opportunity to obtain remuneration for their works. Section 24 provides:
"[T]he author of [a copyrighted] work, if still living, or the widow, widower, or children of the author, if the author be not living, or if such author, widow, widower, or children be not living, then the author's executors, or in the absence of a will, his next of kin shall be entitled to a renewal and extension of the copyright in such work for a further term of twenty-eight years when application for such renewal and extension shall have been made to the copyright office and duly registered therein within one year prior to the expiration of the original term of copyright." 17 U.S.C. § 24 (1976 ed.)
Since the earliest copyright statute in this country, the copyright term of ownership has been split between an original term and a renewal term. Originally, the renewal was intended merely to serve as an extension of the original term; at the end of the original term, the renewal could be effected and claimed by the author, if living, or by the author's executors, administrators, or assigns. See Copyright Act of May 31, 1790, ch. XV, § 1, 1 Stat. 124. In 1831, Congress altered the provision so that the author could assign his contingent interest in the renewal term, but could not, through his assignment, divest the rights of his widow or children in the renewal term. See Copyright Act of February 3, 1831, ch. XVI, 4 Stat. 436; see also G. Curtis, Law of Copyright 235 [218] (1847). The 1831 renewal provisions created "an entirely new policy, completely dissevering the title, breaking up the continuance . . . and vesting an absolutely new title eo nomine in the persons designated." White-Smith Music Publishing Co. v. Goff, 187 F. 247, 250 (CA1 1911). In this way, Congress attempted to give the author a second chance to control and benefit from his work. Congress also intended to secure to the author's family the opportunity to exploit the work if the author died before he could register for the renewal term. See Bricker, Renewal and Extension of Copyright, 29 S.Cal.L.Rev. 23, 27 (1955) ("The renewal term of copyright is the law's second chance to the author and his family to profit from his mental labors"). "The evident purpose of [the renewal provision] is to provide for the family of the author after his death. Since the author cannot assign his family's renewal rights, [it] takes the form of a compulsory bequest of the copyright to the designated persons." De Sylva v. Ballentine, 351 U.S. 570, 582, 76 S.Ct. 974, 981, 100 L.Ed. 1415 (1956). See Fred Fisher Music Co. v. M. Witmark & Sons, 318 U.S. 643, 651, 63 S.Ct. 773, 776, 87 L.Ed. 1055 (1943) (if at the end of the original copyright period, the author is not living, "his family stand[s] in more need of the only means of subsistence ordinarily left to them" (citation omitted)).
In its debates leading up to the Copyright Act of 1909, Congress elaborated upon the policy underlying a system comprised of an original term and a completely separate renewal term. See G. Ricordi & Co. v. Paramount Pictures, Inc., 189 F.2d 469, 471 (CA2) (the renewal right "creates a new estate, and the . . . cases which have dealt with the subject assert that the new estate is clear of all rights, interests or licenses granted under the original copyright"), cert. denied, 342 U.S. 849, 72 S.Ct. 77, 96 L.Ed. 641 (1951). "It not infrequently happens that the author sells his copyright outright to a publisher for a comparatively small sum." H.R.Rep. No. 2222, 60th Cong., 2d Sess., 14 (1909). The renewal term permits the author, originally in a poor bargaining position, to renegoti [219] ate the terms of the grant once the value of the work has been tested. "[U]nlike real property and other forms of personal property, [a copyright] is by its very nature incapable of accurate monetary evaluation prior to its exploitation." 2 M. Nimmer & D. Nimmer, Nimmer on Copyright § 9.02, p. 9-23 (1989) (hereinafter Nimmer). "If the work proves to be a great success and lives beyond the term of twenty-eight years, . . . it should be the exclusive right of the author to take the renewal term, and the law should be framed . . . so that [the author] could not be deprived of that right." H.R.Rep. No. 2222, supra, at 14. With these purposes in mind, Congress enacted the renewal provision of the Copyright Act of 1909, 17 U.S.C. § 24 (1976 ed.). With respect to works in their original or renewal term as of January 1, 1978, Congress retained the two-term system of copyright protection in the 1976 Act. See 17 U.S.C. §§ 304(a) and (b) (1988 ed.) (incorporating language of 17 U.S.C. § 24 (1976 ed.)).
Applying these principles in Miller Music Corp. v. Charles N. Daniels, Inc., 362 U.S. 373, 80 S.Ct. 792, 4 L.Ed.2d 804 (1960), this Court held that when an author dies before the renewal period arrives, his executor is entitled to the renewal rights, even though the author previously assigned his renewal rights to another party. "An assignment by an author of his renewal rights made before the original copyright expires is valid against the world, if the author is alive at the commencement of the renewal period. [Fred] Fisher Co. v. [M.] Witmark & Sons, 318 U.S. 643 [63 S.Ct. 773], so holds." Id., 362 U.S., at 375, 80 S.Ct., at 794. If the author dies before that time, the "next of kin obtain the renewal copyright free of any claim founded upon an assignment made by the author in his lifetime. These results follow not because the author's assignment is invalid but because he had only an expectancy to assign; and his death, prior to the renewal period, terminates his interest in the renewal which by § 24 vests in the named classes." Ibid. The legislative history of the 1909 Act echoes this view: "The right of renewal is contingent. It does not vest until the end [of the original term].
[220] If [the author] is alive at the time of renewal, then the original contract may pass it, but his widow or children or other persons entitled would not be bound by that contract." 5 Legislative History of the 1909 Copyright Act, Part K, p. 77 (E. Brylawski & A. Goldman eds. 1976) (statement of Mr. Hale).[2] Thus, the renewal provisions were intended to give the author a second chance to obtain fair remuneration for his creative efforts and to provide the author's family a "new estate" if the author died before the renewal period arrived.
An author holds a bundle of exclusive rights in the copyrighted work, among them the right to copy and the right to incorporate the work into derivative works.[3] By assigning the renewal copyright in the work without limitation, as in Miller Music, the author assigns all of these rights. After Miller Music, if the author dies before the commencement of the renewal period, the assignee holds nothing. If the assignee of all of the renewal rights holds nothing upon the death of the assignor before arrival of the renewal period, [221] then, a fortiori, the assignee of a portion of the renewal rights, e.g., the right to produce a derivative work, must also hold nothing. See also Brief for Register of Copyrights as Amicus Curiae 22 ("[A]ny assignment of renewal rights made during the original term is void if the author dies before the renewal period"). Therefore, if the author dies before the renewal period, then the assignee may continue to use the original work only if the author's successor transfers the renewal rights to the assignee. This is the rule adopted by the Court of Appeals below and advocated by the Register of Copyrights. See 863 F.2d, at 1478; Brief for Register of Copyrights as Amicus Curiae 22. Application of this rule to this case should end the inquiry. Woolrich died before the commencement of the renewal period in the story, and, therefore, petitioners hold only an unfulfilled expectancy. Petitioners have been "deprived of nothing. Like all purchasers of contingent interests, [they took] subject to the possibility that the contingency may not occur." Miller Music, supra, 362 U.S., at 378, 80 S.Ct., at 796.
B
The reason that our inquiry does not end here, and that we granted certiorari, is that the Court of Appeals for the Second Circuit reached a contrary result in Rohauer v. Killiam Shows, Inc., 551 F.2d 484 (1977). Petitioners' theory is drawn largely from Rohauer. The Court of Appeals in Rohauer attempted to craft a "proper reconciliation" between the owner of the pre-existing work, who held the right to the work pursuant to Miller Music, and the owner of the derivative work, who had a great deal to lose if the work could not be published or distributed. 551 F.2d, at 490. Addressing a case factually similar to this case, the court concluded that even if the death of the author caused the renewal rights in the pre-existing work to revert to the statutory successor, the owner of the derivative work could continue to exploit that work. The court reasoned that the 1976 Act and the relevant precedents did not preclude such a re [222] sult and that it was necessitated by a balancing of the equities:
"[T]he equities lie preponderantly in favor of the proprietor of the derivative copyright. In contrast to the situation where an assignee or licensee has done nothing more than print, publicize and distribute a copyrighted story or novel, a person who with the consent of the author has created an opera or a motion picture film will often have made contributions literary, musical and economic, as great as or greater than the original author. . . . [T]he purchaser of derivative rights has no truly effective way to protect himself against the eventuality of the author's death before the renewal period since there is no way of telling who will be the surviving widow, children or next of kin or the executor until that date arrives." Id., at 493.
The Court of Appeals for the Second Circuit thereby shifted the focus from the right to use the pre-existing work in a derivative work to a right inhering in the created derivative work itself. By rendering the renewal right to use the original work irrelevant, the court created an exception to our ruling in Miller Music and, as petitioners concede, created an "intrusion" on the statutorily created rights of the owner of the pre-existing work in the renewal term. Brief for Petitioners 33.
Though petitioners do not, indeed could not, argue that its language expressly supports the theory they draw from Rohauer, they implicitly rely on § 6 of the 1909 Act, 17 U.S.C. § 7 (1976 ed.), which states that "dramatizations . . . of copyrighted works when produced with the consent of the proprietor of the copyright in such works . . . shall be regarded as new works subject to copyright under the provisions of this title." Petitioners maintain that the creation of the "new," i.e., derivative, work extinguishes any right the owner of rights in the pre-existing work might have had to sue for infringement that occurs during the renewal term.
[223] We think, as stated in Nimmer, that "[t]his conclusion is neither warranted by any express provision of the Copyright Act, nor by the rationale as to the scope of protection achieved in a derivative work. It is moreover contrary to the axiomatic copyright principle that a person may exploit only such copyrighted literary material as he either owns or is licensed to use." 1 Nimmer § 3.07[A], pp. 3-23 to 3-24 (footnotes omitted). The aspects of a derivative work added by the derivative author are that author's property, but the element drawn from the pre-existing work remains on grant from the owner of the pre-existing work. See Russell v. Price, 612 F.2d 1123, 1128 (CA9 1979) (reaffirming "well-established doctrine that a derivative copyright protects only the new material contained in the derivative work, not the matter derived from the underlying work"), cert. denied, 446 U.S. 952, 100 S.Ct. 2919, 64 L.Ed.2d 809 (1980); see also Harper & Row, Publishers, Inc. v. Nation Enterprises, 471 U.S. 539, 547, 105 S.Ct. 2218, 2223, 85 L.Ed.2d 588 (1985) ("The copyright is limited to those aspects of the work termed 'expression'—that display the stamp of the author's originality"). So long as the pre-existing work remains out of the public domain, its use is infringing if one who employs the work does not have a valid license or assignment for use of the pre-existing work. Russell v. Price, supra, at 1128 ("[E]stablished doctrine prevents unauthorized copying or other infringing use of the underlying work or any part of that work contained in the derivative product so long as the underlying work itself remains copyrighted"). It is irrelevant whether the pre-existing work is inseparably intertwined with the derivative work. See Gilliam v. American Broadcasting Cos., 538 F.2d 14, 20 (CA2 1976) ("[C]opyright in the underlying script survives intact despite the incorporation of that work into a derivative work"). Indeed, the plain language of § 7 supports the view that the full force of the copyright in the pre-existing work is preserved despite incorporation into the derivative work. See 17 U.S.C. § 7 (1976 ed.) (publication of the derivative work "shall not affect the force or validity of [224] any subsisting copyright upon the matter employed"); see also 17 U.S.C. § 3 (1976 ed.) (copyright protection of a work extends to "all matter therein in which copyright is already subsisting, but without extending the duration or scope of such copyright"). This well-settled rule also was made explicit in the 1976 Act:
"The copyright in a compilation or derivative work extends only to the material contributed by the author of such work, as distinguished from the preexisting material employed in the work, and does not imply any exclusive right in the preexisting material. The copyright in such work is independent of, and does not affect or enlarge the scope, duration, ownership, or subsistence of, any copyright protection in the pre-existing material." 17 U.S.C. § 103(b).
See also B. Ringer, Renewal of Copyright (1960), reprinted as Copyright Law Revision Study No. 31, prepared for the Senate Committee on the Judiciary, 86th Cong., 2d. Sess., 169-170 (1961) ("[O]n the basis of judicial authority, legislative history, and the opinions of the commentators, . . . someone cannot avoid his obligations to the owner of a renewal copyright merely because he created and copyrighted a 'new version' under a license or assignment which terminated at the end of the first term") (footnotes omitted).
Properly conceding there is no explicit support for their theory in the 1909 Act, its legislative history, or the case law, petitioners contend, as did the court in Rohauer, that the termination provisions of the 1976 Act, while not controlling, support their theory of the case. For works existing in their original or renewal terms as of January 1, 1978, the 1976 Act added 19 years to the 1909 Act's provision of 28 years of initial copyright protection and 28 years of renewal protection. See 17 U.S.C. §§ 304(a) and (b). For those works, the author has the power to terminate the grant of rights at the end of the renewal term and, therefore, to gain the benefit of that additional 19 years of protection. See [225] § 304(c). In effect, the 1976 Act provides a third opportunity for the author to benefit from a work in its original or renewal term as of January 1, 1978. Congress, however, created one exception to the author's right to terminate: The author may not, at the end of the renewal term, terminate the right to use a derivative work for which the owner of the derivative work has held valid rights in the original and renewal terms. See § 304(c)(6)(A). The author, however, may terminate the right to create new derivative works. Ibid. For example, if petitioners held a valid copyright in the story throughout the original and renewal terms, and the renewal term in "Rear Window" were about to expire, petitioners could continue to distribute the motion picture even if respondent terminated the grant of rights, but could not create a new motion picture version of the story. Both the court in Rohauer and petitioners infer from this exception to the right to terminate an intent by Congress to prevent authors of pre-existing works from blocking distribution of derivative works. In other words, because Congress decided not to permit authors to exercise a third opportunity to benefit from a work incorporated into a derivative work, the Act expresses a general policy of undermining the author's second opportunity. We disagree.
The process of compromise between competing special interests leading to the enactment of the 1976 Act undermines any such attempt to draw an overarching policy out of § 304(c)(6)(A), which only prevents termination with respect to works in their original or renewal copyright terms as of January 1, 1978, and only at the end of the renewal period. See Ringer, First Thoughts on the Copyright Act of 1976, 13 Copyright 187, 188-189 (1977) (each provision of 1976 Act was drafted through series of compromises between interested parties). More specifically, § 304(c)
"was part of a compromise package involving the controversial and intertwined issues of initial ownership, duration of copyright, and reversion of rights. The Regis [226] ter, convinced that the opposition . . . would scuttle the proposed legislation, drafted a number of alternative proposals. . . .
"Finally, the Copyright Office succeeded in urging negotiations among representatives of authors, composers, book and music publishers, and motion picture studios that produced a compromise on the substance and language of several provisions.
. . . . .
"Because the controversy surrounding the provisions disappeared once the parties reached a compromise, however, Congress gave the provisions little or no detailed consideration. . . . Thus, there is no evidence whatsoever of what members of Congress believed the language to mean." Litman, Copyright, Compromise, and Legislative History, 72 Cornell L. Rev. 857, 865-868 (1987) (footnotes omitted).
In fact, if the 1976 Act's termination provisions provide any guidance at all in this case, they tilt against petitioners' theory. The plain language of the termination provision itself indicates that Congress assumed that the owner of the pre-existing work possessed the right to sue for infringement even after incorporation of the pre-existing work in the derivative work.
"A derivative work prepared under authority of the grant before its termination may continue to be utilized under the terms of the grant after its termination, but this privilege does not extend to the preparation after the termination of other derivative works based upon the copyrighted work covered by the terminated grant." § 304(c)(6)(A) (emphasis added).
Congress would not have stated explicitly in § 304(c)(6)(A) that, at the end of the renewal term, the owner of the rights in the pre-existing work may not terminate use rights in existing derivative works unless Congress had assumed that [227] the owner continued to hold the right to sue for infringement even after incorporation of the pre-existing work into the derivative work. Cf. Mills Music, Inc. v. Snyder, 469 U.S. 153, 164, 105 S.Ct. 638, 645, 83 L.Ed.2d 556 (1985) (§ 304(c)(6)(A) "carves out an exception from the reversion of rights that takes place when an author exercises his right to termination").
Accordingly, we conclude that neither the 1909 Act nor the 1976 Act provides support for the theory set forth in Rohauer. And even if the theory found some support in the statute or the legislative history, the approach set forth in Rohauer is problematic. Petitioners characterize the result in Rohauer as a bright-line "rule." The Court of Appeals in Rohauer, however, expressly implemented policy considerations as a means of reconciling what it viewed as the competing interests in that case. See 551 F.2d, at 493-494. While the result in Rohauer might make some sense in some contexts, it makes no sense in others. In the case of a condensed book, for example, the contribution by the derivative author may be little, while the contribution by the original author is great. Yet, under the Rohauer "rule," publication of the condensed book would not infringe the pre-existing work even though the derivative author has no license or valid grant of rights in the pre-existing work. See Brief for Committee for Literary Property Studies as Amicus Curiae 29-31; see also Brief for Songwriters Guild of America as Amicus Curiae 11-12 (policy reasons set forth in Rohauer make little sense when applied to musical compositions). Thus, even if the Rohauer "rule" made sense in terms of policy in that case, it makes little sense when it is applied across the derivative works spectrum. Indeed, in the view of the commentators, Rohauer did not announce a "rule," but rather an "interest-balancing approach." See Jaszi, When Works Collide: Derivative Motion Pictures, Underlying Rights, and the Public Interest, 28 UCLA L.Rev. 715, 758-761 (1981); Note, Derivative Copyright and the 1909 [228] Act—New Clarity or Confusion?, 44 Brooklyn L.Rev. 905, 926-927 (1978).
Finally, petitioners urge us to consider the policies underlying the Copyright Act. They argue that the rule announced by the Court of Appeals will undermine one of the policies of the Act—the dissemination of creative works—by leading to many fewer works reaching the public. Amicus Columbia Pictures asserts that "[s]ome owners of underlying work renewal copyrights may refuse to negotiate, preferring instead to retire their copyrighted works, and all derivative works based thereon, from public use. Others may make demands—like respondent's demand for 50% of petitioners' future gross proceeds in excess of advertising expenses . . . which are so exorbitant that a negotiated economic accommodation will be impossible." Brief for Columbia Pictures et al. as Amici Curiae 21. These arguments are better addressed by Congress than the courts.
In any event, the complaint that respondent's monetary request in this case is so high as to preclude agreement fails to acknowledge that an initially high asking price does not preclude bargaining. Presumably, respondent is asking for a share in the proceeds because he wants to profit from the distribution of the work, not because he seeks suppression of it.
Moreover, although dissemination of creative works is a goal of the Copyright Act, the Act creates a balance between the artist's right to control the work during the term of the copyright protection and the public's need for access to creative works. The copyright term is limited so that the public will not be permanently deprived of the fruits of an artist's labors. See Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417, 429, 104 S.Ct. 774, 782, 78 L.Ed.2d 574 (1984) (the limited monopoly conferred by the Copyright Act "is intended to motivate creative activity of authors and inventors by the provision of a special reward, and to allow the public access to the products of their genius after the limited period of exclusive control has expired"). But nothing in the copyright statutes would [229] prevent an author from hoarding all of his works during the term of the copyright. In fact, this Court has held that a copyright owner has the capacity arbitrarily to refuse to license one who seeks to exploit the work. See Fox Film Corp. v. Doyal, 286 U.S. 123, 127, 52 S.Ct. 546, 547, 76 L.Ed. 1010 (1932).
The limited monopoly granted to the artist is intended to provide the necessary bargaining capital to garner a fair price for the value of the works passing into public use. See Harper & Row, Publishers, Inc. v. Nation Enterprises, 471 U.S., at 546, 105 S.Ct., at 2223 ("The rights conferred by copyright are designed to assure contributors to the store of knowledge a fair return for their labors"); Register of Copyrights, Copyright Law Revision, 87th Cong., 1st Sess., 6 (Comm.Print 1961) ("While some limitations and conditions on copyright are essential in the public interest, they should not be so burdensome and strict as to deprive authors of their just reward. . . . [T]heir rights should be broad enough to give them a fair share of the revenue to be derived from the market for their works"). When an author produces a work which later commands a higher price in the market than the original bargain provided, the copyright statute is designed to provide the author the power to negotiate for the realized value of the work. That is how the separate renewal term was intended to operate. See Ringer, Renewal of Copyright (1960), reprinted as Copyright Law Revision Study No. 31, prepared for the Senate Committee on the Judiciary, 86th Cong., 2d. Sess., 125 (1961) ("Congress wanted to give [the author] an opportunity to benefit from the success of his work and to renegotiate disadvantageous bargains . . . made at a time when the value of the work [wa]s unknown or conjectural and the author . . . necessarily in a poor bargaining position"). At heart, petitioners' true complaint is that they will have to pay more for the use of works they have employed in creating their own works. But such a result was contemplated by Congress and is consistent with the goals of the Copyright Act.
[230] With the Copyright Act of 1790, Congress provided an initial term of protection plus a renewal term that did not survive the author. In the Copyright Act of 1831, Congress devised a completely separate renewal term that survived the death of the author so as to create a "new estate" and to benefit the author's family, and, with the passage of the 1909 Act, his executors. See supra, at 217-219. The 1976 Copyright Act provides a single, fixed term, but provides an inalienable termination right. See 17 U.S.C. §§ 203, 302. This evolution of the duration of copyright protection tellingly illustrates the difficulties Congress faces in attempting to "secur[e] for limited Times to Authors . . . the exclusive Right to their respective Writings." U.S. Const., Art. I, § 8, cl. 8. Absent an explicit statement of congressional intent that the rights in the renewal term of an owner of a pre-existing work are extinguished upon incorporation of his work into another work, it is not our role to alter the delicate balance Congress has labored to achieve.
C
In a creative, though ultimately indefensible, exposition of the 1909 Act, the dissent attempts to breathe life into petitioners' suggestion that the derivative work is somehow independent of the pre-existing work. Although no Court of Appeals in the 81 years since enactment of the 1909 Act has held as much, and although the petitioners have not argued the point, the dissent contends that "§ 7 was intended to . . . give the original author the power to sell the right to make a derivative work that upon creation and copyright would be completely independent of the original work." Post, at 244; see also post, at 248. This assertion, far removed from the more modest holding of Rohauer, is derived from three erroneous premises.
First, we think the dissent misreads § 7, which provides:
"Compilations or abridgments, adaptations, arrangements, dramatizations, translations, or other versions of [231] works in the public domain or of copyrighted works when produced with the consent of the proprietor of the copyright in such works, or works republished with new matter, shall be regarded as new works subject to copyright under the provisions of this title; but the publication of any such new works shall not affect the force or validity of any subsisting copyright upon the matter employed or any part thereof, or be construed to imply an exclusive right to such use of the original works, or to secure or extend copyright in such original works." 17 U.S.C. § 7 (1976 ed.).
The provision consists of one sentence with two clauses divided by a semicolon. The first clause lists the types of works that may be derivative works, explains that one may incorporate either copyrighted or public domain works into a derivative work, and further explains that the derivative work itself is copyrightable. The clause also expressly limits incorporation of copyrighted works to instances where the owner of the pre-existing work "consents."
The second clause explains what publication of the new work does not portend: Publication of the derivative work does not "affect the force or validity of any subsisting copyright upon the matter employed " (emphasis added); publication of the derivative work does not mean that use of the original work in other works is precluded; and publication does not mean that a copyright in the original work shall be secured, e.g., if the work was in the public domain, or extended, as where the original work was copyrighted before the date that the derivative work is copyrighted. The plain meaning of the italicized sentence is that the copyright in the "matter employed"—the pre-existing work when it is incorporated into the derivative work—is not abrogated by publication of the new work. The succeeding phrases preserve the copyright status of the original work: Publication does not operate to prohibit other uses of the original work or to [232] "secure or extend copyright in such original works." Cf. post, at 249.
The dissent fails to heed § 7's preservation of copyright in both the "matter employed" and the "original work." Under its theory, only the latter is preserved. See post, at 253 ("author's right to sell his derivative rights is exercised when consent is conveyed and completed when the derivative work is copyrighted"); post, at 250 (underlying work "owner . . . retains full dominion and control over all other means of exploiting" underlying work). In light of § 7's explicit preservation of the "force and validity" of the copyright in the "matter employed," the dissent is clearly wrong when it asserts that § 7 was intended to create a work that is "completely independent" of the pre-existing work. Post, at 245. The dissent further errs when it unjustifiably presumes that § 7 "limit[s] the enforceability of the derivative copyright." Post, at 249.
According to the dissent, § 7 requires the derivative work author to obtain "consent of the proprietor of the copyright" in the pre-existing work, because "§ 7 . . . derogate[s] in some manner from the underlying author's copyright rights." Post, at 241. The more natural inference to be drawn from the requirement of consent is that Congress simply intended that a derivative work author may not employ a copyrighted work without the author's permission, although of course he can obtain copyright protection for his own original additions.
The text of § 7 reveals that it is not "surplusage." Post, at 244. It does not merely stand for the proposition that authors receive copyright protection for their original additions. It also limits the effect of the publication of the derivative work on the underlying work. See supra, at 231 and this page. Nowhere else in the Act does Congress address the treatment to be afforded derivative works. The principle that additions and improvements to existing works of art receive copyright protection was settled at the time the 1909 Act was enacted, a principle that Congress simply codified in § 7.
[233] Second, the dissent attempts to undercut the plain meaning of § 7 by looking to its legislative history and the substitution of the term "publication" for "copyright" in the force or validity clause. According to the dissent, that particular alteration in the proposed bill "made clear that it was the publication of the derivative work, not the copyright itself, that was not to 'affect the force or validity of any subsisting copyright.' " Post, at 249. Under the 1909 Act, it was necessary to publish the work with proper notice to obtain copyright. Publication of a work without proper notice automatically sent a work into the public domain. See generally 2 Nimmer § 7.02[C][1]; 17 U.S.C. § 10 (1976 ed.). The language change was suggested only to ensure that the publication of a "new compiled work" without proper notice, including smaller portions that had not been previously published and separately copyrighted, would not result in those sections moving into the public domain. See Note, 44 Brooklyn L.Rev., at 919-920. Had the bill retained the term "copyright," publication alone could have affected the force or validity of the copyright in the pre-existing work. Thus, far from telling us anything about the copyright in the derivative work, as the dissent apparently believes it does, the language change merely reflects the practical operation of the Act.
Third, we think the dissent errs in its reading of § 3. Section 3 provides:
"The copyright provided by this title shall protect all the copyrightable component parts of the work copyrighted, and all matter therein in which copyright is already subsisting, but without extending the duration or scope of such copyright." 17 U.S.C. § 3 (1976 ed.).
The dissent reasons that § 7, "read together with § 3, plainly indicates that the copyright on a derivative work extends to both the new material and that 'in which copyright is already subsisting.' The author or proprietor of the derivative work therefore has the statutory right to publish and distribute the entire work." Post, at 241. Section 3, however, [234] undermines, rather than supports, the dissent's ultimate conclusion that the derivative work is "completely independent" of the pre-existing work. Post, at 245. Section 3 makes three distinct points: (1) copyright protects the copyrightable parts of the work; (2) copyright extends to parts of the work in which copyright was already obtained, and (3) the duration or scope of the copyright already obtained will not be extended. Important for this case is that § 3 provides that one can obtain copyright in a work where parts of the work are already copyrighted. For example, one could obtain a copyright in an opera even though three of the songs to be used were already copyrighted. This, and only this, is what is meant in § 7 when it states that "[c]ompilations or abridgments, adaptations, arrangements, dramatizations, translations or other versions of works . . . or works republished with new matter shall be regarded as new works subject to copyright under the provisions of this title."
More important, however, is that under the express language of § 3, one obtains a copyright on the entire work, but the parts previously copyrighted get copyright protection only according to the "duration or scope" of the already existing copyright. Thus, if an author attempts to obtain copyright in a book derived from a short story, he can obtain copyright on the book for the full copyright term, but will receive protection of the story parts only for the duration and scope of the rights previously obtained. Correlatively, if an author attempts to copyright a novel, e.g., about Cinderella, and the story elements are already in the public domain, the author holds a copyright in the novel, but may receive protection only for his original additions to the Cinderella story. See McCaleb v. Fox Film Corp., 299 F. 48 (CA5 1924); American Code Co. v. Bensinger, 282 F. 829 (CA2 1922).
The plain language of the first clause of § 7 ensures that this scheme is carried out with respect to "[c]ompilations or abridgments, adaptations, arrangements, dramatizations, translations, or other versions of works in the public domain [235] or of copyrighted works . . . or works republished with new matter," i.e., derivative works. The second clause of § 7 clarifies what might have been otherwise unclear—that the principle in § 3 of preservation of the duration or scope of the subsisting copyright applies to derivative works, and that neither the scope of the copyright in the matter employed nor the duration of the copyright in the original work is undermined by publication of the derivative work. See Adventures in Good Eating v. Best Places to Eat, 131 F.2d 809, 813, n. 3 (CA7 1942); G. Ricordi & Co. v. Paramount Pictures, Inc., 189 F.2d 469 (CA2), cert. denied, 342 U.S. 849, 72 S.Ct. 77, 96 L.Ed. 641 (1951); Russell v. Price, 612 F.2d, at 1128; see also 1 Nimmer § 3.07.
If one reads the plain language of § 7 and § 3 together, one must conclude that they were enacted in no small part to ensure that the copyright in the pre-existing work would not be abrogated by the derivative work. Section 7 requires consent by the author of the pre-existing work before the derivative work may be produced, and both provisions explicitly require that the copyright in the "subsisting work" will not be abrogated by incorporation of the work into another work.
If the dissent's theory were correct, § 3 need only say that "copyright provided by this title shall protect all the copyrightable component parts of the work copyrighted, and all matter therein in which copyright is already subsisting." Instead, § 3 goes on to say that the latter coverage exists "without extending the duration or scope of such copyright." Clearly, the 1909 Act's plain language requires that the underlying work's copyright term exists independently of the derivative work's term, even when incorporated and even though the derivative work holder owns copyright in the whole "work." If the terms must exist separately, each copyright term must be examined for the validity and scope of its grant of rights.
In this case, the grant of rights in the pre-existing work lapsed and, therefore, the derivative work owners' rights to [236] use those portions of the pre-existing work incorporated into the derivative work expired. Thus, continued use would be infringing; whether the derivative work may continue to be published is a matter of remedy, an issue which is not before us. To say otherwise is to say that the derivative work nullifies the "force" of the copyright in the "matter employed." Whether or not we believe that this is good policy, this is the system Congress has provided, as evidenced by the language of the 1909 Act and the cases decided under the 1909 Act. Although the dissent's theory may have been a plausible option for a legislature to have chosen, Congress did not so provide.
III
Petitioners assert that even if their use of "It Had to Be Murder" is unauthorized, it is a fair use and, therefore, not infringing. At common law, "the property of the author . . . in his intellectual creation [was] absolute until he voluntarily part[ed] with the same." American Tobacco Co. v. Werckmeister, 207 U.S. 284, 299, 28 S.Ct. 72, 77, 52 L.Ed. 208 (1907). The fair use doctrine, which is incorporated into the 1976 Act, evolved in response to this absolute rule. See Harper & Row, 471 U.S., at 549-551, 105 S.Ct., at 2224-2226. The doctrine is an " 'equitable rule of reason,' " Sony Corp. of America v. Universal City Studios, Inc., 464 U.S., at 448, 104 S.Ct., at 792, which "permits courts to avoid rigid application of the copyright statute when, on occasion, it would stifle the very creativity which that law is designed to foster." Iowa State University Research Foundation, Inc. v. American Broadcasting Cos., 621 F.2d 57, 60 (CA2 1980). Petitioners contend that the fair use doctrine should be employed in this case to "avoid [a] rigid applicatio[n] of the Copyright Act." Brief for Petitioners 42.
In 17 U.S.C. § 107, Congress provided examples of fair use, e.g., copying "for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research," and listed four [237] nonexclusive factors that a court must consider in determining whether an unauthorized use is not infringing:
"(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;
"(2) the nature of the copyrighted work;
"(3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and
"(4) the effect of the use upon the potential market for or value of the copyrighted work."
The Court of Appeals determined that the use of Woolrich's story in petitioners' motion picture was not fair use. We agree. The motion picture neither falls into any of the categories enumerated in § 107 nor meets the four criteria set forth in § 107. "[E]very [unauthorized] commercial use of copyrighted material is presumptively an unfair exploitation of the monopoly privilege that belongs to the owner of the copyright." Sony Corp. of America v. Universal Studios, Inc., supra, 464 U.S., at 451, 104 S.Ct., at 793. Petitioners received $12 million from the re-release of the motion picture during the renewal term. 863 F.2d, at 1468. Petitioners asserted before the Court of Appeals that their use was educational rather than commercial. The Court of Appeals found nothing in the record to support this assertion, nor do we.
Applying the second factor, the Court of Appeals pointed out that "[a] use is less likely to be deemed fair when the copyrighted work is a creative product." 863 F.2d, at 1481 (citing Brewer v. Hustler Magazine, Inc., 749 F.2d 527, 529 (CA9 1984)). In general, fair use is more likely to be found in factual works than in fictional works. See 3 Nimmer § 13.05[A], pp. 13-77 to 13-78 ("[A]pplication of the fair use defense [is] greater . . . in the case of factual works than in the case of works of fiction or fantasy"); cf. Harper & Row, 471 U.S., at 563, 105 S.Ct., at 2232 ("The law generally recognizes a greater need to disseminate factual works than works of fiction or fan tasy").
[238] A motion picture based on a fictional short story obviously falls into the latter category.
Examining the third factor, the Court of Appeals determined that the story was a substantial portion of the motion picture. See 471 U.S., at 564-565, 105 S.Ct., at 2232-2233 (finding unfair use where quotation from book " 'took what was essentially the heart of the book' "). The motion picture expressly uses the story's unique setting, characters, plot, and sequence of events. Petitioners argue that the story constituted only 20% of the motion picture's story line, Brief for Petitioners 40, n. 69, but that does not mean that a substantial portion of the story was not used in the motion picture. "[A] taking may not be excused merely because it is insubstantial with respect to the infringing work." Harper & Row, supra, at 565, 105 S.Ct., at 2233.
The fourth factor is the "most important, and indeed, central fair use factor." 3 Nimmer § 13.05[A], p. 13-81. The record supports the Court of Appeals' conclusion that re-release of the film impinged on the ability to market new versions of the story. Common sense would yield the same conclusion. Thus, all four factors point to unfair use. "This case presents a classic example of an unfair use: a commercial use of a fictional story that adversely affects the story owner's adaptation rights." 863 F.2d, at 1482.
For the foregoing reasons, the judgment of the Court of Appeals is affirmed, and the case is remanded for further proceedings consistent with this opinion.
It is so ordered.
Justice WHITE, concurring in the judgment.
Although I am not convinced, as the Court seems to be, that the decision in Miller Music Corp. v. Charles N. Daniels, Inc., 362 U.S. 373, 80 S.Ct. 792, 4 L.Ed.2d 804 (1960), was required by the Copyright Act, neither am I convinced that it was an impermissible construction of the statute. And because Miller Music, in my view, requires the result reached by the Court in this case, I concur in the judgment of affirmance.
[239] Justice STEVENS, with whom THE CHIEF JUSTICE and Justice SCALIA join, dissenting.
The Constitution authorizes the Congress:
"To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries. . . ." U.S. Const. Art. I, § 8, Cl. 8.
Section 6 of the Copyright Act of 1909, 35 Stat. 1077, 17 U.S.C. § 7 (1970 ed.) (hereinafter § 7), furthers that purpose; § 24 of that Act, 17 U.S.C. § 24 (1970 ed.) (hereinafter § 24), as construed by the Court in this case, does not. It is therefore appropriate to begin with § 7.[1]
I
In a copyright case, as in any other case, the language of the statute provides the starting point. Community for Creative Non-Violence v. Reid, 490 U.S. 730, 739, 109 S.Ct. 2166, 2172, 104 L.Ed.2d 811 (1989); Mills Music, Inc. v. Snyder, 469 U.S. 153, 164, 105 S.Ct. 638, 645, 83 L.Ed.2d 556 (1985).
Section 7 provides in pertinent part:
"Compilations or abridgments, adaptations, arrangements, dramatizations, translations, or other versions of [240] works in the public domain or of copyrighted works when produced with the consent of the proprietor of the copyright in such works . . . shall be regarded as new works subject to copyright under the provisions of this title; but the publication of any such new works shall not affect the force or validity of any subsisting copyright upon the matter employed or any part thereof, or be construed to imply an exclusive right to such use of the original works, or to secure or extend copyright in such original works."
This statutory provision deals with derivative works—works that include both old material and new material. The plain language of § 7 confers on the entire derivative work—not just the new material contained therein—the status of all other works of authorship, that of "new works subject to copyright under the provisions of this title." Among those rights is that specified in § 3 of the 1909 Act, 17 U.S.C. § 3 (1976 ed.), which applies both to composite and derivative works and states that "the copyright provided by this Act shall protect all the copyrightable component parts of the work copyrighted, and all matter therein in which copyright is already subsisting, but without extending the duration or scope of such copyright." In turn, under § 1, U.S.C. § 1 (1976 ed.), the author or proprietor of the copyright has the right to distribute and publicly perform the copyrighted derivative work. §§ 1(a), 1(d).[2] The statute does not say [241] anything about the duration of the copyright being limited to the underlying work's original term; rather, derivative works made with the consent of the author and derivative works based on matter in the public domain are treated identically. They are both given independent copyright protection. Section 7, read together with § 3, plainly indicates that the copyright on a derivative work extends to both the new material and that "in which copyright is already subsisting." § 3. The author or proprietor of the derivative work therefore has the statutory right to publish and distribute the entire work.[3]
The structure of § 7 confirms this reading. The statute does not merely provide the derivative author with a right to copyright but goes on to set limitations and conditions on that copyright. The statute makes "the consent of the proprietor of the [underlying] copyright" a precondition for copyright of the derivative work, a provision that would make little sense if the copyright provided by § 7 did not derogate in some manner from the underlying author's copyright rights.[4] The [242] statute also directs that the right granted the derivative work proprietor should not "be construed to imply an exclusive right to such use of the original works," suggesting, by negative implication, that it should be read to include a non-exclusive right to use of the original works. The provision that publication "shall not affect the force or validity of any subsisting copyright" also suggests that publication would otherwise have the capacity to affect the force or validity of the original copyright: By publishing the derivative work [243] without satisfying the notice requirements of the Act, the derivative author would dedicate to the public not only his own original contribution, but also that of the original author. Conversely, the limitation that publication does not "secure or extend copyright in such original works" would be unnecessary if the copyrighted derivative work did not include within it some of the material covered by the earlier copyright, or if the term of the derivative copyright did not extend beyond the life of the original copyright.[5] Although the derivative copyright protects only the new material contained within the new work, that limitation is not the product of the limited extent of the copyright—which encompasses both new and old material—but rather of the specific statutory language restricting its effect against third parties.[6]
[244] Any other interpretation would render the provision largely surplusage. The Copyright Act of 1909 elsewhere accords protection to "all the writings of an author," § 4, including dramatic composition, § 5, and long before the Act of 1909, it was recognized that the additions and improvements to existing works of art were subject to copyright as original works of authorship.[7] Congress would hardly have needed to provide for the copyright of derivative works, including the detailed provisions on the limit of that copyright, if it intended only to accord protection to the improvements to an original work of authorship. In my opinion, § 7 was intended to do something more: to give the original author the power [245] to sell the right to make a derivative work that upon creation and copyright would be completely independent of the original work.
II
The statutory background supports the conclusion that Congress intended the original author to be able to sell the right to make a derivative work that could be distributed for the full term of the derivative work's copyright protection. At the time of the enactment of § 7, copyright in the right to dramatize a nondramatic work was a relatively recent innovation with equivocal support. Until 1870, an author had only the right to prevent the copying or vending of his work in the identical medium.[8] The Act of 1870, which gave the author the "sole liberty of printing, reprinting, publishing, completing, copying, executing, finishing, and vending," made a limited start toward further protection, providing that "authors may reserve the right to dramatize or to translate their own works." Ch. 230, § 86, 16 Stat. 212. The identical language was carried over when the statute was revised in 1873. Rev.Stat. § 4952. The Act of 1891 was a landmark. It gave the same rights to the "author" as had the previous statutes, but provided further that "authors or their assigns shall have exclusive right to dramatize and translate any of their works for which copyright shall have been obtained under the laws of the United States." Ch. 565, § 4952, 26 Stat. 1107. The case law was in accord. Although courts were occasionally willing to enjoin abridgments as infringing, in 1853 Justice Grier wrote that a dramatization of the novel "Uncle Tom's Cabin" would not infringe [246] the author's rights in the book, see Stowe v. Thomas, 23 F.Cas. 201, 208 (No. 13,514) (CC ED Pa.1853),[9] and it was not until after the passage of the 1909 Act that this Court first held that a copy of a literary work in another form than the original could infringe the author's copyright. See Kalem Co. v. Harper Brothers, 222 U.S. 55, 32 S.Ct. 20, 56 L.Ed. 92 (1911).[10]
[247] The drafts of the copyright bill, considered by the Conferences held by the Register of Copyrights and the Librarian of Congress in 1905 and 1906,[11] had three distinctive features with respect to derivative works: They provided a limited period of protection from the creation of derivative works during which a derivative work could only be created with "the consent of the author or his assigns," Brylawski & Goldman D LXV; [12] they distinguished between the copyright term for original works of authorship and for derivative works, according the latter a shorter period of protection; [13] and, finally, they provided that derivative works produced with the consent of the original author would be considered new works entitled to copyright. Together these provisions reveal a more complicated set of theoretical premises than is commonly acknowledged. Although originality of authorship was an essential precondition of copy- [248] right, the duration of the copyright term and the extent of copyright protection rested upon the nature of the work as a whole rather than the original expression contributed by the copyright author. Moreover, the consent of the underlying author to the production of a derivative work was to be encouraged and, once given, entitled the derivative work to independence from the work upon which it was based.
The first two provisions were not included in the Copyright Act, which gave authors the right, during the full term of copyright, to create or consent to the creation of derivative works which would then enjoy their own copyright protection. But the third provision which set the conditions upon which an original author would consent and the second author would create a derivative work entitled to protection under the Copyright Act carried forward the view that the derivative copyright extended beyond the original contribution of the derivative author. Throughout the debates on the provision, the drafters of the Copyright Act evinced their understanding that the derivative copyright itself encompassed the whole derivative work. The first draft of § 7, considered by the second Conference in 1905, would have provided copyright as a new work for a derivative work "produced with the consent and authorization of the author of the original," without any restrictions on the effect of that copyright on the copyright in the original work. 2 Brylawski & Goldman, Part D, p. XXXII. By the time of the third Conference in 1906, the Register of Copyrights expressed his concern that that provision would be read too broadly, adding the proviso: "That the copyright thus secured shall not be construed to grant any exclusive right to such use of the original works, except as that may be obtained by agreement with the author or proprietor thereof." 3 id., Part E, p. LI. The implication was that, in the absence of an agreement, the author of the derivative work would have, as a matter of copyright law, a nonexclusive right "to such use of the original works."
[249] The final draft presented to Congress at the end of 1906 addressed a parallel problem that the license to use the underlying material might also detract from the rights of the underlying copyright if the derivative author did not adequately protect the material on which the copyright was subsisting. To allay this concern, the Register added the language "no such copyright shall affect the force or validity of any subsisting copyright upon the matter employed or any part thereof." 1 id., Part B, p. 15.
Two significant changes were made during the congressional hearings from 1907 through 1909, but with those exceptions the provision survived intact. First, in response to the objection that the language of § 6, codified at 17 U.S.C. § 7 (1976 ed.), in conjunction with that of § 3, codified at 17 U.S.C. § 3 (1976 ed.), would be read to give the derivative work proprietor "a new term of copyright running on this old matter of his" and, in that way, provide for perpetual copyright, 4 Brylawski & Goldman, Part J, pp. 132-138 (statement of Mr. Porterfeld); see also id., at 428, Congress limited the enforceability of the derivative copyright, adding language that publication of the dramatization would not "secure or extend copyright in such original works." § 6, 35 Stat. 1077. Second, in response to the objection that the Register's draft provision did not address with sufficient precision the possibility that failure of the derivative copyright would allow the underlying work to enter the public domain, Congress substituted the word "publication" for "copyright" in the "force or validity" clause. Congress thus made clear that it was the publication of the derivative work, not the copyright itself, that was not to "affect the force or validity of any subsisting copyright." Ibid.[14]
[250] The legislative history confirms that the copyright in derivative works not only gives the second creative product the monopoly privileges of excluding others from the unconsented use of the new work, but also allows the creator to publish his or her own work product. The authority to produce the derivative work, which includes creative contributions by both the original author and the second artist, is dependent upon the consent of the proprietor of the underlying copyright. But once that consent has been obtained, and a derivative work has been created and copyrighted in accord with that consent, "a right of property spr[ings] into existence," Edmonds v. Stern, 248 F. 897, 898 (CA2 1918), that Congress intended to protect. Publication of the derivative work does not "affect the force or validity" of the underlying copyright except to the extent that it gives effect to the consent of the original proprietor. That owner—and in this case, the owner of a renewal of the original copyright—retains full dominion and control over all other means of exploiting that work of art, including the right to authorize other derivative works. The original copyright may have relatively little value because the creative contribution of the second artist is far more significant than the original con-[251] tribution, but that just means that the rewards for creativity are being fairly allocated between the two artists whose combined efforts produced the derivative work.
III
Nothing in § 24 requires a different result. The portion of that section dealing with copyright renewals provides:
"[T]he author of such work, if still living, or the widow, widower, or children of the author, if the author be not living, . . . shall be entitled to a renewal and extension of the copyright in such work for a further term of twenty-eight years when application for such renewal and extension shall have been made to the copyright office and duly registered therein within one year prior to the expiration of the original term of copyright." 17 U.S.C. § 24 (1976 ed.).
That statute limits the renewal rights in a copyright to the specified statutory beneficiaries, "completely dissevering the title, breaking up the continuance . . . and vesting an absolutely new title eo nomine in the persons designated." White-Smith Music Publishing Co. v. Goff, 187 F. 247, 250 (CA1 1911). Since copyright is a creature of statute and since the statute gives the author only a contingent estate, with "the widow, widower, or children" as remaindermen, the author "ha[s] only an expectancy to assign" for the second term. Miller Music Corp. v. Charles N. Daniels, Inc., 362 U.S. 373, 375, 80 S.Ct. 792, 794, 4 L.Ed.2d 804 (1960). The original author may not sell more than he owns. He may not convey the second-term rights to print or copy the underlying work or to create additional derivative works from it. See Gilliam v. American Broadcasting Cos., 538 F.2d 14, 21 (CA2 1976); G. Ricordi & Co. v. Paramount Pictures Inc., 189 F.2d 469 (CA2), cert. denied, 342 U.S. 849, 72 S.Ct. 77, 96 L.Ed. 641 (1951).[15] Nor may the derivative author dedi-[252] cate the underlying art to the public by failing to renew his copyright. See Filmvideo Releasing Corp. v. Hastings, 668 F.2d 91, 93 (CA2 1981); Russell v. Price, 612 F.2d 1123, 1128 (CA9 1979).[16] Even if the alienation of second-term rights would be in the author's best interest, providing funds when he is most in need, the restriction on sale of the corpus is a necessary consequence of Congress' decision to provide two terms of copyright.
Neither § 24 nor any other provision of the Act, however, expressly or by implication, prevents the author from exercising any of his other statutory rights during the original term of the copyright. The author of the underlying work may contract to sell his work at a bargain price during the original term of the copyright. That agreement would be enforceable even if performance of the contract diminished the value of the copyright to the owner of the renewal interest. Similarly, the original author may create and copyright his own derivative work; the right of an assignee or legatee to receive that work by assignment or bequest should not be limited by the interests of the owners of the renewal copyright in the underlying work. Section 1 of the Act, 17 U.S.C. § 1 (1976 ed.), gives the author the right to dramatize his own work without any apparent restriction. Such use might appear, at the time or in retrospect, to be improvident and a waste of the asset. Whatever harm the proprietor of the renewal copyright might suffer, however, is a consequence of the enjoyment by the author of the rights granted him by Congress.
The result should be no different when the author exercises his right to consent to creation of a derivative work by another. By designating derivative works as "new works" [253] that are subject to copyright and accorded the two terms applicable to original works, Congress evinced its intention that the derivative copyright not lapse upon termination of the original author's interest in the underlying copyright. The continued publication of the derivative work, after the expiration of the original term of the prior work, does not infringe any of the statutory successor's rights in the renewal copyright of the original work. The author's right to sell his derivative rights is exercised when consent is conveyed and completed when the derivative work is copyrighted. At that point, prior to the end of the first term, the right to prevent publication of the derivative work is no longer one of the bundle of rights attaching to the copyright. The further agreement to permit use of the underlying material during the renewal term does not violate § 24 because at the moment consent is given and the derivative work is created and copyrighted, a new right of property comes into existence independent of the original author's copyright estate.
As an ex post matter, it might appear that the original author could have negotiated a better contract for his consent to creation of a derivative work, but Congress in § 24 was not concerned with giving an author a second chance to renegotiate his consent to the production of a derivative work.[17] It provided explicitly that, once consent was given, the derivative work was entitled as a matter of copyright law to treatment as a "new wor[k]." § 7. Ironically, by restricting the [254] author's ability to consent to creation of a derivative work with independent existence, the Court may make it practically impossible for the original author to sell his derivative rights late in the original term and to reap the financial and artistic advantage that comes with the creation of a derivative work.[18] Unless § 24 is to overwhelm § 7, the consent of the original author must be given effect whether or not it intrudes into the renewal term of the original copyright.
A putative author may sell his work to a motion picture company who will have greater use for it, by becoming an employee and making the work "for hire." The 1909 Act gave the employer the right to renew the copyright in such circumstances.[19] In addition, when an author intends that his work be used as part of a joint work, the copyright law gives the joint author common authority to exploit the underlying work and renew the copyright.[20] The Court today [255] holds, however, that the independent entrepreneur, who does not go into the company's employ and who intends to make independent use of his work, does not also have the same right to sell his consent to produce a derivative work that can be distributed and publicly performed during the full term of its copyright protection. That result is perverse and cannot have been what Congress intended.[21]
The critical flaw in the Court's analysis is its implicit endorsement of the Court of Appeals reasoning that:
" 'If Miller Music makes assignment of the full renewal rights in the underlying copyright unenforceable when the author dies before effecting renewal of the copyright, then a fortiori, an assignment of part of the rights in the underlying work, the right to produce a movie version, must also be unenforceable if the author dies before effecting renewal of the underlying copyright.' " Ante, at 215-216.
That reasoning would be valid if the sole basis for the protection of the derivative work were the contractual assignment of copyright, but Woolrich did not just assign the rights to produce a movie version the way an author would assign the publisher rights to copy and vend his work. Rather, he expressed his consent to production of a derivative work under § 7. The possession of a copyright on a properly created derivative work gives the proprietor rights superior to those of [256] a mere licensee. As Judge Friendly concluded, this position is entirely consistent with relevant policy considerations.[22]
In my opinion, a fair analysis of the entire 1909 Act, with special attention to § 7, indicates that the statute embodied the same policy choice that continues to be reflected in the 1976 Act. Section 101 of the Act provides:
"A derivative work prepared under authority of the grant before its termination may continue to be utilized under the terms of the grant after its termination, but this privilege does not extend to the preparation after the termination of other derivative works based upon the copyrighted work covered by the terminated grant." 17 U.S.C.App. § 304(c)(6)(A).
I respectfully dissent.
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[1] The Copyright Act of 1976 (1976 Act), 17 U.S.C. § 101 et seq. (1988 ed.), codified the definition of a " 'derivative work,' " as "a work based upon one or more preexisting works, such as a translation, musical arrangement, dramatization, fictionalization, motion picture version . . . or any other form in which a work may be recast, transformed, or adapted." § 101.
[2] Neither Miller Music nor Fred Fisher decided the question of when the renewal rights vest, i.e., whether the renewal rights vest upon commencement of the registration period, registration, or the date on which the original term expires and the renewal term begins. We have no occasion to address the issue here.
[3] Title 17 U.S.C. § 106 (1988 ed.) codifies the various rights a copyright holder possesses: "[T]he owner of copyright under this title has the exclusive rights to do and to authorize any of the following:
"(1) to reproduce the copyrighted work in copies or phonorecords;
"(2) to prepare derivative works based upon the copyrighted work;
"(3) to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending;
"(4) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and motion pictures and other audiovisual works, to perform the copyrighted work publicly; and
"(5) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and pictorial, graphic, or sculptural works, including the individual images of a motion picture or other audiovisual work, to display the copyrighted work publicly."
__________
[1] Although the Court of Appeals determined the rights of the parties by looking to the 1909 Act, respondent now argues that the 1976 Act is applicable. At the time petitioners secured their copyright in the film in 1954, and respondent renewed his copyright in the short story in 1969, the Copyright Act of 1909 was in effect. There is no evidence that Congress in the Copyright Act of 1976 intended to abrogate rights created under the previous Act. I therefore take it as evident that while the cause of action under which respondent sues may have been created by the 1976 Act, the respective property rights of the parties are determined by the statutory grant under the 1909 Act. See Roth v. Pritikin, 710 F.2d 934, 938 (CA2), cert. denied, 464 U.S. 961, 104 S.Ct. 394, 78 L.Ed.2d 337 (1983); International Film Exchange, Ltd. v. Corinth Films, Inc., 621 F.Supp. 631 (SDNY 1985); Jaszi, When Works Collide: Derivative Motion Pictures, Underlying Rights, and the Public Interest, 28 UCLA L.Rev. 715, 746-747 (1981) (hereinafter Jaszi). Cf. 1 M. Nimmer & D. Nimmer, Nimmer on Copyright § 1.11, p. 1-96 (1989) (hereinafter Nimmer) (no explicit statement of a legislative intent to apply the current Act retroactively).
[2] Section 1 of the 1909 Act, 35 Stat. 1075, provides in pertinent part:
"That any person entitled thereto, upon complying with the provisions of this Act, shall have the exclusive right:
"(a) To print, reprint, publish, copy, and vend the copyrighted work;
. . . . .
"(d) To perform or represent the copyrighted work publicly if it be a drama . . .; and to exhibit, perform, represent, produce, or reproduce it in any manner or by any method whatsoever."
In its response to this dissent, the Court completely ignores the plain language of § 1.
[3] The Court states that this reading of § 7 is "creative," has not been adopted by any Court of Appeals in the history of the 1909 Act, and has not been argued by petitioners. Ante, at 230. Although I am flattered by this comment, I must acknowledge that the credit belongs elsewhere. In their briefs to this Court, petitioners and their amici argue that § 7 created an independent but limited copyright in the entire derivative work entitled to equal treatment with original works under the renewal and duration provisions of § 24. Brief for Petitioners 14-15, 17, 21, 29-30; Brief for Columbia Pictures Industries, Inc., et al., as Amici Curiae 11, 13, 15. That was also the central argument of Judge Friendly in his opinion for the Court of Appeals for the Second Circuit, see Rohauer v. Killiam Shows, Inc., 551 F.2d 484, 487-488, 489-490, 493-494, cert. denied, 431 U.S. 949, 97 S.Ct. 2666, 53 L.Ed.2d 266 (1977), and Judge Thompson dissenting from the panel decision below, see Abend v. MCA, Inc., 863 F.2d 1465, 1484-1487 (CA9 1988). Indeed, Judge Friendly only addressed the equities with great reservation, 551 F.2d, at 493, after "a close reading of the language of what is now § 7." Id., at 489.
[4] The drafters of the 1909 Act were well aware of the difficulty of contacting distant authors who no longer wished to enforce their copyright rights. In § 24,
for example, Congress provided that a proprietor could secure and renew copyright on a composite work when the individual contributions were not separately registered. The provision was apparently addressed to the difficulties such proprietors had previously faced in locating and obtaining the consent of authors at the time of renewal. See H.R.Rep. No. 2222, 60th Cong., 2d Sess., 15 (1909); 1 Legislative History of the 1909 Copyright Act, Part C, p. 56 (E. Brylawski & A. Goldman eds. 1976) (statement of Mr. Elder) (hereinafter Brylawski & Goldman); 5 id., Part K pp. 18-19 (statement of Mr. Putnam); id., at K77 (statement of Mr. Hale). See also Elder, Duration of Copyright, 14 Yale L.J. 417, 418 (1905). The effect of the § 7 consent requirement under the Court's reading should not only be to forbid the author of the derivative work to "employ a copyrighted work without the author's permission," ante, at 232, but also to penalize him by depriving him both of the right to use his own new material and, in theory, of the right to protect that new material against use by the public. It is most unlikely that a Congress which intended to promote the creation of literary works would have conditioned the protection of new material in an otherwise original work on "consent" of an original author who did not express the desire to protect his own work.
The Court of Appeals thought that the failure of Congress to grant an "exemption" to derivative works similar to that it granted composite works demonstrated its intention that derivative works lapse upon termination of the underlying author's copyright interest. 863 F.2d, at 1476. Section 24, however, does not exempt composite works from the renewal provision, but merely provides for their renewal by the proprietor alone when the individual contributions are not separately copyrighted. See 2 Nimmer § 9.03[B], p. 9-36. Moreover, the "author," entitled to renewal under § 24, refers back to the author of the original work and the derivative work. Congress did not need to make special provision for the derivative work in § 24 because it already did so in § 7, making it a new work "subject to copyright under the provisions of this title." 17 U.S.C. § 7 (1976 ed.).
[5] It is instructive to compare the language of § 7 to that used by Congress in 1976 to indicate that copyright in a derivative work under the new Act attached only to the new material:
"The copyright in a compilation or derivative work extends only to the material contributed by the author of such work, as distinguished from the preexisting material employed in the work, and does not imply any exclusive right in the preexisting material. The copyright in such work is independent of, and does not affect or enlarge the scope, duration, ownership, or subsistence of, any copyright protection in the preexisting material." 17 U.S.C. § 103(b) (1988 ed.).
[6] I thus agree with the Court that publication of a derivative work cannot extend the scope or duration of the copyright in the original work, ante, at 234-235, and that the underlying work's copyright term exists independently of the derivative work's term. Ante, at 231-232, 235. As much is clear from the language of § 7, which extends the copyright to the entire work, but then limits the effect of that copyright. I further agree that the original author's right to "consent" to the copyright of a derivative work terminates when the statutory term of the copyright in the underlying work expires. Ante, at 235. As I explain, infra at 251-253, that result follows from the language of § 24. I do not agree, however, that the statutory right to distribute and publicly perform a derivative work that has been copyrighted with the original author's consent during the original term of the underlying work is limited by the validity and scope of the original copyright. Ante, at 235. Section 7, in conjunction with § 24, gives the derivative author two full terms of copyright in the entire derivative work both when the original work is used with the consent of the original author and when the original work is in the public domain. My conclusion thus rests upon the language of the statute. The Court's contrary assertion, that if the right to publish the derivative work extended beyond the original term of the underlying work it would "nulli[fy] the 'force' of the copyright in the 'matter employed,' " ante, at 236, simply begs the question of the extent of the original author's statutory rights. Even after the derivative work has been copyrighted, the original author retains all of his statutory rights, including the right to consent to the creation of additional derivative works during both the original and renewal terms. Moreover, even if the derivative work did derogate from the force of the original work, the provision to which the Court apparently refers states only that "publication " of a derivative work—and not consent to its creation—shall not affect the force of the copyright in the matter employed. The Court can avoid making § 7 complete surplus (and allow it to limit the rights of both the original and the derivative author) only by distorting the plain language of that provision.
[7] See, e.g., Gray v. Russell, 10 F.Cas. 1035, 1037-1038 (No. 5,728) (CC Mass.1839); Emerson v. Davies, 8 F.Cas. 615, 618-619 (No. 4,436) (CC Mass.1845); Shook v. Rankin, 21 F.Cas. 1335, 1336 (No. 12,804) (CC N.D.Ill.1875). The Court's difficulty in explaining away the language of § 7 is not surprising. The authority upon whom it almost exclusively relies, see ante, at 223, had the same difficulty, stating at one point that "[t]he statutory text was somewhat ambiguous," 1 Nimmer, p. 3-22.2, and admitting at another that under his reading of the Copyright Act the provision was largely irrelevant. See id., at 3-29, n. 17 ("[I]t is consent referred to in Sec. 7, but which would have efficacy as a matter of contract law even without Sec. 7"). At least in the Copyright Act of 1909, however, Congress knew exactly what it was doing.
[8] The Act of 1790, passed by the First Congress, provided "the sole right and liberty of printing, reprinting, publishing and vending" the copyrighted work. § 1, 1 Stat. 124. Its successor, the Act of 1831, repeated the language that the author of a copyrighted work "shall have the sole right and liberty of printing, reprinting, publishing, and vending" the work. Ch. 16, § 1, 4 Stat. 436. Benjamin Kaplan has written that the Act of 1870 constituted an "enlargement of the monopoly to cover the conversion of a work from one to another artistic medium." An Unhurried View of Copyright 32 (1967) (hereinafter Kaplan).
"By the publication of Mrs. Stowe's book, the creations of the genius and imagination of the author have become as much public property as those of Homer or Cervantes. . . . All her conceptions and inventions may be used and abused by imitators, play-rights and poetasters [They are no longer her own—those who have purchased her book, may clothe them in English doggerel, in German or Chinese prose. Her absolute dominion and property in the creations of her genius and imagination have been voluntarily relinquished.] All that now remains is the copyright of her book; the exclusive right to print, reprint and vend it, and those only can be called infringers of her rights, or pirates of her property, who are guilty of printing, publishing, importing or vending without her license, 'copies of her book.' " Stowe v. Thomas, 23 F.Cas., at 208 (footnote omitted).
It appears that at least as late as 1902, English copyright law also did not recognize that a dramatization could infringe an author's rights in a book. See E. MacGillivray, A Treatise Upon The Law of Copyright 114 (1902); see also Reade v. Conquist, 9 C.B.N.S. 755, 142 Eng.Rep. 297 (C.P.1861); Coleman v. Wathen, 5 T.R. 245, 101 Eng.Rep. 137 (K.B.1793). Even after the passage of the Act of 1870, one American commentator flatly declared: "Even if the public recitation of a book, in which copyright exists, is not made from memory, but takes the form of a public reading, from the work itself, of the whole or portions of it, this would not amount to an infringement of the author's copyright." 2 J. Morgan, Law of Literature 700-701 (1875).
"The American cases reflect no recognition that unauthorized dramatization could infringe rights in a nondramatic work until the 1870 copyright revision provided authors with the same option to reserve dramatization rights that they were afforded with respect to translation. By then, dramatizations like other derivative works—already had enjoyed almost a century of substantial independence. During this period, courts construing federal copyright statutes were willing to extend protection to them, but were reluctant to interfere with their unauthorized production." Jaszi 783.
See also Goldstein, Derivative Rights and Derivative Works in Copyright, 30 J. Copyright Society 209, 211-215 (1983).
[11] The history of the Copyright Act of 1909 is recounted in Justice Frankfurter's opinion for the Court in Fred Fisher Music Co. v. M. Witmark & Sons, 318 U.S. 643, 652, 63 S.Ct. 773, 777, 87 L.Ed. 1055 (1943).
[12] The first draft of the copyright bill considered in 1905 provided that if the author or his assigns did not make or authorize to be made a dramatization within 10 years of the date of registration, the work could be used for dramatization by other authors. 2 Brylawski & Goldman, Part D, p. LXV. A similar provision appeared in the third draft of the bill considered by the Conference the following year, 3 id., Part E, p. XL, and in the bill submitted by the Register of Copyrights to Congress. 1 id., Part B, pp. 37-38. The provision was eventually dropped during hearings in Congress and was never adopted into law.
[13] The first draft provided identical terms for both original works of authorship and derivative works, 2 id., Part D, pp. XXXVII-XXXVIII. Successive drafts gave the copyright in the original work to the author for his life plus 50 years, but limited the copyright in a derivative work to 50 years. 3 id., Part E, pp. LIII-LIV; 1 id., Part B, pp. 34-35. The single term was rejected at a late date by Congress and the final Act eventually provided the same two-term copyright for original and derivative works. See generally B. Ringer, Renewal of Copyright (1960), reprinted as Copyright Law Revision Study No. 31, prepared for the Senate Committee on the Judiciary, 86th Cong., 2d Sess., 115-121 (1961).
[14] The amendment apparently emerged from dialogue between Mr. W.B. Hale, representative of the American Law Book Company, and Senator Smoot:
"Mr. Hale: 'There is another verbal criticism I should like to make in section 6 of the Kittredge bill, which also relates to compilations, abridgments, etc.'
"The Chairman [Senator Smoot]. 'I think it is the same in the other bills.'
"Mr. Hale. 'Yes; it is the same in all the bills. I heartily agree with and am in favor of that section; but in line 12, in lieu of the words "but no such copyright shall effect the force or validity," etc., I would prefer to substitute these words: "and the publication of any such new work shall not affect the copyright," etc. . . . Under the act, as it stands now, it says the copyright shall not affect it. I would like to meet the case of a new compiled work, within the meaning of this clause, that is not copyrighted, or where, by reason of some accident the copyright fails. That should not affect the original copyrights in the works that have entered into and formed a part of this new compiled work. It does not change the intent of this section in any way.' " 5, Brylawski & Goldman, Part K, p. 78.
[15] In Ricordi, the author of the derivative work not only produced a new derivative work, but also breached his covenant not to distribute the work, after the first term of the underlying copyright. As Justice WHITE has explained, "Ricordi merely held that the licensee of a copyright holder may not prepare a new derivative work based upon the copyrighted work after termination of the grant." Mills Music, Inc. v. Snyder, 469 U.S. 153, 183, n. 7, 105 S.Ct. 638, 655, n. 7, 83 L.Ed.2d 556 (1985) (dissenting opinion).
[16] The result follows as well from the "force and validity" clause of § 7.
[17] Congress was primarily concerned with the ability of the author to exploit his own work of authorship:
"Your committee, after full consideration, decided that it was distinctly to the advantage of the author to preserve the renewal period. It not infrequently happens that the author sells his copyright outright to a publisher for a comparatively small sum. If the work proves to be a great success and lives beyond the term of twenty-eight years, your committee felt that it should be the exclusive right of the author to take the renewal term, and the law should be framed as is the existing law, so that he could not be deprived of that right." H.R.Rep. No. 2222, 60th Cong., 2d Sess., at 14.
[18] The creation of a derivative work often is in the best interests of both the original author and his statutory successors. As one commentator has noted:
"The movie Rear Window became a selling point for anthologies containing the Woolrich story. The musical play Cats no doubt sent many people who dimly remembered the Love Song of J. Alfred Prufrock as the chief, if not the only oeuvre of T.S. Eliot to the bookstore for Old Possum's Book of Practical Cats."
Weinreb, Fair's Fair: A Comment on the Fair Use Doctrine, 103 Harv.L.Rev. 1137, 1147 (1990).
[19] See 17 U.S.C. § 24 (1976 ed.) ("[I]n the case of . . . any work copyrighted by . . . an employer for whom such work is made for hire, the proprietor of such copyright shall be entitled to a renewal and extension of the copyright in such work for the further term of twenty-eight years"). See also Ellingson, Copyright Exception for Derivative Works and the Scope of Utilization, 56 Ind.L.J. 1, 11 (1980-1981).
[20] See Shapiro, Bernstein & Co. v. Jerry Vogel Music Co., 161 F.2d 406 (CA2 1946); Edward B. Marks Music Corp. v. Jerry Vogel Music Co., 140 F.2d 266 (CA2 1944). In the "12th Street Rag" case, Shapiro, Bernstein & Co. v. Jerry Vogel Music Co., 221 F.2d 569 (CA2 1955), the Court of Appeals held that a work of music, intended originally to stand on its own as an instrumental, could become a joint work when it was later sold to a publisher who commissioned lyrics to be written for it. The decision, which would give the creator of the derivative work and the underlying author a joint interest in the derivative work, accomplishes the same result that I believe § 7 does expressly.
"The effect of the Fred Fisher [, 318 U.S. 643, 63 S.Ct. 773, 87 L.Ed. 1055 (1943),] case and other authorities is that if the author is dead when the twenty-eighth year comes round, the renewal reverts, free and clear, to his widow, children, and so forth in a fixed order of precedency; but if the author is alive in that year, the original sale holds and there is no reversion. The distinction is hard to defend and may operate in a peculiarly perverse way where on the faith of a transfer from the now-deceased author, the transferee has created a 'derivative work,' say a movie based on the original novel." Kaplan 112.
"To such extent as it may be permissible to consider policy considerations, the equities lie preponderantly in favor of the proprietor of the derivative copyright. In contrast to the situation where an assignee or licensee has done nothing more than print, publicize and distribute a copyrighted story or novel, a person who with the consent of the author has created an opera or a motion picture film will often have made contributions literary, musical and economic, as great as or greater than the original author. As pointed out in the Bricker article [Bricker, Renewal and Extension of Copyright, 29 S.Cal.L.Rev. 23, 33 (1955) ], the purchaser of derivative rights has no truly effective way to protect himself against the eventuality of the author's death before the renewal period since there is no way of telling who will be the surviving widow, children or next of kin or the executor until that date arrives. To be sure, this problem exists in equal degree with respect to assignments or licenses of underlying copyright, but in such cases there is not the countervailing consideration that large and independently copyrightable contributions will have been made by the transferee." Rohauer v. Killiam Shows, Inc., 551 F.2d 484, 493 (CA2), cert. denied, 431 U.S. 949, 97 S.Ct. 2666, 53 L.Ed.2d 266 (1977).
4.2.2 Eldred v. Ashcroft 4.2.2 Eldred v. Ashcroft
537 U.S. 186
ELDRED ET AL.
v.
ASHCROFT, ATTORNEY GENERAL
No. 01-618.
Supreme Court of United States.
Argued October 9, 2002.
Decided January 15, 2003.
The Copyright and Patent Clause, U.S. Const., Art. I, § 8, cl. 8, provides as to copyrights: "Congress shall have Power ... [t]o promote the Progress of Science . . . by securing [to Authors] for limited Times ... the exclusive Right to their ... Writings." In the 1998 Copyright Term Extension Act (CTEA), Congress enlarged the duration of copyrights by 20 years: Under the 1976 Copyright Act (1976 Act), copyright protection generally lasted from a work's creation until 50 years after the author's death; under the CTEA, most copyrights now run from creation until 70 years after the author's death, 17 U.S.C. § 302(a). As in the case of prior copyright extensions, principally in 1831, 1909, and 1976, Congress provided for application of the enlarged terms to existing and future copyrights alike.
Petitioners, whose products or services build on copyrighted works that have gone into the public domain, brought this suit seeking a determination that the CTEA fails constitutional review under both the Copyright Clause's "limited Times" prescription and the First Amendment's free speech guarantee. Petitioners do not challenge the CTEA's "life-plus-70-years" timespan itself. They maintain that Congress went awry not with respect to newly created works, but in enlarging the term for published works with existing copyrights. The "limited Tim[e]" in effect when a copyright is secured, petitioners urge, becomes the constitutional boundary, a clear line beyond the power of Congress to extend. As to the First Amendment, petitioners contend that the CTEA is a content-neutral regulation of speech that fails inspection under the heightened judicial scrutiny appropriate for such regulations. The District Court entered judgment on the pleadings for the Attorney General (respondent here), holding that the CTEA does not violate the Copyright Clause's "limited Times" restriction because the CTEA's terms, though longer than the 1976 Act's terms, are still limited, not perpetual, and therefore fit within Congress' discretion. The court also held that there are no First Amendment rights to use the copyrighted works of others. The District of Columbia Circuit affirmed. In that court's unanimous view, Harper & Row, Publishers, Inc. v. Nation Enterprises, 471 U.S. 539, foreclosed petitioners' First Amendment challenge to the CTEA. The appeals court reasoned that copyright does not impermissibly [537 U.S. 187] restrict free speech, for it grants the author an exclusive right only to the specific form of expression; it does not shield any idea or fact contained in the copyrighted work, and it allows for "fair use" even of the expression itself. A majority of the court also rejected petitioners' Copyright Clause claim. The court ruled that Circuit precedent precluded petitioners' plea for interpretation of the "limited Times" prescription with a view to the Clause's preambular statement of purpose: "To promote the Progress of Science." The court found nothing in the constitutional text or history to suggest that a term of years for a copyright is not a "limited Tim[e]" if it may later be extended for another "limited Tim[e]." Recounting that the First Congress made the 1790 Copyright Act applicable to existing copyrights arising under state copyright laws, the court held that that construction by contemporaries of the Constitution's formation merited almost conclusive weight under Burrow-Giles Lithographic Co. v. Sarony, 111 U.S. 53, 57. As early as McClurg v. Kingsland, 1 How. 202, the Court of Appeals recognized, this Court made it plain that the Copyright Clause permits Congress to amplify an existing patent's terms. The court added that this Court has been similarly deferential to Congress' judgment regarding copyright. E. g., Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417. Concerning petitioners' assertion that Congress could evade the limitation on its authority by stringing together an unlimited number of "limited Times," the court stated that such legislative misbehavior clearly was not before it. Rather, the court emphasized, the CTEA matched the baseline term for United States copyrights with the European Union term in order to meet contemporary circumstances.
Held: In placing existing and future copyrights in parity in the CTEA, Congress acted within its authority and did not transgress constitutional limitations. Pp. 199-222.
1. The CTEA's extension of existing copyrights does not exceed Congress' power under the Copyright Clause. Pp. 199-218.
(a) Guided by text, history, and precedent, this Court cannot agree with petitioners that extending the duration of existing copyrights is categorically beyond Congress' Copyright Clause authority. Although conceding that the CTEA's baseline term of life plus 70 years qualifies as a "limited Tim[e]" as applied to future copyrights, petitioners contend that existing copyrights extended to endure for that same term are not "limited." In petitioners' view, a time prescription, once set, becomes forever "fixed" or "inalterable." The word "limited," however, does not convey a meaning so constricted. At the time of the Framing, "limited" meant what it means today: confined within certain bounds, restrained, or circumscribed. Thus understood, a timespan appropriately "limited" [537 U.S. 188] as applied to future copyrights does not automatically cease to be "limited" when applied to existing copyrights. To comprehend the scope of Congress' Copyright Clause power, "a page of history is worth a volume of logic." New York Trust Co. v. Eisner, 256 U.S. 345, 349. History reveals an unbroken congressional practice of granting to authors of works with existing copyrights the benefit of term extensions so that all under copyright protection will be governed evenhandedly under the same regime. Moreover, because the Clause empowering Congress to confer copyrights also authorizes patents, the Court's inquiry is significantly informed by the fact that early Congresses extended the duration of numerous individual patents as well as copyrights. Lower courts saw no "limited Times" impediment to such extensions. Further, although this Court never before has had occasion to decide whether extending existing copyrights complies with the "limited Times" prescription, the Court has found no constitutional barrier to the legislative expansion of existing patents. See, e. g., McClurg, 1 How., at 206. Congress' consistent historical practice reflects a judgment that an author who sold his work a week before should not be placed in a worse situation than the author who sold his work the day after enactment of a copyright extension. The CTEA follows this historical practice by keeping the 1976 Act's duration provisions largely in place and simply adding 20 years to each of them.
The CTEA is a rational exercise of the legislative authority conferred by the Copyright Clause. On this point, the Court defers substantially to Congress. Sony, 464 U.S., at 429. The CTEA reflects judgments of a kind Congress typically makes, judgments the Court cannot dismiss as outside the Legislature's domain. A key factor in the CTEA's passage was a 1993 European Union (EU) directive instructing EU members to establish a baseline copyright term of life plus 70 years and to deny this longer term to the works of any non-EU country whose laws did not secure the same extended term. By extending the baseline United States copyright term, Congress sought to ensure that American authors would receive the same copyright protection in Europe as their European counterparts. The CTEA may also provide greater incentive for American and other authors to create and disseminate their work in the United States. Additionally, Congress passed the CTEA in light of demographic, economic, and technological changes, and rationally credited projections that longer terms would encourage copyright holders to invest in the restoration and public distribution of their works. Pp. 199-208.
(b) Petitioners' Copyright Clause arguments, which rely on several novel readings of the Clause, are unpersuasive. Pp. 208-218.
[537 U.S. 189] (1) Nothing before this Court warrants construction of the CTEA's 20-year term extension as a congressional attempt to evade or override the "limited Times" constraint. Critically, petitioners fail to show how the CTEA crosses a constitutionally significant threshold with respect to "limited Times" that the 1831, 1909, and 1976 Acts did not. Those earlier Acts did not create perpetual copyrights, and neither does the CTEA. Pp. 208-210.
(2) Petitioners' dominant series of arguments, premised on the proposition that Congress may not extend an existing copyright absent new consideration from the author, are unavailing. The first such contention, that the CTEA's extension of existing copyrights overlooks the requirement of "originality," incorrectly relies on Feist Publications, Inc. v. Rural Telephone Service Co., 499 U.S. 340, 345, 359. That case did not touch on the duration of copyright protection. Rather, it addressed only the core question of copyrightability. Explaining the originality requirement, Feist trained on the Copyright Clause words "Authors" and "Writings," id., at 346-347, and did not construe the "limited Times" prescription, as to which the originality requirement has no bearing. Also unavailing is petitioners' second argument, that the CTEA's extension of existing copyrights fails to "promote the Progress of Science" because it does not stimulate the creation of new works, but merely adds value to works already created. The justifications that motivated Congress to enact the CTEA, set forth supra, provide a rational basis for concluding that the CTEA "promote[s] the Progress of Science." Moreover, Congress' unbroken practice since the founding generation of applying new definitions or adjustments of the copyright term to both future works and existing works overwhelms petitioners' argument. Also rejected is petitioners' third contention, that the CTEA's extension of existing copyrights without demanding additional consideration ignores copyright's quid pro quo, whereby Congress grants the author of an original work an "exclusive Right" for a "limited Tim[e]" in exchange for a dedication to the public thereafter. Given Congress' consistent placement of existing copyright holders in parity with future holders, the author of a work created in the last 170 years would reasonably comprehend, as the protection offered her, a copyright not only for the time in place when protection is gained, but also for any renewal or extension legislated during that time. Sears, Roebuck & Co. v. Stiffel Co., 376 U.S. 225, 229, and Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141, 146, both of which involved the federal patent regime, are not to the contrary, since neither concerned the extension of a patent's duration nor suggested that such an extension [537 U.S. 190] might be constitutionally infirm. Furthermore, given crucial distinctions between patents and copyrights, one cannot extract from language in the Court's patent decisions—language not trained on a grant's duration—genuine support for petitioners' quid pro quo argument. Patents and copyrights do not entail the same exchange, since immediate disclosure is not the objective of, but is exacted from, the patentee, whereas disclosure is the desired objective of the author seeking copyright protection. Moreover, while copyright gives the holder no monopoly on any knowledge, fact, or idea, the grant of a patent prevents full use by others of the inventor's knowledge. Pp. 210-217.
(3) The "congruence and proportionality" standard of review described in cases evaluating exercises of Congress' power under § 5 of the Fourteenth Amendment has never been applied outside the § 5 context. It does not hold sway for judicial review of legislation enacted, as copyright laws are, pursuant to Article I authorization. Section 5 authorizes Congress to "enforce" commands contained in and incorporated into the Fourteenth Amendment. The Copyright Clause, in contrast, empowers Congress to define the scope of the substantive right. See Sony, 464 U.S., at 429. Judicial deference to such congressional definition is "but a corollary to the grant to Congress of any Article I power." Graham v. John Deere Co. of Kansas City, 383 U.S. 1, 6. It would be no more appropriate for this Court to subject the CTEA to "congruence and proportionality" review than it would be to hold the Act unconstitutional per se. Pp. 217-218.
2. The CTEA's extension of existing and future copyrights does not violate the First Amendment. That Amendment and the Copyright Clause were adopted close in time. This proximity indicates the Framers' view that copyright's limited monopolies are compatible with free speech principles. In addition, copyright law contains built-in First Amendment accommodations. See Harper & Row, 471 U.S., at 560. First, 17 U.S.C. § 102(b), which makes only expression, not ideas, eligible for copyright protection, strikes a definitional balance between the First Amendment and copyright law by permitting free communication of facts while still protecting an author's expression. Harper & Row, 471 U.S., at 556. Second, the "fair use" defense codified at § 107 allows the public to use not only facts and ideas contained in a copyrighted work, but also expression itself for limited purposes. "Fair use" thereby affords considerable latitude for scholarship and comment, id., at 560, and even for parody, see Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569. The CTEA itself supplements these traditional First Amendment safeguards in two prescriptions: The first allows libraries and similar institutions to reproduce and distribute copies of certain published works for scholarly purposes during the last 20 years of any copyright [537 U.S. 191] term, if the work is not already being exploited commercially and further copies are unavailable at a reasonable price, § 108(h); the second exempts small businesses from having to pay performance royalties on music played from licensed radio, television, and similar facilities, § 110(5)(B). Finally, petitioners' reliance on Turner Broadcasting System, Inc. v. FCC, 512 U.S. 622, 641, is misplaced. Turner Broadcasting involved a statute requiring cable television operators to carry and transmit broadcast stations through their proprietary cable systems. The CTEA, in contrast, does not oblige anyone to reproduce another's speech against the carrier's will. Instead, it protects authors' original expression from unrestricted exploitation. The First Amendment securely protects the freedom to make—or decline to make—one's own speech; it bears less heavily when speakers assert the right to make other people's speeches. When, as in this case, Congress has not altered the traditional contours of copyright protection, further First Amendment scrutiny is unnecessary. See, e. g., Harper & Row, 471 U.S., at 560. Pp. 218-222.
239 F.3d 372, affirmed.
GINSBURG, J., delivered the opinion of the Court, in which REHNQUIST, C. J., and O'CONNOR, SCALIA, KENNEDY, SOUTER, and THOMAS, JJ., joined. STEVENS, J., post, p. 222, and BREYER, J., post, p. 242, filed dissenting opinions.
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT.
Lawrence Lessig argued the cause for petitioners. With him on the briefs were Kathleen M. Sullivan, Alan B. Morrison, Edward Lee, Charles Fried, Geoffrey S. Stewart, Donald B. Ayer, Robert P. Ducatman, Daniel H. Bromberg, Charles R. Nesson, and Jonathan L. Zittrain.
Solicitor General Olson argued the cause for respondent. With him on the brief were Assistant Attorney General McCallum, Deputy Solicitor General Wallace, Jeffrey A. Lamken, William Kanter, and John S. Koppel.[*]
[537 U.S. 192] JUSTICE GINSBURG delivered the opinion of the Court.
This case concerns the authority the Constitution assigns to Congress to prescribe the duration of copyrights. The Copyright and Patent Clause of the Constitution, Art. I, § 8, cl. 8, provides as to copyrights: "Congress shall have [537 U.S. 193] Power ... [t]o promote the Progress of Science ... by securing [to Authors] for limited Times ... the exclusive Right to their . . . Writings." In 1998, in the measure here under inspection, Congress enlarged the duration of copyrights by 20 years. Copyright Term Extension Act (CTEA), Pub. L. 105-298, §§ 102(b) and (d), 112 Stat. 2827-2828 (amending 17 U.S.C. §§ 302, 304). As in the case of prior extensions, principally in 1831, 1909, and 1976, Congress provided for application of the enlarged terms to existing and future copyrights alike.
Petitioners are individuals and businesses whose products or services build on copyrighted works that have gone into the public domain. They seek a determination that the CTEA fails constitutional review under both the Copyright Clause's "limited Times" prescription and the First Amendment's free speech guarantee. Under the 1976 Copyright Act, copyright protection generally lasted from the work's creation until 50 years after the author's death. Pub. L. 94-553, § 302(a), 90 Stat. 2572 (1976 Act). Under the CTEA, most copyrights now run from creation until 70 years after the author's death. 17 U.S.C. § 302(a). Petitioners do not challenge the "life-plus-70-years" timespan itself. "Whether 50 years is enough, or 70 years too much," they acknowledge, "is not a judgment meet for this Court." Brief for Petitioners 14.[1] Congress went awry, petitioners maintain, not with respect to newly created works, but in enlarging the term for published works with existing copyrights. The "limited Tim[e]" in effect when a copyright is secured, petitioners urge, becomes the constitutional boundary, a clear line beyond the power of Congress to extend. See ibid. As to the First Amendment, petitioners contend that the CTEA is a content-neutral regulation of speech that fails inspection [537 U.S. 194] under the heightened judicial scrutiny appropriate for such regulations.
In accord with the District Court and the Court of Appeals, we reject petitioners' challenges to the CTEA. In that 1998 legislation, as in all previous copyright term extensions, Congress placed existing and future copyrights in parity. In prescribing that alignment, we hold, Congress acted within its authority and did not transgress constitutional limitations.
I
A
We evaluate petitioners' challenge to the constitutionality of the CTEA against the backdrop of Congress' previous exercises of its authority under the Copyright Clause. The Nation's first copyright statute, enacted in 1790, provided a federal copyright term of 14 years from the date of publication, renewable for an additional 14 years if the author survived the first term. Act of May 31, 1790, ch. 15, § 1, 1 Stat. 124 (1790 Act). The 1790 Act's renewable 14-year term applied to existing works (i. e., works already published and works created but not yet published) and future works alike. Ibid. Congress expanded the federal copyright term to 42 years in 1831 (28 years from publication, renewable for an additional 14 years), and to 56 years in 1909 (28 years from publication, renewable for an additional 28 years). Act of Feb. 3, 1831, ch. 16, §§ 1, 16, 4 Stat. 436, 439 (1831 Act); Act of Mar. 4, 1909, ch. 320, §§ 23-24, 35 Stat. 1080-1081 (1909 Act). Both times, Congress applied the new copyright term to existing and future works, 1831 Act §§ 1, 16; 1909 Act §§ 23-24; to qualify for the 1831 extension, an existing work had to be in its initial copyright term at the time the Act became effective, 1831 Act §§ 1, 16.
In 1976, Congress altered the method for computing federal copyright terms. 1976 Act §§ 302-304. For works created [537 U.S. 195] by identified natural persons, the 1976 Act provided that federal copyright protection would run from the work's creation, not—as in the 1790, 1831, and 1909 Acts—its publication; protection would last until 50 years after the author's death. § 302(a). In these respects, the 1976 Act aligned United States copyright terms with the then-dominant international standard adopted under the Berne Convention for the Protection of Literary and Artistic Works. See H. R. Rep. No. 94-1476, p. 135 (1976). For anonymous works, pseudonymous works, and works made for hire, the 1976 Act provided a term of 75 years from publication or 100 years from creation, whichever expired first. § 302(c).
These new copyright terms, the 1976 Act instructed, governed all works not published by its effective date of January 1, 1978, regardless of when the works were created. §§ 302-303. For published works with existing copyrights as of that date, the 1976 Act granted a copyright term of 75 years from the date of publication, §§ 304(a) and (b), a 19-year increase over the 56-year term applicable under the 1909 Act.
The measure at issue here, the CTEA, installed the fourth major duration extension of federal copyrights.[2] Retaining the general structure of the 1976 Act, the CTEA enlarges the terms of all existing and future copyrights by 20 years. For works created by identified natural persons, the term now lasts from creation until 70 years after the author's [537 U.S. 196] death. 17 U.S.C. § 302(a). This standard harmonizes the baseline United States copyright term with the term adopted by the European Union in 1993. See Council Directive 93/98/EEC of 29 October 1993 Harmonizing the Term of Protection of Copyright and Certain Related Rights, 1993 Official J. Eur. Coms. (L 290), p. 9 (EU Council Directive 93/98). For anonymous works, pseudonymous works, and works made for hire, the term is 95 years from publication or 120 years from creation, whichever expires first. 17 U.S.C. § 302(c).
Paralleling the 1976 Act, the CTEA applies these new terms to all works not published by January 1, 1978. §§ 302(a), 303(a). For works published before 1978 with existing copyrights as of the CTEA's effective date, the CTEA extends the term to 95 years from publication. §§ 304(a) and (b). Thus, in common with the 1831, 1909, and 1976 Acts, the CTEA's new terms apply to both future and existing copyrights.[3]
B
Petitioners' suit challenges the CTEA's constitutionality under both the Copyright Clause and the First Amendment. On cross-motions for judgment on the pleadings, the District Court entered judgment for the Attorney General (respondent here). 74 F. Supp.2d 1 (DC 1999). The court held that the CTEA does not violate the "limited Times" restriction of the Copyright Clause because the CTEA's terms, though [537 U.S. 197] longer than the 1976 Act's terms, are still limited, not perpetual, and therefore fit within Congress' discretion. Id., at 3. The court also held that "there are no First Amendment rights to use the copyrighted works of others." Ibid.
The Court of Appeals for the District of Columbia Circuit affirmed. 239 F.3d 372 (2001). In that court's unanimous view, Harper & Row, Publishers, Inc. v. Nation Enterprises, 471 U.S. 539 (1985), foreclosed petitioners' First Amendment challenge to the CTEA. 239 F.3d, at 375. Copyright, the court reasoned, does not impermissibly restrict free speech, for it grants the author an exclusive right only to the specific form of expression; it does not shield any idea or fact contained in the copyrighted work, and it allows for "fair use" even of the expression itself. Id., at 375-376.
A majority of the Court of Appeals also upheld the CTEA against petitioners' contention that the measure exceeds Congress' power under the Copyright Clause. Specifically, the court rejected petitioners' plea for interpretation of the "limited Times" prescription not discretely but with a view to the "preambular statement of purpose" contained in the Copyright Clause: "To promote the Progress of Science." Id., at 377-378. Circuit precedent, Schnapper v. Foley, 667 F.2d 102 (CADC 1981), the court determined, precluded that plea. In this regard, the court took into account petitioners' acknowledgment that the preamble itself places no substantive limit on Congress' legislative power. 239 F.3d, at 378.
The appeals court found nothing in the constitutional text or its history to suggest that "a term of years for a copyright is not a `limited Time' if it may later be extended for another `limited Time.'" Id., at 379. The court recounted that "the First Congress made the Copyright Act of 1790 applicable to subsisting copyrights arising under the copyright laws of the several states." Ibid. That construction of Congress' authority under the Copyright Clause "by [those] contemporary with [the Constitution's] formation," the court said, merited [537 U.S. 198] "very great" and in this case "almost conclusive" weight. Ibid. (quoting Burrow-Giles Lithographic Co. v. Sarony, 111 U.S. 53, 57 (1884)). As early as McClurg v. Kingsland, 1 How. 202 (1843), the Court of Appeals added, this Court had made it "plain" that the same Clause permits Congress to "amplify the terms of an existing patent." 239 F.3d, at 380. The appeals court recognized that this Court has been similarly deferential to the judgment of Congress in the realm of copyright. Ibid. (citing Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417 (1984); Stewart v. Abend, 495 U.S. 207 (1990)).
Concerning petitioners' assertion that Congress might evade the limitation on its authority by stringing together "an unlimited number of `limited Times,'" the Court of Appeals stated that such legislative misbehavior "clearly is not the situation before us." 239 F.3d, at 379. Rather, the court noted, the CTEA "matches" the baseline term for "United States copyrights [with] the terms of copyrights granted by the European Union." Ibid. "[I]n an era of multinational publishers and instantaneous electronic transmission," the court said, "harmonization in this regard has obvious practical benefits" and is "a `necessary and proper' measure to meet contemporary circumstances rather than a step on the way to making copyrights perpetual." Ibid.
Judge Sentelle dissented in part. He concluded that Congress lacks power under the Copyright Clause to expand the copyright terms of existing works. Id., at 380-384. The Court of Appeals subsequently denied rehearing and rehearing en banc. 255 F.3d 849 (2001).
We granted certiorari to address two questions: whether the CTEA's extension of existing copyrights exceeds Congress' power under the Copyright Clause; and whether the CTEA's extension of existing and future copyrights violates the First Amendment. 534 U.S. 1126 and 1160 (2002). We now answer those two questions in the negative and affirm.
[537 U.S. 199] II
A
We address first the determination of the courts below that Congress has authority under the Copyright Clause to extend the terms of existing copyrights. Text, history, and precedent, we conclude, confirm that the Copyright Clause empowers Congress to prescribe "limited Times" for copyright protection and to secure the same level and duration of protection for all copyright holders, present and future.
The CTEA's baseline term of life plus 70 years, petitioners concede, qualifies as a "limited Tim[e]" as applied to future copyrights.[4] Petitioners contend, however, that existing copyrights extended to endure for that same term are not "limited." Petitioners' argument essentially reads into the text of the Copyright Clause the command that a time prescription, once set, becomes forever "fixed" or "inalterable." The word "limited," however, does not convey a meaning so constricted. At the time of the Framing, that word meant what it means today: "confine[d] within certain bounds," "restrain[ed]," or "circumscribe[d]." S. Johnson, A Dictionary of the English Language (7th ed. 1785); see T. Sheridan, A Complete Dictionary of the English Language (6th ed. 1796) ("confine[d] within certain bounds"); Webster's Third New International Dictionary 1312 (1976) ("confined within limits"; "restricted in extent, number, or duration"). Thus understood, a timespan appropriately "limited" as applied to future copyrights does not automatically cease to be "limited" when applied to existing copyrights. And as we observe, infra, at 209-210, there is no cause to suspect that a [537 U.S. 200] purpose to evade the "limited Times" prescription prompted Congress to adopt the CTEA.
To comprehend the scope of Congress' power under the Copyright Clause, "a page of history is worth a volume of logic." New York Trust Co. v. Eisner, 256 U.S. 345, 349 (1921) (Holmes, J.). History reveals an unbroken congressional practice of granting to authors of works with existing copyrights the benefit of term extensions so that all under copyright protection will be governed evenhandedly under the same regime. As earlier recounted, see supra, at 194, the First Congress accorded the protections of the Nation's first federal copyright statute to existing and future works alike. 1790 Act § 1.[5] Since then, Congress has regularly applied [537 U.S. 201] duration extensions to both existing and future copyrights. 1831 Act §§ 1, 16; 1909 Act §§ 23-24; 1976 Act §§ 302-303; 17 U.S.C. §§ 302-304.[6]
Because the Clause empowering Congress to confer copyrights also authorizes patents, congressional practice with respect to patents informs our inquiry. We count it significant that early Congresses extended the duration of numerous individual patents as well as copyrights. See, e. g., Act of Jan. 7, 1808, ch. 6, 6 Stat. 70 (patent); Act of Mar. 3, 1809, ch. 35, 6 Stat. 80 (patent); Act of Feb. 7, 1815, ch. 36, 6 Stat. 147 (patent); Act of May 24, 1828, ch. 145, 6 Stat. 389 (copyright); Act of Feb. 11, 1830, ch. 13, 6 Stat. 403 (copyright); [537 U.S. 202] see generally Ochoa, Patent and Copyright Term Extension and the Constitution: A Historical Perspective, 49 J. Copyright Soc. 19 (2001). The courts saw no "limited Times" impediment to such extensions; renewed or extended terms were upheld in the early days, for example, by Chief Justice Marshall and Justice Story sitting as circuit justices. See Evans v. Jordan, 8 F. Cas. 872, 874 (No. 4,564) (CC Va. 1813) (Marshall, J.) ("Th[e] construction of the constitution which admits the renewal of a patent, is not controverted. A renewed patent ... confers the same rights, with an original."), aff'd, 9 Cranch 199 (1815); Blanchard v. Sprague, 3 F. Cas. 648, 650 (No. 1,518) (CC Mass. 1839) (Story, J.) ("I never have entertained any doubt of the constitutional authority of congress" to enact a 14-year patent extension that "operates retrospectively"); see also Evans v. Robinson, 8 F. Cas. 886, 888 (No. 4,571) (CC Md. 1813) (Congresses "have the exclusive right ... to limit the times for which a patent right shall be granted, and are not restrained from renewing a patent or prolonging" it.).[7]
Further, although prior to the instant case this Court did not have occasion to decide whether extending the duration of existing copyrights complies with the "limited Times" prescription, the Court has found no constitutional barrier to the legislative expansion of existing patents.[8] McClurg v. [537 U.S. 203] Kingsland, 1 How. 202 (1843), is the pathsetting precedent. The patentee in that case was unprotected under the law in force when the patent issued because he had allowed his employer briefly to practice the invention before he obtained the patent. Only upon enactment, two years later, of an exemption for such allowances did the patent become valid, retroactive to the time it issued. McClurg upheld retroactive application of the new law. The Court explained that the legal regime governing a particular patent "depend[s] on the law as it stood at the emanation of the patent, together with such changes as have been since made; for though they may be retrospective in their operation, that is not a sound objection to their validity." Id., at 206.[9] Neither is it a sound [537 U.S. 204] objection to the validity of a copyright term extension, enacted pursuant to the same constitutional grant of authority, that the enlarged term covers existing copyrights.
Congress' consistent historical practice of applying newly enacted copyright terms to future and existing copyrights reflects a judgment stated concisely by Representative Huntington at the time of the 1831 Act: "[J]ustice, policy, and equity alike forb[id]" that an "author who had sold his [work] a week ago, be placed in a worse situation than the author who should sell his work the day after the passing of [the] act." 7 Cong. Deb. 424 (1831); accord, Symposium, The Constitutionality of Copyright Term Extension, 18 Cardozo Arts & Ent. L. J. 651, 694 (2000) (Prof. Miller) ("[S]ince 1790, it has indeed been Congress's policy that the author of yesterday's work should not get a lesser reward than the author of tomorrow's work just because Congress passed a statute lengthening the term today."). The CTEA follows this historical practice by keeping the duration provisions of the 1976 Act largely in place and simply adding 20 years to each of them. Guided by text, history, and precedent, we cannot agree with petitioners' submission that extending the duration of existing copyrights is categorically beyond Congress' authority under the Copyright Clause.
Satisfied that the CTEA complies with the "limited Times" prescription, we turn now to whether it is a rational exercise of the legislative authority conferred by the Copyright Clause. On that point, we defer substantially to Congress. [537 U.S. 205] Sony, 464 U.S., at 429 ("[I]t is Congress that has been assigned the task of defining the scope of the limited monopoly that should be granted to authors ... in order to give the public appropriate access to their work product.").[10]
The CTEA reflects judgments of a kind Congress typically makes, judgments we cannot dismiss as outside the Legislature's domain. As respondent describes, see Brief for Respondent 37-38, a key factor in the CTEA's passage was a 1993 European Union (EU) directive instructing EU members to establish a copyright term of life plus 70 years. EU Council Directive 93/98, Art. 1(1), p. 11; see 144 Cong. Rec. S12377-S12378 (daily ed. Oct. 12, 1998) (statement of Sen. Hatch). Consistent with the Berne Convention, the EU directed its members to deny this longer term to the works of any non-EU country whose laws did not secure the same extended term. See Berne Conv. Art. 7(8); P. Goldstein, International Copyright § 5.3, p. 239 (2001). By extending the baseline United States copyright term to life plus 70 years, Congress sought to ensure that American authors would receive [537 U.S. 206] the same copyright protection in Europe as their European counterparts.[11] The CTEA may also provide greater incentive for American and other authors to create and disseminate their work in the United States. See Perlmutter, Participation in the International Copyright System as a Means to Promote the Progress of Science and Useful Arts, 36 Loyola (LA) L. Rev. 323, 330 (2002) ("[M]atching th[e] level of [copyright] protection in the United States [to that in the EU] can ensure stronger protection for U.S. works abroad and avoid competitive disadvantages vis-à-vis foreign rightholders."); see also id., at 332 (the United States could not "play a leadership role" in the give-and-take evolution of the international copyright system, indeed it would "lose all flexibility," "if the only way to promote the progress of science were to provide incentives to create new works").[12]
In addition to international concerns,[13] Congress passed the CTEA in light of demographic, economic, and technological [537 U.S. 207] changes, Brief for Respondent 25-26, 33, and nn. 23 and 24,[14] and rationally credited projections that longer terms would encourage copyright holders to invest in the restoration and public distribution of their works, id., at 34-37; see H. R. Rep. No. 105-452, p. 4 (1998) (term extension "provide[s] copyright owners generally with the incentive to restore older works and further disseminate them to the public").[15]
[537 U.S. 208] In sum, we find that the CTEA is a rational enactment; we are not at liberty to second-guess congressional determinations and policy judgments of this order, however debatable or arguably unwise they may be. Accordingly, we cannot conclude that the CTEA — which continues the unbroken congressional practice of treating future and existing copyrights in parity for term extension purposes — is an impermissible exercise of Congress' power under the Copyright Clause.
B
Petitioners' Copyright Clause arguments rely on several novel readings of the Clause. We next address these arguments and explain why we find them unpersuasive.
1
Petitioners contend that even if the CTEA's 20-year term extension is literally a "limited Tim[e]," permitting Congress to extend existing copyrights allows it to evade the "limited Times" constraint by creating effectively perpetual copyrights through repeated extensions. We disagree.
[537 U.S. 209] As the Court of Appeals observed, a regime of perpetual copyrights "clearly is not the situation before us." 239 F.3d, at 379. Nothing before this Court warrants construction of the CTEA's 20-year term extension as a congressional attempt to evade or override the "limited Times" constraint.[16] Critically, we again emphasize, petitioners fail to [537 U.S. 210] show how the CTEA crosses a constitutionally significant threshold with respect to "limited Times" that the 1831, 1909, and 1976 Acts did not. See supra, at 194-196; Austin, supra n. 13, at 56 ("If extending copyright protection to works already in existence is constitutionally suspect," so is "extending the protections of U.S. copyright law to works by foreign authors that had already been created and even first published when the federal rights attached."). Those earlier Acts did not create perpetual copyrights, and neither does the CTEA.[17]
2
Petitioners dominantly advance a series of arguments all premised on the proposition that Congress may not extend an existing copyright absent new consideration from the author. They pursue this main theme under three headings. Petitioners contend that the CTEA's extension of existing copyrights (1) overlooks the requirement of "originality," (2) fails to "promote the Progress of Science," and (3) ignores copyright's quid pro quo.
[537 U.S. 211] Petitioners' "originality" argument draws on Feist Publications, Inc. v. Rural Telephone Service Co., 499 U.S. 340 (1991). In Feist, we observed that "[t]he sine qua non of copyright is originality," id., at 345, and held that copyright protection is unavailable to "a narrow category of works in which the creative spark is utterly lacking or so trivial as to be virtually nonexistent," id., at 359. Relying on Feist, petitioners urge that even if a work is sufficiently "original" to qualify for copyright protection in the first instance, any extension of the copyright's duration is impermissible because, once published, a work is no longer original.
Feist, however, did not touch on the duration of copyright protection. Rather, the decision addressed the core question of copyrightability, i. e., the "creative spark" a work must have to be eligible for copyright protection at all. Explaining the originality requirement, Feist trained on the Copyright Clause words "Authors" and "Writings." Id., at 346-347. The decision did not construe the "limited Times" for which a work may be protected, and the originality requirement has no bearing on that prescription.
More forcibly, petitioners contend that the CTEA's extension of existing copyrights does not "promote the Progress of Science" as contemplated by the preambular language of the Copyright Clause. Art. I, § 8, cl. 8. To sustain this objection, petitioners do not argue that the Clause's preamble is an independently enforceable limit on Congress' power. See 239 F.3d, at 378 (Petitioners acknowledge that "the preamble of the Copyright Clause is not a substantive limit on Congress' legislative power." (internal quotation marks omitted)). Rather, they maintain that the preambular language identifies the sole end to which Congress may legislate; accordingly, they conclude, the meaning of "limited Times" must be "determined in light of that specified end." Brief for Petitioners 19. The CTEA's extension of existing copyrights categorically fails to "promote the Progress of Science," petitioners argue, because it does not stimulate the [537 U.S. 212] creation of new works but merely adds value to works already created.
As petitioners point out, we have described the Copyright Clause as "both a grant of power and a limitation," Graham v. John Deere Co. of Kansas City, 383 U.S. 1, 5 (1966), and have said that "[t]he primary objective of copyright" is "[t]o promote the Progress of Science," Feist, 499 U.S., at 349. The "constitutional command," we have recognized, is that Congress, to the extent it enacts copyright laws at all, create a "system" that "promote[s] the Progress of Science." Graham, 383 U.S., at 6.[18]
We have also stressed, however, that it is generally for Congress, not the courts, to decide how best to pursue the Copyright Clause's objectives. See Stewart v. Abend, 495 U.S., at 230 ("Th[e] evolution of the duration of copyright protection tellingly illustrates the difficulties Congress faces. . . . [I]t is not our role to alter the delicate balance [537 U.S. 213] Congress has labored to achieve."); Sony, 464 U.S., at 429 ("[I]t is Congress that has been assigned the task of defining the scope of [rights] that should be granted to authors or to inventors in order to give the public appropriate access to their work product."); Graham, 383 U.S., at 6 ("Within the limits of the constitutional grant, the Congress may, of course, implement the stated purpose of the Framers by selecting the policy which in its judgment best effectuates the constitutional aim."). The justifications we earlier set out for Congress' enactment of the CTEA, supra, at 205-207, provide a rational basis for the conclusion that the CTEA "promote[s] the Progress of Science."
On the issue of copyright duration, Congress, from the start, has routinely applied new definitions or adjustments of the copyright term to both future works and existing works not yet in the public domain.[19] Such consistent congressional practice is entitled to "very great weight, and when it is remembered that the rights thus established have not been disputed during a period of [over two] centur[ies], it is almost conclusive." Burrow-Giles Lithographic Co. v. Sarony, 111 U.S., at 57. Indeed, "[t]his Court has repeatedly laid down the principle that a contemporaneous legislative exposition of the Constitution when the founders of our Government and framers of our Constitution were actively participating in public affairs, acquiesced in for a long term of years, fixes the construction to be given [the Constitution's] provisions." Myers v. United States, 272 U.S. 52, 175 (1926). Congress' unbroken practice since the founding generation [537 U.S. 214] thus overwhelms petitioners' argument that the CTEA's extension of existing copyrights fails per se to "promote the Progress of Science."[20]
Closely related to petitioners' preambular argument, or a variant of it, is their assertion that the Copyright Clause "imbeds a quid pro quo." Brief for Petitioners 23. They contend, in this regard, that Congress may grant to an "Autho[r]" an "exclusive Right" for a "limited Tim[e]," but only in exchange for a "Writin[g]." Congress' power to confer copyright protection, petitioners argue, is thus contingent upon an exchange: The author of an original work receives an "exclusive Right" for a "limited Tim[e]" in exchange for a dedication to the public thereafter. Extending an existing copyright without demanding additional consideration, petitioners maintain, bestows an unpaid-for benefit on copyright holders and their heirs, in violation of the quid pro quo requirement.
We can demur to petitioners' description of the Copyright Clause as a grant of legislative authority empowering Congress "to secure a bargain — this for that." Id., at 16; see Mazer v. Stein, 347 U.S. 201, 219 (1954) ("The economic philosophy behind the clause empowering Congress to grant patents and copyrights is the conviction that encouragement of individual effort by personal gain is the best way to advance public welfare through the talents of authors and inventors in `Science and useful Arts.'"). But the legislative evolution earlier recalled demonstrates what the bargain entails. Given the consistent placement of existing copyright [537 U.S. 215] holders in parity with future holders, the author of a work created in the last 170 years would reasonably comprehend, as the "this" offered her, a copyright not only for the time in place when protection is gained, but also for any renewal or extension legislated during that time.[21] Congress could rationally seek to "promote . . . Progress" by including in every copyright statute an express guarantee that authors would receive the benefit of any later legislative extension of the copyright term. Nothing in the Copyright Clause bars Congress from creating the same incentive by adopting the same position as a matter of unbroken practice. See Brief for Respondent 31-32.
Neither Sears, Roebuck & Co. v. Stiffel Co., 376 U.S. 225 (1964), nor Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141 (1989), is to the contrary. In both cases, we invalidated the application of certain state laws as inconsistent with the federal patent regime. Sears, 376 U.S., at 231-233; Bonito, 489 U.S., at 152. Describing Congress' constitutional authority to confer patents, Bonito Boats noted: "The Patent Clause itself reflects a balance between the need to encourage innovation and the avoidance of monopolies which stifle competition without any concomitant advance in the `Progress of Science and useful Arts.'" Id., at 146. [537 U.S. 216] Sears similarly stated that "[p]atents are not given as favors ... but are meant to encourage invention by rewarding the inventor with the right, limited to a term of years fixed by the patent, to exclude others from the use of his invention." 376 U.S., at 229. Neither case concerned the extension of a patent's duration. Nor did either suggest that such an extension might be constitutionally infirm. Rather, Bonito Boats reiterated the Court's unclouded understanding: "It is for Congress to determine if the present system" effectuates the goals of the Copyright and Patent Clause. 489 U.S., at 168. And as we have documented, see supra, at 201-204, Congress has many times sought to effectuate those goals by extending existing patents.
We note, furthermore, that patents and copyrights do not entail the same exchange, and that our references to a quid pro quo typically appear in the patent context. See, e. g., J. E. M. Ag Supply, Inc. v. Pioneer Hi-Bred International, Inc., 534 U.S. 124, 142 (2001) ("The disclosure required by the Patent Act is `the quid pro quo of the right to exclude.'" (quoting Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470, 484 (1974))); Bonito Boats, 489 U.S., at 161 ("the quid pro quo of substantial creative effort required by the federal [patent] statute"); Brenner v. Manson, 383 U.S. 519, 534 (1966) ("The basic quid pro quo ... for granting a patent monopoly is the benefit derived by the public from an invention with substantial utility."); Pennock v. Dialogue, 2 Pet. 1, 23 (1829) (If an invention is already commonly known and used when the patent is sought, "there might be sound reason for presuming, that the legislature did not intend to grant an exclusive right," given the absence of a "quid pro quo."). This is understandable, given that immediate disclosure is not the objective of, but is exacted from, the patentee. It is the price paid for the exclusivity secured. See J. E. M. Ag Supply, 534 U.S., at 142. For the author seeking copyright protection, in contrast, disclosure is the desired objective, not something exacted from the author in exchange for the copyright.
[537 U.S. 217] Indeed, since the 1976 Act, copyright has run from creation, not publication. See 1976 Act § 302(a); 17 U.S.C. § 302(a).
Further distinguishing the two kinds of intellectual property, copyright gives the holder no monopoly on any knowledge. A reader of an author's writing may make full use of any fact or idea she acquires from her reading. See § 102(b). The grant of a patent, on the other hand, does prevent full use by others of the inventor's knowledge. See Brief for Respondent 22; Alfred Bell & Co. v. Catalda Fine Arts, 191 F.2d 99, 103, n. 16 (CA2 1951) (The monopoly granted by a copyright "is not a monopoly of knowledge. The grant of a patent does prevent full use being made of knowledge, but the reader of a book is not by the copyright laws prevented from making full use of any information he may acquire from his reading." (quoting W. Copinger, Law of Copyright 2 (7th ed. 1936))). In light of these distinctions, one cannot extract from language in our patent decisions — language not trained on a grant's duration — genuine support for petitioners' bold view. Accordingly, we reject the proposition that a quid pro quo requirement stops Congress from expanding copyright's term in a manner that puts existing and future copyrights in parity.[22]
3
As an alternative to their various arguments that extending existing copyrights violates the Copyright Clause per se, petitioners urge heightened judicial review of such extensions to ensure that they appropriately pursue the purposes of the Clause. See Brief for Petitioners 31-32. Specifically, [537 U.S. 218] petitioners ask us to apply the "congruence and proportionality" standard described in cases evaluating exercises of Congress' power under § 5 of the Fourteenth Amendment. See, e. g., City of Boerne v. Flores, 521 U.S. 507 (1997). But we have never applied that standard outside the § 5 context; it does not hold sway for judicial review of legislation enacted, as copyright laws are, pursuant to Article I authorization.
Section 5 authorizes Congress to enforce commands contained in and incorporated into the Fourteenth Amendment. Amdt. 14, § 5 ("The Congress shall have power to enforce, by appropriate legislation, the provisions of this article." (emphasis added)). The Copyright Clause, in contrast, empowers Congress to define the scope of the substantive right. See Sony, 464 U.S., at 429. Judicial deference to such congressional definition is "but a corollary to the grant to Congress of any Article I power." Graham, 383 U.S., at 6. It would be no more appropriate for us to subject the CTEA to "congruence and proportionality" review under the Copyright Clause than it would be for us to hold the Act unconstitutional per se.
For the several reasons stated, we find no Copyright Clause impediment to the CTEA's extension of existing copyrights.
III
Petitioners separately argue that the CTEA is a content-neutral regulation of speech that fails heightened judicial review under the First Amendment.[23] We reject petitioners' [537 U.S. 219] plea for imposition of uncommonly strict scrutiny on a copyright scheme that incorporates its own speech-protective purposes and safeguards. The Copyright Clause and First Amendment were adopted close in time. This proximity indicates that, in the Framers' view, copyright's limited monopolies are compatible with free speech principles. Indeed, copyright's purpose is to promote the creation and publication of free expression. As Harper & Row observed: "[T]he Framers intended copyright itself to be the engine of free expression. By establishing a marketable right to the use of one's expression, copyright supplies the economic incentive to create and disseminate ideas." 471 U.S., at 558.
In addition to spurring the creation and publication of new expression, copyright law contains built-in First Amendment accommodations. See id., at 560. First, it distinguishes between ideas and expression and makes only the latter eligible for copyright protection. Specifically, 17 U.S.C. § 102(b) provides: "In no case does copyright protection for an original work of authorship extend to any idea, procedure, process, system, method of operation, concept, principle, or discovery, regardless of the form in which it is described, explained, illustrated, or embodied in such work." As we said in Harper & Row, this "idea/expression dichotomy strike[s] a definitional balance between the First Amendment and the Copyright Act by permitting free communication of facts while still protecting an author's expression." 471 U.S., at 556 (internal quotation marks omitted). Due to this distinction, every idea, theory, and fact in a copyrighted work becomes instantly available for public exploitation at the moment of publication. See Feist, 499 U.S., at 349-350.
Second, the "fair use" defense allows the public to use not only facts and ideas contained in a copyrighted work, but also expression itself in certain circumstances. Codified at 17 U.S.C. § 107, the defense provides: "[T]he fair use of a [537 U.S. 220] copyrighted work, including such use by reproduction in copies . . ., for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright." The fair use defense affords considerable "latitude for scholarship and comment," Harper & Row, 471 U.S., at 560, and even for parody, see Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569 (1994) (rap group's musical parody of Roy Orbison's "Oh, Pretty Woman" may be fair use).
The CTEA itself supplements these traditional First Amendment safeguards. First, it allows libraries, archives, and similar institutions to "reproduce" and "distribute, display, or perform in facsimile or digital form" copies of certain published works "during the last 20 years of any term of copyright ... for purposes of preservation, scholarship, or research" if the work is not already being exploited commercially and further copies are unavailable at a reasonable price. 17 U.S.C. § 108(h); see Brief for Respondent 36. Second, Title II of the CTEA, known as the Fairness in Music Licensing Act of 1998, exempts small businesses, restaurants, and like entities from having to pay performance royalties on music played from licensed radio, television, and similar facilities. 17 U.S.C. § 110(5)(B); see Brief for Representative F. James Sensenbrenner, Jr., et al. as Amici Curiae 5-6, n. 3.
Finally, the case petitioners principally rely upon for their First Amendment argument, Turner Broadcasting System, Inc. v. FCC, 512 U.S. 622 (1994), bears little on copyright. The statute at issue in Turner required cable operators to carry and transmit broadcast stations through their proprietary cable systems. Those "must-carry" provisions, we explained, implicated "the heart of the First Amendment," namely, "the principle that each person should decide for himself or herself the ideas and beliefs deserving of expression, consideration, and adherence." Id., at 641.
[537 U.S. 221] The CTEA, in contrast, does not oblige anyone to reproduce another's speech against the carrier's will. Instead, it protects authors' original expression from unrestricted exploitation. Protection of that order does not raise the free speech concerns present when the government compels or burdens the communication of particular facts or ideas. The First Amendment securely protects the freedom to make— or decline to make—one's own speech; it bears less heavily when speakers assert the right to make other people's speeches. To the extent such assertions raise First Amendment concerns, copyright's built-in free speech safeguards are generally adequate to address them. We recognize that the D. C. Circuit spoke too broadly when it declared copyrights "categorically immune from challenges under the First Amendment." 239 F. 3d, at 375. But when, as in this case, Congress has not altered the traditional contours of copyright protection, further First Amendment scrutiny is unnecessary. See Harper & Row, 471 U. S., at 560; cf. San Francisco Arts & Athletics, Inc. v. United States Olympic Comm., 483 U. S. 522 (1987).[24]
IV
If petitioners' vision of the Copyright Clause held sway, it would do more than render the CTEA's duration extensions unconstitutional as to existing works. Indeed, petitioners' assertion that the provisions of the CTEA are not severable would make the CTEA's enlarged terms invalid even as to [537 U.S. 222] tomorrow's work. The 1976 Act's time extensions, which set the pattern that the CTEA followed, would be vulnerable as well.
As we read the Framers' instruction, the Copyright Clause empowers Congress to determine the intellectual property regimes that, overall, in that body's judgment, will serve the ends of the Clause. See Graham, 383 U. S., at 6 (Congress may "implement the stated purpose of the Framers by selecting the policy which in its judgment best effectuates the constitutional aim." (emphasis added)). Beneath the facade of their inventive constitutional interpretation, petitioners forcefully urge that Congress pursued very bad policy in prescribing the CTEA's long terms. The wisdom of Congress' action, however, is not within our province to second-guess. Satisfied that the legislation before us remains inside the domain the Constitution assigns to the First Branch, we affirm the judgment of the Court of Appeals.
It is so ordered.
JUSTICE STEVENS, dissenting.
Writing for a unanimous Court in 1964, Justice Black stated that it is obvious that a State could not "extend the life of a patent beyond its expiration date," Sears, Roebuck & Co. v. Stiffel Co., 376 U. S. 225, 231 (1964).[1] As I shall explain, the reasons why a State may not extend the life of a patent apply to Congress as well. If Congress may not expand the scope of a patent monopoly, it also may not extend [537 U.S. 223] the life of a copyright beyond its expiration date. Accordingly, insofar as the 1998 Sonny Bono Copyright Term Extension Act, 112 Stat. 2827, purported to extend the life of unexpired copyrights, it is invalid. Because the majority's contrary conclusion rests on the mistaken premise that this Court has virtually no role in reviewing congressional grants of monopoly privileges to authors, inventors, and their successors, I respectfully dissent.
I
The authority to issue copyrights stems from the same Clause in the Constitution that created the patent power. It provides:
"Congress shall have Power . . . To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries." Art. I, § 8, cl. 8.
It is well settled that the Clause is "both a grant of power and a limitation" and that Congress "may not overreach the restraints imposed by the stated constitutional purpose." Graham v. John Deere Co. of Kansas City, 383 U. S. 1, 5-6 (1966). As we have made clear in the patent context, that purpose has two dimensions. Most obviously the grant of exclusive rights to their respective writings and discoveries is intended to encourage the creativity of "Authors and Inventors." But the requirement that those exclusive grants be for "limited Times" serves the ultimate purpose of promoting the "Progress of Science and useful Arts" by guaranteeing that those innovations will enter the public domain as soon as the period of exclusivity expires:
"Once the patent issues, it is strictly construed, United States v. Masonite Corp., 316 U. S. 265, 280 (1942), it cannot be used to secure any monopoly beyond that contained in the patent, Morton Salt Co. v. G. S. Suppiger Co., 314 U. S. 488, 492 (1942), . . . and especially relevant [537 U.S. 224] here, when the patent expires the monopoly created by it expires, too, and the right to make the article—including the right to make it in precisely the shape it carried when patented—passes to the public. Kellogg Co. v. National Biscuit Co., 305 U. S. 111, 120-122 (1938); Singer Mfg. Co. v. June Mfg. Co., 163 U. S. 169, 185 (1896)." Sears, Roebuck & Co., 376 U. S., at 230.
It is that ultimate purpose that explains why a patent may not issue unless it discloses the invention in such detail that one skilled in the art may copy it. See, e. g., Grant v. Raymond, 6 Pet. 218, 247 (1832) (Marshall, C. J.) ("The third section [of the 1793 Act] requires, as preliminary to a patent, a correct specification and description of the thing discovered. This is necessary in order to give the public, after the privilege shall expire, the advantage for which the privilege is allowed, and is the foundation of the power to issue the patent"). Complete disclosure as a precondition to the issuance of a patent is part of the quid pro quo that justifies the limited monopoly for the inventor as consideration for full and immediate access by the public when the limited time expires.[2]
Almost two centuries ago the Court plainly stated that public access to inventions at the earliest possible date was the essential purpose of the Clause:
"While one great object was, by holding out a reasonable reward to inventors and giving them an exclusive right to their inventions for a limited period, to stimulate the efforts of genius; the main object was `to promote the [537 U.S. 225] progress of science and useful arts;' and this could be done best, by giving the public at large a right to make, construct, use, and vend the thing invented, at as early a period as possible, having a due regard to the rights of the inventor. If an inventor should be permitted to hold back from the knowledge of the public the secrets of his invention; if he should for a long period of years retain the monopoly, and make, and sell his invention publicly, and thus gather the whole profits of it, relying upon his superior skill and knowledge of the structure; and then, and then only, when the danger of competition should force him to secure the exclusive right, he should be allowed to take out a patent, and thus exclude the public from any farther use than what should be derived under it during his fourteen years; it would materially retard the progress of science and the useful arts, and give a premium to those, who should be least prompt to communicate their discoveries." Pennock v. Dialogue, 2 Pet. 1, 18 (1829).
Pennock held that an inventor could not extend the period of patent protection by postponing his application for the patent while exploiting the invention commercially. As we recently explained, "implicit in the Patent Clause itself" is the understanding "that free exploitation of ideas will be the rule, to which the protection of a federal patent is the exception. Moreover, the ultimate goal of the patent system is to bring new designs and technologies into the public domain through disclosure." Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U. S. 141, 151 (1989).
The issuance of a patent is appropriately regarded as a quid pro quo—the grant of a limited right for the inventor's disclosure and subsequent contribution to the public domain. See, e. g., Pfaff v. Wells Electronics, Inc., 525 U. S. 55, 63 (1998) ("[T]he patent system represents a carefully crafted bargain that encourages both the creation and the public disclosure of new and useful advances in technology, in return [537 U.S. 226] for an exclusive monopoly for a limited period of time"). It would be manifestly unfair if, after issuing a patent, the Government as a representative of the public sought to modify the bargain by shortening the term of the patent in order to accelerate public access to the invention. The fairness considerations that underlie the constitutional protections against ex post facto laws and laws impairing the obligation of contracts would presumably disable Congress from making such a retroactive change in the public's bargain with an inventor without providing compensation for the taking. Those same considerations should protect members of the public who make plans to exploit an invention as soon as it enters the public domain from a retroactive modification of the bargain that extends the term of the patent monopoly. As I discuss below, the few historical exceptions to this rule do not undermine the constitutional analysis. For quite plainly, the limitations "implicit in the Patent Clause itself," 489 U. S., at 151, adequately explain why neither a State nor Congress may "extend the life of a patent beyond its expiration date," Sears, Roebuck & Co., 376 U. S., at 231.[3]
Neither the purpose of encouraging new inventions nor the overriding interest in advancing progress by adding knowledge to the public domain is served by retroactively increasing the inventor's compensation for a completed invention and frustrating the legitimate expectations of members of the public who want to make use of it in a free [537 U.S. 227] market. Because those twin purposes provide the only avenue for congressional action under the Copyright/Patent Clause of the Constitution, any other action is manifestly unconstitutional.
II
We have recognized that these twin purposes of encouraging new works and adding to the public domain apply to copyrights as well as patents. Thus, with regard to copyrights on motion pictures, we have clearly identified the overriding interest in the "release to the public of the products of [the author's] creative genius." United States v. Paramount Pictures, Inc., 334 U. S. 131, 158 (1948).[4] And, as with patents, we have emphasized that the overriding purpose of providing a reward for authors' creative activity is to motivate that activity and "to allow the public access to the products of their genius after the limited period of exclusive control has expired." Sony Corp. of America v. Universal City Studios, Inc., 464 U. S. 417, 429 (1984). Ex post facto extensions of copyrights result in a gratuitous transfer of wealth from the public to authors, publishers, and their successors in interest. Such retroactive extensions do not even arguably serve either of the purposes of the Copyright/Patent Clause. The reasons why such extensions of the patent monopoly are unconstitutional apply to copyrights as well.
Respondent, however, advances four arguments in support of the constitutionality of such retroactive extensions: (1) The first Copyright Act enacted shortly after the Constitution [537 U.S. 228] was ratified applied to works that had already been produced; (2) later Congresses have repeatedly authorized extensions of copyrights and patents; (3) such extensions promote the useful arts by giving copyright holders an incentive to preserve and restore certain valuable motion pictures; and (4) as a matter of equity, whenever Congress provides a longer term as an incentive to the creation of new works by authors, it should provide an equivalent reward to the owners of all unexpired copyrights. None of these arguments is persuasive.
III
Congress first enacted legislation under the Copyright/Patent Clause in 1790 when it passed bills creating federal patent and copyright protection. Because the content of that first legislation, the debate that accompanied it, and the differences between the initial versions and the bills that ultimately passed provide strong evidence of early Congresses' understanding of the constitutional limits of the Copyright/Patent Clause, I examine both the initial copyright and patent statutes.
Congress first considered intellectual property statutes in its inaugural session in 1789. The bill debated, House Resolution 10—"a bill to promote the progress of science and useful arts, by securing to authors and inventors the exclusive right to their respective writings and discoveries," 3 Documentary History of First Federal Congress of the United States 94 (L. de Pauw, C. Bickford, & L. Hauptman eds. 1977) (hereinafter Documentary History)—provided both copyright and patent protection for similar terms.[5] The first Congress did not pass H. R. 10, though a similar version was [537 U.S. 229] reintroduced in the second Congress in 1790. After minimal debate, however, the House of Representatives began consideration of two separate bills, one covering patents and the other copyrights. Because, as the majority recognizes, "congressional practice with respect to patents informs our inquiry," ante, at 201, I consider the history of both patent and copyright legislation.
The Patent Act
What eventually became the Patent Act of 1790 had its genesis in House Resolution 41, introduced on February 16, 1790. That resolution differed from H. R. 10 in one important respect. Whereas H. R. 10 would have extended patent protection to only those inventions that were "not before known or used," H. R. 41, by contrast, added the phrase "within the United States" to that limitation and expressly authorized patent protection for "any person, who shall after the passing of this act, first import into the United States . . . any . . . device . . . not before used or known in the said States." 6 Documentary History 1626-1632. This change would have authorized patents of importation, providing United States patent protection for inventions already in use elsewhere. This change, however, was short lived and was removed by a floor amendment on March 5, 1789. Walterscheid 125. Though exact records of the floor debate are lost, correspondence from House Members indicate that doubts about the constitutionality of such a provision led to its removal. Representative Thomas Fitzsimmons wrote to a leading industrialist that day stating that the section "`allowing to Importers, was left out, the Constitutional power being Questionable.'" Id., at 126 (quoting Letter from Rep. Thomas Fitzsimmons to Tench Coxe (Mar. 5, 1790)). James Madison himself recognized this constitutional limitation on patents of importation, flatly stating that the constitution "forbids patents for that purpose." 13 Papers [537 U.S. 230] of James Madison 128 (C. Hobson & R. Rutland eds. 1981) (reprinting letter to Tench Coxe (Mar. 28, 1790)).[6]
The final version of the 1790 Patent Act, 1 Stat. 109, did not contain the geographic qualifier and thus did not provide for patents of importation. This statutory omission, coupled with the contemporaneous statements by legislators, provides strong evidence that Congress recognized significant limitations on their constitutional authority under the Copyright/Patent Clause to extend protection to a class of intellectual properties. This recognition of a categorical constitutional limitation is fundamentally at odds with the majority's reading of Article I, § 8, to provide essentially no limit on congressional action under the Clause. If early congressional practice does, indeed, inform our analysis, as it should, then the majority's judicial excision of these constitutional limits cannot be correct.
The Copyright Act
Congress also passed the first Copyright Act, 1 Stat. 124, in 1790. At that time there were a number of maps, charts, and books that had already been printed, some of which were copyrighted under state laws and some of which were arguably entitled to perpetual protection under the common law. The federal statute applied to those works as well as to new works. In some cases the application of the new federal rule reduced the pre-existing protections, and in others it [537 U.S. 231] may have increased the protection.[7] What is significant is that the statute provided a general rule creating new federal rights that supplanted the diverse state rights that previously existed. It did not extend or attach to any of those pre-existing state and common-law rights: "That congress, in passing the act of 1790, did not legislate in reference to existing rights, appears clear." Wheaton v. Peters, 8 Pet. 591, 661 (1834); see also Fox Film Corp. v. Doyal, 286 U. S. 123, 127 (1932) ("As this Court has repeatedly said, the Congress did not sanction an existing right but created a new one"). Congress set in place a federal structure governing certain types of intellectual property for the new Republic. That Congress exercised its unquestionable constitutional authority to create a new federal system securing rights for authors and inventors in 1790 does not provide support for the proposition that Congress can extend pre-existing federal protections retroactively.
Respondent places great weight on this first congressional action, arguing that it proves that "Congress thus unquestionably understood that it had authority to apply a new, more favorable copyright term to existing works." Brief for Respondent 12-13. That understanding, however, is not relevant to the question presented by this case—whether "Congress has the power under the Copyright Clause to extend retroactively the term of existing copyrights?" Brief for [537 U.S. 232] Petitioners i.[8] Precisely put, the question presented by this case does not even implicate the 1790 Act, for that Act created, rather than extended, copyright protection. That this law applied to works already in existence says nothing about the First Congress' conception of its power to extend this newly created federal right.
Moreover, Members of Congress in 1790 were well aware of the distinction between the creation of new copyright regimes and the extension of existing copyrights. The 1790 Act was patterned, in many ways, after the Statute of Anne enacted in England in 1710. 8 Ann., c. 19; see Fred Fisher Music Co. v. M. Witmark & Sons, 318 U. S. 643, 647-648 (1943). The English statute, in addition to providing authors with copyrights on new works for a term of 14 years renewable for another 14-year term, also replaced the booksellers' claimed perpetual rights in existing works with a single 21-year term. In 1735, the booksellers proposed an amendment that would have extended the terms of existing copyrights until 1756, but the amendment was defeated. Opponents of the amendment had argued that if the bill were to pass, it would "in Effect be establishing a perpetual Monopoly . . . only to increase the private Gain of the [537 U.S. 233] Booksellers . . . ."[9] The authors of the federal statute that used the Statute of Anne as a model were familiar with this history. Accordingly, this Court should be especially wary of relying on Congress' creation of a new system to support the proposition that Congress unquestionably understood that it had constitutional authority to extend existing copyrights.
IV
Since the creation of federal patent and copyright protection in 1790, Congress has passed a variety of legislation, both providing specific relief for individual authors and inventors as well as changing the general statutes conferring patent and copyright privileges. Some of the changes did indeed, as the majority describes, extend existing protections retroactively. Other changes, however, did not do so. A more complete and comprehensive look at the history of congressional action under the Copyright/Patent Clause demonstrates that history, in this case, does not provide the "`volume of logic,'" ante, at 200, necessary to sustain the Sonny Bono Act's constitutionality.
Congress, aside from changing the process of applying for a patent in the 1793 Patent Act, did not significantly alter the basic patent and copyright systems for the next 40 years. During this time, however, Congress did consider many private bills. Respondent seeks support from "Congress's historical practice of using its Copyright and Patent Clause authority to extend the terms of individual patents and copyrights." Brief for Respondent 13. Carefully read, [537 U.S. 234] however, these private bills do not support respondent's historical gloss, but rather significantly undermine the historical claim.
The first example relied upon by respondent, the extension of Oliver Evans' patent in 1808, ch. 13, 6 Stat. 70, demonstrates the pitfalls of relying on an incomplete historical analysis. Evans, an inventor who had developed several improvements in milling flour, received the third federal patent on January 7, 1791. See Federico, Patent Trials of Oliver Evans, 27 J. Pat. Off. Soc. 586, 590 (1945). Under the 14-year term provided by the 1790 Patent Act, this patent was to expire on January 7, 1805. Claiming that 14 years had not provided him a sufficient time to realize income from his invention and that the net profits were spent developing improvements on the steam engine, Evans first sought an extension of his patent in December 1804. Id., at 598; 14 Annals of Cong. 1002 (1805). Unsuccessful in 1804, he tried again in 1805, and yet again in 1806, to persuade Congress to pass his private bill. Undaunted, Evans tried one last time to revive his expired patent after receiving an adverse judgment in an infringement action. See Evans v. Chambers, 8 F. Cas. 837 (No. 4,555) (CC Pa. 1807). This time, his effort at private legislation was successful, and Congress passed a bill extending his patent for 14 years. See An Act for the relief of Oliver Evans, 6 Stat. 70. This legislation, passed January 21, 1808, restored a patent monopoly for an invention that had been in the public domain for over four years. As such, this Act unquestionably exceeded Congress' authority under the Copyright/Patent Clause: "The Congress in the exercise of the patent power may not overreach the restraints imposed by the stated constitutional purpose. . . . Congress may not authorize the issuance of patents whose effects are to remove existent knowledge from the public domain, or to restrict free access to materials already available." Graham, 383 U. S., at 5-6 (emphasis added).
[537 U.S. 235] This extension of patent protection to an expired patent was not an isolated incident. Congress passed private bills either directly extending patents or allowing otherwise untimely applicants to apply for patent extensions for approximately 75 patents between 1790 and 1875. Of these 75 patents, at least 56 had already fallen into the public domain.[10] The fact that this repeated practice was patently unconstitutional completely undermines the majority's reliance on this history as "significant." Ante, at 201.
Copyright legislation has a similar history. The federal Copyright Act was first amended in 1831. That amendment, like later amendments, not only authorized a longer term for new works, but also extended the terms of unexpired copyrights. Respondent argues that that historical practice effectively establishes the constitutionality of retroactive extensions of unexpired copyrights. Of course, the practice buttressess the presumption of validity that attaches to every Act of Congress. But, as our decision in INS v. Chadha, 462 U. S. 919 (1983), demonstrates, the fact that Congress has repeatedly acted on a mistaken interpretation of the Constitution does not qualify our duty to invalidate an unconstitutional practice when it is finally challenged in an appropriate case. As Justice White pointed out in his dissent in Chadha, that case sounded the "death knell for nearly 200 other statutory provisions" in which Congress had exercised a "`legislative veto.'" Id., at 967. Regardless of the effect of unconstitutional enactments of Congress, the scope of "`the constitutional power of Congress . . . is ultimately a [537 U.S. 236] judicial rather than a legislative question, and can be settled finally only by this Court.'" United States v. Morrison, 529 U. S. 598, 614 (2000) (quoting Heart of Atlanta Motel, Inc. v. United States, 379 U. S. 241, 273 (1964) (Black, J., concurring)). For, as this Court has long recognized, "[i]t is obviously correct that no one acquires a vested or protected right in violation of the Constitution by long use, even when that span of time covers our entire national existence." Walz v. Tax Comm'n of City of New York, 397 U. S. 664, 678 (1970).
It would be particularly unwise to attach constitutional significance to the 1831 amendment because of the very different legal landscape against which it was enacted. Congress based its authority to pass the amendment on grounds shortly thereafter declared improper by the Court. The Judiciary Committee Report prepared for the House of Representatives asserted that "an author has an exclusive and perpetual right, in preference to any other, to the fruits of his labor." 7 Cong. Deb., App., p. cxx (1831). The floor debate echoed this same sentiment. See, e. g., id., at 424 (statement of Mr. Verplanck (rejecting the idea that copyright involved "an implied contract existing between an author and the public" for "[t]here was no contract; the work of an author was the result of his own labor" and copyright was "merely a legal provision for the protection of a natural right")). This sweat-of-the-brow view of copyright, however, was emphatically rejected by this Court in 1834 in Wheaton v. Peters, 8 Pet., at 661 ("Congress, then, by this act, instead of sanctioning an existing right, as contended for, created it"). No presumption of validity should attach to a statutory enactment that relied on a shortly thereafter discredited interpretation of the basis for congressional power.[11]
[537 U.S. 237] In 1861, Congress amended the term of patents, from a 14-year term plus opportunity for 7-year extension to a flat 17 years with no extension permitted. Act of Mar. 2, 1861, ch. 88, § 16, 12 Stat. 249. This change was not retroactive, but rather only applied to "all patents hereafter granted." Ibid. To be sure, Congress, at many times in its history, has retroactively extended the terms of existing copyrights and patents. This history, however, reveals a much more heterogeneous practice than respondent contends. It is replete with actions that were unquestionably unconstitutional. Though relevant, the history is not dispositive of the constitutionality of the Sonny Bono Act.
The general presumption that historic practice illuminates the constitutionality of congressional action is not controlling in this case. That presumption is strongest when the earliest acts of Congress are considered, for the overlap of identity between those who created the Constitution and those who first constituted Congress provides "contemporaneous and weighty evidence" of the Constitution's "true meaning." Wisconsin v. Pelican Ins. Co., 127 U. S. 265, 297 (1888). But that strong presumption does not attach to congressional action in 1831, because no member of the 1831 Congress had been a delegate to the framing convention 44 years earlier.
Moreover, judicial opinions relied upon by the majority interpreting early legislative enactments have either been implicitly overruled or do not support the proposition claimed. Graham flatly contradicts the cases relied on by the majority and respondent for support that "renewed or extended terms [537 U.S. 238] were upheld in the early days." Ante, at 202.[12] Evans v. Jordan, 8 F. Cas. 872, 874 (No. 4,564) (CC Va. 1813) (Marshall, J.); Evans v. Robinson, 8 F. Cas. 886, 888 (No. 4,571) (CC Md. 1813); and Blanchard v. Sprague, 3 F. Cas. 648, 650 (No. 1,518) (CC Mass. 1839) (Story, J.), all held that private bills passed by Congress extending previously expired patents were valid. Evans v. Jordan and Evans v. Robinson both considered Oliver Evans' private bill discussed above while Blanchard involved ch. 213, 6 Stat. 589, which extended Thomas Blanchard's patent after it had been in the public domain for five months. Irrespective of what circuit courts held "in the early days," ante, at 202, such holdings have been implicitly overruled by Graham and, therefore, provide no support for respondent in the present constitutional inquiry.
The majority's reliance on the other patent case it cites is similarly misplaced. Contrary to the suggestion in the Court's opinion, McClurg v. Kingsland, 1 How. 202 (1843), did not involve the "legislative expansion" of an existing patent. Ante, at 202. The question in that case was whether the former employer of the inventor, one James Harley, could be held liable as an infringer for continuing to use the process that Harley had invented in 1834 when he was in its employ. The Court first held that the employer's use of the process before the patent issued was not a public [537 U.S. 239] use that would invalidate the patent, even if it might have had that effect prior to the amendment of the patent statute in 1836. 1 How., at 206-208. The Court then disposed of the case on the ground that a statute enacted in 1839 protected the alleged infringer's right to continue to use the process after the patent issued. Id., at 209-211. Our opinion said nothing about the power of Congress to extend the life of an issued patent. It did note that Congress has plenary power to legislate on the subject of patents provided "that they do not take away the rights of property in existing patents." Id., at 206. The fact that Congress cannot change the bargain between the public and the patentee in a way that disadvantages the patentee is, of course, fully consistent with the view that it cannot enlarge the patent monopoly to the detriment of the public after a patent has issued.
The history of retroactive extensions of existing and expired copyrights and patents, though relevant, is not conclusive of the constitutionality of the Sonny Bono Act. The fact that the Court has not previously passed upon the constitutionality of retroactive copyright extensions does not insulate the present extension from constitutional challenge.
V
Respondent also argues that the Act promotes the useful arts by providing incentives to restore old movies. For at least three reasons, the interest in preserving perishable copies of old copyrighted films does not justify a wholesale extension of existing copyrights. First, such restoration and preservation will not even arguably promote any new works by authors or inventors. And, of course, any original expression in the restoration and preservation of movies will receive new copyright protection.[13] Second, however strong [537 U.S. 240] the justification for preserving such works may be, that justification applies equally to works whose copyrights have already expired. Yet no one seriously contends that the Copyright/Patent Clause would authorize the grant of monopoly privileges for works already in the public domain solely to encourage their restoration. Finally, even if this concern with aging movies would permit congressional protection, the remedy offered—a blanket extension of all copyrights —simply bears no relationship to the alleged harm.
VI
Finally, respondent relies on concerns of equity to justify the retroactive extension. If Congress concludes that a longer period of exclusivity is necessary in order to provide an adequate incentive to authors to produce new works, respondent seems to believe that simple fairness requires that the same lengthened period be provided to authors whose works have already been completed and copyrighted. This is a classic non sequitur. The reason for increasing the inducement to create something new simply does not apply to an already-created work. To the contrary, the equity argument actually provides strong support for petitioners. Members of the public were entitled to rely on a promised access to copyrighted or patented works at the expiration of the terms specified when the exclusive privileges were granted. On the other hand, authors will receive the full benefit of the exclusive terms that were promised as an inducement to their creativity, and have no equitable claim to increased compensation for doing nothing more.
[537 U.S. 241] One must indulge in two untenable assumptions to find support in the equitable argument offered by respondent— that the public interest in free access to copyrighted works is entirely worthless and that authors, as a class, should receive a windfall solely based on completed creative activity. Indeed, Congress has apparently indulged in those assumptions for under the series of extensions to copyrights, with the exception of works which required renewal and which were not renewed, no copyrighted work created in the past 80 years has entered the public domain or will do so until 2019. But as our cases repeatedly and consistently emphasize, ultimate public access is the overriding purpose of the constitutional provision. See, e. g., Sony Corp., 464 U. S., at 429. Ex post facto extensions of existing copyrights, unsupported by any consideration of the public interest, frustrate the central purpose of the Clause.
VII
The express grant of a perpetual copyright would unquestionably violate the textual requirement that the authors' exclusive rights be only "for limited Times." Whether the extraordinary length of the grants authorized by the 1998 Act are invalid because they are the functional equivalent of perpetual copyrights is a question that need not be answered in this case because the question presented by the certiorari petition merely challenges Congress' power to extend retroactively the terms of existing copyrights. Accordingly, there is no need to determine whether the deference that is normally given to congressional policy judgments may save from judicial review its decision respecting the appropriate length of the term.[14] It is important to note, however, that [537 U.S. 242] a categorical rule prohibiting retroactive extensions would effectively preclude perpetual copyrights. More importantly, as the House of Lords recognized when it refused to amend the Statute of Anne in 1735, unless the Clause is construed to embody such a categorical rule, Congress may extend existing monopoly privileges ad infinitum under the majority's analysis.
By failing to protect the public interest in free access to the products of inventive and artistic genius—indeed, by virtually ignoring the central purpose of the Copyright/Patent Clause—the Court has quitclaimed to Congress its principal responsibility in this area of the law. Fairly read, the Court has stated that Congress' actions under the Copyright/Patent Clause are, for all intents and purposes, judicially unreviewable. That result cannot be squared with the basic tenets of our constitutional structure. It is not hyperbole to recall the trenchant words of Chief Justice John Marshall: "It is emphatically the province and duty of the judicial department to say what the law is." Marbury v. Madison, 1 Cranch 137, 177 (1803). We should discharge that responsibility as we did in Chadha.
I respectfully dissent.
JUSTICE BREYER, dissenting.
The Constitution's Copyright Clause grants Congress the power to "promote the Progress of Science . . . by securing for limited Times to Authors . . . the exclusive Right to their respective Writings." Art. I, § 8, cl. 8 (emphasis added). The statute before us, the 1998 Sonny Bono Copyright Term Extension Act, extends the term of most existing copyrights [537 U.S. 243] to 95 years and that of many new copyrights to 70 years after the author's death. The economic effect of this 20-year extension—the longest blanket extension since the Nation's founding—is to make the copyright term not limited, but virtually perpetual. Its primary legal effect is to grant the extended term not to authors, but to their heirs, estates, or corporate successors. And most importantly, its practical effect is not to promote, but to inhibit, the progress of "Science" —by which word the Framers meant learning or knowledge, E. Walterscheid, The Nature of the Intellectual Property Clause: A Study in Historical Perspective 125-126 (2002).
The majority believes these conclusions rest upon practical judgments that at most suggest the statute is unwise, not that it is unconstitutional. Legal distinctions, however, are often matters of degree. Panhandle Oil Co. v. Mississippi ex rel. Knox, 277 U. S. 218, 223 (1928) (Holmes, J., dissenting), overruled in part by Alabama v. King & Boozer, 314 U. S. 1, 8-9 (1941); accord, Walz v. Tax Comm'n of City of New York, 397 U. S. 664, 678-679 (1970). And in this case the failings of degree are so serious that they amount to failings of constitutional kind. Although the Copyright Clause grants broad legislative power to Congress, that grant has limits. And in my view this statute falls outside them.
I
The "monopoly privileges" that the Copyright Clause confers "are neither unlimited nor primarily designed to provide a special private benefit." Sony Corp. of America v. Universal City Studios, Inc., 464 U. S. 417, 429 (1984); cf. Graham v. John Deere Co. of Kansas City, 383 U. S. 1, 5 (1966). This Court has made clear that the Clause's limitations are judicially enforceable. E. g., Trade-Mark Cases, 100 U. S. 82, 93-94 (1879). And, in assessing this statute for that purpose, I would take into account the fact that the Constitution is a single document, that it contains both a [537 U.S. 244] Copyright Clause and a First Amendment, and that the two are related.
The Copyright Clause and the First Amendment seek related objectives—the creation and dissemination of information. When working in tandem, these provisions mutually reinforce each other, the first serving as an "engine of free expression," Harper & Row, Publishers, Inc. v. Nation Enterprises, 471 U. S. 539, 558 (1985), the second assuring that government throws up no obstacle to its dissemination. At the same time, a particular statute that exceeds proper Copyright Clause bounds may set Clause and Amendment at cross-purposes, thereby depriving the public of the speech-related benefits that the Founders, through both, have promised.
Consequently, I would review plausible claims that a copyright statute seriously, and unjustifiably, restricts the dissemination of speech somewhat more carefully than reference to this Court's traditional Copyright Clause jurisprudence might suggest, cf. ante, at 204-205, and n. 10. There is no need in this case to characterize that review as a search for "`congruence and proportionality,'" ante, at 218, or as some other variation of what this Court has called "intermediate scrutiny," e. g., San Francisco Arts & Athletics, Inc. v. United States Olympic Comm., 483 U. S. 522, 536-537 (1987) (applying intermediate scrutiny to a variant of normal trademark protection). Cf. Nixon v. Shrink Missouri Government PAC, 528 U. S. 377, 402-403 (2000) (BREYER, J., concurring) (test of proportionality between burdens and benefits "where a law significantly implicates competing constitutionally protected interests"). Rather, it is necessary only to recognize that this statute involves not pure economic regulation, but regulation of expression, and what may count as rational where economic regulation is at issue is not necessarily rational where we focus on expression—in a Nation constitutionally dedicated to the free dissemination of speech, information, learning, and culture. In this sense [537 U.S. 245] only, and where line-drawing among constitutional interests is at issue, I would look harder than does the majority at the statute's rationality—though less hard than precedent might justify, see, e. g., Cleburne v. Cleburne Living Center, Inc., 473 U. S. 432, 446-450 (1985); Plyler v. Doe, 457 U. S. 202, 223-224 (1982); Department of Agriculture v. Moreno, 413 U. S. 528, 534-538 (1973).
Thus, I would find that the statute lacks the constitutionally necessary rational support (1) if the significant benefits that it bestows are private, not public; (2) if it threatens seriously to undermine the expressive values that the Copyright Clause embodies; and (3) if it cannot find justification in any significant Clause-related objective. Where, after examination of the statute, it becomes difficult, if not impossible, even to dispute these characterizations, Congress' "choice is clearly wrong." Helvering v. Davis, 301 U. S. 619, 640 (1937).
II
A
Because we must examine the relevant statutory effects in light of the Copyright Clause's own purposes, we should begin by reviewing the basic objectives of that Clause. The Clause authorizes a "tax on readers for the purpose of giving a bounty to writers." 56 Parl. Deb. (3d Ser.) (1841) 341, 350 (Lord Macaulay). Why? What constitutional purposes does the "bounty" serve?
The Constitution itself describes the basic Clause objective as one of "promot[ing] the Progress of Science," i. e., knowledge and learning. The Clause exists not to "provide a special private benefit," Sony, supra, at 429, but "to stimulate artistic creativity for the general public good," Twentieth Century Music Corp. v. Aiken, 422 U. S. 151, 156 (1975). It does so by "motivat[ing] the creative activity of authors" through "the provision of a special reward." Sony, supra, at 429. The "reward" is a means, not an end. And that is [537 U.S. 246] why the copyright term is limited. It is limited so that its beneficiaries—the public—"will not be permanently deprived of the fruits of an artist's labors." Stewart v. Abend, 495 U. S. 207, 228 (1990).
That is how the Court previously has described the Clause's objectives. See also Mazer v. Stein, 347 U. S. 201, 219 (1954) ("[C]opyright law . . . makes reward to the owner a secondary consideration" (internal quotation marks omitted)); Sony, 464 U. S., at 429 ("[L]imited grant" is "intended . . . to allow the public access to the products of [authors'] genius after the limited period of exclusive control has expired"); Harper & Row, supra, at 545 (Copyright is "intended to increase and not to impede the harvest of knowledge"). But cf. ante, at 212, n. 18. And, in doing so, the Court simply has reiterated the views of the Founders.
Madison, like Jefferson and others in the founding generation, warned against the dangers of monopolies. See, e. g., Monopolies. Perpetuities. Corporations. Ecclesiastical Endowments. in J. Madison, Writings 756 (J. Rakove ed. 1999) (hereinafter Madison on Monopolies); Letter from Thomas Jefferson to James Madison (July 31, 1788), in 13 Papers of Thomas Jefferson 443 (J. Boyd ed. 1956) (hereinafter Papers of Thomas Jefferson) (arguing against even copyright monopolies); 2 Annals of Cong. 1917 (1791) (statement of Rep. Jackson in the First Congress, Feb. 1791) ("What was it drove our forefathers to this country? Was it not the ecclesiastical corporations and perpetual monopolies of England and Scotland?"). Madison noted that the Constitution had "limited them to two cases, the authors of Books, and of useful inventions." Madison on Monopolies 756. He thought that in those two cases monopoly is justified because it amounts to "compensation for" an actual community "benefit" and because the monopoly is "temporary"— the term originally being 14 years (once renewable). Ibid. Madison concluded that "under that limitation a sufficient recompence and encouragement may be given." Ibid. But [537 U.S. 247] he warned in general that monopolies must be "guarded with strictness agst abuse." Ibid.
Many Members of the Legislative Branch have expressed themselves similarly. Those who wrote the House Report on the landmark Copyright Act of 1909, for example, said that copyright was not designed "primarily" to "benefit" the "author" or "any particular class of citizens, however worthy." H. R. Rep. No. 2222, 60th Cong., 2d Sess., 6-7 (1909). Rather, under the Constitution, copyright was designed "primarily for the benefit of the public," for "the benefit of the great body of people, in that it will stimulate writing and invention." Id., at 7. And were a copyright statute not "believed, in fact, to accomplish" the basic constitutional objective of advancing learning, that statute "would be beyond the power of Congress" to enact. Id., at 6-7. Similarly, those who wrote the House Report on legislation that implemented the Berne Convention for the Protection of Literary and Artistic Works said that "[t]he constitutional purpose of copyright is to facilitate the flow of ideas in the interest of learning." H. R. Rep. No. 100-609, p. 22 (1988) (internal quotation marks omitted). They added:
"Under the U. S. Constitution, the primary objective of copyright law is not to reward the author, but rather to secure for the public the benefits derived from the authors' labors. By giving authors an incentive to create, the public benefits in two ways: when the original expression is created and . . . when the limited term . . . expires and the creation is added to the public domain." Id., at 17.
For present purposes, then, we should take the following as well established: that copyright statutes must serve public, not private, ends; that they must seek "to promote the Progress" of knowledge and learning; and that they must do so both by creating incentives for authors to produce and by removing the related restrictions on dissemination after [537 U.S. 248] expiration of a copyright's "limited Tim[e]"—a time that (like "a limited monarch") is "restrain[ed]" and "circumscribe[d]," "not [left] at large," 2 S. Johnson, A Dictionary of the English Language 1151 (4th rev. ed. 1773). I would examine the statute's effects in light of these well-established constitutional purposes.
B
This statute, like virtually every copyright statute, imposes upon the public certain expression-related costs in the form of (1) royalties that may be higher than necessary to evoke creation of the relevant work, and (2) a requirement that one seeking to reproduce a copyrighted work must obtain the copyright holder's permission. The first of these costs translates into higher prices that will potentially restrict a work's dissemination. The second means search costs that themselves may prevent reproduction even where the author has no objection. Although these costs are, in a sense, inevitable concomitants of copyright protection, there are special reasons for thinking them especially serious here.
First, the present statute primarily benefits the holders of existing copyrights, i. e., copyrights on works already created. And a Congressional Research Service (CRS) study prepared for Congress indicates that the added royalty-related sum that the law will transfer to existing copyright holders is large. E. Rappaport, CRS Report for Congress, Copyright Term Extension: Estimating the Economic Values (1998) (hereinafter CRS Report). In conjunction with official figures on copyright renewals, the CRS Report indicates that only about 2% of copyrights between 55 and 75 years old retain commercial value—i. e., still generate royalties after that time. Brief for Petitioners 7 (estimate, uncontested by respondent, based on data from the CRS, Census Bureau, and Library of Congress). But books, songs, and movies of that vintage still earn about $400 million per year in royalties. CRS Report 8, 12, 15. Hence, (despite declining [537 U.S. 249] consumer interest in any given work over time) one might conservatively estimate that 20 extra years of copyright protection will mean the transfer of several billion extra royalty dollars to holders of existing copyrights—copyrights that, together, already will have earned many billions of dollars in royalty "reward." See id., at 16.
The extra royalty payments will not come from thin air. Rather, they ultimately come from those who wish to read or see or hear those classic books or films or recordings that have survived. Even the $500,000 that United Airlines has had to pay for the right to play George Gershwin's 1924 classic Rhapsody in Blue represents a cost of doing business, potentially reflected in the ticket prices of those who fly. See Ganzel, Copyright or Copywrong? 39 Training 36, 42 (Dec. 2002). Further, the likely amounts of extra royalty payments are large enough to suggest that unnecessarily high prices will unnecessarily restrict distribution of classic works (or lead to disobedience of the law)—not just in theory but in practice. Cf. CRS Report 3 ("[N]ew, cheaper editions can be expected when works come out of copyright"); Brief for College Art Association et al. as Amici Curiae 24 (One year after expiration of copyright on Willa Cather's My Antonia, seven new editions appeared at prices ranging from $2 to $24); Ganzel, supra, at 40-41, 44 (describing later abandoned plans to charge individual Girl Scout camps $257 to $1,439 annually for a license to sing songs such as God Bless America around a campfire).
A second, equally important, cause for concern arises out of the fact that copyright extension imposes a "permissions" requirement—not only upon potential users of "classic" works that still retain commercial value, but also upon potential users of any other work still in copyright. Again using CRS estimates, one can estimate that, by 2018, the number of such works 75 years of age or older will be about 350,000. See Brief for Petitioners 7. Because the Copyright Act of 1976 abolished the requirement that an owner must renew a [537 U.S. 250] copyright, such still-in-copyright works (of little or no commercial value) will eventually number in the millions. See Pub. L. 94-553, §§ 302-304, 90 Stat. 2572-2576; U. S. Dept. of Commerce, Bureau of Census, Statistical History of the United States: From Colonial Times to the Present 956 (1976) (hereinafter Statistical History).
The potential users of such works include not only movie buffs and aging jazz fans, but also historians, scholars, teachers, writers, artists, database operators, and researchers of all kinds—those who want to make the past accessible for their own use or for that of others. The permissions requirement can inhibit their ability to accomplish that task. Indeed, in an age where computer-accessible databases promise to facilitate research and learning, the permissions requirement can stand as a significant obstacle to realization of that technological hope.
The reason is that the permissions requirement can inhibit or prevent the use of old works (particularly those without commercial value): (1) because it may prove expensive to track down or to contract with the copyright holder, (2) because the holder may prove impossible to find, or (3) because the holder when found may deny permission either outright or through misinformed efforts to bargain. The CRS, for example, has found that the cost of seeking permission "can be prohibitive." CRS Report 4. And amici, along with petitioners, provide examples of the kinds of significant harm at issue.
Thus, the American Association of Law Libraries points out that the clearance process associated with creating an electronic archive, Documenting the American South, "consumed approximately a dozen man-hours" per work. Brief for American Association of Law Libraries et al. as Amici Curiae 20. The College Art Association says that the costs of obtaining permission for use of single images, short excerpts, and other short works can become prohibitively high; it describes the abandonment of efforts to include, e. g., campaign [537 U.S. 251] songs, film excerpts, and documents exposing "horrors of the chain gang" in historical works or archives; and it points to examples in which copyright holders in effect have used their control of copyright to try to control the content of historical or cultural works. Brief for College Art Association et al. as Amici Curiae 7-13. The National Writers Union provides similar examples. Brief for National Writers Union et al. as Amici Curiae 25-27. Petitioners point to music fees that may prevent youth or community orchestras, or church choirs, from performing early 20th-century music. Brief for Petitioners 3-5; see also App. 16-17 (Copyright extension caused abandonment of plans to sell sheet music of Maurice Ravel's Alborada Del Gracioso). Amici for petitioners describe how electronic databases tend to avoid adding to their collections works whose copyright holders may prove difficult to contact, see, e. g., Arms, Getting the Picture: Observations from the Library of Congress on Providing Online Access to Pictorial Images, 48 Library Trends 379, 405 (1999) (describing how this tendency applies to the Library of Congress' own digital archives).
As I have said, to some extent costs of this kind accompany any copyright law, regardless of the length of the copyright term. But to extend that term, preventing works from the 1920's and 1930's from falling into the public domain, will dramatically increase the size of the costs just as— perversely—the likely benefits from protection diminish. See infra, at 254-256. The older the work, the less likely it retains commercial value, and the harder it will likely prove to find the current copyright holder. The older the work, the more likely it will prove useful to the historian, artist, or teacher. The older the work, the less likely it is that a sense of authors' rights can justify a copyright holder's decision not to permit reproduction, for the more likely it is that the copyright holder making the decision is not the work's creator, but, say, a corporation or a great-grandchild whom the work's creator never knew. Similarly, the costs of obtaining [537 U.S. 252] permission, now perhaps ranging in the millions of dollars, will multiply as the number of holders of affected copyrights increases from several hundred thousand to several million. See supra, at 249-250. The costs to the users of nonprofit databases, now numbering in the low millions, will multiply as the use of those computer-assisted databases becomes more prevalent. See, e. g., Brief for Internet Archive et al. as Amici Curiae 2, 21, and n. 37 (describing nonprofit Project Gutenberg). And the qualitative costs to education, learning, and research will multiply as our children become ever more dependent for the content of their knowledge upon computer-accessible databases—thereby condemning that which is not so accessible, say, the cultural content of early 20th-century history, to a kind of intellectual purgatory from which it will not easily emerge.
The majority finds my description of these permissions-related harms overstated in light of Congress' inclusion of a statutory exemption, which, during the last 20 years of a copyright term, exempts "facsimile or digital" reproduction by a "library or archives" "for purposes of preservation, scholarship, or research," 17 U. S. C. § 108(h). Ante, at 220. This exemption, however, applies only where the copy is made for the special listed purposes; it simply permits a library (not any other subsequent users) to make "a copy" for those purposes; it covers only "published" works not "subject to normal commercial exploitation" and not obtainable, apparently not even as a used copy, at a "reasonable price"; and it insists that the library assure itself through "reasonable investigation" that these conditions have been met. § 108(h). What database proprietor can rely on so limited an exemption—particularly when the phrase "reasonable investigation" is so open-ended and particularly if the database has commercial, as well as noncommercial, aspects?
The majority also invokes the "fair use" exception, and it notes that copyright law itself is restricted to protection of a work's expression, not its substantive content. Ante, at [537 U.S. 253] 219-220. Neither the exception nor the restriction, however, would necessarily help those who wish to obtain from electronic databases material that is not there—say, teachers wishing their students to see albums of Depression Era photographs, to read the recorded words of those who actually lived under slavery, or to contrast, say, Gary Cooper's heroic portrayal of Sergeant York with filmed reality from the battlefield of Verdun. Such harm, and more, see supra, at 248-252, will occur despite the 1998 Act's exemptions and despite the other "First Amendment safeguards" in which the majority places its trust, ante, at 219-220.
I should add that the Motion Picture Association of America also finds my concerns overstated, at least with respect to films, because the extension will sometimes make it profitable to reissue old films, saving them from extinction. Brief for Motion Picture Association of America, Inc., as Amicus Curiae 14-24. Other film preservationists note, however, that only a small minority of the many films, particularly silent films, from the 1920's and 1930's have been preserved. 1 Report of the Librarian of Congress, Film Preservation 1993, pp. 3-4 (Half of all pre-1950 feature films and more than 80% of all such pre-1929 films have already been lost); cf. Brief for Hal Roach Studios et al. as Amici Curiae 18 (Out of 1,200 Twenties Era silent films still under copyright, 63 are now available on digital video disc). They seek to preserve the remainder. See, e. g., Brief for Internet Archive et al. as Amici Curiae 22 (Nonprofit database digitized 1,001 public-domain films, releasing them online without charge); 1 Film Preservation 1993, supra, at 23 (reporting well over 200,000 titles held in public archives). And they tell us that copyright extension will impede preservation by forbidding the reproduction of films within their own or within other public collections. Brief for Hal Roach Studios et al. as Amici Curiae 10-21; see also Brief for Internet Archive et al. as Amici Curiae 16-29; Brief for American Association of Law Libraries et al. as Amici Curiae 26-27.
[537 U.S. 254] Because this subsection concerns only costs, not countervailing benefits, I shall simply note here that, with respect to films as with respect to other works, extension does cause substantial harm to efforts to preserve and to disseminate works that were created long ago. And I shall turn to the second half of the equation: Could Congress reasonably have found that the extension's toll-related and permissions-related harms are justified by extension's countervailing preservationist incentives or in other ways?
C
What copyright-related benefits might justify the statute's extension of copyright protection? First, no one could reasonably conclude that copyright's traditional economic rationale applies here. The extension will not act as an economic spur encouraging authors to create new works. See Mazer, 347 U. S., at 219 (The "economic philosophy" of the Copyright Clause is to "advance public welfare" by "encourag[ing] individual effort" through "personal gain"); see also ante, at 212, n. 18 ("[C]opyright law serves public ends by providing individuals with an incentive to pursue private ones"). No potential author can reasonably believe that he has more than a tiny chance of writing a classic that will survive commercially long enough for the copyright extension to matter. After all, if, after 55 to 75 years, only 2% of all copyrights retain commercial value, the percentage surviving after 75 years or more (a typical pre-extension copyright term)—must be far smaller. See supra, at 248; CRS Report 7 (estimating that, even after copyright renewal, about 3.8% of copyrighted books go out of print each year). And any remaining monetary incentive is diminished dramatically by the fact that the relevant royalties will not arrive until 75 years or more into the future, when, not the author, but distant heirs, or shareholders in a successor corporation, will receive them. Using assumptions about the time value of money provided us by a group of economists (including five [537 U.S. 255] Nobel prize winners), Brief for George A. Akerlof et al. as Amici Curiae 5-7, it seems fair to say that, for example, a 1% likelihood of earning $100 annually for 20 years, starting 75 years into the future, is worth less than seven cents today. See id., App. 3a; see also CRS Report 5. See generally Appendix, Part A, infra.
What potential Shakespeare, Wharton, or Hemingway would be moved by such a sum? What monetarily motivated Melville would not realize that he could do better for his grandchildren by putting a few dollars into an interest-bearing bank account? The Court itself finds no evidence to the contrary. It refers to testimony before Congress (1) that the copyright system's incentives encourage creation, and (2) (referring to Noah Webster) that income earned from one work can help support an artist who "`continue[s] to create.'" Ante, at 208, n. 15. But the first of these amounts to no more than a set of undeniably true propositions about the value of incentives in general. And the applicability of the second to this Act is mysterious. How will extension help today's Noah Webster create new works 50 years after his death? Or is that hypothetical Webster supposed to support himself with the extension's present discounted value, i. e., a few pennies? Or (to change the metaphor) is the argument that Dumas fils would have written more books had Dumas père's Three Musketeers earned more royalties?
Regardless, even if this cited testimony were meant more specifically to tell Congress that somehow, somewhere, some potential author might be moved by the thought of great-grandchildren receiving copyright royalties a century hence, so might some potential author also be moved by the thought of royalties being paid for two centuries, five centuries, 1,000 years, "'til the End of Time." And from a rational economic perspective the time difference among these periods makes no real difference. The present extension will produce a copyright period of protection that, even under conservative [537 U.S. 256] assumptions, is worth more than 99.8% of protection in perpetuity (more than 99.99% for a songwriter like Irving Berlin and a song like Alexander's Ragtime Band). See Appendix, Part A, infra. The lack of a practically meaningful distinction from an author's ex ante perspective between (a) the statute's extended terms and (b) an infinite term makes this latest extension difficult to square with the Constitution's insistence on "limited Times." Cf. Tr. of Oral Arg. 34 (Solicitor General's related concession).
I am not certain why the Court considers it relevant in this respect that "[n]othing . . . warrants construction of the [1998 Act's] 20-year term extension as a congressional attempt to evade or override the 'limited Times' constraint." Ante, at 209. Of course Congress did not intend to act unconstitutionally. But it may have sought to test the Constitution's limits. After all, the statute was named after a Member of Congress, who, the legislative history records, "wanted the term of copyright protection to last forever." 144 Cong. Rec. H9952 (daily ed. Oct. 7, 1998) (statement of Rep. Mary Bono). See also Copyright Term, Film Labeling, and Film Preservation Legislation: Hearings on H. R. 989 et al. before the Subcommittee on Courts and Intellectual Property of the House Judiciary Committee, 104th Cong., 1st Sess., 94 (1995) (hereinafter House Hearings) (statement of Rep. Sonny Bono) (questioning why copyrights should ever expire); ibid. (statement of Rep. Berman) ("I guess we could . . . just make a permanent moratorium on the expiration of copyrights"); id., at 230 (statement of Rep. Hoke) ("Why 70 years? Why not forever? Why not 150 years?"); cf. ibid. (statement of the Register of Copyrights) (In Copyright Office proceedings, "[t]he Songwriters Guild suggested a perpetual term"); id., at 234 (statement of Quincy Jones) ("I'm particularly fascinated with Representative Hoke's statement. . . . [W]hy not forever?"); id., at 277 (statement of Quincy Jones) ("If we can start with 70, add 20, it would be a good start"). And the statute ended up creating a term so long that (were the vesting [537 U.S. 257] of 19th-century real property at issue) it would typically violate the traditional rule against perpetuities. See 10 R. Powell, Real Property §§ 71.02[2]-[3], p. 71-11 (M. Wolf ed. 2002) (traditional rule that estate must vest, if at all, within lives in being plus 21 years); cf. id., § 71.03, at 71-15 (modern statutory perpetuity term of 90 years, 5 years shorter than 95-year copyright terms).
In any event, the incentive-related numbers are far too small for Congress to have concluded rationally, even with respect to new works, that the extension's economic-incentive effect could justify the serious expression-related harms earlier described. See Part II-B, supra. And, of course, in respect to works already created—the source of many of the harms previously described—the statute creates no economic incentive at all. See ante, at 226-227 (STEVENS, J., dissenting).
Second, the Court relies heavily for justification upon international uniformity of terms. Ante, at 196, 205-206. Although it can be helpful to look to international norms and legal experience in understanding American law, cf. Printz v. United States, 521 U. S. 898, 977 (1997) (BREYER, J., dissenting), in this case the justification based upon foreign rules is surprisingly weak. Those who claim that significant copyright-related benefits flow from greater international uniformity of terms point to the fact that the nations of the European Union have adopted a system of copyright terms uniform among themselves. And the extension before this Court implements a term of life plus 70 years that appears to conform with the European standard. But how does "uniformity" help to justify this statute?
Despite appearances, the statute does not create a uniform American-European term with respect to the lion's share of the economically significant works that it affects—all works made "for hire" and all existing works created prior to 1978. See Appendix, Part B, infra. With respect to those works the American statute produces an extended term of 95 years [537 U.S. 258] while comparable European rights in "for hire" works last for periods that vary from 50 years to 70 years to life plus 70 years. Compare 17 U. S. C. §§ 302(c), 304(a)-(b), with Council Directive 93/98/EEC of 29 October 1993 Harmonizing the Term of Protection of Copyright and Certain Related Rights, Arts. 1-3, 1993 Official J. Eur. Coms. (L 290), pp. 11-12 (hereinafter EU Council Directive 93/98). Neither does the statute create uniformity with respect to anonymous or pseudonymous works. Compare 17 U. S. C. §§ 302(c), 304(a)-(b), with EU Council Directive 93/98, Art. 1, p. 11.
The statute does produce uniformity with respect to copyrights in new, post-1977 works attributed to natural persons. Compare 17 U. S. C. § 302(a) with EU Council Directive 93/98, Art. 1(1), p. 11. But these works constitute only a subset (likely a minority) of works that retain commercial value after 75 years. See Appendix, Part B, infra. And the fact that uniformity comes so late, if at all, means that bringing American law into conformity with this particular aspect of European law will neither encourage creation nor benefit the long-dead author in any other important way.
What benefit, then, might this partial future uniformity achieve? The majority refers to "greater incentive for American and other authors to create and disseminate their work in the United States," and cites a law review article suggesting a need to "`avoid competitive disadvantages.'" Ante, at 206. The Solicitor General elaborates on this theme, postulating that because uncorrected disuniformity would permit Europe, not the United States, to hold out the prospect of protection lasting for "life plus 70 years" (instead of "life plus 50 years"), a potential author might decide to publish initially in Europe, delaying American publication. Brief for Respondent 38. And the statute, by creating a uniformly longer term, corrects for the disincentive that this disuniformity might otherwise produce.
That disincentive, however, could not possibly bring about serious harm of the sort that the Court, the Solicitor General, [537 U.S. 259] or the law review author fears. For one thing, it is unclear just who will be hurt and how, should American publication come second—for the Berne Convention still offers full protection as long as a second publication is delayed by 30 days. See Berne Conv. Arts. 3(4), 5(4). For another, few, if any, potential authors would turn a "where to publish" decision upon this particular difference in the length of the copyright term. As we have seen, the present commercial value of any such difference amounts at most to comparative pennies. See supra, at 254-256. And a commercial decision that turned upon such a difference would have had to have rested previously upon a knife edge so fine as to be invisible. A rational legislature could not give major weight to an invisible, likely nonexistent incentive-related effect.
But if there is no incentive-related benefit, what is the benefit of the future uniformity that the statute only partially achieves? Unlike the Copyright Act of 1976, this statute does not constitute part of an American effort to conform to an important international treaty like the Berne Convention. See H. R. Rep. No. 94-1476, pp. 135-136 (1976) (The 1976 Act's life-plus-50 term was "required for adherence to the Berne Convention"); S. Rep. No. 94-473, p. 118 (1975) (same). Nor does European acceptance of the longer term seem to reflect more than special European institutional considerations, i. e., the needs of, and the international politics surrounding, the development of the European Union. House Hearings 230 (statement of the Register of Copyrights); id., at 396-398 (statement of J. Reichman). European and American copyright law have long coexisted despite important differences, including Europe's traditional respect for authors' "moral rights" and the absence in Europe of constitutional restraints that restrict copyrights to "limited Times." See, e. g., Kwall, Copyright and the Moral Right: Is an American Marriage Possible? 38 Vand. L. Rev. 1-3 (1985) (moral rights); House Hearings 187 (testimony of the Register of Copyrights) ("limited [T]imes").
[537 U.S. 260] In sum, the partial, future uniformity that the 1998 Act promises cannot reasonably be said to justify extension of the copyright term for new works. And concerns with uniformity cannot possibly justify the extension of the new term to older works, for the statute there creates no uniformity at all.
Third, several publishers and filmmakers argue that the statute provides incentives to those who act as publishers to republish and to redistribute older copyrighted works. This claim cannot justify this statute, however, because the rationale is inconsistent with the basic purpose of the Copyright Clause—as understood by the Framers and by this Court. The Clause assumes an initial grant of monopoly, designed primarily to encourage creation, followed by termination of the monopoly grant in order to promote dissemination of already-created works. It assumes that it is the disappearance of the monopoly grant, not its perpetuation, that will, on balance, promote the dissemination of works already in existence. This view of the Clause does not deny the empirical possibility that grant of a copyright monopoly to the heirs or successors of a long-dead author could on occasion help publishers resurrect the work, say, of a long-lost Shakespeare. But it does deny Congress the Copyright Clause power to base its actions primarily upon that empirical possibility —lest copyright grants become perpetual, lest on balance they restrict dissemination, lest too often they seek to bestow benefits that are solely retroactive.
This view of the Clause finds strong support in the writings of Madison, in the antimonopoly environment in which the Framers wrote the Clause, and in the history of the Clause's English antecedent, the Statute of Anne—a statute which sought to break up a publishers' monopoly by offering, as an alternative, an author's monopoly of limited duration. See Patterson, Understanding the Copyright Clause, 47 J. Copyright Soc. 365, 379 (2000) (Statute of Anne); L. Patterson, Copyright in Historical Perspective 144-147 (1968) [537 U.S. 261] (same); Madison on Monopolies 756-757; Papers of Thomas Jefferson 442-443; The Constitutional Convention and the Formation of the Union 334, 338 (W. Solberg 2d ed. 1990); see also supra, at 246-247.
This view finds virtually conclusive support in the Court's own precedents. See Sony, 464 U.S., at 429 (The Copyright Clause is "intended . . . to allow the public access ... after the limited period of exclusive control"); Stewart, 495 U. S., at 228 (The copyright term is limited to avoid "permanently depriv[ing]" the public of "the fruits of an artist's labors"); see also supra, at 245-246.
This view also finds textual support in the Copyright Clause's word "limited." Cf. J. Story, Commentaries on the Constitution § 558, p. 402 (R. Rotunda & J. Nowak eds. 1987) (The Copyright Clause benefits the public in part because it "admit[s] the people at large, after a short interval, to the full possession and enjoyment of all writings . . . without restraint" (emphasis added)). It finds added textual support in the word "Authors," which is difficult to reconcile with a rationale that rests entirely upon incentives given to publishers perhaps long after the death of the work's creator. Cf. Feist Publications, Inc. v. Rural Telephone Service Co., 499 U. S. 340, 346-347 (1991).
It finds empirical support in sources that underscore the wisdom of the Framers' judgment. See CRS Report 3 ("[N]ew, cheaper editions can be expected when works come out of copyright"); see also Part II-B, supra. And it draws logical support from the endlessly self-perpetuating nature of the publishers' claim and the difficulty of finding any kind of logical stopping place were this Court to accept such a uniquely publisher-related rationale. (Would it justify continuing to extend copyrights indefinitely, say, for those granted to F. Scott Fitzgerald or his lesser known contemporaries? Would it not, in principle, justify continued protection of the works of Shakespeare, Melville, Mozart, or perhaps Salieri, Mozart's currently less popular contemporary? [537 U.S. 262] Could it justify yet further extension of the copyright on the song Happy Birthday to You (melody first published in 1893, song copyrighted after litigation in 1935), still in effect and currently owned by a subsidiary of AOL Time Warner? See Profitable "Happy Birthday," Times of London, Aug. 5, 2000, p. 6.)
Given this support, it is difficult to accept the conflicting rationale that the publishers advance, namely, that extension, rather than limitation, of the grant will, by rewarding publishers with a form of monopoly, promote, rather than retard, the dissemination of works already in existence. Indeed, given these considerations, this rationale seems constitutionally perverse—unable, constitutionally speaking, to justify the blanket extension here at issue. Cf. ante, at 239-240 (STEVENS, J., dissenting).
Fourth, the statute's legislative history suggests another possible justification. That history refers frequently to the financial assistance the statute will bring the entertainment industry, particularly through the promotion of exports. See, e. g., S. Rep. No. 104-315, p. 3 (1996) ("The purpose of the bill is to ensure adequate copyright protection for American works in foreign nations and the continued economic benefits of a healthy surplus balance of trade"); 144 Cong. Rec., at H9951 (statement of Rep. Foley) (noting "the importance of this issue to America's creative community," "[w]hether it is Sony, BMI, Disney," or other companies). I recognize that Congress has sometimes found that suppression of competition will help Americans sell abroad—though it has simultaneously taken care to protect American buyers from higher domestic prices. See, e. g., Webb-Pomerene Act (Export Trade), 40 Stat. 516, as amended, 15 U. S. C. §§61-65; see also IA P. Areeda & H. Hovenkamp, Antitrust Law ¶ 251a, pp. 134-137 (2d ed. 2000) (criticizing export cartels). In doing so, however, Congress has exercised its commerce, not its copyright, power. I can find nothing in the Copyright Clause that would authorize Congress to enhance the [537 U.S. 263] copyright grant's monopoly power, likely leading to higher prices both at home and abroad, solely in order to produce higher foreign earnings. That objective is not a copyright objective. Nor, standing alone, is it related to any other objective more closely tied to the Clause itself. Neither can higher corporate profits alone justify the grant's enhancement. 1The Clause seeks public, not private, benefits.
Finally, the Court mentions as possible justifications "demographic, economic, and technological changes"—by which the Court apparently means the facts that today people communicate with the help of modern technology, live longer, and have children at a later age. Ante, at 206-207, and n. 14. The first fact seems to argue not for, but instead against, extension. See Part II-B, supra. The second fact seems already corrected for by the 1976 Act's life-plus-50 term, which automatically grows with lifespans. Cf. Department of Health and Human Services, Centers for Disease Control and Prevention, Deaths: Final Data for 2000 (2002) (Table 8) (reporting a 4-year increase in expected lifespan between 1976 and 1998). And the third fact—that adults are having children later in life—is a makeweight at best, providing no explanation of why the 1976 Act's term of 50 years after an author's death—a longer term than was available to authors themselves for most of our Nation's history—is an insufficient potential bequest. The weakness of these final rationales simply underscores the conclusion that emerges from consideration of earlier attempts at justification: There is no legitimate, serious copyright-related justification for this statute.
III
The Court is concerned that our holding in this case not inhibit the broad decisionmaking leeway that the Copyright Clause grants Congress. Ante, at 204-205, 208, 222. It is concerned about the implications of today's decision for the Copyright Act of 1976—an Act that changed copyright's basic term from 56 years (assuming renewal) to life of the [537 U.S. 264] author plus 50 years, ante, at 194-195. Ante, at 222. It is concerned about having to determine just how many years of copyright is too many—a determination that it fears would require it to find the "right" constitutional number, a task for which the Court is not well suited. See ibid.; but cf. ante, at 210, n. 17.
I share the Court's initial concern, about intrusion upon the decisionmaking authority of Congress. See ante, at 205, n. 10. But I do not believe it intrudes upon that authority to find the statute unconstitutional on the basis of (1) a legal analysis of the Copyright Clause's objectives, see supra, at 245-248, 260-263; (2) the total implausibility of any incentive effect, see supra, at 254-257; and (3) the statute's apparent failure to provide significant international uniformity, see supra, at 257-260. Nor does it intrude upon congressional authority to consider rationality in light of the expressive values underlying the Copyright Clause, related as it is to the First Amendment, and given the constitutional importance of correctly drawing the relevant Clause/Amendment boundary. Supra, at 243-245. We cannot avoid the need to examine the statute carefully by saying that "Congress has not altered the traditional contours of copyright protection," ante, at 221, for the sentence points to the question, rather than the answer. Nor should we avoid that examination here. That degree of judicial vigilance—at the far outer boundaries of the Clause—is warranted if we are to avoid the monopolies and consequent restrictions of expression that the Clause, read consistently with the First Amendment, seeks to preclude. And that vigilance is all the more necessary in a new century that will see intellectual property rights and the forms of expression that underlie them play an ever more important role in the Nation's economy and the lives of its citizens.
I do not share the Court's concern that my view of the 1998 Act could automatically doom the 1976 Act. Unlike the present statute, the 1976 Act thoroughly revised copyright law and enabled the United States to join the Berne Convention [537 U.S. 265] —an international treaty that requires the 1976 Act's basic life-plus-50 term as a condition for substantive protections from a copyright's very inception, Berne Conv. Art. 7(1). Consequently, the balance of copyright-related harms and benefits there is far less one sided. The same is true of the 1909 and 1831 Acts, which, in any event, provided for maximum terms of 56 years or 42 years while requiring renewal after 28 years, with most copyrighted works falling into the public domain after that 28-year period, well before the putative maximum terms had elapsed. See ante, at 194; Statistical History 956-957. Regardless, the law provides means to protect those who have reasonably relied upon prior copyright statutes. See Heckler v. Mathews, 465 U. S. 728, 746 (1984). And, in any event, we are not here considering, and we need not consider, the constitutionality of other copyright statutes.
Neither do I share the Court's aversion to line-drawing in this case. Even if it is difficult to draw a single clear bright line, the Court could easily decide (as I would decide) that this particular statute simply goes too far. And such examples —of what goes too far—sometimes offer better constitutional guidance than more absolute-sounding rules. In any event, "this Court sits" in part to decide when a statute exceeds a constitutional boundary. See Panhandle Oil, 277 U. S., at 223 (Holmes, J., dissenting). In my view, "[t]ext, history, and precedent," ante, at 199, support both the need to draw lines in general and the need to draw the line here short of this statute. See supra, at 242-248, 260-263. But see ante, at 199, n. 4.
Finally, the Court complains that I have not "restrained" my argument or "train[ed my] fire, as petitioners do, on Congress' choice to place existing and future copyrights in parity." Ante, at 193, n. 1, and 199, n. 4. The reason that I have not so limited my argument is my willingness to accept, for purposes of this opinion, the Court's understanding that, for reasons of "[j]ustice, policy, and equity"—as well as established [537 U.S. 266] historical practice—it is not "categorically beyond Congress' authority" to "exten[d] the duration of existing copyrights" to achieve such parity. Ante, at 204 (internal quotation marks omitted). I have accepted this view, however, only for argument's sake—putting to the side, for the present, JUSTICE STEVENS' persuasive arguments to the contrary, ante, at 226-242 (dissenting opinion). And I make this assumption only to emphasize the lack of rational justification for the present statute. A desire for "parity" between A (old copyrights) and B (new copyrights) cannot justify extending A when there is no rational justification for extending B. At the very least (if I put aside my rationality characterization), to ask B to support A here is like asking Tom Thumb to support Paul Bunyan's ox. Where the case for extending new copyrights is itself so weak, what "justice," what "policy," what "equity" can warrant the tolls and barriers that extension of existing copyrights imposes?
IV
This statute will cause serious expression-related harm. It will likely restrict traditional dissemination of copyrighted works. It will likely inhibit new forms of dissemination through the use of new technology. It threatens to interfere with efforts to preserve our Nation's historical and cultural heritage and efforts to use that heritage, say, to educate our Nation's children. It is easy to understand how the statute might benefit the private financial interests of corporations or heirs who own existing copyrights. But I cannot find any constitutionally legitimate, copyright-related way in which the statute will benefit the public. Indeed, in respect to existing works, the serious public harm and the virtually nonexistent public benefit could not be more clear.
I have set forth the analysis upon which I rest these judgments. This analysis leads inexorably to the conclusion that the statute cannot be understood rationally to advance a constitutionally legitimate interest. The statute falls outside [537 U.S. 267] the scope of legislative power that the Copyright Clause, read in light of the First Amendment, grants to Congress. I would hold the statute unconstitutional.
I respectfully dissent.
APPENDIX TO OPINION OF BREYER, J.
A
The text's estimates of the economic value of 1998 Act copyrights relative to the economic value of a perpetual copyright, supra, at 255-256, as well as the incremental value of a 20-year extension of a 75-year term, supra, at 254-255, rest upon the conservative future value and discount rate assumptions set forth in the brief of economist amici. Brief for George A. Akerlof et al. as Amici Curiae 5-7. Under these assumptions, if an author expects to live 30 years after writing a book, the copyright extension (by increasing the copyright term from "life of the author plus 50 years" to "life of the author plus 70 years") increases the author's expected income from that book—i. e., the economic incentive to write—by no more than about 0.33%. Id., at 6.
The text assumes that the extension creates a term of 95 years (the term corresponding to works made for hire and for all existing pre-1978 copyrights). Under the economists' conservative assumptions, the value of a 95-year copyright is slightly more than 99.8% of the value of a perpetual copyright. See also Tr. of Oral Arg. 50 (Petitioners' statement of the 99.8% figure). If a "life plus 70" term applies, and if an author lives 78 years after creation of a work (as with Irving Berlin and Alexander's Ragtime Band), the same assumptions yield a figure of 99.996%.
The most unrealistically conservative aspect of these assumptions, i. e., the aspect most unrealistically favorable to the majority, is the assumption of a constant future income stream. In fact, as noted in the text, supra, at 248, uncontested data indicate that no author could rationally expect [537 U.S. 268] that a stream of copyright royalties will be constant forever. Indeed, only about 2% of copyrights can be expected to retain commercial value at the end of 55 to 75 years. Ibid. Thus, in the overwhelming majority of cases, the ultimate value of the extension to copyright holders will be zero, and the economic difference between the extended copyright and a perpetual copyright will be zero.
Nonetheless, there remains a small 2% or so chance that a given work will remain profitable. The CRS Report suggests a way to take account of both that likelihood and the related "decay" in a work's commercial viability: Find the annual decay rate that corresponds to the percentage of works that become commercially unavailable in any given year, and then discount the revenue for each successive year accordingly. See CRS Report 7. Following this approach, if one estimates, conservatively, that a full 2% of all works survives at the end of 75 years, the corresponding annual decay rate is about 5%. I instead (and again conservatively) use the 3.8% decay rate the CRS has applied in the case of books whose copyrights were renewed between 1950 and 1970. Ibid. Using this 3.8% decay rate and the economist amici's proposed 7% discount rate, the value of a 95-year copyright is more realistically estimated not as 99.8%, but as 99.996% of the value of a perpetual copyright. The comparable "Irving Berlin" figure is 99.99999%. (With a 5% decay rate, the figures are 99.999% and 99.999998%, respectively.) Even these figures seem likely to be underestimates in the sense that they assume that, if a work is still commercially available, it earns as much as it did in a year shortly after its creation.
B
Conclusions regarding the economic significance of "works made for hire" are judgmental because statistical information about the ratio of "for hire" works to all works is scarce. Cf. Community for Creative Non-Violence v. Reid, 490 U. S. 730, 737-738, n. 4 (1989). But we know that, as of 1955, [537 U.S. 269] copyrights on "for hire" works accounted for 40% of newly registered copyrights. Varmer, Works Made for Hire and on Commission, Study No. 13, in Copyright Law Revision Studies Nos. 1-19, prepared for the Subcommittee on Patents, Trademarks, and Copyrights of the Senate Committee on the Judiciary, 86th Cong., 2d Sess., 139, n. 49 (Comm. Print 1960). We also know that copyrights on works typically made for hire—feature-length movies—were renewed, and since the 1930's apparently have remained commercially viable, at a higher than average rate. CRS Report 13-14. Further, we know that "harmonization" looks to benefit United States exports, see, e. g., H. R. Rep. No. 105-452, p. 4 (1998), and that films and sound recordings account for the dominant share of export revenues earned by new copyrighted works of potential lasting commercial value (i. e., works other than computer software), S. Siwek, Copyright Industries in the U. S. Economy: The 2002 Report 17. It also appears generally accepted that, in these categories, "for hire" works predominate. E. g., House Hearings 176 (testimony of the Register of Copyrights) ("[A]udiovisual works are generally works made for hire"). Taken together, these circumstances support the conclusion in the text that the extension fails to create uniformity where it would appear to be most important—pre-1978 copyrighted works nearing the end of their pre-extension terms, and works made for hire.
__________
[*] Briefs of amici curiae urging reversal were filed for the American Association of Law Libraries et al. by Arnold P. Lutzker and Carl H. Settlemyer III; for the College Art Association et al. by Jeffrey P. Cunard and Bruce P. Keller; for the Eagle Forum Education & Legal Defense Fund et al. by Karen Tripp and Phyllis Schlafly; for the Free Software Foundation by Eben Moglen; for Intellectual Property Law Professors by Jonathan Weinberg; for the Internet Archive et al. by Deirdre K. Mulligan, Mark A. Lemley, and Steven M. Harris; and for Jack M. Balkin et al. by Burt Neuborne.
Briefs of amici curiae urging affirmance were filed for the American Intellectual Property Law Association by Baila H. Celedonia, Mark E. Haddad, and Roger W. Parkhurst; for the American Society of Composers, Authors and Publishers et al. by Carey R. Ramos, Peter L. Felcher, Drew S. Days III, Beth S. Brinkmann, and Paul Goldstein; for Amsong, Inc., by Dorothy M. Weber; for AOL Time Warner, Inc., by Kenneth W. Starr, Richard A. Cordray, Daryl Joseffer, Paul T. Cappuccio, Edward J. Weiss, and Shira Perlmutter; for the Association of American Publishers et al. by Charles S. Sims and Jon A. Baumgarten; for the Bureau of National Affairs, Inc., et al. by Paul Bender and Michael R. Klipper; for the Directors Guild of America et al. by George H. Cohen, Leon Dayan, and Laurence Gold; for Dr. Seuss Enterprises, L. P., et al. by Karl ZoBell, Nancy O. Dix, Cathy Ann Bencivengo, Randall E. Kay, and Herbert B. Cheyette; for the Intellectual Property Owners Association by Charles D. Ossola and Ronald E. Myrick; for the International Coalition for Copyright Protection by Eric Lieberman; for the Motion Picture Association of America, Inc., by Seth P. Waxman, Randolph D. Moss, Edward C. DuMont, Neil M. Richards, and Simon Barsky; for the Recording Artists Coalition by Thomas G. Corcoran, Jr.; for the Recording Industry Association of America by Donald B. Verrilli, Jr., Thomas J. Perrelli, William M. Hohengarten, Matthew J. Oppenheim, and Stanley Pierre-Louis; for the Songwriters Guild of America by Floyd Abrams and Joel Kurtzberg; for Jack Beeson et al. by I. Fred Koenigsberg and Gaela K. Gehring Flores; for Senator Orrin G. Hatch by Thomas R. Lee; for Edward Samuels, pro se; and for Representative F. James Sensenbrenner, Jr., et al. by Arthur B. Culvahouse, Jr., and Robert M. Schwartz.
Briefs of amici curiae were filed for Hal Roach Studios et al. by H. Jefferson Powell and David Lange; for Intel Corp. by James M. Burger; for the Nashville Songwriters Association International by Stephen K. Rush; for the New York Intellectual Property Law Association by Bruce M. Wexler and Peter Saxon; for the National Writers Union et al. by Peter Jaszi; for the Progressive Intellectual Property Law Association et al. by Michael H. Davis; for George A. Akerlof et al. by Roy T. Englert, Jr.; for Tyler T. Ochoa et al. by Mr. Ochoa; and for Malla Pollack, pro se.
[1] JUSTICE BREYER's dissent is not similarly restrained. He makes no effort meaningfully to distinguish existing copyrights from future grants. See, e. g., post, at 242-243, 254-260, 264-266. Under his reasoning, the CTEA's 20-year extension is globally unconstitutional.
[2] Asserting that the last several decades have seen a proliferation of copyright legislation in departure from Congress' traditional pace of legislative amendment in this area, petitioners cite nine statutes passed between 1962 and 1974, each of which incrementally extended existing copyrights for brief periods. See Pub. L. 87-668, 76 Stat. 555; Pub. L. 89-142, 79 Stat. 581; Pub. L. 90-141, 81 Stat. 464; Pub. L. 90-416, 82 Stat. 397; Pub. L. 91-147, 83 Stat. 360; Pub. L. 91-555, 84 Stat. 1441; Pub. L. 92-170, 85 Stat. 490; Pub. L. 92-566, 86 Stat. 1181; Pub. L. 93-573, Title I, 88 Stat. 1873. As respondent (Attorney General Ashcroft) points out, however, these statutes were all temporary placeholders subsumed into the systemic changes effected by the 1976 Act. Brief for Respondent 9.
[3] Petitioners argue that the 1790 Act must be distinguished from the later Acts on the ground that it covered existing works but did not extend existing copyrights. Reply Brief 3-7. The parties disagree on the question whether the 1790 Act's copyright term should be regarded in part as compensation for the loss of any then existing state- or common-law copyright protections. See Brief for Petitioners 28-30; Brief for Respondent 17, n. 9; Reply Brief 3-7. Without resolving that dispute, we underscore that the First Congress clearly did confer copyright protection on works that had already been created.
[4] We note again that JUSTICE BREYER makes no such concession. See supra, at 193, n. 1. He does not train his fire, as petitioners do, on Congress' choice to place existing and future copyrights in parity. Moving beyond the bounds of the parties' presentations, and with abundant policy arguments but precious little support from precedent, he would condemn Congress' entire product as irrational.
[5] This approach comported with English practice at the time. The Statute of Anne, 1710, 8 Ann. c. 19, provided copyright protection to books not yet composed or published, books already composed but not yet published, and books already composed and published. See ibid. ("[T]he author of any book or books already composed, and not printed and published, or that shall hereafter be composed, and his assignee or assigns, shall have the sole liberty of printing and reprinting such book and books for the term of fourteen years, to commence from the day of the first publishing the same, and no longer."); ibid. ("[T]he author of any book or books already printed ... or the bookseller or booksellers, printer or printers, or other person or persons, who hath or have purchased or acquired the copy or copies of any book or books, in order to print or reprint the same, shall have the sole right and liberty of printing such book and books for the term of one and twenty years, to commence from the said tenth day of April, and no longer.").
JUSTICE STEVENS stresses the rejection of a proposed amendment to the Statute of Anne that would have extended the term of existing copyrights, and reports that opponents of the extension feared it would perpetuate the monopoly position enjoyed by English booksellers. Post, at 232-233, and n. 9. But the English Parliament confronted a situation that never existed in the United States. Through the late 17th century, a government-sanctioned printing monopoly was held by the Stationers' Company, "the ancient London guild of printers and booksellers." M. Rose, Authors and Owners: The Invention of Copyright 4 (1993); see L. Patterson, Copyright in Historical Perspective ch. 3 (1968). Although that legal monopoly ended in 1695, concerns about monopolistic practices remained, and the 18th-century English Parliament was resistant to any enhancement of booksellers' and publishers' entrenched position. See Rose, supra, at 52-56. In this country, in contrast, competition among publishers, printers, and booksellers was "intens[e]" at the time of the founding, and "there was not even a rough analog to the Stationers' Company on the horizon." Nachbar, Constructing Copyright's Mythology, 6 Green Bag 2d 37, 45 (2002). The Framers guarded against the future accumulation of monopoly power in booksellers and publishers by authorizing Congress to vest copyrights only in "Authors." JUSTICE STEVENS does not even attempt to explain how Parliament's response to England's experience with a publishing monopoly may be construed to impose a constitutional limitation on Congress' power to extend copyrights granted to "Authors."
[6] Moreover, the precise duration of a federal copyright has never been fixed at the time of the initial grant. The 1790 Act provided a federal copyright term of 14 years from the work's publication, renewable for an additional 14 years if the author survived and applied for an additional term. § 1. Congress retained that approach in subsequent statutes. See Stewart v. Abend, 495 U.S. 207, 217 (1990) ("Since the earliest copyright statute in this country, the copyright term of ownership has been split between an original term and a renewal term."). Similarly, under the method for measuring copyright terms established by the 1976 Act and retained by the CTEA, the baseline copyright term is measured in part by the life of the author, rendering its duration indeterminate at the time of the grant. See 1976 Act § 302(a); 17 U.S.C. § 302(a).
[7] JUSTICE STEVENS would sweep away these decisions, asserting that Graham v. John Deere Co. of Kansas City, 383 U.S. 1 (1966), "flatly contradicts" them. Post, at 237. Nothing but wishful thinking underpins that assertion. The controversy in Graham involved no patent extension. Graham addressed an invention's very eligibility for patent protection, and spent no words on Congress' power to enlarge a patent's duration.
[8] JUSTICE STEVENS recites words from Sears, Roebuck & Co. v. Stiffel Co., 376 U.S. 225 (1964), supporting the uncontroversial proposition that a State may not "extend the life of a patent beyond its expiration date," id., at 231, then boldly asserts that for the same reasons Congress may not do so either. See post, at 222, 226. But Sears placed no reins on Congress' authority to extend a patent's life. The full sentence in Sears, from which JUSTICE STEVENS extracts words, reads: "Obviously a State could not, consistently with the Supremacy Clause of the Constitution, extend the life of a patent beyond its expiration date or give a patent on an article which lacked the level of invention required for federal patents." 376 U.S., at 231. The point insistently made in Sears is no more and no less than this: States may not enact measures inconsistent with the federal patent laws. Ibid. ("[A] State cannot encroach upon the federal patent laws directly ... [and] cannot ... give protection of a kind that clashes with the objectives of the federal patent laws."). A decision thus rooted in the Supremacy Clause cannot be turned around to shrink congressional choices.
Also unavailing is JUSTICE STEVENS' appeal to language found in a private letter written by James Madison. Post, at 230, n. 6; see also dissenting opinion of BREYER, J., post, at 246-247, 260, 261. Respondent points to a better "demonstrat[ion]," post, at 226, n. 3 (STEVENS, J., dissenting), of Madison's and other Framers' understanding of the scope of Congress' power to extend patents: "[T]hen-President Thomas Jefferson — the first administrator of the patent system, and perhaps the Founder with the narrowest view of the copyright and patent powers — signed the 1808 and 1809 patent term extensions into law; ... James Madison, who drafted the Constitution's `limited Times' language, issued the extended patents under those laws as Secretary of State; and ... Madison as President signed another patent term extension in 1815." Brief for Respondent 15.
[9] JUSTICE STEVENS reads McClurg to convey that "Congress cannot change the bargain between the public and the patentee in a way that disadvantages the patentee." Post, at 239. But McClurg concerned no such change. To the contrary, as JUSTICE STEVENS acknowledges, McClurg held that use of an invention by the patentee's employer did not invalidate the inventor's 1834 patent, "even if it might have had that effect prior to the amendment of the patent statute in 1836." Post, at 239. In other words, McClurg evaluated the patentee's rights not simply in light of the patent law in force at the time the patent issued, but also in light of "such changes as ha[d] been since made." 1 How., at 206. It is thus inescapably plain that McClurg upheld the application of expanded patent protection to an existing patent.
[10] JUSTICE BREYER would adopt a heightened, three-part test for the constitutionality of copyright enactments. Post, at 245. He would invalidate the CTEA as irrational in part because, in his view, harmonizing the United States and European Union baseline copyright terms "apparent[ly]" fails to achieve "significant" uniformity. Post, at 264. But see infra this page and 206. The novelty of the "rational basis" approach he presents is plain. Cf. Board of Trustees of Univ. of Ala. v. Garrett, 531 U.S. 356, 383 (2001) (BREYER, J., dissenting) ("Rational-basis review — with its presumptions favoring constitutionality — is `a paradigm of judicial restraint.'" (quoting FCC v. Beach Communications, Inc., 508 U.S. 307, 314 (1993))). Rather than subjecting Congress' legislative choices in the copyright area to heightened judicial scrutiny, we have stressed that "it is not our role to alter the delicate balance Congress has labored to achieve." Stewart v. Abend, 495 U.S., at 230; see Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417, 429 (1984). Congress' exercise of its Copyright Clause authority must be rational, but JUSTICE BREYER'S stringent version of rationality is unknown to our literary property jurisprudence.
[11] Responding to an inquiry whether copyrights could be extended "forever," Register of Copyrights Marybeth Peters emphasized the dominant reason for the CTEA: "There certainly are proponents of perpetual copyright: We heard that in our proceeding on term extension. The Songwriters Guild suggested a perpetual term. However, our Constitution says limited times, but there really isn't a very good indication on what limited times is. The reason why you're going to life-plus-70 today is because Europe has gone that way . . . ." Copyright Term, Film Labeling, and Film Preservation Legislation: Hearings on H. R. 989 et al. before the Subcommittee on Courts and Intellectual Property of the House Committee on the Judiciary, 104th Cong., 1st Sess., 230 (1995) (hereinafter House Hearings).
[12] The author of the law review article cited in text, Shira Perlmutter, currently a vice president of AOL Time Warner, was at the time of the CTEA's enactment Associate Register for Policy and International Affairs, United States Copyright Office.
[13] See also Austin, Does the Copyright Clause Mandate Isolationism? 26 Colum. J. L. & Arts 17, 59 (2002) (cautioning against "an isolationist reading of the Copyright Clause that is in tension with ... America's international copyright relations over the last hundred or so years").
[14] Members of Congress expressed the view that, as a result of increases in human longevity and in parents' average age when their children are born, the pre-CTEA term did not adequately secure "the right to profit from licensing one's work during one's lifetime and to take pride and comfort in knowing that one's children — and perhaps their children — might also benefit from one's posthumous popularity." 141 Cong. Rec. 6553 (1995) (statement of Sen. Feinstein); see 144 Cong. Rec. S12377 (daily ed. Oct. 12, 1998) (statement of Sen. Hatch) ("Among the main developments [compelling reconsideration of the 1976 Act's term] is the effect of demographic trends, such as increasing longevity and the trend toward rearing children later in life, on the effectiveness of the life-plus-50 term to provide adequate protection for American creators and their heirs."). Also cited was "the failure of the U.S. copyright term to keep pace with the substantially increased commercial life of copyrighted works resulting from the rapid growth in communications media." Ibid. (statement of Sen. Hatch); cf. Sony, 464 U.S., at 430-431 ("From its beginning, the law of copyright has developed in response to significant changes in technology. . . . [A]s new developments have occurred in this country, it has been the Congress that has fashioned the new rules that new technology made necessary.").
[15] JUSTICE BREYER urges that the economic incentives accompanying copyright term extension are too insignificant to "mov[e]" any author with a "rational economic perspective." Post, at 255; see post, at 254-257. Calibrating rational economic incentives, however, like "fashion[ing] ... new rules [in light of] new technology," Sony, 464 U.S., at 431, is a task primarily for Congress, not the courts. Congress heard testimony from a number of prominent artists; each expressed the belief that the copyright system's assurance of fair compensation for themselves and their heirs was an incentive to create. See, e. g., House Hearings 233-239 (statement of Quincy Jones); Copyright Term Extension Act of 1995: Hearing before the Senate Committee on the Judiciary, 104th Cong., 1st Sess., 55-56 (1995) (statement of Bob Dylan); id., at 56-57 (statement of Don Henley); id., at 57 (statement of Carlos Santana). We would not take Congress to task for crediting this evidence which, as JUSTICE BREYER acknowledges, reflects general "propositions about the value of incentives" that are "undeniably true." Post, at 255.
Congress also heard testimony from Register of Copyrights Marybeth Peters and others regarding the economic incentives created by the CTEA. According to the Register, extending the copyright for existing works "could ... provide additional income that would finance the production and publication of new works." House Hearings 158. "Authors would not be able to continue to create," the Register explained, "unless they earned income on their finished works. The public benefits not only from an author's original work but also from his or her further creations. Although this truism may be illustrated in many ways, one of the best examples is Noah Webster[,] who supported his entire family from the earnings on his speller and grammar during the twenty years he took to complete his dictionary." Id., at 165.
[16] JUSTICE BREYER agrees that "Congress did not intend to act unconstitutionally" when it enacted the CTEA, post, at 256, yet in his very next breath, he seems to make just that accusation, ibid. What else is one to glean from his selection of scattered statements from individual Members of Congress? He does not identify any statement in the statutory text that installs a perpetual copyright, for there is none. But even if the statutory text were sufficiently ambiguous to warrant recourse to legislative history, JUSTICE BREYER'S selections are not the sort to which this Court accords high value: "In surveying legislative history we have repeatedly stated that the authoritative source for finding the Legislature's intent lies in the Committee Reports on the bill, which `represen[t] the considered and collective understanding of those [Members of Congress] involved in drafting and studying proposed legislation.'" Garcia v. United States, 469 U.S. 70, 76 (1984) (quoting Zuber v. Allen, 396 U.S. 168, 186 (1969)). The House and Senate Reports accompanying the CTEA reflect no purpose to make copyright a forever thing. Notably, the Senate Report expressly acknowledged that the Constitution "clearly precludes Congress from granting unlimited protection for copyrighted works," S. Rep. No. 104-315, p. 11 (1996), and disclaimed any intent to contravene that prohibition, ibid. Members of Congress instrumental in the CTEA's passage spoke to similar effect. See, e. g., 144 Cong. Rec. H1458 (daily ed. Mar. 25, 1998) (statement of Rep. Coble) (observing that "copyright protection should be for a limited time only" and that "[p]erpetual protection does not benefit society").
JUSTICE BREYER nevertheless insists that the "economic effect" of the CTEA is to make the copyright term "virtually perpetual." Post, at 243. Relying on formulas and assumptions provided in an amicus brief supporting petitioners, he stresses that the CTEA creates a copyright term worth 99.8% of the value of a perpetual copyright. Post, at 254-256. If JUSTICE BREYER'S calculations were a basis for holding the CTEA unconstitutional, then the 1976 Act would surely fall as well, for — under the same assumptions he indulges — the term set by that Act secures 99.4% of the value of a perpetual term. See Brief for George A. Akerlof et al. as Amici Curiae 6, n. 6 (describing the relevant formula). Indeed, on that analysis even the "limited" character of the 1909 (97.7%) and 1831 (94.1%) Acts might be suspect. JUSTICE BREYER several times places the Founding Fathers on his side. See, e. g., post, at 246-247, 260, 261. It is doubtful, however, that those architects of our Nation, in framing the "limited Times" prescription, thought in terms of the calculator rather than the calendar.
[17] Respondent notes that the CTEA's life-plus-70-years baseline term is expected to produce an average copyright duration of 95 years, and that this term "resembles some other long-accepted durational practices in the law, such as 99-year leases of real property and bequests within the rule against perpetuities." Brief for Respondent 27, n. 18. Whether such referents mark the outer boundary of "limited Times" is not before us today. JUSTICE BREYER suggests that the CTEA's baseline term extends beyond that typically permitted by the traditional rule against perpetuities. Post, at 256-257. The traditional common-law rule looks to lives in being plus 21 years. Under that rule, the period before a bequest vests could easily equal or exceed the anticipated average copyright term under the CTEA. If, for example, the vesting period on a deed were defined with reference to the life of an infant, the sum of the measuring life plus 21 years could commonly add up to 95 years.
[18] JUSTICE STEVENS' characterization of reward to the author as "a secondary consideration" of copyright law, post, at 227, n. 4 (internal quotation marks omitted), understates the relationship between such rewards and the "Progress of Science." As we have explained, "[t]he economic philosophy behind the [Copyright] [C]lause ... is the conviction that encouragement of individual effort by personal gain is the best way to advance public welfare through the talents of authors and inventors." Mazer v. Stein, 347 U.S. 201, 219 (1954). Accordingly, "copyright law celebrates the profit motive, recognizing that the incentive to profit from the exploitation of copyrights will redound to the public benefit by resulting in the proliferation of knowledge.... The profit motive is the engine that ensures the progress of science." American Geophysical Union v. Texaco Inc., 802 F. Supp. 1, 27 (SDNY 1992), aff'd, 60 F.3d 913 (CA2 1994). Rewarding authors for their creative labor and "promot[ing] ... Progress" are thus complementary; as James Madison observed, in copyright "[t]he public good fully coincides . . . with the claims of individuals." The Federalist No. 43, p. 272 (C. Rossiter ed. 1961). JUSTICE BREYER's assertion that "copyright statutes must serve public, not private, ends," post, at 247, similarly misses the mark. The two ends are not mutually exclusive; copyright law serves public ends by providing individuals with an incentive to pursue private ones.
[19] As we have noted, see supra, at 196, n. 3, petitioners seek to distinguish the 1790 Act from those that followed. They argue that by requiring authors seeking its protection to surrender whatever rights they had under state law, the 1790 Act enhanced uniformity and certainty and thus "promote[d] . . . Progress." See Brief for Petitioners 28-31. This account of the 1790 Act simply confirms, however, that the First Congress understood it could "promote ... Progress" by extending copyright protection to existing works. Every subsequent adjustment of copyright's duration, including the CTEA, reflects a similar understanding.
[20] JUSTICE STEVENS, post, at 235, refers to the "legislative veto" held unconstitutional in INS v. Chadha, 462 U.S. 919 (1983), and observes that we reached that decision despite its impact on federal laws geared to our "contemporary political system," id., at 967 (White, J., dissenting). Placing existing works in parity with future works for copyright purposes, in contrast, is not a similarly pragmatic endeavor responsive to modern times. It is a measure of the kind Congress has enacted under its Patent and Copyright Clause authority since the founding generation. See supra, at 194-196.
[21] Standard copyright assignment agreements reflect this expectation. See, e. g., A. Kohn & B. Kohn, Music Licensing 471 (3d ed. 1992-2002) (short form copyright assignment for musical composition, under which assignor conveys all rights to the work, "including the copyrights and proprietary rights therein and in any and all versions of said musical composition(s), and any renewals and extensions thereof (whether presently available or subsequently available as a result of intervening legislation)" (emphasis added)); 5 M. Nimmer & D. Nimmer, Copyright § 21.11[B], p. 21-305 (2002) (short form copyright assignment under which assignor conveys all assets relating to the work, "including without limitation, copyrights and renewals and/or extensions thereof"); 6 id., § 30.04[B][1], p. 30-325 (form composer-producer agreement under which composer "assigns to Producer all rights (copyrights, rights under copyright and otherwise, whether now or hereafter known) and all renewals and extensions (as may now or hereafter exist)").
[22] The fact that patent and copyright involve different exchanges does not, of course, mean that we may not be guided in our "limited Times" analysis by Congress' repeated extensions of existing patents. See supra, at 201-204. If patent's quid pro quo is more exacting than copyright's, then Congress' repeated extension of existing patents without constitutional objection suggests even more strongly that similar legislation with respect to copyrights is constitutionally permissible.
[23] Petitioners originally framed this argument as implicating the CTEA's extension of both existing and future copyrights. See Pet. for Cert. i. Now, however, they train on the CTEA's extension of existing copyrights and urge against consideration of the CTEA's First Amendment validity as applied to future copyrights. See Brief for Petitioners 39-48; Reply Brief 16-17; Tr. of Oral Arg. 11-13. We therefore consider petitioners' argument as so limited. We note, however, that petitioners do not explain how their First Amendment argument is moored to the prospective/retrospective line they urge us to draw, nor do they say whether or how their free speech argument applies to copyright duration but not to other aspects of copyright protection, notably scope.
[24] We are not persuaded by petitioners' attempt to distinguish Harper & Row on the ground that it involved an infringement suit rather than a declaratory action of the kind here presented. As respondent observes, the same legal question can arise in either posture. See Brief for Respondent 42. In both postures, it is appropriate to construe copyright's internal safeguards to accommodate First Amendment concerns. Cf. United States v. X-Citement Video, Inc., 513 U. S. 64, 78 (1994) ("It is . . . incumbent upon us to read the statute to eliminate [serious constitutional] doubts so long as such a reading is not plainly contrary to the intent of Congress.").
__________
[1] Justice Harlan wrote a brief concurrence, but did not disagree with this statement. Justice Black's statement echoed a portion of Attorney General Wirt's argument in Gibbons v. Ogden, 9 Wheat. 1, 171 (1824): "The law of Congress declares, that all inventors of useful improvements throughout the United States, shall be entitled to the exclusive right in their discoveries for fourteen years only. The law of New-York declares, that this inventor shall be entitled to the exclusive use of his discovery for thirty years, and as much longer as the State shall permit. The law of Congress, by limiting the exclusive right to fourteen years, in effect declares, that after the expiration of that time, the discovery shall be the common right of the whole people of the United States."
[2] Attorney General Wirt made this precise point in his argument in Gibbons v. Ogden, 9 Wheat., at 175: "The limitation is not for the advantage of the inventor, but of society at large, which is to take the benefit of the invention after the period of limitation has expired. The patentee pays a duty on his patent, which is an effective source of revenue to the United States. It is virtually a contract between each patentee and the people of the United States, by which the time of exclusive and secure enjoyment is limited, and then the benefit of the discovery results to the public."
[3] The Court acknowledges that this proposition is "uncontroversial" today, see ante, at 202, n. 8, but overlooks the fact that it was highly controversial in the early 1800's. See n. 11, infra. The Court assumes that the Sears holding rested entirely on the pre-emptive effect of congressional statutes even though the opinion itself, like the opinions in Graham v. John Deere Co. of Kansas City, 383 U. S. 1 (1966), and Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U. S. 141 (1989), also relied on the pre-emptive effect of the constitutional provision. That at least some of the Framers recognized that the Constitution itself imposed a limitation even before Congress acted is demonstrated by Madison's letter, quoted in n. 6, infra.
[4] "The copyright law, like the patent statutes, makes reward to the owner a secondary consideration. In Fox Film Corp. v. Doyal, 286 U. S. 123, 127, Chief Justice Hughes spoke as follows respecting the copyright monopoly granted by Congress, `The sole interest of the United States and the primary object in conferring the monopoly lie in the general benefits derived by the public from the labors of authors.' It is said that reward to the author or artist serves to induce release to the public of the products of his creative genius." 334 U. S., at 158.
[5] A copy of this bill specifically identified has not been found, though strong support exists for considering a bill from that session as H. R. 10. See E. Walterscheid, To Promote the Progress of Useful Arts: American Patent Law and Administration, 1798-1836, pp. 87-88 (1998) (hereinafter Walterscheid). This bill is reprinted in 4 Documentary History 513-519.
[6] "Your idea of appropriating a district of territory to the encouragement of imported inventions is new and worthy of consideration. I can not but apprehend however that the clause in the constitution which forbids patents for that purpose will lie equally in the way of your expedient. Congress seem to be tied down to the single mode of encouraging inventions by granting the exclusive benefit of them for a limited time, and therefore to have no more power to give a further encouragement out of a fund of land than a fund of money. This fetter on the National Legislature tho' an unfortunate one, was a deliberate one. The Latitude of authority now wished for was strongly urged and expressly rejected." Madison's description of the Copyright/Patent Clause as a "fetter on the National Legislature" is fully consistent with this Court's opinion in Graham.
[7] Importantly, even this first Act required a quid pro quo in order to receive federal copyright protection. In order to receive protection under the Act, the author was first required to register the work: "That no person shall be entitled to the benefit of this act, in cases where any map, chart, book or books, hath or have been already printed and published, unless he shall first deposit, and in all other cases, unless he shall before publication deposit a printed copy of the title of such map, chart, book or books, in the clerk's office of the district court where the author or proprietor shall reside." § 3, 1 Stat. 124. This registration requirement in federal district court—a requirement obviously not required under the various state laws protecting written works—further illustrates that the 1790 Act created new rights, rather than extending existing rights.
[8] Respondent's reformulation of the questions presented by this case confuses this basic distinction. We granted certiorari to consider the question: "Did the D. C. Circuit err in holding that Congress has the power under the Copyright Clause to extend retroactively the term of existing copyrights?" Respondent's reformulation of the first question presented —"Whether the 20-year extension of the terms of all unexpired copyrights . . . violates the Copyright Clause of the Constitution insofar as it applies to works in existence when it took effect"—significantly changes the substance of inquiry by changing the focus from the federal statute at issue to irrelevant common-law protections. Brief for Respondent I. Indeed, this reformulation violated this Court's Rule 24(1)(a), which states that "the brief [on the merits] may not raise additional questions or change the substance of the questions already presented in" the petition for certiorari.
[9] "A LETTER to a MEMBER of Parliament concerning the Bill now depending . . . for making more effectual an Act in the 8th Year of the Reign of Queen Anne, entituled, An Act for the Encouragement of Learning, by . . . Vesting the Copies of Printed Books in the Authors or Purchasers." Document reproduced in Goldsmiths'—Kress Library of Economic Literature, Segment I: Printed Books Through 1800, Microfilm No. 7300 (reel 460).
[10] See, e. g., ch. 74, 6 Stat. 458 (patent had expired for three months); ch. 113, 6 Stat. 467 (patent had expired for over two years); ch. 213, 6 Stat. 589 (patent had expired for five months); ch. 158, 9 Stat. 734 (patent had expired for over two years); ch. 72, 14 Stat. 621 (patent had expired nearly four years); ch. 175, 15 Stat. 461 (patent had expired for over two years); ch. 15, 16 Stat. 613 (patent had expired for six years); ch. 317, 16 Stat. 659 (patent had expired for nearly four years); ch. 439, 17 Stat. 689 (patent had expired for over two years).
[11] In the period before our decision in Wheaton, the pre-emptive effect of the Patent/Copyright Clause was also a matter of serious debate within the legal profession. Indeed, in their argument in this Court in Gibbons v. Ogden, 9 Wheat., at 44-61, 141-157, the defenders of New York's grant of a 30-year monopoly on the passenger trade between New Jersey and Manhattan argued that the Clause actually should be interpreted as confirming the State's authority to grant monopoly privileges that supplemented any federal grant. That argument is, of course, flatly inconsistent with our recent unanimous decision in Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U. S. 141 (1989). Although Attorney General Wirt had urged the Court to endorse our present interpretation of the Clause, its implicit limitations were unsettled when the 1831 Copyright Act was passed.
[12] It is true, as the majority points out, ante, at 202, n. 7, that Graham did not expressly overrule those earlier cases because Graham did not address the issue whether Congress could revive expired patents. That observation does not even arguably justify reliance on a set of old circuit court cases to support a proposition that is inconsistent with our present understanding of the limits imposed by the Copyright/Patent Clause. After all, a unanimous Court recently endorsed the precise analysis that the majority now seeks to characterize as "wishful thinking." Ante, at 202, n. 7. See Bonito Boats, 489 U. S., at 146 ("Congress may not create patent monopolies of unlimited duration, nor may it 'authorize the issuance of patents whose effects are to remove existent knowledge from the public domain, or to restrict free access to materials already available'" (quoting Graham, 383 U. S., at 6)).
[13] Indeed, the Lodging of the Motion Picture Association of America, Inc., as Amicus Curiae illustrates the significant creative work involved in releasing these classics. The Casablanca Digital Video Disc (DVD) contains a "documentary You Must Remember This, hosted by Lauren Bacall and featuring recently unearthed outtakes" and an "[a]ll-new introduction by Lauren Bacall." Disc cover text. Similarly, the Citizen Kane DVD includes "[t]wo feature-length audio commentaries: one by film critic Roger Ebert and the other by director/Welles biographer Peter Bogdanovich" and a "gallery of storyboards, rare photos, alternate ad campaigns, studio correspondence, call sheets and other memorabilia" in addition to a 2-hour documentary. Disc cover text.
[14] Similarly, the validity of earlier retroactive extensions of copyright protection is not at issue in this case. To decide the question now presented, we need not consider whether the reliance and expectation interests that have been established by prior extensions passed years ago would alter the result. Cf. Heckler v. Mathews, 465 U. S. 728, 746 (1984) ("We have recognized, in a number of contexts, the legitimacy of protecting reasonable reliance on prior law even when that requires allowing an unconstitutional statute to remain in effect for a limited period of time"). Those interests are not at issue now, because the act under review in this case was passed only four years ago and has been under challenge in court since shortly after its enactment.
4.3 South Africa Readings 4.3 South Africa Readings
4.3.1. South African Copyright Act No. 98 of 1978
4.3.2 Prism Holdings Ltd and another v Liversage 2004 (2) SA 478 (W) 4.3.2 Prism Holdings Ltd and another v Liversage 2004 (2) SA 478 (W)
PRISM HOLDINGS LTD AND ANOTHER v LIVERSAGE AND OTHERS 2004 (2) SA 478 (W)
Citation
2004 (2) SA 478 (W)
Case No
20957/2001
Court
Witwatersrand Local Division
Judge
Hoffman AJ
Heard
November 21, 2001; November 22, 2001
Judgment
December 12, 2001
Annotations
Link to Case Annotations
Flynote
Contract - Legality - Restraint of trade - Enforcement of - Contract in restraint of trade regarded as part of goodwill of business sold - Therefore benefits of restraint of trade transferred even if agreement not ceded - Respondent found to be in breach of restraint signed by him and acquired by applicant and applicant found entitled to interdict restraining respondents from competing with applicant.
Copyright - Infringement of - Computer programs - Section 2 of Copyright Act 98 of 1978 making computer programs as defined in s 1, including source code of programs, eligible for copyright - Respondents having made copies of programs they were working on while in employ of applicants - Respondents must have used material copied to make competing computer programs - Respondents not entitled to use confidential information gleaned during period of employment with applicants as springboard to compete - Applicants entitled to interdict restraining respondents from selling competing programs.
Headnote : Kopnota
The applicants applied in a Local Division for an interdict restraining the respondents from (1) adapting, marketing or selling certain computer software and (2) selling the software to a specific company (E). In addition, an order was sought compelling the respondents to deliver the software in question to the Sheriff pending the outcome of the action to be instituted. Still further relief was claimed against specifically the first and second respondents as it was alleged that they were in breach of undertakings in restraint of competition concluded between them and the A company, which restraints had been ceded to the first applicant when the A company had been sold to the first applicant. Subsequent to the termination of their employment with the applicant companies on 8 June 2001, the respondents set up business in Gauteng and this business competed directly with that of the applicants. It was common cause that E, formerly a customer of the applicants, had taken its business away from the applicants and purchased competing suites of computer programs, called 'Nuntius' and 'Thuros', from the respondents' new business. The first respondent contended, in answer to the applicants' claim to be entitled to enforce the undertaking in restraint of competition, that the restraint was limited to South Africa and that as he had not, and would not for a three-year period, sell his product in South Africa, he was not in breach of the undertaking. It was further alleged that E was a Zimbabwean company doing business in that country.
The first question to be considered was whether the applicants owned the copyright in the computer programs in issue. If so, they were entitled, in terms of the provisions of s 24 of the Copyright Act 98 of 1978 to an interdict to prevent infringement thereof. In order to determine the question of copyright, the Court needed to examine the genesis and history of the two suites of computer programs sought to be protected by the applicants. It was apparent from the papers that the first and second respondents were skilled computer programmers who surrounded themselves with a talented team of assistants, the remaining respondents. With regard to the works created after 3 July 200, during the course of the respondents' employment with the first applicant, it was common cause that the first applicant owned the copyright in that work. The questions to be answered were how much of that work had found its way into the Nuntius and Thuros programs and whether the respondents, in selling those programs, had contravened the provisions of s 11B of the Act in that their programs amounted to an adaptation of the works of which the applicants owned copyright or were a reproduction of a substantial part of those works. The applicants had engaged the services of an expert to determine the extent of the similarities between their programs and Nuntius and Thuros. The expert had concluded that there were indeed substantial similarities but did not seek to distinguish between work done prior to 3 July 2000 and work done thereafter.
Held, that a contract in restraint of trade was to be regarded as a part of the goodwill of a business sold. Therefore, upon the sale of the A company businesses, the benefits of the restraint agreement were transferred to the first applicant. Even if the A company had not ceded the restraint agreement to the first applicant, it would have acquired the benefits of the restraint as part of the goodwill sold to and acquired by it. The cession put it beyond doubt that the first respondent was restrained for a period of three years from engaging, in South Africa, in the competitive activities detailed in the restraint undertaking. (At 483A - C.)
Held, further, that the first respondent's argument that he was not in breach of the restraint undertaking because the company (E) he sold his product to was based in Zimbabwe and did business in that country was not acceptable. The first respondent conducted business in competition with the applicants in Gauteng. He sold from that province and the fact that his customer was situated elsewhere was irrelevant. In the circumstances, the first respondent was accordingly in breach of the restraint undertaking signed by him and acquired by the first applicant. The applicants were, accordingly, entitled to an interdict restraining the respondents from competing with them in this fashion. (At 483G and H.)
Held, further, that s 2 of the Act made a computer program, as defined in s 1 and including the source code to such program, eligible for copyright. (At 484B/C.)
Held, further, that the first respondent had been employed by the A group to develop the programs to be sold exclusively by A's subsidiary, D, which had been sold to A by the first respondent. In developing the programs, copyright in anything which he wrote after taking up employment would, by virtue of his employment, have vested in D. Thus, the first respondent had nothing to sell but his interest in the technology itself which included copyright in the early versions of the programs. It had to be concluded that the first respondent did sell to D copyright in the programs comprising the earlier versions of the applicants' products. (At 485F - G/H.)
Held, further, that, when the A group sold its businesses to the first applicant, it no doubt intended to sell all business assets owned by D, including copyright in the software which was to be developed further and culminate in the applicants' products. This included the developments taking place during the period 1998 to 2000. There had, however, been no formal assignment of copyright and no evidence that D, which owned the copyright, had signed any document to transfer ownership of its copyright to the first applicant. Therefore, the requirements of s 22(3) of the Act had not been complied with and there had been no effective assignment of copyright to the first applicant in the computer programs which were eventually developed into the applicants' products. D therefore remained the owner of the copyright in the software as it existed in July 2000. (At 486A/B - D/E.)
Held, further, that the Court was unable to rely on the expert evidence tendered by the applicants to support infringement. The Court was further unable to discern, on the basis of the evidence tendered, whether substantial parts of the work done after 3 July 2000 had been reproduced in Nuntius and Thuros. It was, accordingly, not appropriate for the interdicts against the respondents to be granted, restraining them from infringing copyright in the works created by them for the applicants while working on the applicants' products during the period of their employment with the applicants. (At 488F/G and H/I - I/J.)
Held, further, that the respondents had made copies of the programs they worked on while in the employ of the applicants. On the evidence, the respondents must have used material that they had copied to compete with the applicants. That material had been confidential to the applicants and, in acting as they did, the respondents had competed unlawfully with the applicants. (At 489E/F - F/G.)
Held, further, that nothing prevented the respondents, including the first respondent in the event of him moving his business outside South Africa, from writing programs de novo and selling them in competition with the applicants. What the respondents were not entitled to do was use the confidential information gleaned during the period of their employment with the applicants and A and use that to compete with the applicants. Nor could they use that information as a springboard to compete. (At 489G/H - I.)
Held, further, that a prima facie case, at the very least, had been established. The applicants had undoubtedly suffered irreparable harm and there was potential for further harm, should the respondents be allowed to continue to sell their Nuntius and Thuros programs. The balance of convenience favoured the applicants and there was no other remedy available to them. In the circumstances it was, therefore, appropriate to interdict the respondents, pendente lite, from selling the Nuntius and Thuros programs or any adaptations thereof. (At 489I/J - 490A, 490B, C/D and D/E - E.)
Cases Considered
Annotations
Reported cases
Arlyn Butcheries (Pty) Ltd v Bosch1966 (2) SA 308 (W): applied
Botha and Another v Carapax Shadeports (Pty) Ltd1992 (1) SA 202 (A): applied
Elcock & Co v Elcock 1928 WLD 121: applied
Faccenda Chicken Ltd v Fowler and Others; Fowler v Faccenda Chicken Ltd [1985] 1 All ER 724 (Ch): applied
Galago Publishers (Pty) Ltd and Another v Erasmus1989 (1) SA 276 (A): referred to
Harvey Tiling Co (Pty) Ltd v Rodomac (Pty) Ltd and Another1977 (1) SA 316 (T): applied
Klep Valves (Pty) Ltd v Saunders Valve Co Ltd1987 (2) SA 1 (A): referred to
Knox D'Arcy Ltd and Others v Jamieson and Others1992 (3) SA 520 (W): applied
Telefund Raisers CC v Isaacs and Others1998 (1) SA 521 (C): applied
Triomed (Pty) Ltd v Beecham Group plc and Others2001 (2) SA 522 (T): applied
Wolmer v Rees and Others 1935 TPD 319: applied.
Statutes Considered
Statutes
The Copyright Act 98 of 1978, ss 1, 2, 11B, 22(3) and 24: see Juta's Statutes of South Africa 2001 vol 2 at 2-217 - 2-219, 2-221 and 2-224 - 2-225.
Case Information
Application for an interdict. The facts appear from the reasons for judgment.
The names of counsel and their instructing attorneys were not supplied to the editors.
Cur adv vult.
Postea (December 12).
Judgment
Hoffman AJ:
The applicants have applied for an interdict restraining the respondents, pendente lite, from:
(1) adapting, marketing or selling certain computer software ('the software'); and
(2) selling the software to Econet Wireless International Ltd (Econet).
In addition, an order is sought compelling the respondents to deliver the software to the Sheriff pending the outcome of the action to be instituted.
Yet further relief is claimed against the first and second respondent. It is alleged that they are in breach of undertakings in restraint of competition concluded between them and Accord Technologies Ltd (Accord), which restraints have been ceded to the first applicant.
It is convenient to deal, first, with the interdict sought against the first and second respondents arising out of allegations of breach of the restraint undertakings referred to above. In order to do so it is necessary to refer, briefly, to the history of the covenants in restraint of competition.
In 1998 the first and second respondents entered into contracts in terms of which they were employed by Accord. It is alleged by the applicants that when they did so both the first and second respondents signed covenants in restraint of trade in terms to which I shall refer hereunder.
The restraint undertaking signed by the first respondent is annexed to the papers. That signed by the second respondent has, according to the applicants, been lost. It is alleged that the document which she signed is in its terms identical to that signed by the first respondent.
The first respondent admits signing the covenant in restraint of trade. The second respondent denies having done so. While there are indications in the papers that the second respondent would, in all likelihood, have signed a covenant in restraint of trade similar to that signed by the first respondent, I cannot make a positive finding to this effect. In the circumstances, given the fundamental dispute of fact in this regard, it would be inappropriate for me to grant relief against the second respondent at this stage.
I turn now to the undertaking signed by the first respondent. It was signed by him on 11 August 1998 and in its terms restrains him in favour of Accord and its subsidiaries, inter alia, as follows:
'. . . (The) employee undertakes that he will not directly or indirectly either as principal, agent, partner, representative, shareholder, director or employee or any other like or similar capacity:
. . . be associated with, interested in . . . or interest himself in any firm, person or group carrying on business in competition with the company in the research and development, promotion, marketing, distribution, repairs, rental or sale of cellular, car radio, card security, multimedia or video conferencing products, and/or technology and/or training methods or systems in relation to any of the aforegoing and in particular, in the development, marketing, sale and/or support of GSM Middleware Software;
. . . knowingly solicit in competition with the company, the custom of any person who, within the 12-month period immediately preceding at the date of termination of the employee's employment with the company, was a customer of the company, or any of them;
. . . solicit, interfere with or entice or endeavour to entice away from the company any person who, within the 12-month period immediately preceding the date of termination of the employee's employment with the company, was employed by the company.'
The area of the restraint is South Africa.
On 10 May 2000 Accord Technology Investments (Pty) Ltd (Accord Technologies) sold the business of Accord to the first applicant and, in terms of the sale agreement, Accord ceded to it the restraint of trade agreements concluded 'with each of the key management' personnel.
In the circumstances there can be little doubt (indeed, counsel for the respondents did not seriously contend otherwise) that the restraint agreement operates in favour of the first and second applicants (it is not disputed that the second applicant is a subsidiary of the first applicant, and that the restraint undertaking operates in its favour).
A contract in restraint of trade is to be 'regarded as a part of the goodwill of the business' sold (Botha and Another v Carapax Shadeports (Pty) Ltd1992 (1) SA 202 (A)) and thus, on the sale of the Accord businesses, the benefits of the restraint agreement were, ipso facto transferred to the first applicant. Accordingly, even if Accord had not ceded the restraint agreement to the first applicant, it would have acquired the benefits of the restraint as part of the goodwill sold to and acquired by it. The cession, of course, puts this beyond doubt: the first respondent is restrained for a period of three years (the period of the restraint) from engaging, in South Africa, in the competitive activities detailed in the restraint undertaking.
It is common cause that on 3 July 2000 the respondents concluded contracts of employment with the first applicant. In addition, the first and second respondents concluded contracts of employment with the second applicant, pursuant to which they were to be appointed directors of the second applicant. Their employment endured until 8 June 2001.
It is not in dispute that, subsequent to the termination of their employment with the applicant companies on 8 June 2001 (the date on which they resigned their employment), the respondents set up business in Petervale, Gauteng, and this business competes, directly, with that of the applicants. It is also common cause that Econet, formerly a customer of the applicants, has taken its business away from them and has purchased competing suites of computer programs from the business now being conducted by the respondents.
The only serious challenge mounted by the first respondent to the applicants' claim to be entitled to enforce the undertaking in restraint of competition is that the restraint is limited to South Africa, that he does not and will not, for a three-year period, sell into South Africa and that he accordingly is not in breach of the undertaking. I pause to mention that Econet is a Zimbabwe company which does business in that country.
The first respondent's reasoning is fallacious. He conducts his business in competition with the applicants in Gauteng. He sells from this province. The fact that his customer base is situate outside South Africa is irrelevant. (See Elcock & Co v Elcock 1928 WLD 121 at 126; Wolmer v Rees and Others 1935 TPD 319; Arlyn Butcheries (Pty) Ltd v Bosch1966 (2) SA 308 (W).)
In the circumstances the first respondent is in breach of the restraint undertaking signed by him, and acquired by the first applicant. The applicants are, accordingly entitled to an interdict restraining them from competing with it in this fashion.
It is not suggested in the respondents' papers that the restraint is unreasonable. Accordingly I shall order, pendente lite, that the first respondent be restrained in the terms sought in the notice of motion, save only that I shall limit the ambit of the restraint, both as to area (South Africa), and time (three years from 8 June 2001, or the final determination of the action to be instituted, whichever is the sooner).
I pause to observe that, in my view, the applicants have established a clear right to this relief and the remaining requisites for a final interdict.
Had this been sought I would have granted final relief against the first respondent for breach of his restraint undertakings.
I turn now to the question of copyright.
The first matter to be considered is whether the applicants, or either of them, own(s) the copyright in the computer programs in issue: If they do, then they are entitled, in terms of the provisions of s 24 of the Copyright Act 98 of 1978 (the Act) to an interdict to prevent infringement thereof.
Section 2 of the Act, of course, makes eligible for copyright 'a computer program' as defined in s 1, which would include the source code to any such program.
In order to determine the question of copyright, it is necessary to examine the genesis and history of the two suites of computer programs which the applicants seek to protect.
It is apparent from the papers that the first and second respondents are skilled computer programmers and have gathered around them a talented team of assistants (the remaining respondents). They have developed considerable abilities, particularly in the field of programs written for the cellular telephone industry.
Prior to his association with, and employment by the Accord Group of companies, the first respondent, according to what is stated in his affidavit, developed his suites of programs which ultimately evolved into the programs now owned and sold by the first applicant under the names 'AirComm' and 'AirTrax'.
It is apparent that prior to the Accord era, while the first respondent wrote programs during the course of his employment with several employers, he was astute to retain, expressly, ownership of the copyright in all the programs so written; thus, effectively, he licensed his employers to use and exploit the copyright in what he created for them while retaining ownership of copyright in the works he F produced. Ordinarily, of course, copyright in works created in the course and scope of his employment with the companies for which he worked would have vested in the employers concerned (s 21 of the Act).
The reservations of ownership of copyright in the various programs were, prior to the first respondent taking up employment with the Accord Group, express and specific. Thus, for example, when he, the second respondent and one Ria van Zyl, formed and became shareholders in a company, World-wide Solutions Gateway (Pty) Ltd (WSG), the following is specifically recorded in the 'Founders Agreement':
'WSG will have exclusive rights to sell the products developed by Johan Liversage unless the directors and shareholders mutually agree upon distributors. The intellectual property and copyright and source code will at all times remain the property of Johan Liversage and will not be sold with the products.'
During 1998 the first respondent took up employment with the Accord Group. Contemporaneously:
- WSG sold its business, including all technology which it owned, to a shelf company.
- The first respondent sold to the shelf company, for a purchase price of R150 000, what is referred to as the 'technology'. This is defined as 'GSM Middleware Software and Communications Gateways and Connectivity Solutions. . .'. This software comprised early versions of what became the AirComm and AirTrax programs.
The issued share capital in the shelf company, to which I shall refer as 'Datagate' (its name was changed to this) was owned as to 50% thereof by the Accord Group on the one hand, and as to the remaining 50% thereof by the first and second respondents, and Ria van Zyl.
It is thus to be seen that WSG sold its business to a company which was partially owned by the first and second respondents, and in which they and their associate Ria van Zyl had a direct interest. It is apparent therefore, that the first and second respondents stood to benefit from their association with Accord.
For reasons which are not relevant, the shareholding in Datagate, which was owned by the first and second respondents and Ria van Zyl, was later acquired by Accord. Thus, Datagate became a wholly-owned subsidiary of Accord.
The respondents contend that what was sold to Datagate by, particularly, the first respondent was only the business that WSG conducted. This, as I have observed, included the early versions of what became the AirComm and AirTrax programs. The applicants, on the other hand, contend that at the time of the conclusion of the agreement WSG already had exclusive rights to sell the products (the early versions of the programs) and, accordingly, all that the first respondent had left to sell was the intellectual property in those products. It was argued that 'technology' must, therefore, have included the intellectual property in the programs.
In my view, the applicants' contentions in this regard are correct. The first respondent was to be employed by the Accord Group to develop the programs that Datagate was entitled, exclusively, to sell. In developing the programs, copyright in anything which he wrote after taking up employment would, by virtue of his employment, have vested in Datagate. Thus, ultimately, he had nothing else to sell but his interest in the technology itself. This must have included copyright in the early versions of the programs. Thus, I conclude that the first respondent did sell to Datagate copyright in the programs comprising the earlier versions of AirComm and AirTrax. Pursuant to the sale agreement that copyright was assigned to Datagate in terms of s 22(3) of the Act (Klep Valves (Pty) Ltd v Saunders Valve Co Ltd1987 (2) SA 1 (A) at 31 - 2).
I am strengthened in my view by the warranties given by the first respondent in terms of the agreement referred to above. Thus he warranted, inter alia, that:
'1 he is the sole and beneficial owner of the technology and is entitled to sell and pass ownership thereof to the purchaser;
2 save for the right of WSG . . . to use the technology no person currently has, nor will any person have any option or right to acquire any of the technology or to acquire or to use any of the technology;
3 the technology sold to the purchaser in terms of this agreement constitutes all and any technology of which Johan is the registered and beneficial owner relating in any manner whatsoever to the business.'
The Accord Group found itself in financial difficulties, and in May 2000, and as I have stated above, the first applicant purchased from Accord Technologies (a wholly-owned subsidiary of Accord) the 'Accord Business Solutions business and the Datagate Software business'.
Accord Technologies thus sold the businesses which Datagate had acquired from WSG; no doubt what was intended was to sell all business assets owned by Datagate, including copyright in the software which was to be developed further and culminated in the AirComm and AirTrax programs. This included the developments which took place during the period 1998 to 2000. There was, however, no formal assignment of copyright, and there is no evidence that Datagate (which owned the copyright) signed any document, the effect of which was to transfer to the first applicant ownership of its copyright (see Klep Valves (Pty) Ltd v Saunders Valve Co Ltd (supra)). That being so, the requirements of s 22(3) of the Act have not been complied with and there has been no effective assignment of copyright to the first applicant in the computer programs which were developed into AirComm and AirTrax. No doubt this was due to an oversight and the matter can be rectified. However, as things stand, Datagate remains the owner of the copyright in the software as it existed in July 2000.
The question of the formal requirements for the assignment of copyright was not raised by counsel for either the applicants, or for the respondents, and it was only when I was preparing this judgment that I became alive to the problem. I would have preferred to have given counsel an opportunity of addressing further argument on this issue. There is, however, some urgency in the matter, and in the circumstances this is not practicable. In any event, for reasons which will become apparent from what I say later in this judgment, the end result is not affected by the fact that the first applicant does not own the copyright in the programs it acquired from Datagate.
As I have stated, the respondents took up employment with the first applicant in accordance with contracts concluded by them on 3 July 2000. In addition the first and second respondents were to have been appointed to the board of directors of the first applicant. There is a dispute between the parties whether the appointments were made but nothing turns upon this.
During the period 3 July 2000 to 8 June 2001 (when the respondents left the applicants' employ) there were developments to the computer programs acquired from Datagate. It is common cause that the first applicant owns the copyright in whatever was written by the respondents in the course of their employment, and the question which now arises is whether the applicants are entitled to an order restraining the respondents from infringing that copyright.
After 11 June 2001 the first respondent established a business which trades as Ianitor International (Ianitor) and which competes directly with the applicants. Ianitor has sold to Econet two suites of computer programs which are called 'Nuntius' and I 'Thuros'. These programs perform the same functions as the AirComm and AirTrax programs sold by the applicants.
Prior to establishing Ianitor, and in May 2001, the first and second respondents held a meeting at their home with the remaining respondents and certain other persons, including one Paul Boshoff (Boshoff) (then, and still, an employee of the first applicant). Boshoff attended the meeting because he was offered employment by the first and second respondents in the business which they proposed to set up and which became Ianitor. What the first and second respondents proposed at that meeting was, inter alia, that:
1 they would set up a new 'company' (Ianitor);
2 the respondents and Boshoff would resign from their employment with the applicants, and take up employment with Ianitor;
3 Econet would be targeted as a potential client of the new company;
4 the respondents were to make copies of all programs comprising AirComm and AirTrax, and take these with them for use by the new company;
5 the laptop computers used by the respondents were to be wiped clean (formatted) prior to their leaving the employ of the applicants.
This indeed happened (save only that Boshoff remained in the employ of the first applicant after initially resigning his employment, but withdrawing that resignation). The respondents state that they took away nothing with them to which they were not entitled. This, however, rings hollow. Their actions must be seen in the most sinister of lights. There can be no reason for them to have copied the programs as they did if they did not intend to use them for their own benefit, and that of Ianitor.
Subsequent to the setting up of Ianitor the applicants launched what has come to be known as an 'Anton Piller' application. When they searched the respondents' premises they found evidence which indicated unequivocally that the respondents had in their possession copies of all programs comprising the AirComm and AirTrax suites.
The respondents admit copying the programs. They say, however, that:
(1) copyright in those programs does not vest in the applicants;
(2) the use to which they have put the programs in writing, Nuntius and Thuros, is not significant;
(3) Nuntius and Thuros are 'revolutionary' and new, and that they could recreate them from scratch within a matter of weeks;
(4) in any event, in creating Nuntius and Thuros the first respondent used what might loosely be referred to as the tools of his trade - standard programming commands which he has used over many years.
The respondents' contentions fall to be rejected for the following reasons:
- It took the first respondent and his team in excess of three years to develop the AirComm and AirTrax programs. It is hardly likely that he and his team could have created new programs which serve the same purpose within a matter of weeks, and which are, to use the first respondent's own word, 'revolutionary'.
- If the first respondent intended to create a new suite of programs it would hardly have been necessary to copy AirComm and AirTrax.
- The tools of his trade would, readily, have been available to the first respondent. They would not reside exclusively in the programs which belong to the applicants, and it would not have been necessary for the respondents to copy those programs.
In the circumstances, had I been able to find that the first applicant owned copyright in the software written prior to July 2000, I would have granted the applicants interim relief, restraining the respondents from infringing that copyright. As things stand, however, I cannot do so.
I turn now to the works created after 3 July 2000 during the course of the respondents' employment with the first applicant. It is common cause that the first applicant owns the copyright in this work. The question which must be posed is how much of this work has found its way into the Nuntius and Thuros programs, and whether the respondents, in selling those programs, contravene the provisions of s 11B of the Act, in that their programs amount to an adaption of the works, of which the applicants own the copyright, or are a reproduction of a substantial part of those works (s 1(2A) of the Act).
After seizing documents and programs pursuant to the Anton Piller order, the applicants engaged an expert to determine the extent of the similarities between AirComm and AirTrax, and Nuntius and Thuros. He concluded that there were indeed substantial qualitative similarities (see Galago Publishers (Pty) Ltd and Another v Erasmus1989 (1) SA 276 (A)).
The applicants' expert did not seek to distinguish between work done prior to 3 July 2000 and work done thereafter. Indeed he could not have done so - he compared the final AirComm and AirTrax programs with the Nuntius and Thuros programs.
Accordingly I am unable to rely on the expert evidence tendered by the applicants to support infringement. It is true that Boshoff stated in his affidavit that substantial work was done on both AirComm and AirTrax during the year, approximately, that the respondents were employed by the applicants. There is a logical attractiveness to this evidence: The respondents worked primarily on the development of the two suites of programs during this time, and there must have been considerable development work done on both. In addition, by copying the final programs, the respondents themselves indicate that there was material which they required in order to write their programs. In my view, however, this is not sufficient.
At the end of the day, I am unable to discern, on the basis of the evidence tendered, whether substantial parts of the work done after 3 July 2000 have been reproduced in Nuntius and Thuros. It is, thus, not appropriate that interdicts against the respondents be granted, restraining them from infringing copyright in the works created by them for the applicants while working on the AirComm and AirTrax programs during the period of their employment with the applicants.
I should mention that the respondents deny substantial copying of any of the works in order to write Nuntius and Thuros. The first respondent, apart from asserting that this is the case, ran a computer program to highlight differences between AirComm and AirTrax, and Nuntius and Thuros. He concludes that there are insignificant similarities. His evidence on this aspect must be rejected for the following reasons:
- The results of the analysis using the computer program (a commercial program not written by the first respondent) are hearsay and inadmissible.
- The respondents cannot, and indeed have not attempted to, explain adequately why they copied and removed the AirComm and AirTrax programs.
It is now necessary to consider the final basis upon which relief is sought. Each respondent signed an employment contract which contains identical clauses. These contain the following clauses:
(1) Each of the respondents will not be
'. . . entitled, whether for your own benefit or that of others, to make use of or disclose to others or avail yourselves or others of or derive profit or benefit from any information concerning the business affairs of the company or its clients, suppliers or trade connections which you may have acquired by reason of your position or association with the business and affairs of the company or its clients';
and
(2) each respondent acknowledged
'. . . that ownership of all intellectual rights regarding the hardware and software design, documentation etc produced while employed by the company shall be vested in the company'.
The respondents, as I have stated, made copies of the programs on which they worked while in the employ of the applicants. I am satisfied that they must have used the material they filched to compete with the applicants. That material was confidential to the applicants and, in acting as they did, the respondents competed unlawfully with them. (See Faccenda Chicken Ltd v Fowler and Others; Fowler v Faccenda Chicken Ltd [1985] 1 All ER 724 (Ch); Knox D'Arcy and Others v Jamieson and Others1992 (3) SA 520 (W); Telefund Raisers CC v Isaacs and Others1998 (1) SA 521 (C) Triomed (Pty) Ltd v Beecham Group plc and Others2001 (2) SA 522 (T).)
There is, of course, nothing to prevent the respondents (including the first respondent if he moves his place of business outside of South Africa) from writing programs de novo, and selling them in competition with the applicants. What they are not entitled to do is to use the confidential information gleaned during H the period of their employment with the applicants, and Accord, and use that to compete with the applicants. Nor may they use that information as a springboard to compete, and springboard it remains for so long as they use programs which are based on material filched by them. (See Harvey Tiling Co (Pty) Ltd v Rodomac (Pty) Ltd and Another 1977 (1) SA 316 (T).)
It follows that the requirements for an interim interdict have been established. Thus:
- A prima facie case, at the very least, has been established.
- The applicants have undoubtedly suffered irreparable harm, and there must be the potential for further harm. They have already lost one client (Econet), and the prospect of Ianitor concluding other contracts in competition with the applicants, and selling their Nuntius and Thuros programs to potential customers of the applicants is self-evident.
- The balance of convenience unquestionably favours the applicants: As I have already observed, there is nothing to stop the respondents (including the first respondent if he were to set up business outside South Africa) from writing new suites of programs without copying. If this takes some time, then so be it. I repeat that the respondents themselves claim to be able to create completely new programs within a matter of weeks.
- There is no other remedy available to the applicants. An award of damages some years down the line would be cold comfort for the potential losses which the applicants stand to sustain. In any event, damages would be difficult if not impossible to quantify. Furthermore, there is no guarantee that the respondents would be able to meet any award which the applicants might obtain.
In the circumstances it is appropriate to interdict the respondents, pendente lite, from selling the Nuntius and Thuros programs, or any adaptations thereof.
It follows from what I have said earlier that it is appropriate to grant an order, pendente lite, for delivery up of the Nuntius and Thuros programs. They were written at a time when the respondents had access to AirComm and AirTrax and had filched those programs for purposes which, on the face of it, were nefarious. Furthermore, the two programs were written primarily by the first respondent in circumstances where he was in breach of the restraint provisions which operate in favour of the applicants.
I shall do no great hardship to the respondents in ordering them to deliver up the Nuntius and Thuros programs more particularly, as the first respondent, on his own say-so claims to be able to write their equivalents in a matter of weeks. (He must, of course, ensure that, if he does so, he avoids a further breach of his restraint.) Accordingly, the prejudice caused by such an order is not significant.
There will be an order in the following terms:
- The first respondent is interdicted from:
- Carrying on, or conducting business in South Africa in competition with the applicants in the research and development, marketing, sale and support of GSM Middleware software, including the Ianitor International, Nuntius and Thuros software.
- Soliciting any business from Econet Wireless International Ltd, or any of its subsidiaries, or any other client of the applicants which was a client of the applicants or either one of them during the time of the first respondent's employment with the applicants.
- The respondents are interdicted from:
- Marketing or selling Nuntius or Thuros software, or any adaptation thereof, or any software copied or adapted from the A applicants' AirComm or AirTrax software.
- Selling to Econet Wireless International Ltd, or any subsidiary thereof, Nuntius or Thuros software copied or adapted from the applicants' AirComm or AirTrax software.
- The respondents are ordered, forthwith, to deliver up to the Sheriff of the High Court the Ianitor Nuntius and Thuros software and any developments thereof.
- The interim interdicts and the order granted in terms of paras 1A, B and C above shall endure until 8 June 2004, or the final outcome of the action to be instituted, which is referred to in para 4 below, whichever is the sooner.
- The orders granted in terms of para 1A, B and C above shall not preclude:
- The second to thirteenth respondents from carrying on business developing, marketing and selling software in competition with the applicants, provided that any such software is not copied or adapted from the applicants' AirComm or AirTrax software.
- The first respondent from carrying on business developing, marketing and selling software in competition with the applicants, provided that any such software is not copied or adapted from the applicants' AirComm or AirTrax software, and provided further that he does not carry on nor conduct such business in South Africa.
- The applicants are to institute proceedings against the respondents for final relief by not later than 20 January 2002, failing which this order shall lapse and become of no force nor effect.
- Costs of this application, and the costs of the application under case No 18306/01 shall be costs in the cause of the action to be instituted, save that in the event that the action is not instituted by 20 January 2002, the costs, including costs of the application under case No 18306/01 shall be paid by the applicants jointly and severally.
4.3.3 Klep Valves (Pty) Ltd v Saunders Valve Co Ltd 1987 (2) SA 1 (A) 4.3.3 Klep Valves (Pty) Ltd v Saunders Valve Co Ltd 1987 (2) SA 1 (A)
KLEP VALVES (PTY) LTD v SAUNDERS VALVE CO LTD 1987 (2) SA 1 (A)
Citation
1987 (2) SA 1 (A)
Court
Appellate Division
Judge
Corbett JA, Joubert JA, Grosskopf JA, Galgut AJA and Nicholas AJA
Heard
September 2, 1986
Judgment
December 15, 1986
Annotations
Flynote : Sleutelwoorde
Copyright - Subsistence of - Subsistence of copyright in works made in United Kingdom prior to 1978 governed by Copyright Act 9 of 1916 and thus British Copyright Act of 1911 - Respondent's draughtsmen executing engineering drawings depicting valves - Whether respondent's engineering drawings constituting, artistic works' as defined by s 35 of
1911 Act and thus entitled to copyright protection - 'Artistic works' in s 35 not requiring any element of artistic endeavour and engineering drawings qualifying as such works - Whether drawings 'original' for purposes of s 1 of 1911 Act - Originality not barred by fact that drawings resulted from team efforts involving number of people in addition to draughtsmen or that they represented developments of earlier valves, provided that draughtsmen contributed sufficient skill or labour to later drawings.
Copyright - Subsistence of - Publication of works - Section 1(1 )(a) and (b) of British Copyright Act of 1911 - Conclusion of Court of first instance that engineering drawings in question were unpublished works not shown to be wrong - Section 1(1 )(b) therefore applicable - As draughtsmen British subjects resident in Britain when drawings were made, requirements of s 1(1 )(b) complied with (copyright holder a British company and drawings executed in Britain) - Semble: question of whether drawings were published turns on meaning of s 1(3) of 1911 Act, which provides that publication means 'issue of copies of work to the public' - Latter phrase meaning offering of reproductions of work to the public.
Copyright - Subsistence of - Section 22(1) of British Copyright Act of 1911 providing that Act not applicable to designs capable of registration under Patents and Designs Act of 1907 - Engineering drawings in question not qualifying as design in terms of s 76 of Act 9 of 1916 in that general shape and other visible features of valves determined by purely functional features - Copyright Act of 1911 therefore applicable.
Copyright - Infringement of - Appellant had copied its valves from copies of valves manufactured in accordance with respondent's engineering drawings - Court holding that this type of indirect copying was in principle infringement of copyright in original drawings - As appellant had reproduced 'substantial part' of respondent's drawings within meaning of s 1(2) of British Copyright Act of 1911, it had infringed respondent's copyright.
Copyright - Infringement of - Locus standi to bring infringement action - Fact that respondent as owner of copyright had appointed exclusive licencees in South Africa not accompanied by corresponding diminution of respondent's rights - Legislature not intending, in enacting ss 24 and 25 of Copyright Act 98 of 1978, to deprive owner of copyright of locus standi, which he might need to protect rights he retained despite grant of exclusive licence.
Trade and trade mark - Trade mark - Infringement of - Appellant contending that respondent's trademark liable to expungement from register - Appellant not establishing requirements laid down by s 41 (1) of Trade Mark Act 62 of 1963 for such expungement
Headnote : Kopnota
The respondent, a British company which designed and manufactured valves, known as 'diaphragm valves', had successfully sought an interdict in a Provincial Division restraining the appellant from infringing respondent's copyright in its original engineering drawings relating to 'diaphragm valves', as well as an interdict restraining the infringement by appellant of the trade mark 'Saunders' owned by respondent and used by appellant in its advertising brochures relating to the valves which it manufactured. The appellant, in the brochures, had claimed that its valves were interchangeable with 'Saunders' diaphragm valves. The Court, on appeal, accepting that the legislation governing the matter was the Copyright Act 9 of 1916 and therefore the British Copyright Act of 1911 which was incorporated in the 1916 Act as the Third Schedule thereto, was required, inter alia, to determine (a) whether the respondent's drawings were 'artistic works as required by s 1(1) of the 1911 Act, (b) whether they were original and (c) whether s 1(1)(a) and (b) of the 1911 Act had been complied with. It had been contended on appellant's behalf that the drawings, to be 'artistic works', had to have been made with artistic intent and that drawings of a purely technical nature would not qualify as such.
Held, upon an examination of s 35 of the 1911 Act, which section defined the phrase 'artistic works' and in terms whereof 'artistic work' included 'works of drawing', and having regard to the practical needs served by the Act, that the items mentioned in the definition, save for works of craftsmanship and architectural works, did not require any element of artistic endeavour.
Held, accordingly, that the drawings constituted artistic works as defined in the 1911 Act.
Held, as to (b), in respect of which it was contended by appellant that the drawings were not original in that they had resulted from team efforts involving a number of people in addition to the draughtsmen and that they represented developments of earlier valves, that, in view of the uncontradicted evidence led by respondent that a draughtsman exercised a great deal of independent skill and labour when converting the ideas of a design engineer into detailed specification for practical manufacture, it could make no difference per se that the drawings were team efforts nor did it matter that earlier drawings were followed, provided that the draughtsmen contributed sufficient skill or labour to the later drawings.
Held, as to compliance with ss 1(1)(a) or (b) of the 1911 Act, which concerned publication of the drawings, that the Court a quo had dealt with them as unpublished works and that this conclusion had not been shown to be wrong: s 1(1)(b) was therefore applicable and as the draughtsmen were British subjects resident in Britain when the drawings were made there, the relevant requirement for the subsistence of copyright was satisfied.
Semble: the question whether or not the drawings were published turned on the meaning of s 1(3) of the 1911 Act, which provided that publication meant the 'issue of copies of the work to the public'. The latter phrase was defined in British Northrop Ltd v Texteam Blackburn Ltd [1974] RPC 57 as being the offering of reproductions of the work to the public and the Court in the present matter accepted this definition as correct.
The Court was required also to consider the effect of s 22(1) of the 1911 Act which provided that the Act would not apply to designs capable of being registered under the Patents and Designs Act of 1907. The Court, relying on the decision in Allen - Sherman - Hoff Co v Registrar of Designs 1935 TPD 270, held that the drawings did not quality as 'designs' in that the general shape and other visible features of the valves were determined by purely functional features and that some of the components depicted on the drawings were inside the valves and would not ordinarily be visible.
The Court proceeded to consider whether the respondent had established that it owned the copyright in the drawings on which it relied in the present action, concluded that it did and proceeded to ascertain whether appellant had infringed such copyright. It had been contended by respondent that, although appellant had not copied its valves directly from respondent's drawings but from copies of valves manufactured in accordance with the drawings, this indirect copying constituted sufficient infringement to entitle respondent to relief. The Court, after considering English and South African decisions on this point,
Held, that indirect copying of the sort in issue in the present case was in principle an infringement of the copyright in the original drawings.
Held, further, on the evidence, that there had been a reproduction by the appellant of at least a 'substantial part' of the respondent's drawings within the meaning of s 1(2) of the 1911 British Act as incorporated in Act 9 of 1916 and that appellant had thus infringed respondent's copyright.
As far as the respondent's locus standi to bring the action was concerned, the Court, relying on the decision in Video Parktown North (Pty) Ltd v Paramount Pictures Corporation ; Video Parktown North (Pty) Ltd v Shelburne Associates and Others ; Video Parktown North (Pty) Ltd v Century Associates and Others 1986 (2) SA 623 (T), concluded that it did have the necessary locus standi as the fact that the respondent (the owner of the copyright) had appointed exclusive licensees in South Africa was not accompanied by a corresponding diminution of the respondent's rights and that it was unthinkable that the Legislature, in enacting ss 24 and 25 of the Copyright Act 98 of 1978, would have intended to deprive an owner of copyright of locus standi which he might need to protect the rights which he had retained despite the grant of an exclusive license.
The Court finally had regard to the question of whether respondent's trade mark 'Saunders' had been infringed by appellant and concluded that appellant, who had not contested that its conduct constituted an infringement of the mark but had contended that the trade mark was not entitled to protection and was liable to expungement from the register, had not established the requirements laid down by s 41(1) of the Trade Mark Act 62 of 1963 for such expungement and that it had infringed respondent's trade mark. Appeal dismissed.
The decision of the Transvaal Provincial Division in Saunders Valve Co Ltd v Klep Valves (Pty) Ltd 1985 (1) SA 646 upheld.
Case Information
Appeal from a decision in the Transvaal Provincial Division (O'Donovan J). The facts appear from the decision of Grosskopf JA.
S Kentridge SC (with him C J Pearson ) for the appellant: The locus standi of the respondent: The respondent's claim for relief is based on its assertion that it is the owner of South African copyright subsisting in the 11 drawings. In 1982 the respondent granted a licence to Stewarts & Lloyds Ltd in respect of this South African copyright. This licence which still subsists is an exclusive licence. Stewarts & Lloyds in turn granted an exclusive sub-licence to its subsidiary Valve Makers of South Africa (Pty) Ltd. An exclusive licence is one which authorises the licensee to exercise the rights of the owner of the copyright to the exclusion of all other persons, including the grantor of the licence. Section I of the Copyright Act 98 of 1978, as amended. An exclusive licensee has the same rights of action and remedies as if the licence had been an assignment. Section 25 of Act 98 of 1978, as amended. When an exclusive licence is granted, the owner of the copyright is divested for the duration of the exclusive licence of the right to exercise any of the rights of copyright. To this extent, an exclusive licence has the same effect as an assignment with a reversionary right in favour of the assignor. A J C Copeling Copyright and the Act of 1978 at 74 and 83. Once an exclusive licence has been granted, only the exclusive licensee has the right to restrain an infringement. If an exclusive sub-licence is granted, then the right to restrain an infringement vests in the exclusive sub-licensee. This was not the position under the 1965 Copyright Act where the rights and remedies of the exclusive licensee were concurrent with the rights and remedies of the owner of the copyright. Section 20(2)(a) of Act 63 of 1965. The omission of this provision from the 1978 Act indicates the intention of the Legislature to vest all rights and remedies solely in the exclusive licensee as set out above. The respondent therefore had no locus standi to bring the present application. In answer to this argument, the Judge held himself bound by a decision of the Full Bench.
The law under which the copyright is to be determined: The subsistence of copyright in the drawings in question (as distinct from the remedies available to the copyright owner) is to be determined in accordance with the provisions of the 1965 Act. Section 43(a) of Act 98 of 1978. Section 48 and the Sixth Schedule of the Copyright Act 63 of 1965. The Judge a quo held that the provisions of the Sixth Schedule left unaffected the subsistence of copyright in works made prior to the commencement of the Act. This is incorrect in view of the repealing provisions in the 1965 Act. Copyright in works made prior to the 1965 Act is to be determined solely by the transitional provisions of the Sixth Schedule. Section 48(1) and (2) of Act 63 of 1965. The Judge a quo erred in determining the subsistence of the copyright in the 11 drawings in accordance with Chapter 4 of Act 9 of 1916 and the British Copyright Act of 1911. The appropriate references will accordingly be to the relevant provisions of the 1965 Act and especially the Sixth Schedule thereto. (a) The originality of the drawings: The appellant has denied that the drawings relied upon by the respondent are original. Part of the denial of originality relates to the authorship of the works. Originality means the exercise of independent skill and labour on the part of the author. It does not require that there be originality of thought or idea or that the work be novel. The party alleging copyright must show the degree of skill or labour expended so that as a matter of fact it can be determined by the Court whether it is sufficient to justify the claim to originality. Kalamazoo Division (Pty) Ltd v Gay and Others 1978 (2) SA at 190C - D; Laddie, Prescott and Vitoria The Modern Law of Copyright para 3.25 at 115; Copeling (op cit at para 16). Copyright moreover protects only the drawing, not the idea and invention behind the drawing - that is the field of patent law. Donoghue v Allied Newspapers Ltd [1938] Ch 106; L B (Plastics) v Swish Products 1979 RPC: 551; Natal Picture Framing Co Ltd v Levin 1920 WLD 35; Barber-Greene Company v Crushquip (Pty) Ltd (unreported) WLD case No 14752/83; Copeling (op cit at para 24); Copinger and Skone James on Copyright 12th ed paras 1 - 2, 179 - 456. Consequently a change in the dimensions indicated on a drawing in existence cannot give rise to a new copyright. The respondent's valves were the product of a team effort in their design. It is therefore incorrect to assert that the draftsmen alone are authors in the sense of persons who have exercised independent skill and labour in the execution of the drawings, without placing evidence before the Court as to what that skill and labour was. The respondent has asserted its conclusion and opinion without presenting evidence on which the Court itself can determine whether the requisite skill and labour have been expended by the alleged author. Respondent has accordingly failed to discharge the onus that rests on it. The respondent has failed to show that the drawings are original since the works to which they relate had been in existence prior to the execution of the drawings relied upon. In order to establish originality in the drawings relied upon, it was therefore necessary for the respondent to place the earlier works before the Court so that the Court can determine whether the drawings relied upon incorporated sufficient additional skill and labour to make them original. Rexnald Inc v Ancon Ltd [1983] FSR 662. Barber-Greene Company v Crushquip (Pty) Ltd (supra ). The respondent has failed to place the earlier drawings in regard to the valves before the Court and has merely asserted that they were or are irrelevant and that the drawings relied upon are original. This is not a conclusion for the respondent to draw, but one for the Court to determine on the evidence before it. Cf Saunder's Valves Ltd v Insamcor (Pty) Ltd 1985 (1) SA 146; Kalamazoo Division v Gay (supra at 190D). Evidence of the earlier drawings is essential and in its absence no such conclusion can be drawn. The respondent has accordingly failed to discharge the onus of proving that the drawings relied upon are original. The Judge a quo dismissed the submissions in regard to originality as conjecture (1985 (1) SA at 649F) and held that it was not sufficient to rebut the presumption arising out of the death of two of the alleged authors. Cf s 26(4) of Act 98 of 1978. This approach was erroneous. The respondent is not entitled to rely on the presumption in view of s 1 of the Sixth Schedule which excludes reliance on the death of the author. Section 1 of the Sixth Schedule, read with s 4(2) of the 1965 Act. Even if an evidential burden rested on the appellant as a result of s 26(4) of the 1979 Act (which is not conceded), this does not alter the overall onus on the respondent. The evidence adduced by the appellant is sufficient to rebut the presumption since that evidence showed that valves were manufactured prior to the execution of the drawings. The presumption cannot assist the respondent where it is known that there exist early versions of the drawings relied upon and there is a dispute as to the extent of the skill or labour has been expended in the execution of the later drawings. This dispute of fact should have been anticipated by the respondent and the reason given for proceeding by notice of motion is without substance. The application should have been dismissed as a result of this dispute. Room Hire Co (Pty) Ltd Jeppe Street Mansions (Pty) Ltd 1949 (3) SA 1155; Tamarillo (Pty) Ltd v Aitken (Pty) Ltd 1982 (1) SA at 43OF - 431D. (b) The valve as a design: Section 8(2) of the Sixth Schedule retains the design provisions of the 1916 Act. Section 8(2) of the Sixth Schedule relates to the subsistence of the copyright and not to a defence to an infringement of copyright. The onus was therefore on the respondent to prove that the artistic work relied upon was not capable of design registration under the 1916 Act. King Features Syndicate Inc v O & M Kleemann Ltd [1941] AC at 423, 431, 434, 438 - 439, 440 - 441, 451 - 452; Pytram Ltd v Models (Leicester) Ltd [1930] 1 Ch 639. The appellant alleges that the respondent's valve was capable of registration as a design under the 1961 Act and that accordingly no copyright subsists in the drawings therefor. The appellant produced the evidence of Duggan on this aspect. He said that the design of the valve was not purely functional, but had distinctive shapes, not necessarily dictated by function. The respondent denied this evidence and argued that Duggan was wrong and that the valve was purely functional and that accordingly, it was not registrable as a design. The Judge a quo characterised the appellant's evidence and submissions as a 'technical defence' and held that, as the features of the valve were dictated solely by function, the valves were not capable of registration as a design. As will be seen, the Judge applied the wrong statutory definition of 'design'. The question is whether or not the drawings in issue were, when made, designs within the meaning of the definition of the 1916 Act. The definition of design in s 76 of the 1916 Act remained unchanged in South Africa until the passing of the Designs Act 57 of 1967. The definition is identical in all material respects to the definition in the 1907 British Act as well as to the earlier definition in the British Act of 1883. In Britain, however, the definition of design underwent substantial changes in the Acts of 1919 and 1949. In 1919 a merely mechanical device was excluded from registrability and in 1949 articles, the design of which was dictated solely by functions, were excluded from registrability. Cf Amp Inc v Utilux (Pty) Ltd [1972] RPC at 119 - 122. It was these new definitions alone which gave rise to the concept that to be registrable a design had to 'appeal to and be judged solely by the eye' - a concept misapplied in this case by the Judge a quo. However, the relevant South African definition of design does not exclude mere mechanical devices or articles the design of which was dictated solely by function or require that its features appeal to and be judged solely by the eye. The question therefore arises whether or not the features of shape, configuration, pattern or ornament that are visible in the finished article constitute a design in terms of the definition in the 1916 Act. The definition of design in the Australian Copyright Act is substantially the same as that which has to be interpreted here. In Australia, this definition has been held to mean that there must be 'sufficient individuality of appearance to distinguish the design from the fundamental form of an article'. The existence of this sort of individuality is to be determined by the eye and not by measuring dimensions. Malleys Ltd v J W Tomlin (Pty) Ltd (1961) 35 ALJR 352; Ogden Industries (Pty) Ltd v Kis (Australia) Ltd 1983 FSR 691. The Judge a quo therefore erred in considering that the fact that the features of the valve were functional excluded the valve from registration as a design in terms of the relevant definition. The decision in the Allen-Sherman Hoff case was wrongly followed by the Judge a quo since it relied on the English cases decided on the basis of the amended definition of design in the 1919 Act, which were not in point in view of the definition applicable in this country. It was for the Court to determine whether the shape of the valve had an individuality of appearance in comparison with others of a similar mould. If it is shown that the respondent's valve is not required to be in its particular shape, and in that shape only, in order to work, in other words that there are other actual or possible shapes for the article, then the artistic works embodying that valve are capable of design registration under the 1916 Act read with s 8(2) of the Sixth Schedule. In this regard, the evidence of Duggan has to be accepted. The respondent's valves were capable of registration as a design and accordingly no copyright subsists in the drawings therefor. (c) The publication of the works: Where an artistic work was published before the commencement of the 1965 Act, the party seeking to rely on the subsistence of copyright in that work must prove that the first publication thereof was in South Africa, or in respect of a foreign work, in a 'convention' country (which would include the UK). Section 1 of the Sixth Schedule read with s 4(2) of Act 63 of 1965. The respondent adduced evidence that all the drawings had been published in three-dimensional form. The Judge a quo therefore erred in regarding the respondent's drawings as unpublished works. The evidence of the respondent on first publication did not clearly and unambiguously show that it took place in the UK. In any event, it was hearsay and inadmissible. There is accordingly no proof that first publication was in South Africa or in a convention country and the respondent has failed to discharge the onus in this regard.
The infringement: The Judge a quo held that the appellant's admitted intention of making valves with components interchangeable with those of respondent's valves was sufficient proof of copying and therefore of infringement, notwithstanding the differences pointed out by Duggan. The Judge's finding that the appellant's valves are reproductions of the respondent's drawings in terms of s 23 of the 1978 Act overlooks the peculiar nature of the artistic works relied on. It has been assumed in a number of South African cases that to reproduce a three-dimensional object which was made from an original drawing is indirectly to copy that drawing and thus to infringe the copyright in that drawing. Scaw Metals v Apex Foundry 1982 (2) SA at 383 - 384; Tolima (Pty) Ltd v Cugacius Motor Accessories (Pty) Ltd 1983 (3) SA at 507 - 8; Barber-Greene v Crushquip (Pty) Ltd (supra ). These cases followed such English cases as: British Northrop Ltd v Texteam Blackburn Ltd [1974] RPC 57; Solar Thomson Engineering Co Ltd v Barton [1977] RPC 537; L B (Plastics) Ltd v Swish Products Ltd [1979] RPC 551. This line of authority is wrong and should be overruled, for the following reasons. Copyright in a drawing protects the drawing as a piece of artistic work, not the idea behind it. In the absence of patent protection, anyone may use the idea, however inventive it may be. The degree of protection must vary with the character of the drawing. In a work with genuinely artistic or aesthetic appeal, the substance of the work may be reproduced in a variety of ways, including a three-dimensional reproduction. But a simple drawing without artistic quality can only be infringed by an exact and literal reproduction of the drawing itself, as distinct from the idea which it embodies. Kenrick and Co v Lawrence and Co (1890) 25 QBD 99. An engineering drawing, such as that relied on in this case, falls into that category. A reproduction in three-dimensional form is not a reproduction of what is special to the drawing, but only of the idea in the drawing. A fortiori, in this case where what is copied is not the drawing at all, but a three-dimensional object which itself has no claim to copyright, and merely embodies the idea of the drawing, including dimensions indicated therein. Still less is there infringement if the copy of even the three-dimensional object is not literal and exact; and the dimensions of the final object are not drawn but merely indicated on the drawing; and it is not necessarily the whole drawing which has sufficient originality to entitle it to copyright. To apply the doctrine of indirect copying to a case such as this is oppressive and extortionate and would be anomalous in the light of the far more limited protection given to truly artistic registrable designs. The doctrine of indirect three-dimensional copying should be limited to artistic works which have truly artistic features, the substance of which can be reproduced in another medium. Cf King Features Syndicate Inc and Segar v O and M Kleeman [1941] AC 417. Similar arguments were rejected by the Court of Appeal in England in British Leyland Motor Corporation v Armstrong Patents Co Ltd [1984] FSR 591. The Court should not follow the Court of Appeal on this issue. If this is correct there was not infringement of any copyright in the drawings.
The trade marks: The respondent sought to interdict the appellant from the use of the word 'Saunders', being the respondent's registered trade mark. The appellant contends that in law the trade mark is not entitled to protection and is liable to expungment. The respondent is accordingly not entitled to rely thereon. The name 'Saunders' has become the only practical name or description for the type of valve which is in issue in this dispute. The valve has been the subject of letters patent in the Republic of South Africa and the letters patent have expired. The mark is no longer distinctive and registration as a trade mark is accordingly an entry wrongly remaining on the register and the respondent cannot rely thereon. Section 41 of the Trade Marks Act 62 of 1963, as amended. Cf Ford v Foster (1872) LR 7 Ch App at 628. The Judge a quo, in dismissing this argument, overlooked the evidence of Duggan that the 'Saunders' diaphragm valve is a type of diaphragm valve. The name 'Saunders' has become used to distinguish this particular type of diaphragm valve. The application in regard to the infringement of the trade mark should accordingly have been dismissed.
Plewman SC (with him C E Puckrin ) for the respondent: Copyright: Engineering drawings are eligible in terms of the Copyright Act of 1978 for copyright as 'artistic works'. In terms of the Act 'artistic works' include 'drawings' and 'drawings' include 'any drawing of a technical nature or any diagram, map or plan'. Section 1, as amended. It is a requirement of the Act that works, in order to enjoy copyright, must be original. Section 2: The earlier Copyright Act of 1965 ('the 1965 Act') similarly gave, for present purposes, protection to engineering drawings. It has been held in South Africa (following many similar decisions in the United Kingdom and elsewhere) that engineering drawings enjoy copyright. Fulton (Pty) Ltd v Logic Engineering Enterprises (Pty) Ltd and Others 1983 (1) SA 735; Barber-Greene Co and Others v Crushquip (Pty) Ltd, unreported judgment of Coetzee J in the WLD delivered on 3 July 1984; Tolima (Pty) Ltd v Cugacius Motor Accessories (Pty) Ltd 1983 (3) SA 504; British Northrop Ltd v Texteam Blackburn Ltd [1974] RPC at 68; Solar Thomson Engineering Co Ltd v Barton [1977] RPC 537. 'Originality' for copyright purposes requires no more than that the work be not slavishly copied from any other works. See Laddie, Prescott & Vitoria The Modern Law of Copyright at para 3.25 at 115. The drawings in issue in this appeal were made in the United Kingdom between the years 1938 and 1958 by employees of the respondent (in the corporate form in which it existed at each such date). Over this period, the law of copyright in South Africa had successively been governed by Act 9 of 1916, Act 63 of 1965 and (presently) by Act 98 of 1978. Each of these Acts made provision for reciprocal protection of foreign works in South Africa and South African works in foreign countries. Section 37 of the Act. (There were similar provisions in the 1965 and 1916 Acts.) Under the 1965 Act and the present Act, protection was, or has been, extended to works made in the United Kingdom (as a signatory of the Berne Convention) by proclamation duly issued. In the case of the present Act, the relevant proclamation is Proc 6252 of 22 December 1978. The 1916 Act applied to South Africa, the Imperial Copyright Act of 1911 which in its own terms gave similar rights in South Africa to works first made in the United Kingdom. Copyright in an artistic work confers on the owner the exclusive right (inter alia ) to reproduce the work (or any substantial part thereof) in any manner or form. Section 7 read with s 2(A) of the Act. 'Reproduction' is defined in the Act to include a version produced by converting the work into three-dimensional form. Section 1(1)(xl) of the Act. What is called 'reverse engineering' - namely the making of a three-dimensional work from a three-dimensional reproduction of a two-dimensional work, also constitutes 'reproduction' for this purpose. Scaw Metals Ltd v Apex Foundry (Pty) Ltd 1982 (2) SA 377. The line of authority cited above and the provisions of the present and earlier Acts establish that the appellant's contentions are incorrect. Infringement of copyright involves the doing or causing to be done in South Africa without the consent of the owner, of any act which only the owner may authorise. Section 23. The respondent has a licensee in South Africa. The appellant contends that s 25 of the 1978 Copyright Act has the effect of divesting the copyright owner of a right of action to sue for infringement of his copyright. The appellant's interpretation of s 25 is demonstrably incorrect. The section seeks to do no more than define the rights of action which an exclusive licensee has to restrain copyright infringement, which, but for this section, he would not have. In order to effect the aforegoing, the Legislature has employed a simile and has likened the rights of action conferred upon an exclusive licensee to those of an assignee. However, the section does not deem an exclusive licence to be an assignment or a partial assignment, nor does the section in any way state that the rights of the proprietor are to be treated as if the exclusive licence was an assignment. It could clearly not have been the intention of the Legislature to divest the proprietor of copyright from his rights of action upon the granting of an exclusive licence: (i) The interests of a proprietor and an exclusive licensee are normally different, but it is clear (even on the appellant's interpretation of s 25) that the proprietor retains an interest and certain rights in relation to the copyright. He can, for instance, still assign the copyright to a third party. It could not have been the intention of the Legislature to preclude the proprietor from taking action in his own name to protect such 'residuary' rights in such a case. (ii) Furthermore, the owner may have (and normally would have where the licensee pays a royalty) an independent claim to damages and interest to protect. (iii) The wording of the section does not indicate an intention on the part of the Legislature to deprive the owner of these rights or interests. The respondent refers to the ratio of the Full Bench of the Transvaal Provincial Division in the case of Video Parktown North (Pty) Ltd v Paramount Pictures Corporation 1986 (2) SA 623. The Court a quo correctly held that the respondent has locus standi to bring the application.
Subsistence of copyright: The drawings relied upon by respondent were made in the period 1938 to 1958. (i) The present Copyright Act came into operation on 1 January 1979. (ii) Section 43 of the 1978 Act provides that: 'This Act shall apply in relation to works made before the commencement of this Act as it applies in relation to works made thereafter,....' Subsection (a) contains a proviso which is relevant. See also items 1, 2, 3 and 8 of the Sixth Schedule to the Act. The effect of the aforegoing is that copyright subsisting in works made prior to the commencement of the 1965 Copyright Act remains unchanged to the present day (save for an important proviso introduced by s 2 of the Copyright Amendment Act of 1983, the effect of which, for present purposes, is that copyright in the respondent's drawings (if it is found to subsist) will endure for a period of 10 years after the commencement of the said amending Act). Section 143 of the Patents, Designs, Trade Marks and Copyright Act 9 of 1916 provided (in essence) that the Imperial Copyright Act of 1911 applies to South Africa. Section 1 of the Imperial Copyright Act provides the following: 'Subject to the provisions of this Act, copyright shall subsist throughout the parts of His Majesty's dominions to which this Act extends for the term hereinafter mentioned in every original literary, dramatic, musical and artistic work, if (a) in the case of a published work, the work was first published within such parts of His Majesty's dominions as aforesaid; and (b) in the case of an unpublished work, the author was at the date of the making of the work a British subject or resident within such parts of His Majesty's dominions as aforesaid; but in no other work....' (Section 35 of the Imperial Copyright Act of 1911 defines 'artistic works' as 'including works of painting, drawing, sculpture and artistic craftmanship and architectural works of art and engravings and photographs'.) In terms of s 3 of the Imperial Act of 1911, the term for which copyright shall subsist shall be the life of the author and a period of 50 years after his death; in terms of s 5(1) of the 1911 Imperial Act, where the author of a particular work was in the employment of some other person under a contract of service or apprenticeship and the work was made in the course of his employment by that person, the person by whom the author was employed shall, in the absence of any agreement to the contrary, became the first owner of the copyright. The effect of the aforegoing provisions is that the 1978 Act applies in regard to the remedies available to a copyright owner of all copyright works, but the subsistence of the copyright in works made prior to the coming into effect of the 1965 Act are to be determined in accordance with the 1916 Act and, therefore, in terms of the 1911 Imperial Copyright Act and the subsistence of copyright works made after the coming into force of the 1965 Act are to be determined by that Act. There is, however, one further provision of the 1978 Act which is of importance, namely s 26(4). The presumption created in s 26(4) applies in respect of all works, whether created under the 1978 Copyright Act, or under the earlier Acts. The appellant's reliance on the provisions of the Sixth Schedule to the 1965 Copyright Act is therefore erroneous. The facts contained in the respondent's founding evidence, when taken with the presumptions contained in s 26(1) and (4) of the 1978 Act, satisfy the requirements of s 3 of the Imperial Copyright Act of 1911 as also the requirements of s 4 of the 1965 Act and establish prima facie that copyright subsists in the works and that the respondent is the proprietor thereof.
Design registration: Section 22(1) of the 1911 Imperial Copyright Act provides that no designs which are capable of being registered under the Patents and Designs Act of 1907 and which are used or intended to be used as models or patterns to be multiplied by any industrial process shall enjoy copyright protection. In terms of s 144 of the 1916 South African Act, all references to the British 1907 Act are to be construed as references to Chap II of the 1916 South African Act. Section 76 of the 1916 Act (forming part of Chap II) defines 'design' as follows: '"Design" shall mean any design applicable to any articles whether for a pattern, for the shape or configuration, or for the ornament thereof, or for any two or more of such purposes and by whatever means it is applicable, whether by printing, etc....' It is common cause between the parties that the issue is whether or not the original drawings relied upon by the respondent were, when made, 'designs' within the meaning of the definition in the 1916 Copyright Act. In the case cited by the appellant, namely King Features Syndicate Inc v O & M Kleeman 1941 RPC 57 (CA) and 1941 RPC at 207 (HL), the defence was raised as a plea by the defendant. It is accordingly not correct to argue that the onus is on the respondent. In any event the evidence and a visual examination of the original works and the valves made in accordance therewith will show that the respondent has discharged any onus resting upon it in this regard. Appellant's argument is based upon the erroneous assumption that there is a material distinction between the definition of 'design' in the 1916 South African Act on the one hand and the 1919 and 1949 English Acts on the other hand. It is cleat from the decision in Amp Inc v Utilux (Pty) Ltd 1972 RPC at 119 - 122 that the amendments to the definition of 'design' in the successive English Design Acts did no more than to give statutory recognition to the test (propounded in a long line of decisions) as to the nature of a registrable design. Holdsworth v M-Crea (1867) LR 2 HL at 388; Hecla Foundry Co v Walker, Hunter & Co 1889 RPC at 558, 559. In particular, the exclusion of a purely functional article from the aegis of design registration is, in reality, the converse to the proposition that a valid design appeals solely, to the eye. See the dictum stated by Lord Pearson in Amp Inc v Utilux (supra at 122 lines 24 - 31. In the premises, the Court a quo's approach, and in particular its reliance on the Allen-Sherman Hoff Co v Registrar of Designs 1935 TPD at 274, was correct. The evidence is to the same effect. Many of the parts which are depicted in its original drawings are not in fact visible to the eve when in use. In the premises, the Court a quo correctly held that the articles depicted in the respondent's original works were not capable of registration as designs under the 1916 Act.
Infringement: The question of infringement and the remedies therefor are to be determined in terms of the 1978 Copyright Act. The most eloquent evidence of copying (in the copyright sense) is that of the managing director of the appellant: 'The respondent in 1977 started manufacturing compounds which could be interchanged with the components used in the "Saunders"-type diaphragm valves found on the mines. The measurements of the respondent's components were made in conformity with those requirements.' There is a sufficient dimensional similarity to enable the components to be used interchangeably.' It is abundantly clear from the aforegoing evidence that the appellant merely copied valves made in accordance with the respondent's aforementioned drawings in order to make its components interchangeable. Indeed, if they were not copied they would not be interchangeable. It is significant that there is not the slightest suggestion in the appellant's papers that it made independent drawings of its valves. This, despite the fact that the appellant's experts stated that it was essential for the production of valves that there should be manufacturing drawings. The appellant was invited to produce for inspection its own manufacturing drawings for its valves. However, the appellant failed to produce the same. The approach of the appellant is to attempt to show that minor modifications were introduced in the appellant's valves. This expert evidence should be seen in the light of the evidence of the appellant's managing director (who apparently was the person responsible for producing the appellant's valves) to the effect that 'Nevertheless, in order to facilitate the manufacture as well as in trying to make them more efficient, I did introduce a number of modifications in some of the components.' The respondent filed the evidence of an expert (Scarr) who established the similarities between the appellant's valves and the original works. Of particular importance is his conclusion. The appellant's approach is to highlight certain differences between its valves and the original works. But there is no direct denial of Scarr's conclusion. In the premises, the respondent has shown that the appellant has manufactured or caused to be manufactured valves which embody a reproduction of the respondent's original works or substantial parts thereof. The appellant invites this Court to overrule a 'substantial body of authority'. There is a flaw in the appellant's basis for its submission in this regard. The appellant has not copied the 'idea' of the original works (ie the shape of the valves) but the drawings themselves in a literal and exact fashion, for otherwise the parts would not be interchangeable. It is denied that the application of the doctrine of indirect copying is 'oppressive and extortionate'. The appellant is free to adopt all the respondent's ideas embodied in its valves. All that is required of it is that it should do its own independent work and not seek to misappropriate the intellectual efforts of others. The appellant need do no more than arrange for its own draughtsmen to make engineering drawings without reference to the respondent's valves.
Trade mark infringement: The respondent is the proprietor of certain registrations of the mark 'Saunders'. The use complained of by the respondent is use in relation to goods for which the trade marks are registered and such use is to be found in the appellant's brochures. Trade mark infringement is defined in s 44(1) of the Trade Marks Act of 1963. It is common cause that the use by the appellant of the mark 'Saunders' is not authorised by the respondent. Use by the appellant of the mark 'Saunders' is use 'otherwise than as a trade mark' in the course of trade. This is so because the appellant is not connoting a connection in the course of trade between it and valves connected in the course of trade with the respondent. The definition of 'trade mark' in s 2 of the Trade Marks Act. The use complained of by the respondent is likely to cause prejudice to the respondent as it induces members of the public to purchase valves or components of valves from the appellant and not the respondent. Indeed, this is the entire purpose of the aforementioned brochures. The appellant relies upon the provisions of s 41 of the Trade Marks Act which provide that if a trade mark consists of a word which has become generally recognised by the public as the only practicable name or description for any article, it shall be deemed to be an entry wrongly remaining on the Register. The appellant has misconstrued the law. The very fact that the appellant in its own brochures and in its witnesses' statements couples the trade mark 'Saunders' with the noun 'diaphragm valves' indicates that the name 'Saunders' is not sufficient on its own to connote the article in question. It is also necessary to add the phrase 'diaphragm valve'. By using the trade mark 'Saunders', the public are indicating a particular type of diaphragm valve. The Court a quo was accordingly correct in granting the order which it did in regard to the trade mark infringement.
Further on the locus standi of the respondent: The appellant's submissions in this regard are not correct. A copy of the draft Bill to amend the Copyright Act published in Government Notice 572 of 1985 makes it clear that the intention of the Legislature was to clarify the situation rather than to bring about a change in the law. The amendment was enacted to render unnecessary arguments such as those raised on this issue in Video Parktown North (Pty) Ltd v Paramount Pictures Corporation 1986 (2) SA 623. The infringement: The appellant annexes four articles from EIPR which are critical of the line of cases in England holding that indirect copying of engineering drawings constitutes copyright infringement. Similar criticisms have from time to time been voiced in South Africa. However, these are not the only views which have been expressed and there is at least an equal number of protagonists for the form of protection granted. An article which appeared in De Rebus March 1984 discussed the opposing views and reviewed the amendments to the South African legislation which have been designed to reconcile these views. On 3 September 1980, the chairman of the advisory committee appointed in terms of the Act, by way of a press statement invited representations and oral evidence at a public hearing of the committee on this very issue. It was also published in the press as is shown in the extract from The Rand Daily Mall of 5 September 1980. The hearings conducted by this body preceded the Copyright Amendment Act 66 of 1982. The Legislature can accordingly be presumed to have been fully aware of the public examination of the principle involved and the Legislature's intention in regard to the protection of 'functional objects' under the laws of copyright can be inferred from the nature of the amendments then introduced. In any event, the criticisms voiced in the articles annexed to the appellant's heads can be shown to be based in the main on misconceptions of the copyright law. The article by Bernard Budd QC states: 'However lacking in any claims to artistic craftmanship a mechanical product may be and however lacking in originality, a manufacturer can protect it against copying provided the product was made from a manufacturing drawing...' Both the United Kingdom Act and the South African Copyright Act specifically exclude artistic merit as a criterion for conferring copyright upon a work. Originality is, on the other hand, a prerequisite for the subsistence of copyright. The author, John Drysdale, states: 'This means that drawings for any articles (or part of articles) no matter how common-lace or trivial the design, are protected under the Act.' It is pointed out that the various Copyright Acts specifically exclude any requirement of artistic merit (and for that matter literary and musical merit) as a prerequisite for the subsistence of copyright. To protect marks of high artistic, literary or musical merit only would unduly limit the protection of intellectual property and would render the copyright law unworkable. The aforegoing is a principle universally accepted in copyright legislation. There is a further point overlooked by the authors of the articles referred to by the appellant and by their Lordships in the speeches in the British Leyland case referred to. The criticisms are all directed to the issue of copying of a three-dimensional article made from an original drawing. However, the criticisms would equally apply to the direct copying by an infringer of an original engineering drawing. There has been no suggestion that such direct copying does not constitute infringement in terms of the various Copyright Acts nor indeed is such a suggestion tenable. In any event, even if the aforegoing criticisms are valid, they can only be a basis for an approach to the Legislature. They cannot justify a strained interpretation of the clear provisions of the various Copyright Acts. In fact, however, whatever the position may be in the United Kingdom, the South African Copyright Act of 1978 is in many respects not subject to the aforegoing criticisms. The important distinctions between the South African legislation and the United Kingdom legislation will be dealt with below with reference to their Lordships' speeches in the British Leyland decision. The speeches in the British Leyland case reveal an unwarranted assumption that facts established in relation to the practice of British Leyland are of universal application. The ratio of the British Leyland case is not relevant to the facts of the present case which is not concerned with the repair but the manufacture of 'Saunders-type diaphragm valves' found on the mines. The appellant refused to disclose the engineering drawings from which its valves are made. It has also not disclosed by what means it manufactures 'the Saunders-type valves' which are in fact three-dimensional reproductions of the respondent's drawings. There is no evidence to show that the draughtsman of the drawings was a 'mere conduit'. In fact the evidence is to the contrary. There is no evidence to show that diaphragm valves incorporating all the principles of the Saunders valves cannot be made by independent design. Indirect copying has indeed been held to be actionable in regard to classes of work other than those under discussion. See Laddie, Prescott & Vitoria The Modern Law of Copyright para 2.75 at 48 and 49. To hold otherwise, would, to a large extent, nullify an author's protection.
Kentridge SC in reply: The locus standi of the respondent: In terms of Act 39 of 1986 which came into force on 23 April 1986, s 25 of Act 98 of 1978 was amended. The amended version is substantially the same as the provisions of the 1965 Act. The amendment, however, cannot save proceedings already commenced. Nkwinti v Commissioner of Police 1986 (2) SA at 440E - H. If the original s 25 had had the meaning ascribed to it in Video Parktown North (Pty) Ltd v Paramount Pictures Corporation Ltd 1986 (2) SA 623, it would not have been necessary for the Legislature to have introduced the amendment to s 25. The infringement: In the line of English and South African cases it was accepted that 'indirect copying' or 'reverse engineering' constituted 'reproduction' of the drawings concerned and therefore was an infringement of the copyright in these drawings. This reasoning has been the subject of substantial criticisms: cf Budd 'The Future of Industrial Copyright' 1978 EIPR 2; Gratwick 'UK Design Copyright' 1980 EIPR 243; Drysdale 'The Application of UK Copyright Law to Manufactured Articles' 1980 EIPR 75. But in the South African case law, the correctness of the reasoning was not really considered despite argument to the contrary: Tolima (Pty) Ltd v Cugacius Motor Accessories (Pty) Ltd 1983 (3) SA at 507 - 508; 510. Scaw Metals v Apex Foundry (Pty) Ltd and Another 1982 (2) SA at 383 - 384 especially at 385A. This approach has been criticised: J R Steyn in (1982) 7 EIPR 208. See the learned author's reference to John Waddington Ltd v Arthur E Harris (Pty) Ltd 1968 (3) SA at 407H - 409A. The issue was raised once more in the House of Lords in British Leyland Motor Corporation Ltd v Armstrong Patents Co Ltd [1986] 2 WLR 400 ([1986] FSR 221). (References are to the WLR) On this occasion, a different view was taken and the law as it stood was subjected to substantial criticism in all five speeches. See Christine Fellner 'BL v Armstrong : Our Souls Redeemed from the Company Store' (1986) 4 EIPR 117. Lords Scarman and Templeman took the view that the Courts had extended the meaning of 'reproduction' beyond that intended by Parliament. In view of the decision of the House in LB (Plastics) Ltd v Swish Products Ltd [1979] RPC 551, both felt that the law was settled, but wrongly so. Neither of these Judges would depart from that earlier decision and sought the solution elsewhere (the 'spare parts exception'). Lord Edmund-Davies and Lord Bridge of Harwich were inclined to blame Parliament but both felt that the law was unacceptable as it stood. Lord Griffiths, alone, agreeing that the line of cases was not in accordance with Parliament's intention, was prepared to depart from the House's earlier decision in L B (Plastics) v Swish as being clearly wrong. Lord Griffiths held that it was not necessary for the Courts to have extended the meaning of 'reproducing' in s 3(5) of the 1956 Act to include 'indirect copying' in the case of drawings for a purely functional object. This became clear when regard was had to the purpose of the Act and of copyright. Section 3(5) of the Copyright Act 1956 (4 & 5 Eliz 2 cap 74) reads: '(5) The acts restricted by the copyright in an artistic work are (a) reproducing the work in any material form;. Section 48(1) of the 1956 Act defines 'reproduction' as follows: '"Reproduction", in the case of a literary, dramatic or musical work, includes a reproduction in the form of a record or of a cinematograph film, and, in the case of an artistic work, includes a version produced by converting the work into a three-dimensional form, or, if it is in three dimensions, by converting it into a two-dimensional form, and references to reproducing a work shall be construed accordingly'. The Copyright Act 98 of 1978 defined 'reproduction' as 'reproduction, in relation to (a ) a literary or musical work or a broadcast, includes a reproduction in the form of a record or a cinematograph film; (b) an artistic work, includes a version produced by converting the work into a three-dimensional form or, if it is in three dimensions, by converting it into a two-dimensional film; and references to "reproduce" and "reproducing" shall be construed accordingly'. This was amended by Act 66 of 1983 which came into force on 17 October 1983 to include a further subparagraph: '(c) "Any work" includes a reproduction made from a reproduction of that work.' See also s 7 of Act 98 of 1978. The reproduction complained of by the respondent took place prior to the amendment to the definition and is therefore not actionable under the amended definition. Schultz v Butt 1986 (3) SA 667. The reasoning of Lord Griffiths is therefore applicable to the South African definition of 'reproduction' especially in view of the similar nature of ss 3(5)(a) (UK) and 7(a) (RSA). Indeed Lord Griffiths's view is reinforced insofar as it applies in South Africa by the introduction of subpara (c) in the definitions of 'reproduction' and the amendment of the definitions of 'artistic work' and 'drawing' by the amending Act in 1983. These amendments were made after the decisions in Scaw Metals and Tolima. It would seem that the South African Legislature was not satisfied with the broad extension of copyright protection to prevent all 'indirect copying' or that the case law was a correct reflection of the interpretation of the Act as it then stood. This appears to be the case since while indirect copying became expressly prohibited by the new para (c) of the definition, this was limited in the case of functional objects to a period of ten years by the same amending statute. See s 15(3A). This remains a material issue for the following reasons: (a) the proceedings were launched prior to the coming into operation of the 1983 amending legislation on 17 October 1983; (b) a decision on this aspect relates to the issue of the damages and account of profits to which the respondent would be entitled, since it would preclude any damages for copies prior to 17 October 1983; (c) the order of the Court a quo includes a delivery up of infringing valves, and this would be restricted to those made after 17 October 1983. In South Africa, furthermore, there is even less reason to extend the meaning of 'reproduction' to include 'indirect copying' since actual copying which is contra bonos mores constitutes unfair competition.
Cur adv vult.
Postea (December 15).
Judgment
Grosskopf JA:
Introduction
The respondent is a British company which designs and manufactures valves. Among its products are diaphragm valves which are widely used for the handling of industrial fluids. The respondent has been selling its valves in South Africa for many years. Two types of diaphragm valves which have been popular in South Africa are described as the type KB or straight through diaphragm valve and the type A or weir diaphragm valve. Although the respondent manufactures a full range of these valves, the present case is concerned with only one model of each type, viz the 2- inch (50mm) type A and type KB valves. For convenience I shall express all dimensions in imperial units, as was done in the affidavits.
The appellant, a South African company, also manufactures valves. Diaphragm valves of the type with which we are now concerned are used in South Africa mainly in the mining industry. In the 1970's the appellant came to realise that a demand existed for valves which were interchangeable with those already being used on the mines. The appellant investigated whether the respondent's valves were protected by patents, and came to the conclusion that any patents which might have been relevant had already lapsed. It is common cause that this conclusion was correct. Accordingly the appellant has since 1977 been manufacturing and selling components which are interchangeable with the components used in the respondent's valves. For purposes of its trade it has issued illustrated brochures, two of which are before the Court. They bear, respectively, the headings 'Klep Type A Diaphragm Valve' and 'Klep Type KB Diaphragm Valve'. After setting out advertising material and particulars concerning the valve with which it deals, each brochure contains the following:
'Interchangeable with "Saunders" Diaphragm Valves. All Klep Diaphragm Valve parts are independently manufactured and are interchangeable with "Saunders" diaphragm valves.'
It is common cause that engineering drawings are essential to the production of equipment such as the valves manufactured by the parties. Such drawings serve the purpose of controlling the processes of repetitive manufacture. In manufacturing its 2-inch types A and KB valves, the respondent uses 11 engineering drawings which were executed at different dates between 1938 and 1958. Six of these relate to the type A valve and five to the type KB.
On 4 October 1982 the respondent, through a firm of South African patent agents, wrote to the appellant inter alia as follows:
'Our client holds the copyright in certain drawings covering their well-known type "A" and type "KB" diaphragm valves and parts thereof. Up until having recently consulted with us, our client was not aware of the existence of its rights.
We have examined certain valves manufactured by you and it is our opinion that such manufacture constitutes a reproduction by you in a three-dimensional form of our client's drawings and as such infringes our client's copyright.'
The letter then continued by calling upon the appellant to stop infringing the respondent's rights as set out in the letter. The appellant's attorneys replied, disputing both that the appellant had infringed the respondent's copyright, and, indeed, that any copyright existed as claimed by the respondent. The respondent subsequently instituted proceedings on motion in the Transvaal Provincial Division in which it claimed an order interdicting the appellant from infringing the respondent's copyright in the said drawings by
'manufacturing and/or selling valves or components for valves known as type 'A' or type 'KB' valves, which manufacture and sale of such valves or components therefor constitute a reproduction and/or adaptation and/or publication of the said original drawings or a substantial part thereof in three-dimensional form'.
In addition, the respondent claimed various ancillary orders, some of which will be considered in more detail later. The respondent also complained that the above-mentioned brochures infringed its registered trade mark 'Saunders' and claimed an order interdicting such infringement. The matter came before O'Donovan J, who decided in favour of the respondent. His judgment is reported as Saunders Valve Co Ltd v Klep Valves (Pty) Ltd1985 (1) SA 646 (T). References hereinafter to the judgment of the Court a quo will be to this report. With the leave of the Judge a quo the matter now comes on appeal to this Court.
The applicable law
It will be convenient to commence by sketching the legislative background against which this case falls to be decided. When the drawings on which the respondent relies were made, copyright in this country was governed by the Patents, Designs, Trade Marks, and Copyright Act 9 of 1916. Section 143 of this Act declared that the 1911 British Copyright Act (1 & 2 Geo 5 ch 46) would thenceforth be in force in South Africa subject to certain minor modifications and additions. The British Act was set out in the Third Schedule to the 1916 Act.
One effect of the 1916 Act was to create virtual uniformity between South African and British copyright law. This continued until 1956 when the British Copyright Act of that year was promulgated (4 & 5 Eliz 2 c 74). In 1965 a new Copyright Act (Act 63 of 1965) was introduced in South Africa. This Act was substantially modelled on the British Act of 1956. The Act of 1965 was in turn repealed by the Copyright Act 98 of 1978 which now governs copyright in this country. Section 43 of this Act provides (in so far as it is relevant):
'This Act shall apply in relation to works made before the commencement of this Act as it applies in relation to works made thereafter; provided that -
(a) nothing in this Act contained shall -
(i) ... affect the ownership, duration or validity of any copyright which subsists under the Copyright Act 63 of 1965; or
(ii) be construed as creating any copyright which did not subsist prior to 11 September 1965;'
11 September 1965 was the date of commencement of the 1965 Act. The effect of s 43 of the 1978 Act accordingly is to render earlier legislation applicable to the question whether copyright subsists in works made prior to the commencement of the 1978 Act, whereas the 1978 Act governs the remedies for infringement of copyright and the procedures relating thereto. It was common cause in argument before us (otherwise than in the written heads of argument) that the 1916 Act governs the subsistence of copyright in the respondent's engineering drawings, which, as I have indicated, were made while that Act was in force. I assume, without deciding, that the parties' attitude in this regard is correct, particularly since I do not consider that the outcome of the case would be any different if, as had been urged by the appellant in its heads of argument, the transitional provisions of s 48 of the 1965 Act and the Sixth Schedule to that Act were to be applied.
I turn now to the question whether the respondent's engineering drawings were entitled to the protection of copyright pursuant to the 1916 Act. Section 1(1) of the 1911 British Act, which, as noted above, was incorporated in the 1916 Act as the Third Schedule thereto, reads as follows:
'1 (1) Subject to the provisions of this Act, copyright shall subsist throughout the parts of His Majesty's Dominions to which this Act extends for the term hereinafter mentioned in every original literary dramatic musical and artistic work, if -
(a) in the case of a published work, the work was first published within such parts of his Majesty's Dominions as aforesaid; and
(b) in the case of an unpublished work, the author was at the date of the making of the work a British subject or resident within such parts of his Majesty's Dominions as aforesaid;
but in no other works....'
In terms of s 35 'artistic work' includes 'works of painting, drawing, sculpture and artistic craftmanship, and architectural works of art and engravings and photographs'.
The questions which arise in this appeal under s 1(1) of the 1911 British Act are whether the respondent's drawings are 'artistic works'; whether they were original; and whether paras (a) or (b) were complied with. I shall first consider these questions before turning to other issues which were raised.
Are the drawings 'artistic works' ?
Mr Plewman, who appeared for the respondent in this matter, contended that the engineering drawings in issue are 'artistic works' because, as 'works of drawing', they fall within the definition quoted above. This contention was contested by Mr Kentridge, who appeared for the appellant. He submitted that the words 'works of drawing' when read in their context are confined to works made with artistic intent. Drawings of a purely technical nature would, according to this submission, not fall within the concept of 'artistic works'.
Both these contentions start from the premise that the word 'drawing' in its ordinary sense has no necessary relationship with the fine arts. I agree with this approach. The Shorter Oxford Dictionary defines 'draw' (in its relevant sense) as, primarily, '(t)o trace (a line, figure, etc) by drawing a pencil, pen, or the like, across a surface;... (t)o make by drawing lines; to design, delineate'. 'Drawing' is defined, inter alia, as '(t)he formation of a line by drawing some tracing instrument from point to point of a surface; representation by lines; delineation, as dist from painting;' and '(t)hat which is drawn; a delineation by pen, pencil or crayon'. These definitions do not suggest that the word 'drawing' is more properly used to connote artistic than technical or any other works. I turn, therefore, to the context in which the word is used in the British Act of 1911.
The immediate neighbours of the expression 'works of drawing' in the definition of 'artistic work' are 'works of painting', 'works of sculpture', 'works of 'artistic craftmanship'. 'architectural works of art', 'engravings' and 'photographs'. It is noteworthy that in respect of two of these items, viz works of artistic craftmanship and architectural works of art, the Legislature found it necessary to use the words 'artistic' and 'art' to indicate that an artistic element was necessary to bring the work in question within the definition of' an artistic work. The expression 'architectural work of art' is further expressly defined in s 35 of the Act to emphasize that the protection of the Act is confined to the 'artistic character and design' of an architectural work, and does not extend to 'processes or methods of construction'. The other items mentioned in the definition of artistic work (namely, works of painting, works of drawing, works of sculpture, engravings and photographs) have, in their ordinary meanings, a greater or lesser affinity with the fine arts, but are not confined thereto. A painted advertising sign would fall within the expression 'work of painting' as naturally as would a work by Rembrandt. The expression 'work of sculpture' is defined in s 35 to include casts and models. The ordinary meaning of these words would encompass works made for aesthetic reasons as well as many, others. 'Engravings' is defined to include 'etchings, lithographs, wood-cuts, prints, and other similar works, not being photographs'. 'Photograph' is defined to include 'photolithograph and any work produced by any processes analogous to photography'. There is nothing in the language relating to engravings and photographs to suggest that only those specimens are covered which were made for artistic reasons.
It is apparent therefore that, save for works of craftsmanship and architectural works, the items mentioned in the definition of 'artistic work' do not in terms require any element of artistic endeavour. Indeed, the words used suggest a wider meaning, and where the Legislature wanted to introduce some specific artistic requirement for works of craftsmanship and architecture, it did so in express terms.
Moreover, when one looks at the nature of the various items covered by the definition of 'artistic work', it seems most unlikely that the Legislature intended to include only works made with an artistic intent. This applies to all of them (save, of course, works of craftsmanship and architectural works) but to none as clearly as photographs. Can it really be imagined that the Act impliedly distinguished between photographs taken with artistic intent, which would be protected by copyright, and others which would not? What purpose would be served by such a distinction? One needs only to think of press photographs, whose claim to protection does not rest on their aesthetic appeal but is nevertheless very strong. It is difficult to imagine that such photographs, and indeed all the others without artistic pretensions, could be copied with impunity under the 1911 Act. And how would one distinguish in practice between a photograph which was taken with artistic intent and one which was not?
These considerations apply also to drawings. It must be extremely difficult, and, indeed, often impossible, to determine what the draughtsman's intent was when making a drawing. This difficulty is increased when it is borne in mind that opinions can legitimately differ on what constitutes art. As stated by Laddie, Prescott & Vitoria The A Modern Law of Copyright at 104: 'There are those who think that the engineer has not infrequently produced undoubted works of art, not least because of his insistence on function.' Moreover, when regard is had to the policy of the Act to protect authors who, by their skill and labour, produced original works, there would not appear to be any reason to exclude drawings merely because they were made for utilitarian rather than aesthetic reasons.
I consider therefore that, if regard is had both to the wording and the practical effect of the definition of 'artistic work', it cannot be said to colour the expression 'work of drawing' in the manner suggested on behalf of the appellant. The only feature which seems to me to provide some support for the appellant's contention is the labelling of these works as 'artistic'. Before giving further consideration to this feature, I propose examining whether there is anything in the wider context of the Act as a whole which casts light on this issue.
The manner in which the Act deals with literary works is, I think, apposite. 'Literary work' is defined in s 35 as including 'maps, charts,.) plans, tables and compilations'. In the leading case of University of London Press Ltd v University Tutorial Press Ltd [1916] 2 Ch 601, Peterson J, in holding that examination papers constituted literary works under the British Act of 1911, said the following (at 608):
'It may be difficult to define "literary work" as used in this Act, but it seems to be plain that it is not confined to "literary work" in the sense in which that phrase is applied, for instance, to Meredith's novels add the writings of Robert Louis Stevenson. In speaking of such writings as literary works one thinks of the quality, the style, and the literary finish which they exhibit. Under the Act of 1842, which protected "books", many things which have no pretensions to literary style acquired copyright; for example, a list of registered bills of sale, a list of foxhounds and hunting days, and trade catalogues; and I see no ground for coming to the conclusion that the present Act was intended to curtail the rights of authors. In my view the words "literary work" cover work which is expressed in print or writing, irrespective of the question whether the quality or style is high. The word "literary" seems to be used in a sense somewhat similar to the use of the word "literature" in political or electioneering literature, and refers to written or printed matter.'
This case has been consistently followed, inter alios by the House of Lords in Ladbroke (Football) Ltd v William Hill (Football) Ltd [1964] 1 WLR 273 (HL) ([1964] 1 All ER 465 (HL)) in which it was held that a football pool coupon constituted a literary work. See also Kalamazoo Division (Pty) Ltd v Gay and Others1978 (2) SA 184 (C) at 191; Copinger & Skone James on Copyright 12th ed at 59 - 60; Laddie, Prescott & Vitoria The Modern Law of Copyright para 2.10; and AJC Copeling Copyright Law at 30 - 32; Copyright and the Act of 1978 at 8 - 9.
It is clear from the above that 'literary works' did not require any literary merit or pretension to be protected under the 1911 Act. Consequently,
'in a statute which frequently uses words in a special sense differing from their normally accepted meaning it should not be surprising to find that "artistic works" includes things which neither are nor purport to be objects of beauty, however slight'
(Laddie, Prescott & Vitoria (op cit at 106).) I do not consider, therefore, that the use of the label 'artistic work' is sufficient by itself to import a requirement of artistic intent which is not found in the language used to describe the relevant items covered by that label and which seems inconsistent with the practical needs served by the Act.
There seems to be no direct authority under the 1916 Act or the British 1911 Act on the point in issue. Copinger & Skone James (op cit at 68) state:
'It was generally considered under the Act of 1911 that the word "artistic" was merely used as a generic term to include the different processes of creating works set out in the definition section and that, provided that a work was produced by one of such processes, and that its creation involved some skill or labour on the part of the artist, it was protected. The use of the word "artistic" was thought to be akin to that of the word "literary", which... was held to refer only to the nature of the material being written or printed matter.'
In Purefoy Engineering Co Ltd and Another v Sykes Boxall & Co Ltd and Others [1955] 72 RPC 89 (CA) copyright was held to subsist in a catalogue of mechanical parts. The catalogue contained, inter alia, photographs of the parts and line drawings or diagrams indicating the dimensions tabulated in the text. Although the photographs and the drawings were held to be protected by copyright, the Court reached this conclusion by regarding the whole work, that is, including text, photographs and drawings, as a literary work in terms of the Act. No attention was given to the question whether the photographs and drawings would have been covered by the definition of 'artistic work'. Although this case is therefore no direct authority for present purposes, it does underline the practical interrelationship between literary works and artistic works. This interrelationship is also shown by the inclusion in the definition of 'literary work' of maps, charts and plans. All this fortifies the view that the Legislature was not likely to require an element of artistic intent for artistic works although no analogous requirement was laid down for literary works.
Mr Kentridge referred us to several recent publications in which it was contended, or suggested as a possibility, that technical drawings were not included in the definition of 'artistic work' in the 1911 British Act or later Acts. I do not propose considering these views separately since I have dealt above with the arguments on which they were based.
For the reasons I have stated I come to the conclusion that the respondent's engineering drawings are 'artistic works' as defined in the 1911 British Act.
Were the drawings 'original' ?
The next question is whether the respondent's drawings qualified as 'original' works for the purposes of s 1 of the 1911 British Act. The principles relating to originality in this context were not in dispute between the parties and are conveniently set out by Prof AJC Copeling in the following passage (Copyright and the Act of 1978 at 15):
'To be original a work need not be the vehicle for new or inventive thought. Nor is it necessary that such thoughts as the work may contain be expressed in a form which is novel or without precedent. "originality", fir the purposes of copyright, refers not to originality of either thought or the expression of thought, but to original skill or labour in execution. All that is required is that the work should emanate from the author himself and not be copied...
The requirement that the work should emanate from the author himself and not be copied must not be interpreted as meaning that a work will be regarded as original only where it is made without reference to existing subject-matter. Indeed, were this so the great majority of works would be denied the benefit of copyright protection. It is perfectly possible for an author to make use of existing material and still achieve originality in respect of the work which he produces. In that event, the work must be more than simply a slavish copy; it must in some measure be due to the application of the author's own skill or labour. Precisely how much skill or labour he need contribute is difficult to say for much will depend upon the facts of each particular case.'
These principles were applied in the unreported judgment of this Court in W K Topka t/a Topring Manufacturing and Engineering v Ehrenberg Engineering (Pty) Ltd delivered on 30 May 1983. See also Kalamazoo Division (Pty) Ltd v Gay and Others (supra at 190).
The evidence on behalf of the respondent disclosed that nine of the 11 drawings in issue had been made by R Jarrett and one each by G Pearson and L Burton. Pearson and Jarrett are both deceased. Section 26 of the 1978 Act which deals with the onus of proof in copyright actions, provides in ss (4) that where it is proved or admitted that the author of a work is dead, 'the work shall be presumed to be an original work unless the contrary is proved'. It is common cause that this provision applies to the present case. The third draughtsman, Burton, filed an affidavit in which he testified that the relevant drawing
'... is a drawing which I recognise as having been drawn by myself... This drawing was drawn by myself on the instructions of Mr Jarrett and was not copied from any other drawing or article. I expended skill and labour in executing such drawing. The drawing represented a significant change in the design of the diaphragm for the 2-inch type "KB" valve......'
On behalf of the appellant a twofold attack was launched on the contention that the drawings were original. First it was pointed out that the development and the design of the valves which were represented in the drawings, resulted from team efforts involving a number of people in addition to the draughtsmen. How can it then be said, it was asked, that the drawings were the original work of the draughtsmen? Moreover, it is common cause that the drawings now in issue represented developments of earlier valves. How do we know, the appellant asked, that the draughtsmen devoted sufficient of their skill and labour to the present drawings to render them original works in accordance with the tests set out above? Or, to pose the question differently, how do we know that the present drawings are not mere copies of curlier ones, perhaps with insignificant changes? To enable these questions to be answered, it was submitted on behalf of the appellant, the matter should have been referred for oral evidence, to give the parties a proper opportunity of testing the witnesses in cross-examination after having had full discovery. The contention that oral evidence was necessary for a proper determination of the case was made also with reference to other issues to be considered in due course, but can be conveniently dealt with now in its present context.
Should oral evidence have been allowed ?
It is apparent that the affidavits do not contain a direct conflict of evidence relating to the originality of the drawings: the appellant's contention is that these are matters peculiarly within the respondent's knowledge which the appellant should have been given the opportunity to probe by discovery and cross-examination, particularly where the appellant was required to discharge the statutory onus. This attitude on the appellant's part seems to me to amount to that expressed as follows in Room Hire Co (Pty) Ltd v Jeppe Street Mansions (Pty) Ltd1949 (3) SA 1155 (T) at 1163:
'"Or... he" (ie a respondent in motion proceedings) "may state that lie can lead no evidence himself or by others to dispute the truth of the applicant's statements, which are peculiarly within applicant's knowledge, but lie puts applicant to the proof thereof by oral evidence subject to cross-examination."'
This attitude, Murray AJP points out in the Room Hire case loc cit has been held in Peterson v Cuthbert & Co Ltd 1945 AD 420 not to give rise to a genuine or real dispute of fact. If the respondent in such a case requires oral evidence he can apply to cross-examine witnesses (in terms of what is today Rule of Court 6 (5)(g)) and such cross-examination is sufficient safeguard for him without requiring the case to be sent to trial (Room Hire case at 1164). See also Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd1984 (3) SA 623 (A) at 634I - 635B. I should add that a respondent who requires discovery can make application therefor under Rule of Court 35(13).
To determine whether the Court a quo dealt with this issue correctly one must have regard to the manner in which the issue was raised. I deal first with the contention that the appellant was prejudiced by the lack of discovery. In this regard it appears that, prior to the lodging of opposing affidavits, the appellant issued two notices pursuant to Rule of Court 35 (12) calling for the production of documents to which reference was made in the respondent's affidavits (including 'all issue cards and drawings'). These notices were amplified by a letter from the appellant's attorneys. In an affidavit filed on behalf of the respondent, its design manager, Mr MI Pearce, explained which engineering drawings were in existence and he annexed to his affidavit those which he had been advised should be produced. Mr R M Miles, the respondent's executive chairman, stated in a replying affidavit that he had 'ensured that all the drawings in the (respondent's) possession relevant to the manufacture of the valves in the sizes in issue (had) been extracted from the records of the (respondent)'. These drawings were available for inspection at the offices of the respondent's attorneys.
It was not contended on behalf of the appellant that the respondent had failed to produce all relevant drawings - indeed, it is not clear whether the appellant availed itself of the opportunity to inspect the drawings tendered to it. In these circumstances the appellant can hardly be heard to say that it was deprived of the opportunity to obtain discovery. On the face of it the appellant was given everything it asked for which, in respect of the documents requested by it, seems to have been fully as much as it would have been entitled to on discovery. If anything had been omitted, the appellant might have asked therefor. And, of course, formal discovery might have been applied for if the appellant had so wished.
The submission that oral evidence should be allowed was raised as follows in the Court a quo. The appellant as respondent in that Court contended in the course of its argument that the evidence adduced by the respondent (applicant in that Court) did not show that the drawings upon which it relied were original. The argument then proceeded as follows, according to written heads of argument handed in to the Court a quo :
'Alternatively, it is submitted that if this Court should deem fit that (sic ) the matter should be referred to trial, alternatively to the hearing of oral evidence on this issue and that the applicant should be obliged to make a full discovery, which will then enable both the respondent and this Court to determine whether indeed any originality and therefore any copyright vests in the drawings relied on by the applicant.'
It is clear therefore that no substantive application in terms of Rule of Court 6(5)(g) was made by the appellant during the hearing in the Court a quo. In De Beers Industrial Diamond Division (PTY) Ltd v Ishizuka1980 (2) SA 191 (T) at 206A a Full Bench of the Transvaal Provincial Division indicated that it is sound practice that an application for evidence viva voce should be made in limine. I agree with this observation although this does not of course mean that a Court may not in appropriate circumstances allow such an application to be brought at some other stage of the proceedings. I need not however pursue this matter since in the present case no clear application was made at any stage. The Court a quo can in my view not be faulted for declining an invitation to refer the matter for the hearing of oral evidence in circumstances such as the present where there is no conflict of evidence and the invitation was extended somewhat tentatively in the course of the respondent's argument as an alternative to a submission on the merits. I consider therefore that the Judge a quo acted correctly in deciding the issue of originality on the papers before him.
On the record as it stands, the respondent has, I consider, shown that the drawings were original. On behalf of the respondent Mr Pearce explained how engineering drawings are made in practice. His evidence in this regard was not contradicted. I need not repeat his explanation in detail. What it amounts to is that, although a draughtsman normally works in co-operation with a design engineer, he exercises a great deal of independent skill and labour when converting the ideas of the design engineer into detailed specifications for practical manufacture. Similar skill and labour are required to modify an existing design. The draughtsman is required to calculate the suitability of the components in a design (whether original or modified) and to plan the inter-relationship between the part as it will be manufactured with other inter-connecting parts. He has to have regard, inter alia, to the method of manufacture, the materials to be used, the tolerances to be allowed, national or international standards to be applied and the degree of rationalization required by the manufacturer. In view of this evidence it can make no difference per se that the drawings were team efforts in that the engineering designs emanated mainly from others. Copyright subsists in the drawings made by the draughtsmen provided the drawings themselves were original in the sense discussed above. Nor can it matter that earlier drawings were followed provided that the draughtsmen contributed sufficient skill or labour to the present drawings. In the instant case we not only have the assurance by the respondent's witnesses that there are substantial differences between the drawings in issue and earlier versions, but the appellant was given an opportunity to verify this, as I have recounted above, and failed to dispute the respondent's evidence. In these circumstances I agree with the Court a quo that the drawings in question were shown to have been original within the meaning of s 1 of the British Act of 1911.
Were ss 1 (a) or (b) complied with ?
The next question which arises under s 1 of the 1911 British Act is whether ss 1(a) or (b) were complied with. These subsections lay down different requirements for published and unpublished works. Published works are protected if their first publication took place within 'the parts of His Majesty's Dominions to which this Act extends', whereas unpublished works are protected if their authors were at the date of the making of the works British subjects or residents of 'His Majesty's Dominions'. In the present case the respondent's drawings were not published in the ordinary sense of the word and the Court a quo dealt with them as unpublished works. On this basis the question presents no difficulty since the evidence is clear that the draughtsmen were British subjects resident in Britain when the drawings were made.
It is only if the drawings were published works that some difficulties arise. One would therefore have thought that the parties would have debated the question whether these drawings were 'published works' or not. They did not however do so. Mr Kentridge contended that the respondent's case in the affidavits was that the drawings were published works whose first publication had been in Britain by way of reproductions in three-dimensional form (ie by the 'publication' of valves made in accordance with the drawings). This case, his contention proceeded, was not established. Mr Plewman, on the other hand, submitted that the respondent had proved its case on both of the possible alternatives.
The facts upon which the Court a quo held that the drawings, if unpublished, were entitled to the protection of copyright were fully canvassed in the papers and were not in dispute. There could accordingly be no objection to the Court's reaching a conclusion on the basis of such facts. The only aspect of the Court's reasoning which may be open to attack is the finding that the drawings were unpublished. This finding was not, however, challenged. In the result, the present issue may probably be resolved on the simple ground that the conclusion of the Court a quo has not been shown to be wrong. However, in view of the arguments presented, I consider it better to give some consideration to what was required for the 'publication' of the drawings and how the subsistence of copyright would have been affected thereby.
The question whether or not the drawings were published turns on the meaning and effect of s 1(3) of the 1911 British Act. This reads: 'For the purposes of this Act, publication, in relation to any work, means the issue of copies of the work to the public...'. If this provision governs the meaning of 'published work', 'first published' and 'unpublished work' in s 1(1) of the Act, the enquiry would be whether copies of the drawings were issued to the public and, if so, whether this happened first in Britain. For present purposes I assume in favour of the appellant's contention that the provision does apply (vide Francis, Day and Hunter v Feldman & Co [1914] 2 Ch 728 (CA)), and that the issue to the public of valves made in accordance with the drawings would amount to the issue of copies of the work to the public. The only remaining question then is: what is meant by 'issue to the public'? In this regard Mr Kentridge accepted the correctness of the following passage from British Northrop Ltd v Texteam Blackburn Ltd [1974] RPC 57 at 67:
'... an artistic work is "issued to the public", and so published, when reproductions of the work are put on offer to the public... Passive availability suffices, without active offering.'
Although the British Northrop case dealt with the 1956 British Act, Megarry J, in coming to the above conclusion, relied, inter alia, on Francis, Day and Hunter v Feldman & Co (supra ) a case decided under the 1911 Act, and his reasoning was in my view applicable to the interpretation of both Acts. It should, in my view, be followed.
The evidence in support of the respondent's case on this aspect was twofold. First there was evidence from its product evaluation manager, Mr D A Thomas. Mr Thomas was not in the respondent's employ when the drawings were made and his evidence was based purely on records under his control. He stated that, according to these records, the drawings were not published in two-dimensional form. However, in the ordinary course of production, valves incorporating the components shown on the drawings would have been manufactured, offered for sale and sold, first in the United Kingdom and thereafter elsewhere in the world.
Then there was evidence from Mr P C E Rose, who joined the respondent's service in 1937 as a costing clerk and retired in 1974 after having been appointed managing director in 1971. Mr Rose stated that
'(a) 11 of the components depicted in the drawings... were first published in the United Kingdom in three-dimensional form in the sense that valves were produced incorporating such components and were offered for sale and sold in the United Kingdom to the general public.'
It seems clear that Mr Rose meant to convey that first publication took place in Britain (in the manner stated) and his evidence, if accepted, would therefore be decisive of this question. Mr Rose's evidence was undisputed and accords with the probabilities to which Mr Thomas testified. I can consequently see no reason for rejecting his evidence. I also do not think that the Judge a quo erred in deciding this issue without the assistance of oral evidence, as was suggested on behalf of the appellant.
To sum up: it has not been suggested that the drawings were published in any other way than by the 'issue' to the public of components depicted on the drawings. If such 'issue' did in law amount to publication of the drawings for the purpose of s 1(1) of the Act, the evidence discloses that the publication first took place in Britain, thereby rendering s 1(1)(a) applicable. If such 'issue' did not amount to publication, the drawings were unpublished. Since the evidence discloses that the authors were British subjects resident in Britain when the drawings were made, s 1(1)(b) would then be applicable. In either event the relevant requirement for the subsistence of copyright was satisfied.
The effect of legislation relating to designs
The last obstacle to the subsistence of copyright in terms of the 1911 British Act is found in ss 22(1) thereof. This subsection reads as follows:
'This Act shall not apply to designs capable of being registered under the Patents and Designs Act, 1907, except designs which, though capable of being so registered, are not used or intended to be used as models or patterns to be multiplied by any industrial process.'
In terms of s 144(c) of the 1916 Act, the reference to the Patents and Designs Act, 1907, must be construed as a reference to the corresponding provisions of chapter 11 of the 1916 Act, being the chapter dealing with designs. For present purposes the relevant provision is the definition of 'design' in s 76 which reads as follows:
'"design" shall mean any design applicable to any article whether for the pattern, for the shape or configuration, or for the ornament thereof or for any two or more of such purposes and by whatever means it is applicable whether by printing, painting, embroidering, weaving, sewing, modelling, casting, embossing, engraving, staining, or any other means whatever, manual, mechanical, or chemical, separate or combined, not being a design for sculpture;'
This definition is identical in all material respects to the definition in the British Act of 1907 to which reference is made in the above-quoted s 22 of the 1911 Act, as well as to that in the British Patents, Designs and Trade Marks Act of 1883.
The only decision in our law in which the definition of 'design' in the 1916 Act was considered is Allen-Sherman-Hoff Co v Registrar of Designs 1935 TPD 270. At 273 - 4 of that case Tindall J, with whom Barry J concurred, held that, in deciding whether certain features constituted a design,
'... one has to see whether that which it is desired to register is something which can be treated as a design appealing to the eye, or whether the shape is obviously nothing more than part and parcel of the function without any appeal to the eye as a design, in which case there should be no registration.'
The quoted words were an extract from the judgment in In the Matter of Wingate's Registered Design [1935] 52 RPC 126 at 131. In the present case the Court a quo, applying the test approved in the Allen-Sherman-Hoff case (supra ), held that
'valves which find their practical application on the mines are strictly utilitarian in character, their features of shape and configuration being dictated solely by the function which they are required to perform'
(at 650H of the report).
On behalf of the appellant it was contended that both the Court in the Allen-Sherman-Hoff case and the Court a quo applied a wrong test for, so it was contended, the definition in the 1916 Act did not exclude a design which was dictated solely by function or require that its features appeal to and be judged solely by the eye. These requirements, so it was contended, were introduced into English law by statute between 1919 and 1949, and Wingate's case supra was decided pursuant to the British Act of 1919.
I would be most reluctant to overrule the Allen-Sherman-Hoff case, a Full Bench decision which has stood since 1935 and which must have been applied many times in practice before the 1916 Act was repealed (in so far as it dealt with designs) by the Designs Act 57 of 1967. Fortunately I do not think it necessary to do so. For, while it is correct that the requirements set out in the passage from Wingate's case (supra ) were not explicitly stated in the definitions in the British statutes of 1883 and 1907 but were introduced by later legislation, it is also clear that, as stated in Homecraft Steel Industries (Pty) Ltd v S M Hare & Son (Pty) Ltd and Another1984 (3) SA 681 (A) at 692E - F, this later legislation 'incorporates principles which had long been accepted in the law relating to designs, namely that a feature which is necessarily determined by the function of the article in question is not registrable as a design and that registered designs must be judged by the eye alone...'.
See also ibid at 690H - I. Thus, for instance, in In the Matter of Bayer's Design [1907] 24 RPC 65 (CA) at 77 Fletcher Moulton LJ said, referring to the definition of 'design' in the Act of 1883:
'It deals entirely with the shape, or configuration, or ornament or pattern: they are all things which the eye has the complete power of learning from representation.... That such is the case is recognised in the classic decision of Lord Herschell in the Hecla Foundry case (Hecla Foundry Co v Walker, Hunter & Co (1889) 6 RPC 554 - also a case on the 1883 Act), where he points out that the eye is the judge of infringement; and, if the eye be the judge of infringement, it must be because the eye is the competent judge of that which is to be infringed. I am satisfied, therefore, that nothing but that which can be for the eye to see can be a good subject of design.'
See also ibid at 74 and 80; Amp Incorporated v Utilux (PTY) Ltd [1972] RPC 103 (HL) at 119 - 120 (Lord Pearson).
I need not, however, labour this aspect because the appellant did not contest in its argument that a design required 'an individuality of appearance in comparison with others' (I quote from the written heads of argument). This seems to recognize the importance of the eye in judging whether a registrable design has been created. Cf the Homecraft case supra at 691, Robinson v D Cooper Corporation of SA (Pty) Ltd 1984 (3) SA 699 (A) at 704C - G. And the appellant accepted that purely functional features were not entitled to registration as designs, but contended:
'If it is shown that the respondent's valve is not required to be in its particular shape, and in that shape only, in order to work, in other words that there are other actual or possible shapes for the article, then the artistic works embodying that valve are capable of design registration under the 1916 Act'.
(Quoted from the heads of argument.)
A similar argument was addressed to the Court in Amp Inc v Utilux (Pty) Ltd (supra ) where the Court was dealing with the definition of 'design' in the British Registered Designs Act of 1949. In that definition there was a specific exclusion of 'features of shape or configuration which are dictated solely by the function which the article to be made... has to perform' (the definition in the South African Act of 1967 has a similar provision). At 109 of the Amp Incorporated case Lord Reid said:
'The respondents' argument is that a shape is only dictated by function if it is necessary to use that precise shape and no other in order to perform the function. Admittedly if that is the meaning the scope of this provision would be reduced almost to vanishing point because it is difficult to imagine any actual case where one shape and one shape alone will work. A key was suggested. Its function is to turn a particular lock, and only one shape of key will do that. But that is not quite true. In most cases at least a skeleton key of different shape will also turn the lock. In the end no actual case was found where only one precise shape would do.
It seems improbable that the framers of this definition could have intended to insert a provision which has virtually no practical effect, so I look to see whether any other meaning produces a more reasonable result.
Again I think that a clue can be found from a consideration of what must have been the object of the provision. If the purpose of the Act was to give protection to a designer where design has added something of value to the prior art then one would expect an exclusion from protection of those cases where nothing has been added because every feature of the shape sought to be protected originated from purely functional considerations.'
His conclusion was (at 110):
'If the shape is not there to appeal to the eye but solely to make the article work then this provision excludes it from the statutory protection.'
In the same vein Lord Morris of Borth-y-Gest said (at 113):
'It was argued on behalf of Amp that as there could be variations of shape in terminals that would successfully do what was required of them then the "features of shape" would not have been "dictated solely" by the function which the terminals would have to perform. In my view, this contention is not sound. If there are alternative features of shape but if each one is "dictated solely" by the function which is to be performed by the article then each one would be excluded from the expression "design"'.
See also at 117 - 18 (Viscount Dilhorne) and 122 (Lord Pearson). The fifth member of the Court (Lord Donovan) concurred in the judgment of Lord Reid.
If it is accepted that purely functional features are in general not entitled to design protection (and, as I have indicated, the appellant rightly does not dispute this) the Amp Incorporated case demonstrates, I consider, that the appellant's argument on this aspect cannot prevail. It does not matter therefore that that case was concerned with a statutory exclusion whereas we are dealing with a similar rule derived from the intrinsic nature of design protection.
In support of its contention, the appellant relied on certain Australian cases, namely Malleys Ltd v J W Tomlin Pty Ltd (1961) 35 ALJR 352 and Ogden Industries Pty Ltd v Kis (Australia) Ltd 1983 FSR 691. In view of my conclusion that the Allen-Sherman-Hoff case supra accords with the law in Great Britain, upon which our legislation was based, I do not consider it helpful to determine whether the Australian law might be different.
Applying the principles I have discussed to the facts of the case, I am of the view that the drawings clearly do not qualify as 'designs'. The valves are functional articles, designed to operate with maximum efficiency over long periods in adverse conditions such as in the mines and in other industries. Some of the components depicted on the drawings are inside the valves and would not ordinarily be visible. But even the general shape and other visible features, we have been told on affidavit by Mr Pearce, were determined by purely functional considerations. This was not disputed and seems overwhelmingly probable. If it were to be correct that the same functional purposes could have been served by designing a valve with a somewhat different shape, as was contended on the papers by Prof Duggan on behalf of the respondent, it would in my view make no difference in the light of the legal principles discussed above.
To conclude, I consider that the drawings in question were not designs capable of being registered under the 1916 Act and were accordingly not excluded from copyright by s 22 of the 1911 British Act.
The ownership of the copyright
The next question to be considered is whether the respondent has established that it owns the copyright in all the drawings on which it relies. This question arises as follows. In September 1933 Mr P K Saunders (the inventor of the original Saunders valves) and Mr A L Trump commenced business as a partnership under the name of the Saunders Valve Company. In February 1934 they registered a company known as the Saunders Valve Company Ltd. This company carried on business until 1948. During the period between 1933 and 1948 five of the drawings on which the respondent relies were executed. These drawings were made in the course of their employment by employees of the Saunders Valve Company Ltd. Consequently the ownership of the copyright vested in the company pursuant to s 5(1)(b) of the 1911 British Act.
On 12 February 1948 an agreement was entered into between, on the one hand, Saunders Valve Company Ltd and Cwmbran Engineering Company Ltd (together called the 'vendor companies' in the agreement) and, on the other, the present respondent (then called Saunders Valve Company (Cwmbran) Ltd). The respondent was called 'the new company' in the agreement. The effect of the agreement was that the 'new company' bought the assets and businesses of the vendor companies, which were to go into liquidation thereafter. The question to be determined now is whether the agreement effected a valid transfer to the respondent of the copyright in the drawings belonging to the earlier Saunders Valve Company Ltd.
In terms of s 5(2) of the 1911 British Act, an owner of copyright may assign it to another 'but no such assignment... shall be valid unless it is in writing signed by the owner of the right in respect of which the assignment... is made, or by his duly authorized agent'. Apart from writing no formalities were required. The question therefore is purely one of construction of the agreement. Although the agreement was executed in Great Britain and related to a transaction which was to be performed there, neither counsel suggested to us that any principles of English law which differed from our law should be applied in its interpretation.
The part of the agreement which is of most relevance for present purposes reads as follows:
'1. Each of the vendor companies shall sell and the new company shall purchase as at 30 April 1947
First: the goodwill of each of the businesses now carried on by the vendor companies respectively with the exclusive right to use the name of each of the vendor companies and the right to represent the new company as carrying on such respective businesses in succession to and in continuation of the vendor companies respectively and the trade marks owned by or connected with the businesses of each of the vendor companies.
Secondly: all the freehold and leasehold properties belonging to each of the vendor companies in connection with their respective businesses, short particulars of which are contained in the schedule hereto.
Thirdly: all the plant machinery loose plant patterns and jigs motor cars and other vehicles and fixtures fittings and office and canteen equipment work in progress stock in trade materials and chattels patents patent rights and licences to which the vendor companies are entitled respectively in connection with their respective businesses.
Fourthly: the full benefit of all pending contracts engagements and orders of each of the vendor companies in connection with their respective businesses....
Fifthly: any post-war refund or releases of excess profits tax to which either of the vendor companies is or may be entitled subject to the provisions of clause 6 hereof
Sixthly: all other property to which the vendor companies are respectively entitled in connection with their respective businesses .......'
It should further be noted that in terms of clause 13, each of the vendor companies undertook to take all necessary steps to procure its voluntary winding-up within three months.
The respondent relies on the words 'all other property to which the vendor companies are respectively entitled in connection with their businesses' in the sixth clause quoted above as establishing an assignment of the rights in question. The appellant on the other hand contends that these words do not disclose any intention to transfer copyright, which is not even mentioned in the clause. But, as stated by Laddie, Prescott & Vitoria (op cit at 334):
'There does not seem to be any requirement that the assignment should specifically mention copyright. Thus the transfer of "all assets" of one business to another, if in writing, would be effective to transfer any copyrights to the transferee.'
I agree with this statement. The result consequently is that the wording of the agreement was in my view wide enough to cover copyright. And the surrounding circumstances seem to support this interpretation. It is almost unthinkable that the parties would have intended to transfer the businesses of the vendor companies, including the engineering drawings themselves, which were in use at the time and some of which have been in use up to the present, but would have intended the copyright to remain vested in the vendor companies which were due to be wound up within three months. But, the appellant contends, the respondent was not aware of the subsistence of copyright in the drawings, and for that reason, probably, made no specific provision for the transfer of copyright. The Judge a quo found himself
'unable to accept the validity of such a purely subjective approach to the interpretation of a written agreement, in terms of which the (respondent) acquired all the rights of its predecessor in title'
(report at 649C). I agree with this finding, but would add that the record provides no support for the factual statement that the respondent was not aware in 1948 that copyright subsisted in the drawings. Those who were in charge of the respondent at the time did not testify in the present proceedings and are in all probability no longer available to testify. There is accordingly no direct evidence before us that the respondent was unaware of the existence of copyright in the drawings, and it would be idle to speculate about the probable state of its knowledge. What does appear from the record is that the persons who now control the respondent and its licensee were not aware until 1982 that the copyright in the drawings might be used to prevent the appellant from manufacturing the valve components which are depicted on the drawings. Even if it be supposed that in 1948 the respondent was also unaware of this possible incident of copyright, it would not mean that the respondent was unaware of the existence of copyright as such.
My view is accordingly that the agreement of 1948, if properly construed, covered the copyright in the drawings existing at the time. The appellant did not contend that if copyright were comprehended by the above quoted clause VI of the agreement, any further document of transfer would have been required. This seems to me to be the correct approach. It has been held that if an artistic work is sold with its copyright the natural inference is that ownership of the work and of the copyright would pass at the same time. As was stated by Fry LJ in London Printing and Publishing Alliance Ltd v Cox (1891) 3 Ch 291 (CA) at 304:
'... it seems to me extremely improbable that the picture should pass and the copyright remain in the vendor. That is a possible but an unnatural dissociation of two kinds of property, which I think we ought not to infer and ought not to think probable.'
I am in respectful agreement with this view.
It was also suggested on behalf of the appellant that oral evidence should have been allowed in order to determine the exact ambit of the agreement of 1948. I have already given my reasons for agreeing in general with the refusal of the Judge a quo to refer the matter for oral evidence. On the specific question of the interpretation of the 1948 agreement I would add that there is nothing on record to suggest that oral evidence would be of any assistance in interpreting the agreement, particularly if one bears in mind the limited role assigned to parol evidence in this field.
The infringement of the copyright
I turn now to the question whether the appellant has infringed the respondent's copyright in the drawings. Section 23(1) of the 1978 Act provides that
'(c)opyright shall be infringed by any person, not being the owner of the copyright, who, without the licence of such owner, does or causes any other person to do, in the Republic, any act which the owner of the copyright may authorize.'
The enquiry is therefore directed towards what the owner of copyright is entitled to authorize. That depends on the ambit of his right. And, as I have already indicated, s 43 of the 1978 Act disavows any intention of creating copyright which did not exist prior to the commencement of the 1965 Act. It follows that in the present case one must look at the 1916 Act (incorporating the 1911 British Act) to ascertain what the ambit of the respondent's copyright was so that one can determine whether the acts which the appellant did were acts which the respondent might authorize.
In terms of s 1(2) of the 1911 British Act 'copyright' means
'the sole right to produce or reproduce the work or any substantial part thereof in any material form whatsoever... and shall include the sole right... to authorize any such acts as aforesaid.'
The respondent's complaint in the present case is that the appellant has manufactured and distributed valve components which were reproductions in three-dimensional form of the components depicted on the respondent's drawings. For purposes of argument it was accepted that the appellant probably never saw the respondent's drawings. However, it was contended that the copying of valves which were manufactured in accordance with the drawings constituted a sufficient indirect copying of the drawings to entitle the respondent to relief. This type of copyright infringement by what has been called 'reverse engineering' has been considered in a number of cases, here and in England. It will be convenient to sketch briefly the origin and development of this part of the law.
The principles on which this type of infringement rests were authoritatively settled in a field far removed from engineering. In the case of King Features Syndicate Inc and Segar v O and M Kleeman Ltd [1940] Ch 806 (CA) ([1940] 2 All ER 355 (Ch)); [1941] AC 417, the facts were briefly as follows. One Segar, an American artist who died in October 1938, was the author of a large number of drawings or cartoons depicting as the central figure 'a grotesque and fictitious character known as "Popeye", or "Popeye, the sailor"'. (1940 Ch at 807). These cartoons had appeared in the form of comic strips running to very large numbers in the United States of America, Canada and Great Britain. The copyright in these drawings or cartoons was vested in Segar's personal representative, or in King Features Incorporated, or both of them (the plaintiffs). The figure and get-up of Popeye having become very popular, the plaintiffs granted licences to certain persons and companies to manufacture and sell brooches and mechanical dolls simulating the figure of Popeye. Large quantities of these articles were sold. The defendant, without obtaining a licence, ordered from a Japanese company, and sold, a large number of 'Popeye brooches' and celluloid mechanical figures and plaster dolls representing Popeye. The plaintiffs sued for infringement of the copyright in the cartoons. The trial Court found that the defendant had infringed copyright in the drawings even though its brooches and dolls may have been copied, not from the drawings, but from the articles made by the plaintiffs' licensees. This conclusion was upheld by the Court of Appeal, Clauson LJ saying the following (at 816 of 1940 Ch):
'There can be no doubt at all that a figure which in fact reproduces an original artistic work consisting, in substance, of a sketch of that figure, is none the less a reproduction of the original artistic work, because the maker of it has copied it not directly from the original but from some representation derived directly or indirectly from the original work. It seems to have been suggested in the Court below that the fact that the alleged infringement was in three dimensions, whereas the original was in two, prevented the plaintiffs making good their claim. I agree with the learned Judge that while this circumstance may add to the difficulty of forming a conclusion on the degree of resemblance between the infringing article and the original, the plain words of the Act ("in any material form") get rid of any difficulty there might otherwise have been in treating a copy in three dimensions as an infringement of copyright in a sketch in two dimensions.'
See also Luxmoore LJ at 826 - 828.
On further appeal to the House of Lords the defendant did not contest the above findings but, in respect of the point now in issue, confined itself to an argument on the facts. In considering this argument the House of Lords applied the law as laid down by the Court of Appeal.
The King Features case was decided under the 1911 British Act and is therefore of direct relevance for present purposes. It was, however, not until the 1956 British Act was already in force that the principles approved in the King Features case were applied to articles manufactured in accordance with engineering drawings (I should add, however, that in my view nothing turns on the changes effected by the new Act). See, for instance, Dorling v Honnor Mann Ltd [1965] Ch 1 (CA) ([1963] 2 All ER 495 (Ch); [1964] 1 All ER 241 (CA)); British Northrop Ltd v Texteam Blackburn Ltd [1974] RPC 57 (Ch); Solar Thomson Engineering Company Ltd v Barton [1977] RPC 537 (CA) and L B (Plastics) Ltd v Swish Products Ltd [1979] RPC 551 (HL), the last mentioned case ending in the House of Lords. These cases have been followed in South Africa. See Scaw Metals v Apex Foundry (Pty) Ltd and Another1982 (2) SA 377 (D) and Tolima (Pty) Ltd v Cugacius Motor Accessories (Pty) Ltd1983 (3) SA 504 (W).
Recently the House of Lords again considered this matter in British Leyland Motor Corporation Ltd and Another v Armstrong Patents Co Ltd and Another [1986] 2 WLR 400. The facts were briefly as follows. The plaintiffs were designers and manufacturers of motor cars and they also produced some of the spare parts for their cars. In addition, they licensed other manufacturers to copy and sell spare parts in consideration of a royalty payment. The defendants declined to obtain a licence from the plaintiffs, but produced replacement exhaust pipes for the plaintiffs' cars by copying the shape and dimensions of the original. The plaintiffs instituted action, alleging that the defendants had by indirect copying infringed the copyright in the plaintiffs' original drawings of the exhaust system. The trial Court held in favour of the plaintiffs. This decision was upheld by the Court of Appeal and also by the House of Lords (Lord Griffiths dissenting).
The result of the British Leyland case therefore does not support the appellant's contentions in the present case. Mr Kentridge pointed out, however, that several of the Law Lords, although considering themselves bound by the LB (Plastics) case supra, nevertheless expressed reservations about the correctness of the decision, while Lord Griffiths regarded it as clearly wrong. We were accordingly urged to consider this matter afresh.
It may be convenient first to discuss the reasons given by Lord Griffiths for disapproving of the LB (Plastics ) case supra. They turn on the interpretation of s 3(5) of the 1956 British Act which reads as follows:
'The acts restricted by the copyright in an artistic work are -
(a) reproducing the work in any material form.'
It is well settled that copyright may be infringed by copying something which is itself a copy of the plaintiff's work (called indirect copying). If the original work has been reproduced it is no answer to say that it has been copied from a work which was itself a copy of the original. This is accepted by Lord Griffiths at 436 - 9, with reference to authority. However, while he recognizes the correctness and value of this principle when applied to works of fine art, he does not think that it should have been extended to mechanical drawings or blueprints of purely functional objects. His ultimate conclusion is (at 443):
'I would, therefore, hold that "reproducing" in s 3(5) should not be given the extended meaning of "indirect copying" in cases in which the mechanical drawing or blueprint is of a purely functional object. In such cases the scope of artistic copyright should be limited to the natural meaning of the words, namely direct copying including using the drawing to make the object it depicts.'
I cannot, with respect, agree with this view. The word 'reproducing' applies to all works which are subject to copyright, and, in particular, to all artistic works, whether they are functional or not. There does not seem to me to be any warrant for assigning a different meaning to the word 'reproducing' according to the nature of the artistic work with which one is dealing. No rule of interpretation of which I am aware can lead to this result. I can understand that the nature of a particular work may make it difficult to prove that an alleged reproduction is in fact a copy of the original (a matter to which I return later), but the difficulty in this regard would be a factual one and would neither require nor justify a different interpretation of the Act.
Moreover, the result for which Lord Griffiths contends would appear to create as many problems as it attempts to solve. First, there is, of course, the problem of distinguishing between drawings of purely functional objects and others. I need not elaborate on that. But even in regard to drawings of what are clearly functional objects there would appear to be as much need of protection against indirect copying as in regard to any other work. Can it be suggested, for instance, that it should be a good defence for the user of a pirated engineering drawing to show that he copied, not the original drawing, but a photograph thereof?
On analysis, it appears that what caused the learned Law Lords disquiet was not the principle that drawings of functional objects are protected against indirect copying (which principle must be unobjectionable) but the particular application of this principle with which they were dealing. This was stated as follows by Christine Fellner in 'BL v Armstrong in the House of Lords: Our Souls Redeemed from the Company Store' (1986) 4 EIPR 117:
'The argument which caught their Lordships' attention was that the Court should look at the nature of the original contribution which confers copyright, and consider whether it is that which an alleged infringer has taken. In the case of a drawing of a functional object, the original contribution which confers copyright is the draughtsman's graphic skill and his labour. If the drawing is traced or photographed, that skill and labour is directly taken. If the drawing is used as a guide to making the object, again that skill and labour is taken. But if it is the object which is copied, then what is taken is not the draughtsman's skill and labour, but that of the designer who designed the object; and no one suggests that this is entitled to copyright. Indirect production of functional design is therefore not infringement.'
The answer to this argument, I would suggest, is the following. It is accepted in copyright law, as I have tried to show above, that an original work is protected even though the author may have borrowed extensively from others. Of course, if infringement is alleged the plaintiff must show that it is the author's work (and not that of somebody whose work he had borrowed) which was copied. This is a matter of fact which might be difficult to establish in particular circumstances, and this difficulty may be increased where the copy not only reflects the work of more than one progenitor, but does so in a different form, such as where there is a three-dimensional reproduction of drawings. The latter difficulty was recognized as far back as in the King Features case (see the above-quoted passage from the judgment of Clauson LJ). However, if it is established as a fact that the three-dimensional object is a copy (direct or indirect) of the original drawing (as distinct from a mere embodiment of the designer's idea) there would not appear to be any rule of copyright law whereby protection could be denied the aggrieved owner of the copyright in the drawing. If the result is considered unsatisfactory, it is only the Legislature which can, in my view, alter it (as it has done in some respects in this country - a matter to which I advert later).
To sum up, I am in respectful agreement with the cases which have held that indirect copying of the sort with which we are here concerned is in principle an infringement of the copyright in the original drawings. Concerning the question whether there was in fact an infringement in the present case, I agree with the following conclusion by the Judge a quo (report at 648):
'... it has been incontestably shown that the respondent has for the purpose of manufacture and sale copied valves made in accordance with the applicant's drawings. The respondent was requested to produce the engineering drawings which it used for the manufacture of its own valves, but has declined to do so. Indeed the clearest evidence of copying is to be found not only in a visual comparison of the two products but in the answering affidavit deposed to by Mr Bell, the managing director of the respondent, in which he states: "The respondent in 1977 starting manufacturing components which could be interchanged with the components used in the Saunders type diaphragm valves found on the mines. The measurements of the respondent's components were made in conformity with those requirements."'
In argument Mr Kentridge pointed to certain differences between the parties' valves as indicating, so he contended, that the appellant's valves were more than mere copies of the respondent's drawings. In my view these minor differences cannot detract from the conclusion that there has been a reproduction of at least a 'substantial part' of the respondent's drawings within the meaning of s 1(2) of the 1911 British Act.
The appellant's final argument on this aspect was that oral evidence should have been allowed to determine whether the respondent's drawings were copied or not. I have indicated in general why I do not think the case should have been referred for oral evidence. In regard to the present issue I also do not think that oral evidence could have made any difference.
I conclude therefore that the respondent has established that copyright subsisted in its drawings pursuant to the 1911 British Act as incorporated in our Act of 1916, and that the appellant has infringed its copyright.
It is interesting to note in passing that some of the difficulties and anomalies in this branch of the law have recently received the attention of our Legislature. Act 66 of 1983 has amended the 1978 Act by including, within the definition of 'drawing', any drawing of a technical nature'. In future proceedings under that Act there will accordingly be no doubt that such drawings are 'artistic works'. 'Reproduction' was defined in the original 1978 Act as including, in relation to artistic works, 'a version produced by converting the work into a three-dimensional form, or, if it is in three dimensions, by converting it into a two-dimensional form'. By Act 66 of 1983 the definition of 'reproduction' was extended to include, in relation to any work, 'a reproduction made from a reproduction of that work'. Consequently the definition of reproduction now makes explicit provision for indirect reproduction and for reproduction of two-dimensional artistic works in three-dimensional form. These changes are not of any consequence: in both respects the Act merely repeats what was clear law before. What is of greater importance was the introduction of s 15(3A) by Act 66 of 1983. The effect of this section is, broadly, to limit the duration of copyright protection to a period of ten years for the industrial reproduction of utilitarian articles which infringe the copyright of artistic works - in other words, cases of reverse engineering like the present. This meets a major objection to the preexisting law, namely that the protection was available for an anomalously long period.
The respondent's locus standi
Having concluded that the respondent is the owner of copyright in the drawings on which it relies and that the appellant has infringed its copyright, I have now to consider whether the respondent had locus standi to institute proceedings in respect of such infringement. It appears that as from May 1978 a company called Valve Makers of South Africa (Pty) Ltd, which was then a subsidiary of the respondent, was granted an exclusive licence in South Africa in respect of the copyright in the respondent's aforesaid engineering drawings. In June 1982 there was a rearrangement of interests, the exclusive licence being granted to Stewarts & Lloyds of South Africa Ltd with Valve Makers becoming exclusive sub-licensee. The appellant contends that only the exclusive licensee or the exclusive sub-licensee had locus standi to bring the present proceedings. A similar argument was rejected in the Full Bench decision of Video Parktown North (Pty) Ltd v Paramount Pictures Corporation; Video Parktown North (Pty ) Ltd v Shelbume Associates and Others ; Video Parktown North (Pty) Ltd v Century Associates and Others1986 (2) SA 623 (T). I agree with the conclusion reached by the Full Bench and propose doing no more than setting out briefly my reasons for so agreeing.
The appellant's argument is based on an interpretation of certain provisions of the 1978 Act. Section I provides inter alia that
'"exclusive licence" means a licence authorizing a licensee, to the exclusion of all other persons, including the grantor of the licence, to exercise a right which by virtue of this Act would, apart from the licence, be exercisable exclusively by the owner of the copyright; and "exclusive licensee" shall be construed accordingly.'
Section 24 provides that, subject to the provisions of the Act, 'infringements of copyright shall be actionable at the suit of the owner of the copyright.'
Section 25 then lays down that '(t)he exclusive licensee shall have the same rights of action and be entitled to the same remedies as if the licence had been an assignment.'
If one reads ss 24 and 25 together their effect is reasonably clear. Whereas the owner is, in terms of s 24, the party who is primarily entitled to institute action against infringers, s 25 grants to the licensee the rights of action and remedies of an assignee (which in effect are the same as the owner's). The section does not, however, say that the grant of rights to the exclusive licensee is to be accompanied by a corresponding diminution of the owner's rights, nor does it say that the exclusive licensee is to be regarded as in all respects equivalent to an assignee, which might have implied such a diminution. Purely as a matter of interpretation it would accordingly seem that the owner has not been deprived of locus standi in favour of the exclusive licensee.
This view is fortified if one has regard to the respective rights of the owner and the exclusive licensee. By granting an exclusive licence, even in the widest possible terms, the owner does not lose his ownership. The practical value of his ownership might vary, but in most cases it would remain important since both his right to receive royalties from the licensee and his right of reversion if the licence were to terminate for any reason, would depend on it. It seems unthinkable therefore that the Legislature would have intended to deprive the owner of the locus standi which he might need to protect the rights which he has retained despite the grant of an exclusive licence.
We were referred to the legislative history of these provisions. In view of the relative clarity of the wording of the relevant sections I do not think that there is really any need to consider this history, but in any event I do not think that it leads to a different conclusion. As was pointed out in Video Parktown North (Pty) Ltd v Paramount Pictures Corporation (supra at 632), a licence was historically only an authority enabling the licensee to do lawfully what he could not do without the licence, and granted no proprietary interest in the copyright. Under the 1911 British Act it was uncertain whether an exclusive licensee was entitled to sue in his own name for infringement of copyright. See Copinger & Skone James (supra para 431), for the English cases. In Kinekor Films (Pty) Ltd v Movie Time1976 (1) SA 649 (D) at 658 - 9 it was held that the exclusive licensee did not have locus standi. See also Clifford Harris (Pty) Ltd v S G B Building Equipment (Pty) Ltd1980 (2) SA 141 (T) at 143 - 149 and cases there quoted.
This uncertainty was set at rest in the 1965 Act. The 1965 Act set out in detail the rights and remedies of the owner against infringers (ss 18 and 19). Section 20 then explicitly granted those rights and remedies to an exclusive licensee 'as if the licence had been an assignment', but specified that some of 'those rights and remedies shall be concurrent with the rights and remedies of the owner of the copyright' (s 20(2)(a); whereas in respect of others the exclusive licensee supplanted the owner in the exercise of the rights in question (s 20(2)(c)). Section 20 also contained elaborate provisions governing the manner in which proceedings were to be instituted and conducted by owners and exclusive licensees and how the Court should decide cases involving both owners and exclusive licensees.
For present purposes it seems to me that the only significant feature of the 1965 Act is that, when the Legislature expressly granted an exclusive licensee locus standis if the licence were an assignment, it did not regard the licensee's locus standi as inconsistent in principle with that of the owner.
In the 1978 Act the Legislature obviously decided to simplify the whole system by providing merely that both the owner and the exclusive licensee would have locus standi to institute action against infringers, leaving it to the Courts to resolve any competition between them. This the Courts could do by applying ordinary legal principles.
It appears, however, that this solution was not considered completely satisfactory, for s 25 was replaced by Act 39 of 1986 with the following:
'An exclusive licensee and an exclusive sub-licensee shall have the same rights of action and be entitled to the same remedies as if the licence were an assignment, and those rights and remedies shall be concurrent with the rights and remedies of the owner of the copyright under which the licence and sub-licence were granted.'
I do not consider it necessary to analyse the new section or to determine whether or to what extent it has changed the law. Presumably the amendment was prompted by the view that, under the unamended section, the owner's rights and remedies were not concurrent with those of the exclusive licensee, or that it was uncertain whether they were. Whatever may be the true reason, it does seem clear to me that this new provision, which expressly lays down that the owner's locus standi is to be concurrent with that of the exclusive licensee, does not thereby imply that, in the Legislature's view, the owner previously had no locus standi whatever, not even to protect his undoubted rights and interests.
For the reasons I have stated I consider that, despite the grant of an exclusive licence, the respondent in the present case retained its locus standi to act against infringers.
Joinder of the exclusive licensee and the exclusive sub-licensee
During the course of argument the Court raised the question whether the exclusive licensee and the exclusive sub-licensee should not have been joined as parties to these proceedings. The appellant and the respondent both indicated that they did not desire the joinder of the licensee or the sub-licensee. Of course, the desire of the parties cannot be conclusive in this matter. As was pointed out in Amalgamated Engineering Union v Minister of Labour1949 (3) SA 637 (A) at 649, the fact that the two parties before the Court desire the case to proceed in the absence of a third party cannot relieve the Court from inquiring into the question whether the order it is asked to make may affect the third party. Consequently, after judgment was reserved on all issues, the Court intimated to the parties by letter that a decision on the joinder issue might be necessary unless there were to be filed a written consent by each of the licensee and sub-licensee agreeing to be bound by the Court's judgment, notwithstanding that it has not been cited as a party to the proceedings. Such consents have now been filed, and it has accordingly become unnecessary to determine whether, in the absence of such consents, the non-joinder of these persons would have precluded the Court from deciding some or all of the issues in this appeal.
The relief granted to the respondent
As I indicated in the introductory part of this judgment, the respondent's main prayers in the Court a quo were for interdicts restraining the appellant from infringing the respondent's copyright in the drawings and its trade mark 'Saunders'. The respondent also prayed for, and was granted, relief ancillary to these main prayers. On appeal the appellant contended that the Court's ruling on one ancillary prayer, viz the prayer for an account of profits in respect of the copyright infringement, was wrong and should be set aside. No objection was taken to any other form of relief granted by the Court a quo and I express no view on the correctness of any order in this regard.
The matter of an account of profits was treated very tersely in the proceedings before the Court a quo. In its notice of motion the respondent prayed in bare terms for 'an account of profits'. No substantive averment was made in the founding affidavits to support this prayer. It is not clear what argument, if any, was presented to the Court a quo in support of, or in opposition to, an order for an account of profits. The judgment does not deal with any argument in this regard: in fact, the only reference in the judgment to this issue is in the order, which contains the following:
'The prayer for an account... is referred as a separate issue for the hearing of oral evidence. Leave is granted to the parties to apply for amplification of this latter order, if necessary.'
The parties did not make use of the leave to apply for amplification of the order, and it is accordingly not clear what precisely the issue was which, in the view of the trial Court, called for the hearing of oral evidence. What is clear, however, is that the Court has not granted or refused any order for the giving of an account of profits, nor has the Court expressed any view on the circumstances which would justify such an order, or the effect which such an order would have. All these matters would appear to be still open to the Court a quo at the resumed hearing which is envisaged by the direction which I have quoted above. In these circumstances, the question arises whether this direction is appealable at all.
Section 20 of the Supreme Court Act 59 of 1959, makes provision for an appeal to this Court against 'a judgment or order' of the Court of a Provincial or Local Division. See particularly ss (1) and (4). It has often been held that 'judgment' here relates to a decision given upon relief claimed in an action and 'order' to a decision given upon relief claimed on application or on summons for provisional sentence. See Desai v Engar and Engar1966 (4) SA 647 (A) at 653B - C, Constantia Insurance Co Ltd v Nohamba1986 (3) SA 27 (A) at 42H - 43G, and the earlier authorities cited in these two judgments.
The question then is whether the direction referring the present issue for the hearing of oral evidence amounts to an 'order'. The judgment in Union Government (Minister of the Interior) and Registrar of Asiatics v Naidoo 1916 AD 50 appears to be direct authority on this point. In that case the respondent had applied to a Judge in Chambers to set aside a deportation warrant, to interdict his deportation and for other specified relief. The application was opposed on the ground, inter alia, that the Court had no authority to hear the matter. The Judge expressed himself in favour of the view that the Court had authority to go into the question, but found himself unable to settle it upon the affidavits before him. He therefore directed that oral testimony should be adduced, and adjourned the case for that purpose. The Government applied to the Appellate Division for special leave to appeal. Innes CJ, who delivered the judgment of the Court, said the following (at 51 - 2):
'Is there under these circumstances any decree in existence against which we should be justified in granting leave to appeal? In Dickenson's case (1914 AD 424) a ruling upon evidence was held not to be an order against which leave to appeal could be granted, because it did not constitute a decision upon an application for specific relief. This is a converse case. There has been an application for relief, but no decision upon it. The prayer of the petition falls under nine separate heads, and in regard to none of them has any order been made. The application has merely been postponed for further evidence. When the enquiry is resumed the Judge may decide in favour of the present applicants on the facts; or he may possibly, though very improbably, revise his view of the law upon further argument. But if he does neither; if he finds against the applicants on the law and the facts, and grants the relief prayed for, it will then be competent for them to appeal and to raise every point upon which they now wish to rely. The fact is that the present application is for leave to appeal not against the order of the learned Judge - for he has made none - but against his reasons.'
The judgment in Naidoo's case has consistently been followed in this Court. See, for instance, Tropical (Commercial and Industrial) Ltd v Plywoods Products Ltd1956 (1) SA 339 (A) at 343C - E, Heyman v Yorkshire Insurance Co Ltd1964 (1) SA 487 (A) at 491B, Desai's case supra at 653D - E and Nohamba's case supra at 43E - F.
The present case is clearly indistinguishable from Naidoo's case. It follows that the direction given by the Judge a quo in the present matter, was not an order and was consequently not appealable. The fact that the leave to appeal granted by the Judge a quo included this direction obviously cannot affect this conclusion. Leave to appeal is a prerequisite for an appeal against a 'judgment or order' (see s 20(4) of the Supreme Court Act) and can consequently have no effect unless there is a 'judgment or order' to appeal against.
In the result the appellant's attack upon the Judge's direction relating to an account of profits cannot be sustained.
Trade mark infringement
The last substantive point in this appeal relates to trade marks. The respondent is the proprietor of the trade mark 'Saunders' which is registered in various classes. In the introductory part of this judgment I quoted an extract from brochures issued by the appellant. It will be recalled that these brochures contained the words 'All Klep diaphragm valve parts... are interchangeable with "Saunders" diaphragm valves'. The respondent contended that this represented an infringement of its trade mark pursuant to s 44(1)(b) of the Trade Marks Act 62 of 1963, as being 'unauthorized use in the course of trade, otherwise than as a trade mark, of a mark so nearly resembling it as to be likely to deceive or cause confusion... in relation to or in connection with goods... for which the trade mark is registered... likely to cause injury or prejudice to the proprietor of the trade mark.'
The Court a quo agreed with the respondent and granted an order restraining the infringement of the trade mark.
On appeal the appellant does not contest that its conduct falls within the terms of s 44(1)(b). Its sole point is that the trade mark is not entitled to protection and is liable to expungement from the register. Since this contention places the validity of the trade mark in issue, the appellant has petitioned the Court to join the Registrar of Trade Marks as a party to this appeal. It was held by this Court in Esquire Electronics Ltd v Executive Video1986 (2) SA 576 (A) that such joinder is necessary in a case like the present. Neither the Registrar nor the respondent opposes the petition and it will be granted subject to payment by the appellant of all costs occasioned thereby.
The appellant relies for its contention on s 41 of the Trade Mark Act. Section 41(1) lays down:
'(1) If a trade marks consists of a word which has become generally recognized by the public as the only practicable name or description for any article... for which it is registered and has commonly been so used by persons carrying on business in relation to such article... (not being used in relation to goods... connected in the course of trade with the proprietor... of the trade mark...), the registration of such trade mark shall... be deemed to be an entry wrongly remaining on the register for the article... in question'.
This subsection lays down two requirements, viz
(a) that the trade mark should consist of a word which has become generally recognized by the public as the only practicable name or description for an article; and
(b) that the word should have been commonly so used, with reference to goods unconnected with the trade of the proprietor of the trade mark, by persons carrying on business in relation to such article.
In my view the appellant has not established either of these requirements. The evidence on which it relies is mainly that of Prof T O Duggan, who is an associate professor of engineering at the University of the Witwatersrand. He states the following:
'Ever since I came into the field of mechanical engineering in the late 1940's, diaphragm valves of this type have been known to me as "Saunders valves". It is a term which has been in general use in this field to describe them. In my view, the use of the term "Saunders valve" is common in industry to describe this type of valve. I am supported in this view by what is stated in Engineering dated 18 September 1931, being annexure TD25, which refers to these valves as Saunders valves.'
The extract from Engineering does not seem pertinent. The references to 'Saunders valves' in the article seem to be only to valves manufactured by the respondent's predecessor or its licensee.
In the passage quoted above, Prof Duggan refers to 'diaphragm valves of this type'. He does not, however, indicate what type of diaphragm valve is appropriately described as a 'Saunders valve'. Mr T P Bell, the appellant's managing director, is equally vague. He states that he has been aware of Saunders valves for many years 'and I consider it as being a particular type of diaphragm valve'. This evidence can hardly be said to indicate that there is any article, other than a valve made by the respondent, which is commonly called a Saunders valve, and still less that this name is the only practicable name or description for such article, if it exists. Expungement of a trade mark can have serious consequences for its proprietor and should not be authorized except on clear evidence.
But the matter does not end there. The appellant itself describes its valves in the aforesaid brochures as 'Klep type "A" diaphragm valve' and 'Klep type "KB" diaphragm valve'. Obviously these descriptions were considered sufficient to identify the valves. Also, as already stated, the brochures indicate that the parts of the appellant's valves are interchangeable with '"Saunders" diaphragm valves'. The reference to 'Saunders' valves is clearly to the respondent's valves, and not to articles of a particular type which may have been manufactured by somebody else. These brochures seem to negative any suggestion that the term 'Saunders valve' has become the only practicable name or description for the article.
On the evidence as a whole it seems clear that the appellant has not established the requirements of s 41(1) of the Trade Marks Act.
In the alternative the appellant relied on s 41(3) of the Act. This section lays down inter alia that the provisions of ss (1) would apply to trade marks consisting of a word which is the 'only practicable name or description of an article... for which such trade mark was registered, if such article... was the subject of Letters Patent in the Republic which have expired or lapsed'. As I have indicated, however, I do not think that the appellant has established that Saunders is the only practicable name or description of any article.
It follows, therefore, that in my view the appeal on this aspect should also fail.
The order
In the result the appellant's attack on the order of the trial Court fails in all respects. The order of this Court is accordingly as follows:
(1) prayer 1 of the appellant's petition for joinder is granted, the appellant to pay all costs occasioned thereby;
(2) the appeal is dismissed with costs;
(3) the orders for costs are to include costs occasioned by the employment of two counsel.
Corbett JA, Joubert JA, Galgut AJA and Nicholas AJA concurred.
Appellant's Attorneys: Godfrey Rabin & Partners, Johannesburg; Savage, Fooste & Adams, Pretoria; Israel & Sackstein, I Bloemfontein. Respondent's Attorneys: Spoor & Fisher, Pretoria; McIntyre & Van der Post, Bloemfontein.