Chappell & Co. v. Middletown Farmers Market & Auction Co.

334 F.2d 303, 142 U.S.P.Q. (BNA) 54
CourtCourt of Appeals for the Third Circuit
DecidedJune 26, 1964
DocketNos. 14676-14678
StatusPublished
Cited by1 cases

This text of 334 F.2d 303 (Chappell & Co. v. Middletown Farmers Market & Auction Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Third Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Chappell & Co. v. Middletown Farmers Market & Auction Co., 334 F.2d 303, 142 U.S.P.Q. (BNA) 54 (3d Cir. 1964).

Opinion

McLAUGHLIN, Circuit Judge.

This is a consolidated appeal from a judgment of copyright infringement under Section 1(e) of the Copyright Act. 17 U.S.C. § 1(e) (1958).

The defendant, Middletown Farmers Market and Auction Co. (Middletown) is a Pennsylvania corporation, operating a Merchandise Mart in Middletown, Pennsylvania. Mid-City Trading Company is the proprietor and lessee of the music department at the Mart, under an arrangement whereby Middletown advertises the merchandise sold by Mid-City, through newspaper advertisements and sales promotion over Middletown’s loud speaker system.

Broadcasts over this system originate in the central office of Middletown, and are carried to some fifty-eight speakers located on the premises and in the parking lot. On certain stipulated occasions, Middletown played, over this loud speaker system, the phonograph records of musical compositions, the copyrights to which were owned by the plaintiffs appel-lees.1 This was done without license or permission of the copyright owners or ASCAP, American Society of Composers, Authors and Publishers, to whom a nonexclusive licensing right was granted.

The defendant contended that these renditions were permissible under the Copyright Act because directed to the promotion of the records for the benefit of the copyright owners; that they amounted to “advertisement” not “public performance for profit”.

The plaintiffs argued that these records were played throughout the store under circumstances which made their rendition a public performance for profit within Section 1(e) of the Copyright Act. 17 U.S.C. 1(e) (1958).

These consolidated cases were tried before Judge Follmer without a jury and judgment was rendered for the plaintiffs in each case, in the amount of $250 for each infringement, and $200 in attorney’s fees for each plaintiff plus costs. Defendants were further enjoined from performing publicly the musical compositions involved.

At the trial below, it was stipulated by the parties that the musical compositions involved were played over the defendant’s loud speaker system on the dates alleged; it was further uncontradicted that the broadcast of these compositions emanated from the central office of the defendant, not the music department.

As to whether announcements were made, promoting the sale of the records played, there was conflicting testimony. The manager of the Mart said announcements promoting the sale of the records were made from time to time. An investigator for ASCAP and his wife testified they heard no such announcements at the Mart. The trial judge, however, left this factual issue unresolved, and found only that these compositions were “publicly performed * * * for the entertainment and amusement of patrons attending such place and to make such [305]*305place of business an attractive place for the patronage of the general public.” Finding No. 4.

This finding has support in the evidence and cannot be said to have been clearly erroneous. United States v. United States Gypsum Co., 333 U.S. 364, 395, 68 S.Ct. 525, 92 L.Ed. 746 (1948); R. M. Palmer Company v. Luden’s, Inc., 236 F.2d 496, 498 (3 Cir. 1956); and it is dispositive, if the rendition of these musical compositions in the manner described is a “public performance for profit” within Section 1(e) of the Copyright Act.

Section 1(e) of the Copyright Act confers two monopolies on the copyright owner, that of reproduction of the musical composition by mechanical means and that of giving public performance for profit. Jewell-LaSalle Realty Co. v. Buck, 283 U.S. 202, 51 S.Ct. 407, 75 L.Ed. 978 (1931). See S.Rep.No. 1108, 60 Cong. 2d Sess. P. 9 (1909); H.Rep.No. 2222, 60 Cong. 2d Sess. P. 9 (1909). In enacting the Copyright Act, Congress sought to give the composer or copyright owner control, in accordance with the provisions of the bill, over “the manufacture and use of such devices” (mechanical reproductions) S.Rep.No. 1108, supra; H.Rep. No. 2222, supra.

The authorization by the copyright owners to record the musical compositions had been given in this case, and the copyright owners could not restrict the sale of the mechanical reproduction, i. e., the phonograph records [17 U.S.C. § 27 (1958)], though under Section 1(e) they were entitled to specified royalties for their manufacture. But while the record itself is thus free from further contributions to the copyright, the use of the recordings for a public performance for profit is still reserved to the copyright owners. 17 U.S.C. § 1(e) (1958). The surrender of one monopoly (the right to make mechanical reproductions) does not carry with it the right to publicly perform the copyrighted musical composition through a phonograph recording thereof. Cf. Berlin, Inc. v. Daigle, 31 F.2d 832, 834-835 (5 Cir. 1929); Interstate Hotel Co. v. Remick Music Corp., 157 F.2d 744 (8 Cir. 1947).

It follows that while the statute provides that once possession of a copy of the copyrighted musical composition is lawfully obtained, (whether in the form of phonograph record or sheet music), there shall be no restriction on its transfer — this cannot be read to permit “public performance for profit” to bring about its transfer or sale.

There was testimony by the manager of the Mart that the playing of the records induced sales; and that this was their purpose in playing them. There was, however, no finding by the trial judge that these renditions were or were not connected with the sales promotions of the defendant: so that the argument of the plaintiffs that the defendants publicly performed the musical composition for profit “under the guise of sales promotions” is inappropriate. It may be true that these renditions served a dual purpose, “sales promotion” and “entertainment and amusement of the customers of the Mart”; but it would seem to us that Sections 1(e) and 27 of the Copyright Act do not authorize the public performance for profit of a copyrighted musical composition even in connection with the sale of a mechanical reproduction of the work. Otherwise, a surrender of one monopoly would severely compromise the monopoly reserved, i. e., “the right to publicly perform for profit.” So that whether the playing of the records was or was not connected with their sales promotion (the factual issue the trial judge did not decide), if they constituted public performances for profit within Section 1(e), plaintiff’s copyrights were infringed. See M. Witmark & Sons v. L. Bamberger & Co., 291 F. 776 (D.N.J.1923).

The trial judge affirmatively found that the musical compositions involved were “publicly performed for profit * * * for the entertainment and amusement of patrons attending” [The Mart] and “to make such place of busi[306]

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334 F.2d 303, 142 U.S.P.Q. (BNA) 54, Counsel Stack Legal Research, https://law.counselstack.com/opinion/chappell-co-v-middletown-farmers-market-auction-co-ca3-1964.