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COPYRIGHT — BLACKLISTING — SHERMAN ACT.
90 per cent. of all copyrighted books. The object of the combine was to fix prices, and to compel publishers and dealers to sell at the prices so fixed. The compulsion was brought about by blacklisting those who refused to be governed by the combine as to prices, and by refusing to such the privilege of purchasing, owning, or selling copyrighted books controlled by the associations, thus injuring, and in some instances destroying, the business of dealers outside the combine. The agreement under which such associations were formed, so far as they related to interstate commerce, were declared to be null and void within the provisions of the Sherman Anti-Trust Law. (BobbsMerrill Co. v. Straus et al., 139 Fed. Rep. 155. February, 1905, Circuit Court, southern district, New York.).
In the case cited the complainant sought to enjoin defendants from selling at retail a copyrighted novel entitled “ The Castaways" at less than $1 per copy. The defense interposed was that defendants purchased the books in the open market and acquired title to them, and had a right to sell them at any price they chose. Defendants claimed also that the suit was brought by plaintiffs to enforce an agreement in restraint of trade and commerce which was void under the Sherman Act. · The court held that if a publisher of a book, being the proprietor of the copyright, parts with the title to the book, either a single copy or a number of copies, and receives his pay therefor, he has parted with all control over such books, and the purchaser can sell them in the open market for any price he chooses. The court held further that while it is no defense to a trespass upon complainants' rights that it has violated or is violating the Sherman Anti-Trust Law (General Electric Co. v. Wise, 119 Fed. Rep. 922), yet if it appears that complainant has turned over to the illegal combine the fixing of prices, and has become a member of such unlawful combination, and is attempting to enforce the illegal agreements of such combination, the action cannot be maintained. A plaintiff cannot use the courts to enforce agreements forbidden by law. He that comes into equity must come with clean hands. The facts before the court having shown that defendant had absolute title to the copyrighted books sold by it, and that the suit was, in effect, an attempt to enforce the rules of a trust prohibited by law, the complaint was dismissed. (Bobbs-Merrill Co. v. Straus, 139 Fed. Rep. 155.)
$ 53. Book Trust – When Owner of Copyright can Control Sale.— The publisher of a book, who also owns the copyright, can control the conditions upon which the book shall be sold only so long as he retains title to the copies of the work. In the exercise of such ownership he can lawfully restrict the manner in which, and the persons to whom, the book can be sold. Such restrictions being protected by the copyright could not be said to be an unlawful restraint of trade under the Sherman Act. The right to restrain the sale, however, is gone when the owner of the copyright or copyrighted work has parted with title to the books, and confers absolute title on the purchaser, even if the sale be accompanied with an agreement for restricted use, or for a sale at a fixed price. Under such an agreement a contractual relation arises, and the remedy, if any, is for damages for its breach. But where title passes to the vendee of the copyrighted book, or books, the vendee cannot be restrained by injunction in an equity suit from disposing of them. (Scribner v. Straus, 139 Fed. Rep. 193. July 1905, Circuit Court, southern district, New York.)
§ 53a. Patent Right will Protect Trust.— The fact that the subject matter of a monopolistic combination is covered by patent-rights, will, if there be no illegality in other respects, protect the combination from the penal provisions of the Sherman Act. If the use of the patented articles does not infringe upon the police powers of the State, the patent will be upheld, even though the effect be to keep up a monopoly and fix prices. (Bement v. Nat. Harrow Company, 98 U. S. 70.)
“The very object of the patent laws,” says PECKHAM, J., in the case cited, “is monopoly, and the rule is, with few exceptions, that any conditions which are not in their very
PATENT RIGHTS — BOYCOTT — SHERMAN ACT.
nature illegal with regard to this kind of property, imposed by the patentee, and agreed to by the licensee for the right to manufacture or use or sell the article, will be upheld by the courts.” The fact that the tendency will be to control prices of the patented article will not render such contracts void, as in restraint of trade within the provisions of the Sherman Act. (Bement v. Nat. Harrow Co., 98 U. S. 70.)
It was held, however, that where the patentee of an invention for the manufacture of rubber tire went beyond the rights secured to him by his patent in raising and maintaining prices in States where the patent had no practical existence, and in raising a fund to crush competition by outside manufacturers in localities where the patent was in force, as well as in those where it had no practical existence, such contracts were within the purview of the Sherman Act as a conspiracy in restraint of trade, and void. (Rubber Tire Wheel Co. v. Milwaukee Rubber Works Co., 142 Fed. R. 531. Jan. 23, 1906, Circuit Court, Wisconsin eastern district.)
$ 54. Boycott - Conspiracy to Boycott Restrained by Injunction.- Under the Sherman Act every contract, combination in the form of trust or otherwise, or conspiracy in restraint of trade or commerce among the several States or with foreign nations is forbidden. Such unlawful contracts and conspiracies may be restrained by injunction. A combination and conspiracy having for its immediate object the injury and destruction of the private business of an individual, firm, or corporation by means of a boycott is an unlawful conspiracy at common law, and may be restrained by injunction. Such a combination and conspiracy does not lose its criminal character, or become lawful, by reason of the fact that the acts contemplated and done pursuant thereto might be lawfully done by an individual acting for himself alone. (Lowe v. California State Federation of Labor et al., 139 Fed. Rep. 71. July, 1905, Circuit Court, northern district, California.)
The case cited arose upon a motion to continue a temporary injunction pendente lite issued in an action by plaintiffs, a firm of hat manufacturers of Danbury, Conn., against the California State Federation of Labor and others, to restrain the defendants from in any manner conspiring together to destroy the trade and business of complainants; from boycotting the complainants' business, or the product of their factory; from publishing or otherwise circulating statements of representations calling the attention of complainants' customers, or of dealers, or of tradesmen, or of the public to a boycott or strike against the complainants, from threatening or intimidating the customers of complainants, or the public, or persons combined with complainants, or persons buying products of complainants' factor; from any other person, firm, or corporation by any means set forth in the bill of complaint. '
The contention of defendants was that a single individual, acting on his own responsibility, might do the things complained of, and that in so doing he would not be guilty of any unlawful act; and that, therefore, what was lawful for an individual to do does not become unlawful by reason of the fact that the acts complained of are done by a number of individuals. The court held that this contention was wholly untenable, and made the distinction between the results of concerted action by means whereof an individual is deprived of his just rights, as distinguished from the acts of an individual which result in harm to no one. The intention by one man, so long as he does nothing, is not a crime which the law will take cognizance of, and so, too, the intention of any number of men acting separately. But when several men form the intention, and come together and agree to carry their intent into execution, the case is changed. The agreement is a step in the direction of accomplishing the purpose. The combination becomes dangerous and subversive of the rights of others, and the law says it is a crime. On this point the court cited from an opinion by Mr. Justice HARLAN in Arthur v. Oakes (63 Fed. Rep. 310; s. C., 11 C. C. A. 209), as follows:
“It is one thing for a single individual or for several individuals, each acting upon its own responsibility and not in co-operation with others, to form the purpose of inflicting actual injury upon the property or rights of others. It is quite a different thing,
in the eye of the law, for many persons to combine or conspire together with the intent not simply of asserting their rights, or of accomplishing lawful ends by peaceable methods, but of employing their united energies to injure others or the public. An intent upon the part of a single person to injure the rights of others or of the public is not in itself a wrong of which the law will take cognizance, unless some injurious act be done in execution of the unlawful intent. But a combination of two or more persons with such an intent, and under circumstances that give them, when so combined, a power to do an injury they would not possess as individuals acting singly, has always been recognized as in itself wrongful and illegal.”
The court also cited from the opinion of Mr. Justice HOLMEs in Aikens v. Wisconsin (195 U. S. 194), in construing a Wisconsin statute forbidding “two or more persons to combine for the purpose of unlawfully and maliciously injuring another in his reputation, trade, business, or profession by any means whatever.” In that case the court said that the liberty to combine to inflict injury upon another was not among the rights which the Fourteenth Amendment was intended to preserve, and that the defense that motives are not. actionable cannot prevail in determining the extent to which a person can justify harm which he has foreseen. If the acts were intended and the injury foreseen, it is no defense to say that motives are not actionable. The court continued the injunction. (Lowe et al. v. California State Federation of Labor et al., 139, Fed. Rep. 71. July, 1905, Circuit Court, northern district, California.)
§ 548. Blacklisting Prohibited as to Employees of Carriers Engaged in Interstate Commerce.- National Trades Unions, and controversies between carriers and their employees are governed by an act of Congress, approved June 29, 1886, entitled “An Act to legalize the incorporation of Trades Unions” (Laws 1886, ch. 567); and also by an act approved June 1, 1898, entitled “An Act concerning carriers engaged in interstate commerce and their employees.” (Laws 1898, ch. 370.)
Section 3, of the act of 1898, provides for a board of arbitration to settle disputes and controversies between employer