Scribner v. Straus/Opinion of the Court

These actions were submitted at the same time and admittedly involve the same questions of law. The suits were brought, the one by a partnership, as Charles Schribner's Sons and the other by a corporation, Charles Scribner's Sons, Incorporated, against R. H. Macy & Company, to restrain the selling at retail of the complainants' books, copyrighted under the laws of the United States, at prices less than those fixed by complainants, and from buying such copyrighted books except under the rules and regulations of the American Publishers' Association. The learned counsel for the appellants in this case, by consent, filed a brief in the case of Bobbs-Merrill Co. v. Straus, No. 176 (just decided), 210 U.S. 339, 52 L. ed. --, 28 Sup. Ct. Rep. 722. So far as the same questions are involved, the decision in No. 176 is pertinent to this case, and these cases are controlled by the rulings made in that case.

The defendants carried on a department store. Among other things, they sold books at retail,-some copyrighted and some not. In the year 1901 the American Publishers' Association was formed among certain publishers of copyrighted books, and in their agreement is found the following:

'3. That the members of the association agree that such net copyrighted books, and all others of their books, shall be sold by them to those booksellers only who will maintain the retail price of such net copyrighted books for one year, and to those booksellers and jobbers only who will sell their books further to no one known to them to cut such net prices, or whose name has been given to them by the association as one who cuts such prices, or who fails to abide by such fair and reasonable rules and regulations as may be established by local associations, as hereinafter provided.'

Scribner's Sons' catalogue, invoices, and bill of goods contained the following notice:

'Copyrighted net books published after May 1, 1901, and copyrighted fiction published after February 1, 1902, are sold on condition that prices be maintained as provided by the regulations of the American Publishers' Association.'

In the case of a new publisher, notice was given by correspondence and by sending a blank, as follows: American Publishers' Association.

_____ ___, 190_.

In consideration of discount allowed on books bought from     _____ _____ we hereby agree that for one year from date of      publication we will not sell net books at less than the      retail prices fixed by the respective publishers, nor fiction      published after February 1, 1902, at a greater discount than      28 per cent at retail, as provided by the rules of the      American publishers' Association. We further agree that we     will not sell books published by members of the American      Publishers Association to any dealer known to us to cut      prices of net books or of new except as above provided.

The new publisher was required to execute this pledge before deliveries were made, although, if dealers refused to sign, the trade was still allowed to sell to them and would sell to them. If a new member made application for books, such application was referred to the association, and the agreement executed before deliveries were made.

Macy & Company refused to enter the association or to be bound by its rules. They sold books at less than the prices fixed by the association, and bought books from other dealers, including publications of complainants, and sold them at less prices than those fixed by the association. And they purchased from dealers who knew that Macy & Company intended to sell at such prices.

Upon the theory that Macy & Company had notice of these agreements, it was sought to hold them as copyright infringers. Both the circuit court (139 Fed. 193) and the court of appeals (78 C. C. A. 122, 147 Fed. 28) held that there was nothing in any of the notices of a claim of right or reservation under the copyright law, and held that the question was one of the right of the complainants to relief in a court of equity by virtue of their rights, independent of statutory copyright, in view of the alleged conditional sale embodied in the notice as to the copyright book. The circuit court of appeals held, rightfully, as we think, that this question was not open in the case, as in the first case there was no diversity of citizenship, nor in either case a claim of damages in the sum of $2,000, requisite to confer jurisdiction of questions of rights independent of the copyright statutes.

Upon the allegations of the bill as to alleged contributory infringement of the copyright, that the defendant had induced and persuaded sundry jobbers and dealers who had obtained copyrighted books from the complainants to deliver the same to the defendant for sale at retail at less than the prices fixed by the complainants, and in violation of the agreement upon which the books were obtained, both the circuit court and the circuit court of appeals held that there was no satisfactory proof that the defendant did thus induce any person to break his agreement with the complainants. It is contended in the brief of the complainants that these findings are opposed to the weight of the testimony, and particularly violate the admissions of the answer; but we think, taking the answer altogether, it did deny the allegations of the complaint as to the conduct of the defendant in inducing dealers to violate their agreements.

Upon the question of fact involved in this branch of the case both courts below found against the contention of the complainants in this respect, and, applying the usual rule in such cases, we find no occasion to disturb such findings.

The decrees of the Circuit Court of Appeals in both cases are affirmed.