straining order or injunction were obtained the bill is not sufficiently clear as to whether a retailer would then be permitted to sell such infringing textiles as he might have in his stock. Again, a careful study of this bill would show the retailers that their fears were unfoundned. The provision to which the retailers refer states that no retailer may be found to have violated the act by selling or offering for sale an infringing textile unless he sells an infringing textile "which he has purchased after receiving notice that a temporary restraining notice or injunction * * has been issued. ** * In other words, there is no possibility under this act for a retailer to be stuck with inventory of an infringing textile unless he purchased this inventory after receiving written notice that a temporary restraining order had been issued forbidding the manufacture or sale of the infringing textile. In order for the retailer to run any risk concerning a large inventory of an infringing textile, he must have actually purchased it from the source of supply with written notice of the fact that the textile infringed on the registered copyright of another. If an injunction is granted after he bought the textile, the retailer may resell it with impunity. The argument also has been advanced in opposition to the bill that it is "discriminatory" legislation in that it seeks to protect commercial designs so far as they relate to textiles, but does not afford any protection to designs used in other products, such as wallpaper, furniture, etc. This limitation of the field to be covered, I submit, is an asset rather than a liability. The Register of Copyrights has told this subcommittee that in his opinion it is administratively impossible to maintain files and investigating personnel who can adequately cover a large number of fields. Certainly, in the novel field of commercial design protection, it is better to make a small start with a reasonable assurance that success will follow, then to undertake a task so overwhelming that satisfactory results could not be achieved in any one field. If it is found that our estimate is correct and that the system will work effectively in the field of textile designs, at a later date other fields can be included. It has been deemed feasible to start with textiles since the textile industry voluntarily has made much progress in the system of voluntary design registration administered under the auspices of the National Federation of Textiles, Inc. That organization has a vast reservoir of technical knowledge and a number of trained personnel which it has generously offered to the Register of Copyrights for use in the administration of this law. From the point of view of economy as well as efficiency, it would be unwise not to use this information and personnel. Last and most important, arguments have been made, even by trained lawyers, that there is adequate protection furnished under the current law. Anyone who has followed this field at all carefully in the past 25 years will recognize that this statement is not in accordance with the facts. As for copyrights under the Copyright Act, the Copyright Office has issued an official ruling to this effect: "The protection of products of the industrial arts, utilitarian in purpose and character, even if artistically made or ornamented, depends upon action under the patent law. * ** The exclusive right to make and sell such articles (including garments, laces, and fabrics) should not be sought by copyright registration." In other words, commercial designs and patterns on fabrics are not subject to copyright. This was held as early as 1929 in Kemp and Bentley v. Hirsch (34 F. 2d 291). Later that same year it was held that there was no common law right which prevented a person from copying the textile design or pattern of another. The court stated that once the design was offered to the public, it became public property which could be appropriated by anyone. The court went on to say "Congress, not the courts, must be appealed to for the fuller protection which Congress can constitutionally afford" Chaney Bros. v. Boris Silk Corp., (35 F. 2d 279). As for design patent, protection cannot be secured from the Patent Office unless the originator can show "complete and absolute originality." In other words, the applicant must show that he was the one who actually and originally devised all of the elements of the design in question. Experience has shown that in many instances objective proof of this fact is impossible in the artistic field of patterns and designs. Too often the applicant finds that his application is refused because he has not proved to the satisfaction of the Patent Office that his design is original in all respects. Furthermore, time consumed in obtaining a design patent often defeats its purpose. Textile designs are seasonal. Unless quick action can be obtained on an application for a design patent, the originator may find that the season has passed before the patent application has been passed upon. In addition, too often the applicant finds that before his design patent is issued someone else has copied his design and has produced it commercially before the official publication of the original design. These time lags are not the fault of the Patent Office, but constitute a defect inherent in the patent law. If the premise is granted that commercial textile designs and patterns should be protected, it is self-evident that some new type of legislation is required. The drafters of H. R. 2860 have been fortunate in being able to use the experience gained in administering the copyright and patent laws in attempting to evolve a new system which will give quick and adequate protection for applicants. It is my considered opinion that this bill will do that job. I further believe that none of the arguments presented by opponents of the bill are meritorious. There can only be two possible postions in this matter. Either there is to be protection for the designers of commercial patterns comparable to the protection which is furnished the originators of literary works, musical works, etc., or there is to be no protection given to commercial art in the textile field. The only reason for taking the latter position is the desire for freedom to "cash in" on the work of another. I respectfully submit that if you adopt the premise that legal protection of original designs is morally and economically sound, this proposed act is eminently sound. No proposed bill would be satisfactory to those who prefer the law of the jungle, and seek the right to steal from another the fruits of his ingenuity. No amount of technical and legal subterfuge and fictitious objections can hide their real reasons for the opposition. Respectfully submitted, SYLVAN GOTSHAL, Weil, Gotshal & Manges, Attorneys. Statement LIBRARY OF CONGRESS, LEGISLATIVE REFERENCE SERVICE, COMMENTS ON "THE NATION'S MOST PROSPEROUS INDUSTRY": 1 "The textile mill products industry is now the most highly profitable manufacturing industry in the United States the corporate return on net worth for all United States manufacturing industries was 28 percent in 1947-in contrast to textile's 47.6 percent return." Comment Data relating to profits of all corporations, prepared by the FTC and by the Department of Commerce, generally bear out the statement with respect to profits of all manufacturing corporations in 1947. It is more difficult to vertify the estimate of return on net worth obtained by the textile manufacturers. FTC data indicate a return before taxes in the first quarter of 1947 at the annual rate of 40 percent, but a drop to 31.2 in the second quarter. National City Bank preliminary estimates for the year 1947, however, indicate a 40.7 percent rate of return after taxes for a number of cotton goods manufacturers, and 31 percent after taxes for cotton goods and other textile manufacturers. Statement "Profits before taxes in the textile mill products industry, including corporate and unincorporated business, reached the $2,000,000,000 mark in 1947, an amount equal to the total profits earned by the industry in the 14 years from 1929 through 1942 * * The statement refers to profits of incorporated and unincorporated business in 1947 but the profits for the years 1929 through 1942 are profits of the corporations only, in the industry. If the income of proprietorships in the industry were added for the 14-year period, the total would be $160,000,000 higher than the total for 1947, using the figures contained in the TWUA report. It is not certain that all profits for 1947 were as high as estimated in the statement, but conclusive data on the volume of profits are not at hand. 1 The Nation's Most Prosperous Industry. Union Square, New York 3, N. Y., Jan. 10, 1948. Textile Workers Union of America, CIO, 15 Other parts of the statement refer to data contained in the tables of the TWUA report. Statement * * the 1947 profits before taxes constituted a return in 1 year of almost one-half of the value of stockholders' claims on the business. The companies themselves have capitalized their (profits') value through their own stock issues, capital surplus, and the accumulation of undistributed profits." The National City Bank estimates referred to above would indicate that after taxes 40 percent or more of stockholders equity including accumulated earnings, was gained in profits in 1947, by cotton goods manufacturers. Statement Profit margins have been rising ever since wartime restraints were impaired and finally removed in 1946 with the elimination of OPA controls. The result has been an increase in reported wholesale prices of textile products of 48 percent from the end of the war to the end of 1947. The textile profit margin (16.6 percent of sales) far exceeds the average margin enjoyed by manufacturing corporations in 1947 (11 percent)." Wholesale prices increased 48 percent between August 1945 and December 1947, for textile products covered by the BLS series. Wholesale prices for all commodities covered in the series increased 54 percent in the same period. Wholesale prices of textiles increased 35 percent from June 1946 to December 1947. Wholesale prices of all commodities increased 44 percent in the same period. Wholesale prices of textiles increased 111.8 percent from the 1939 average through December 1947. Wholesale prices of all commodities increased 111.5 percent from the 1939 average through December 1947. The FTC study of corporate sales and profits in the first quarter of 1947, unrevised, indicates textile company profits of slightly more than 17 percent of sales; the revised estimates for the first quarter indicate 15.8 percent, and 13.7 percent for the second quarter of 1947. The same study indicates that all manufacturing corporations made 12.4 percent in the first quarter and 11.1 percent in the second quarter, comparing profits and sales. Profits before taxes were used in the calculation of profits as a percent of sales. J. C. JACKSON, General Research Section. Congressman EARL R. LEWIS, Chairman, Subcommittee on Patents, PASSAIC, N. J., February 24, 1948. Old House Office Building, Washington, D. C.: We are strongly in favor of and urge passage of H. R. 2860 providing for the protection of designs in textile fabrics but we strongly oppose the amendment submitted by the president of the National Association of Wool Manufacturers, the effect of which, in our opinion, would largely nullify the purposes of the act and limit the development and protection of original designs created on harness looms or knitting machines. We consider this matter of extreme importance to the future of the wool industry in this country and hope this committee will recommend enactment of the legislation without the amendment mentioned. LOWE DONALD & Co., INC. Congressman EARL R. LEWIS, Chairman, Subcommittee on Patents, NEW YORK, N. Y., February 24, 1948. Old House Office Building, Washington, D. C.: We are strongly in favor of the passage of H. R. 2860, providing for the protection of designs in textile fabrics, but we strongly oppose the amendment submitted by the president of the National Association of Wool Manufacturers, the effect of which, in our opinion, would largely nullify the purposes of the act and limit the development and protection of original designs created on harness looms or knitting machines. We consider this matter of extreme importance to the future of the wool industry in this country and hope your committee will recommend enactment of the legislation without the amendment mentioned. Congressman EARL R. LEWIS, JOHN B. ELLISON & SONS, INC. SAN FRANCISCO, CALIF., February 24, 1948. Chairman, Subcommittee on Patents, House Judiciary Committee, Old House Office Building, Washington, D. C.: We are strongly in favor and urge the passage of H. R. 2860, providing for the protection of designs in textile fabrics, but we strongly oppose the amendment submitted by the president of the National Association of Wool Manufacturers, the effect of which, in our opinion, would largely nullify the purposes of the act and limit the development and protection of original designs created on harness looms or knitting machines. We consider this matter of extreme importance to the future of the wool industry in this country and hope your committee will recommend enactment of the legislation without the amendment mentioned. Congressman EARL R. LEWIS, Chairman, Subcommittee on Patents, KEMP-BOOTH CO., LTD. NEW YORK, N. Y., February 24, 1948. Old House Office Building, Washington, D. C.: As it is vitally important to the wool industry of this country and to the protection and encouragement of creative work for the development of original designs made on harness looms or knitting machines, we strongly urge the enactment of the legislation covered by H. R. 2860. We are emphatically not in favor of the amendment submitted by the president of the National Association of Wool Manufacturers. If accepted, this amendment would make it virtually impossible to promote and protect original textile designs. We urge that your committee recommend passage of the act without the amendment. AMALGAMATED TEXTILES, LTD. NEW YORK, N. Y., February 24, 1948. Hon. EARL R. LEWIS, Chairman of Subcommittee on Patents of the House Judiciary Committee, You have our unqualified support of your bill H. R. 2860, which should not be amended, and we thank you for trying to give protection to originators against pirates. MEYER WOOLENS, INC. Hon. EARL R. LEWIS, NEW YORK, N. Y., February 24, 1948. Chairman, Subcommittee on Patents, Trade-Marks, and Copyrights, House Office Building, Washington, D. C. DEAR CONGRESSMAN LEWIS: Our attention was called to your view of the dangers implicit in the language presently contained in section 9 (c), subsections i and ii of H. R. 2860, now under consideration by your committee. It is earnestly hoped, should your committee decide to report that bill favorably, that it will recommend amendments with respect to subsections i and ii as follows: Delete the words "a temporary restraining order or/an" which appear in subsection i; delete the words "either preliminary or final" and insert the words "a final" so that subsection i would read as follows: "(i) He sells an infringing textile which he has purchased after receiving written notice that a final injunction has been issued forbidding the manufacture or sale of the infringing textile, together with a sample or copy of the enjoined design; or" Delete subsection ii in its entirety. Renumber paragraph iii to paragraph ii. The objections which this association advanced to the enactment of the bill are still urged upon your committee with all of the emphasis at our command. As stated by our general counsel in response to a question put to him by Mr. Fenning, the National Retail Dry Goods Association and its membership would oppose the bill notwithstanding favorable action by the committee on the amendments herein suggested. NATIONAL RETAIL DRY GOODS ASSOCIATION. NEW YORK, N. Y., March 2, 1948. Representative EMANUEL CELLER, House Office Building, Washington, D. C.: As one of the largest and long-established textile-designing firms we hereby urge immediate annihilation of the textile-design copyright bill now in the House Judiciary Committee. This bill represents selfish personal interests and will throttle free American business enterprise. As citizens and businessmen, we are shocked that such a bill would be given consideration in the United States of America. Congressman EMANUEL CELLER, JOHN J. MAIBACH, President, Foremost Studio, Inc. PHILADELPHIA, PA., March 4, 1948. House Office Building, Washington, D. C.: Oppose textile-design copyright bill. Recommend consulting designers before action. HAROLD R. RICE, Dearn Moore Institute of Art, Science, and Industry. NEW YORK, N. Y., March 3, 1948. Congressman EMANUEL CELLER, House Office Building, Washington, D. C.: I am professionally engaged in textile designing and employ a group of artists. May I take this opportunity of expressing my opposition to the textile design copyright bill before you. L. KIPP, President, Kipp Studio, Inc. NEW YORK, N. Y., February 24, 1948. Congressman EMANUEL CELLER, House Office Building, Washington, D. C.: We are American artists, who earn our living by creating textile designs. We oppose the textile design bill, H. R. 2860. Congressman EMANUEL CELLER, JAMES VILLANI, JUSTINA COLONNA, MARION FRANCIS, AL LASKA, NEW YORK, N. Y., February 24, 1948. House Office Building, Washington, D. C.: We believe that the Hartley textile design bill is unfair, detrimental, and harmful to all of the American textile designers and that the group of people in our employ agree with us in our thoughts that this bill should not be passed. We feel that if the bill is passed the textile design industry for printed fabrics will fall into a monopoly group. We also feel from previous experience that the group favoring this bill are trying to create a racket for themselves and not |