TWENTIETH CENTURY MUSIC CORP. v. AIKEN

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Argument of Simion H. Rifkind

Chief Justice Mr. Chief Justice Burger : We'll hear arguments first this morning in Number 74-452, Twentieth Century Music Corporation against Aiken.

Mr. Simion H. Rifkind: Mr. Chief Justice --

Chief Justice Mr. Chief Justice Burger : Mr. Rifkind.

Mr. Simion H. Rifkind: And may it please the Court.

This case comes here on the petition for certiorari to review of decision of the Court of Appeals for the Third Circuit.

The petitioners have brought this suit to enforce their copyright claims against the respondent Aiken, who they alleged had infringed their rights by a public performance for profit of two songs, one the copyrighter which belonged to each of the petitioners respectively.

The district judge granted the statutory damages in favor of the plaintiff below of $250.00 for each infringement, the Court of Appeals reversed.

Its asserted ground for reversal was that Aiken's conduct did not amount to a performance though it was public and it was for profit.

The facts are simple.

Respondent Aiken owns and operates a chain of fast food restaurants in the City of Pittsburgh.

He decided to entertain his costumers and to improve the efficiency of his employees by furnishing them with popular musical performances throughout the business day.

There were, as I believe we can take judicial notice, available to him several methods by which his purposes could be accomplished.

One, he could hire one or more musicians to play such compositions as he or his agent selected from the cheap music generally available to the public.

Secondly, he could if he chose equipt the premises with one or more machines that reproduce music mechanically when supplied with either records or tapes or piano roles, depending upon the nature of the particular machine that he decided to use, and these too are generally available for purchase by members of the public.

Or he could subscribe to a service like Muzak which provides musical compositions for use in premises by machinery equipped for that purpose.

And finally, he could if he wished, equipt his premises with a radio receiving set connected to an electric source of energy, install a sufficient number of loudspeakers so as to disseminate the sound agreeably throughout the premises that he wished to serve, and cause the radio receiving set to be oriented by his selection to any kind of music that he preferred from among the many that were being broadcast within the Pittsburgh area by the several stations doing business there.

Aiken in fact chose the last mentioned method.

I don't think I need to argue the point that it was the least costly method.

The district judge after trial found that on the 11th of March 1972, Aiken had caused the costumers and employees in one of his restaurants to be entertained by two compositions of which the petitioners were respectively the copyright owners

These compositions were received over Aiken's radio and were distributed through his restaurant and employment spaces through five loudspeakers which he had installed in the premises.

These two compositions which he so played were broadcast that day by a FM station located in Pittsburgh and licensed to broadcast those compositions.

Aiken however had no license for the public performance for profit of these compositions and the radio station had no authority to confer such permission upon Aiken.

Justice William H. Rehnquist: There was no possibility of any implied license then, as that was referred to in the Jewell-LaSalle.

Mr. Simion H. Rifkind: That is Precisely, Mr. Justice Rehnquist.

The possibility of an applied license had been expressly and explicitly withdrawn in the license issued by the copyright owners to this particular station as to all stations, and that had been true since 1932.

So this --

Chief Justice Mr. Chief Justice Burger : Mr. Rifkind, I'm not sure it's terribly important but I could not find in the record the aggregate number of loudspeaker outlets in all of his establishments.

Mr. Simion H. Rifkind: My understanding of the record is that there were five.

Chief Justice Mr. Chief Justice Burger : Just five?

Mr. Simion H. Rifkind: Some in the public spaces where costumers were entertained and some in the workspaces where the employees were --

Chief Justice Mr. Chief Justice Burger : But that's just in one restaurant, is it not?

Mr. Simion H. Rifkind: It's all in one restaurant.

Chief Justice Mr. Chief Justice Burger : And he has only one?

Mr. Simion H. Rifkind: Oh no, he has other restaurants, but this particular infringement was of course brought as a test situation for the particular two songs that we are talking about.

The District Court granted the plaintiff below the monetary damages requested which was $250.00 for each composition at the statutory rate.

As I've already stated, the Court of Appeals reversed that and I submit that I can state with confidence that the business purpose behind the selection of any one of the methods by which Aiken could have supplied musical entertainment to his guests and employees was identical.

It was to entertain guests and it was to improve the efficiency of his employees.

This much I believe is clear on the record, and all of these methods which ever one he selected would have to have recourse to music created by composers and made available to the public by means of either cheap music, records, tapes,piano roles or broadcast of electrical impulses.

And I suggest that until the Third Circuit had spoken, it was firmly established that no matter by which method Aiken entertained his guests and employees, he was bound to abstain unless he had a license from the copyright owner, such as ASCAP of course.

And of course such licenses were universally available under the compulsion of a decree which is enforced with respect to ASCAP.

I believe that it is still unquestioned that live performances in the restaurant by live musicians would be subject to the copyright laws and subject to Section 1 thereof, and that has been true certainly since Mr. Justice Holmes wrote Herbert against Shanley way back in 1917.

I believe it is still unquestioned that the record, tape, piano role method or electronic method of music is a public performance for profit, and indeed so the Third Circuit itself had held on a number of times.

And now the Third Circuit has decided that the last method, namely the radio plus loudspeaker method, although realistically and functionally indistinguishable from any of the other methods of furnishing the music, is for some reason beyond the reach of Section 1 of the Copyright Act although it is public, although it is for profit, but the Circuit Court said it is not a performance, and at arriving at that conclusion that it was not a performance, it said that it acted under the composure of this Court's mandate as expressed in the two CATV cases, the Fortnightly case and the Teleprompter case and it is that determination of the Court of Appeals that I most distinctly want to challenge.

We challenge it and we challenge that decision on several grounds.

We assert first that the old landmark decision rendered in 1931 entitled Buck against Jewell-LaSalle and reported in 283 U.S. by a majority court in an opinion written by Mr. Justice Brandeis, controls this case and that the judgment therefore should have gone for the petitioner.

We also assert that Buck against Jewell-LaSalle can coexist in the same legal universe as Fortnightly and Teleprompter and that there is no incompatibility between them because Fortnightly and Teleprompter unlike this case, were concerned with a new technological development, never prior thereto with -- brought within the copyright system and never subjected to copyright royalty burdens and respect of which Congress had been quite silent.

And thirdly, that in any event, private arrangements have for over 40 years been made between the creators and consumers of mucic in reliance on Jewell-LaSalle and that Jewell-LaSalle therefore ought to be allowed to survive until Congress directs otherwise.

As far as the congressional voice is concerned, if I can read the incomplete compositions of that -- of those body, I can say that it seems to be targeted towards the continued viability of the doctrines of Jewell-LaSalle.

Now, to develop some of those points a little more explicitly, in a sense, this case is of course concerned with the construction of a section of the Copyright Law, Section 1 thereof.

And that is of primary interest to the authors, composers and publishers of music whom the founding fathers expressed the desire to encourage in the Copyright and Patent Clause of the Constitution.

But from the point of view of the development of our jurisprudence, I believe that more is involved than whether respondent Aiken has to pay $5.00 a month for the privilege of entertaining his business guests and improving the morale of his employees with music created by the copyright owners.

I suppose that the statute means exactly what this course declares it means.

And as I've stated a little while ago, ever since 1931, which is 44 years ago, the meaning of that statute was made plain in the case that I have cited Buck against Jewell-LaSalle.

It declared that Section 1 meant that one situated exactly like Aiken in this case and who did exactly what Aiken did in this case subjected himself to liability as an infringer of copyright, unless he was licensed to do what he did.

The Court of Appeals in its analysis acknowledged that the case here under review is an all force with the facts of the case in Jewell-LaSalle.

Over 5000 contracts are now extent that we know of which have been entered into in reliance and in observance of Jewell-LaSalle, and in that case Mr. Justice Brandeis for a unanimous court said “There is no difference” -- we give you the exact language if I may.

“There is no difference in substance between the case where a hotel engages an orchestra to furnish the music, and that where by means of the radio set and loudspeakers here employed, it furnishes the same music for the same purpose.”

Chief Justice Mr. Chief Justice Burger : Is not there one difference, Mr. Rifkind, in this sense possibly, to the question, do you think there's a difference since the radio station is selling advertising, presumably, and I would assume that as a matter of economics, the advertising rate is based upon the coverage of the radio station that it differs from the orchestra in the sense that the orchestra has no advertising, and the radio station is getting -- radio station having paid the royalty is getting a larger income because of the standard audience of restaurants, hotels, business establishments, etcetera.

Mr. Simion H. Rifkind: Let me explain that most explicitly.

The rates established between the licensing organization, in this case ASCAP, which speaks for the owners of these compositions and the radio industry is determined under a system which is subject to judicial surveillance under the decree in United States against ASCAP, which has been administered in the Southern District of New York since 1940 and amended in 1950.

If my history, if my recollection of the dates is correct and I believe it is.

Those terms are negotiated in terms of what rights are conferred upon the broadcaster.

In this particular situation, broadcasters are expressly excluded from the right of conferring any authority upon people in Aiken's position, and consequently the rate that they pay takes into account the fact that ASCAP will collect another fee from the Aikens of this country, and therefore the fee paid by the broadcasters does not overlap the fee paid by the Aikens.

The District Court and the Court of Appeals both agreed that the circumstance that the radio station in Jewell-LaSalle was unlicensed and that here it was licensed was a difference without significance.

The -- I've explained why the suggestion that Mr. Justice Brandeis made in the footnote, as I believe Mr. Justice Rehnquist called attention that there might conceivably be -- the argument might be made that there's an implied license is no longer valid because in 1932 that was explicitly excluded.

Logically, I should say, the suggestion of an implied license underscores the conclusion that the hotel or Aiken was performing and performing publicly for profit, because if it was not performing or not performing publicly for profit, there'd be no point in talking about a license.

It's only public performance for profit that requires a license, so Mr. Justice Brandeis' discussion of a possible implied license necessarily emphasizes his view that there was a performance and of course a performance for profit.

Now, the Third Circuit seemed to be under the impression that Jewell-LaSalle had been overruled by this Court.

And I believe that therein, again I find myself in sharp disagreement with that Court.

I suppose it can not be challenged that this Court has never yet uttered the talismanic phrase which actually would decanonize Jewell-LaSalle.

This Court had said in Fortnightly that Jewell-LaSalle should be understood as limited to its own facts.

The facts here are the very facts to which the Court said it should be limited to, and that is the very converse of treating it as overruled.

Words of limitation to facts, a phrase not unusual in the opinions of this Court, I've always thought meant that the principle of the case may no longer be regarded as an axiom from which new theorems and new propositions might logically be deduced.

The Court of Appeals went much further than that.

It has acted in reliance on the anticipation that this Court will overrule Jewell, and we entertain the hope that that prophecy is not a valid one.

Be contend that the Court should not overrule Jewell.

Indeed we assert that this case presents a conspicuous example of the salutary purposes of the rule of stare decisis.

For instance, I've already mentioned, very many people have shaped their business conduct in observance of and in reliance on that case.

Moreover, the rule offends no moral principle.

It does not offend good judgment as is evidenced by the fact that all over the world, Jewell-LaSalle is in fact lived by and if it should appear that this Court thinks that some different policy should now prevail, it seems to me that the proper agency to grapple with that is the Congress, and indeed the Congress is grappling with that problem at this very moment.

As Your Honors know, the Copyright Act has been under active consideration by the Congress for some time, and the delay in the new bill has been not Jewell-LaSalle, but the delay has been caused by the inability of the Congress to decide what to do about CATV.

Fortnightly, the first CATV case, was the first occasion on which the Jewell decision was ever questioned in this Court.

In that case, there were a number -- there was one dissent and three nonparticipants.

In that case the Court confronted a brand new industry which had never been subjected to the copyright system, a new technology.

And then in 1974, the Court encountered another further development of that same technology in Fortnightly which brought signals beyond the realm of the original antennae.

But neither of the majority nor the minority in either of those cases suggested that Jewell should be overruled.

The majority never even mentioned Jewell in the last Teleprompter case, and no justice to express the thought that hotel keepers and restaurateurs were free to entertain guests and stimulate employees by the free use of their music.

Aiken's behavior belongs to the unsophisticated realm of what we are fully familiar with, and it wouldn't be a bad idea therefore to see how the world regards that kind of behavior.

I shall be brief and say that Great Britain, Canada, New Zealand, Australia, France, Germany and every other country I could find any evidence of treats Aiken's performance as a breach of the copyright privilege.

In the functional sense which is the idea introduced into this field by the decisions in Fortnightly and Teleprompter, comparison was made to the viewer erecting a giant antennae.

And I would like to suggest that another way to look at it would be as if it was a giant ear trumpet which made it possible for the listener to get signals which otherwise he couldn't hear.

And here's the point I want to make the distinction between those two kinds of cases.

The purveyor of ear trumpets doesn't exploit music even though he sells them on the lobby of the opera house, but the furnisher of music to his costumers does exploit music no matter by what means as long as they're within his control that he brings it to bear upon business guests and his business employees.

Justice Potter Stewart: Go to a barbershop and the radio is turned on, a three-chair barbershop, does the barber have to --

Mr. Simion H. Rifkind: That's a --

Justice Potter Stewart: Pay ASCAP license?

Mr. Simion H. Rifkind: Fair question.

I think the real question is, is the barber playing that music for his own entertainment or is he doing it for business purpose?

Justice Potter Stewart: Let's say the facts are stipulated that he's doing it for the --

Mr. Simion H. Rifkind: And I will only report the practice.

Justice Potter Stewart: Pleasant reaction of his costumers.

Mr. Simion H. Rifkind: The practice has been to impose no royalty charge on the one set type of operation.

Justice Potter Stewart: Why not?

Mr. Simion H. Rifkind: Because it is impossible to draw the line on a nationwide basis --

Justice Potter Stewart: But you're drawing the line.

Mr. Simion H. Rifkind: I beg your pardon?

Justice Potter Stewart: What do you mean impossible?

You've just told us you've drawn a line.

Mr. Simion H. Rifkind: I draw a line between the self-entertainment and the business entertainment.

Justice Potter Stewart: No, no this is a barbershop --

Mr. Simion H. Rifkind: This is the barbershop and the barber of course can entertain himself as well as his costumers.

Justice Potter Stewart: So the restauranteur in this case?

Mr. Simion H. Rifkind: Not when he puts in 5 or 50 or 100 loudspeakers.

Justice Potter Stewart: Now, this is four or you say five, the record seems to indicate four.

But what is the difference?

Why do you draw the line?

Mr. Simion H. Rifkind: It is to some extent, a practical accommodation to the facts of life that you go in to a small grocer who has a little set on his counter which he amuses himself, papa and mama are running an establishment, we say that's for their personal entertainment and only incidentally if at all for business purposes.

When you take a restaurant and install 3, 4 or 5 or 50 loudspeakers, we say that's a business exploitation of the music.

Now, all questions of this kind involve --

Justice Potter Stewart: But if this one is a performance, so is the other, is it not?

Each is a performance and that's a critical word under the statute, is it not?

Mr. Simion H. Rifkind: Each is a performance, but it is hard to see that you can say with assurance in any particular occasion, Your Honor suggest to me one way stipulated that he's doing it for business purposes.

I think if it was stipulated for business purposes, then technically speaking he would be performing publicly for profit and be subject to a charge.

But as a practical matter, no licensing organization that I know of has ever pursued such a course of conduct.

Justice Potter Stewart: How about a dentist's office?

Mr. Simion H. Rifkind: Same thing.

No one set type that is usually used in the home has ever been subjected to a royalty or to a license requirement.

Justice Potter Stewart: No, no we're not talking about a home, we're talking about public performance.

Mr. Simion H. Rifkind: No, I say if the home type of radio has ever been subjected, the kind of thing that the man would have in his home, and the Congress recognizes the distinction in all of the new bills that have been introduced.

Justice Potter Stewart: Well, Congress hasn't enacted any?

Mr. Simion H. Rifkind: Not yet.

Justice Potter Stewart: So it hasn't recognized any of these things?

Mr. Simion H. Rifkind: The House has passed a bill in '67.

The Senate passed a bill in '74.

They are substantially the same on this.

The Senate's Bill was passed I think by a majority of 70 to 1.

They recognized the principle of Jewell-LaSalle, both bills do.

And the thing that has slowed down the enactment is been the problem with the CATV stations.

I will suspend if I may and I would like to reserve the balance of my time for response.

Chief Justice Mr. Chief Justice Burger : Very well Mr. Rifkind.

Mr. Cohen.

Argument of Harold David Cohen

Mr. Harold David Cohen: Mr. Chief Justice, members of the Court.

The argument of my distinguished adversary has a captivating sound, but essentially I believe it begs the very question in dispute.

I think Mr. Justice Stewart has put his finger on the point.

The question is whether the Court of Appeals erred in deciding that when Mr. Aiken in his fast food shop where he has people in for not more than 15 minutes at the most, 60% of the costumers come in to pickup the delicatessen and take it out within two or three minutes, if they decide to consume it on the premises, then they can take it on disposable paper over to a counter.

No waitresses are supplied and they can stay there and eat it, and it's usually about 10 minutes, a maximum of 15 minutes.

I would agree with my learned brother that if Mr. Aiken hired the Pittsburgh Symphony Orchestra to perform in his fast food establishment, or a trio of musicians, or he put in complicated equipment whereby he could go out and buy tapes, select tapes and decide when they should be run without commercials, and perhaps with some advertisements for Aiken's that he might well be chargeable with infringing the copyrights of the music he performed, but that is not this case.

We are concerned with the simple question whether on this particular day on this one store and the record deals only with one store, and I think it is a euphemism to call it a restaurant.

Whether on this day he engaged in a performance of ASCAP's two musical compositions when he turned his radio to an FM station in Pittsburgh and the radio broadcast came through the air to his store and were heard by his three employees and such costumers as happened incidentally to be on the premises.

Chief Justice Mr. Chief Justice Burger : To see, if I understood your illustration, Mr. Cohen.

If the restaurant or store or factory took a typical tape recording machine which many people now use to preserve good programs, and copied all the good programs that he thought his costumers would like and eliminated the advertising, and then had those running by five loudspeakers or three or ten within his establishment, do I understand you to say that might run afoul --

Mr. Harold David Cohen: Yes there is --

Chief Justice Mr. Chief Justice Burger : Or a Buck case?

Mr. Harold David Cohen: No, not at the Buck case.

The Buck case had to do with radio broadcast.

I think it might run afoul of another provision or section apart of Section 1 (e) of the Copyright Act.

That is, there is an exclusive right to record performances and I think if there were tapes or records, that might be an infringement.

Chief Justice Mr. Chief Justice Burger : This would be like copying recordings --

Mr. Harold David Cohen: That's right.

Chief Justice Mr. Chief Justice Burger : But they have to pay a royalty.

Mr. Harold David Cohen: But in this instance, he has no control over what comes in.

The broadcasters as this Court has stated in the Fortnightly case and repeated in the Teleprompter case, are performing.

They are the ones who go out and select the programs.

They're the ones who make the arrangements with the talent sources, with the record companies, with ASCAP and other performing rights organizations.

Justice Potter Stewart: And they pay for the licenses?

Mr. Harold David Cohen: They pay ASCAP for their royalties.

Justice Potter Stewart: And they charge their own costumers --

Mr. Harold David Cohen: They charge their costumers --

Justice Potter Stewart: On the basis of how large listening audience they have?

Mr. Harold David Cohen: Exactly.

And I'm sure that when this FM station goes out and makes the pitch to the advertiser, he says “We can reach people whether they're at their home, or in their cars driving to from their homes, or whether they're in stores, or whether they're waiting in doctors' offices, or whether they're sitting on a barber's chair, or wherever.”

In other words, he tries to maximize his audience so that his revenues will be greater, and in turn ASCAP profits because the amount which it receives from the broadcaster is the percentage of the broadcaster's revenues.

So what in effect they are trying to do here stripped of some of the language is to exact the double payment.

There's nothing in the record that indicates that when they go to the broadcaster they say, “Well, we're not going to charge you as much as we otherwise might because we're going to get Mr. Aiken to give us $60.00 a year.

So we're going to take or deduct that from the amount that you are going to have to pay.”

Justice William H. Rehnquist: Well, Mr. Rifkind says they've been doing that for 40 years and they've been doing it on the authority of Jewell-LaSalle.

Mr. Harold David Cohen: It's curious indeed that if for 40 years they have been doing it, they have 5,150 licenses.

I think we can take notice of the fact that there are hundreds of thousands of establishments in this country like Mr. Aiken's.

Barbershops, beauty salons, doctors' offices if you will, restaurants and if they have 5000 licenses and these are hotels and motels and large supermarkets and the like, it does not show that they have vigorously relied upon Jewell-LaSalle as a basis for --

Justice William H. Rehnquist: Well, does that include Muzak, the 5000 figure?

Mr. Harold David Cohen: No the 5000 figure does not include Muzak.

Muzak is a performer.

That is the Muzak franchisee which supplies or actually performs a Muzak to the business establishment, does perform, does pay a royalty to ASCAP and that is separate, and that will continue to be paid in whatever amount the Court may deem reasonable and nondiscriminatory.

That will continue to be paid regardless of the outcome of this case.

Justice William H. Rehnquist: Do you think this case is factually distinguishable from Jewell-LaSalle?

Mr. Harold David Cohen: It's factually distinguishable --

Justice William H. Rehnquist: In any --

Mr. Harold David Cohen: On two grounds.

Justice William H. Rehnquist: Rational manner.

Mr. Harold David Cohen: Well, certainly the ground that you indicated namely, the license implied in this case -- which may be implied in this case by virtue of the fact that the broadcasting station was authorized in Pittsburgh, whereas the broadcasting station in Kansas City in the Jewell-LaSalle case was not authorized by the copyright owners, is a significant point of distinction.

Justice William H. Rehnquist: But I thought the terms of the license of the broadcasting station negated any authority on its part to license anyone else?

Mr. Harold David Cohen: We are not saying that there is necessarily a license implied in fact, but there's certainly is a license implied in law.

I do not believe that ASCAP can contrive language whereby they can say this, a broadcaster “We are going to license you to broadcast that is disseminate to the public our compositions, and we want you to pay us a royalty.”

These are to go over the air to all members to the public and then say that Mr. Aiken or his costumers who are members to the public can not receive those broadcast without payment of the fee.

Another point of distinction of course is that if we got into the quantitative test, which of course has since been discarded by this Court.

Obviously, what Mr. Aiken has done in his store, which is a small room with two outfits on the ceiling of the public area or two speakers are located, and three other speakers, one on the washroom, the girl's washroom, one in the kitchen and one at the office for his employees is vastly different from the complicated mechanism of the large master radio receiving set in Jewell-LaSalle which piped Muzak to 200 rooms throughout the hotel.

Or in the Statler Hotel case in New York where they had a radio engineer and two assistants on top of the building and they piped music through the ducts to 1900 rooms, and there they held it was a performance upon the authority of Jewell-LaSalle.

That is not this case.

However, I am not relying upon that because I think this Court has clearly stated in the Teleprompter case and on the Fortnightly case before, that viewers of television and by a parody of reasoning, listeners to radio broadcast do not perform, the broadcasters perform.

It's difficult to conceive functionally how Mr. Aiken can be said to be performing music in his establishment when he has no control over what is being broadcast, when it is being broadcast.

He has no dealings with advertisers.

He has no idea of the tempo of the music or the kind of the music that is going, coming over, except as Mr. -- Judge Rifkind pointed out.

Of course he may select one station because he thinks it may be more pleasing to him or people in his store, particularly his employees than another station.

But the fact is, he does not attempt to edit anything that comes over.

He gets the commercial announcements.

He gets the station identifications, the public service announcements, the news, as well as the music.

I'm sure that it would put an unbearable strain upon the ordinary meaning of performance.

Perhaps someone sitting in Mr. Aiken's shop consuming a hamburger regard Mr. Aiken as a performer of the music.

This music is coming to you from station WKJF FM, and there is nothing that Mr. Aiken does to intervene between that broadcast and the listening by the people primarily his employees.

Incidentally --

Justice Thurgood Marshall: Mr. Cohen?

Mr. Harold David Cohen: Yup?

Justice Thurgood Marshall: If you know, what about a record player that's hooked up through an amplifying system.

Mr. Harold David Cohen: Well, the record player I would say --

Justice Thurgood Marshall: Or tape player.

Mr. Harold David Cohen: I would be inclined to say that that would be a performance because of the special provision on the statute, but if he has a record player or tape machine, he goes out and buys the tapes or rents the tapes.

Justice Thurgood Marshall: And selects them, selects what he wants.

Mr. Harold David Cohen: Selects what he wants, has control over what is being sent out.

And presumably, he can intersperse his own commercial announcements.

He may say “From the next five minutes you can get Aiken's chicken at 10% off.”

He could not do it here, he --

Justice Potter Stewart: But even if he doesn't, that's a performance, isn't it?

That's clearly a performance.

Mr. Harold David Cohen: Yes.

Justice Potter Stewart: A jukebox, so called.

Mr. Harold David Cohen: Well, the jukebox there's a special exemption for jukebox in the law which Congress is trying to modify to have an $8.00 jukebox charge imposed.

So far as the legislation is concerned upon which Mr. Rifkind depends, I think it's pretty hard to find in the silence of Congress over these last 10, 15 years any indication that Jewell-LaSalle must be adhered to, otherwise this entire complex of business relationships is going to fall.

Justice William H. Rehnquist: Would you think this Court in Jewell, in Teleprompter rather, intended to overrule Jewell-LaSalle which was a unanimous statutory decision on which presumably property rights have been established?

Mr. Harold David Cohen: Well, obviously this Court did not use the word overrule and I think the Supreme Court generally is reluctant to state explicitly that a former decision of the Court is overruled.

But to say that Jewell-LaSalle must be understood to be limited to its own factual context and to undermine the basic rationale of Jewell-LaSalle, the basic premise on which Jewell-LaSalle was decided, namely that there is a performance because of this -- of what the hotel did by having this elaborate equipment and substitute the functional analysis test of Fortnightly and Teleprompter, obviously in effect emasculates Jewell-LaSalle.

The vitality of Jewell-LaSalle is not what it was prior to the Fortnightly decision.

Justice Potter Stewart: Well Mr. Cohen it's -- I think the phrase was its limited -- must be limited to its own facts.

Mr. Harold David Cohen: Right.

Justice Potter Stewart: And one of the facts on Jewell-LaSalle was that the broadcasting station was unlicensed to sell.

Mr. Harold David Cohen: That was an important fact as I pointed out previously.

Justice Potter Stewart: That's one of its own facts.

Mr. Harold David Cohen: That is right.

Now --

Chief Justice Mr. Chief Justice Burger : From what you said Mr. Cohen --

Mr. Harold David Cohen: Yes sir.

Chief Justice Mr. Chief Justice Burger : I take it that all of your arguments would apply equally to the factual situation we have here, and a hypothetical restaurant let us say sits a thousand people as there are such with 20 different rooms, and in each room there was one outlet.

Mr. Harold David Cohen: Yes.

If it used radio broadcast, I think it would logically.

The difference comes of course a restaurant of that kind as the restaurant in the Herbert v. Shanley case to which my adversary eluded, may go in for a much different type of entertainment.

To say that the business motivation of Mr. Aiken is like that of a hotel owner in Herbert v. Shanley, it seems to me to be fictional.

The Vanderbilt Hotel in New York was concerned with the ambiance of its hotel restaurant so it had an orchestra play, and it had undoubtedly liveried waiters, and it had fine napkins and tablecloths.

That is not true of an establishment of this kind which is willing to have just the radio come in and have two speakers in the public area where the sound can be audible evenly throughout the premises.

The point is that my adversary is attempting to draw a line which I think is an arbitrary one -- artificial one between having a radio behind the counter encased in one cabinet that is it might have one speaker or two speakers, and that would not be a performance.

But he did have that in this particular shop, but he found it to be blared if you were close to it if you heard it too loudly, if you were a little further away you might not hear it as well.

And that blare did interfere with conversations with costumers, so instead he had speakers.

I was not unusual, these days I'm told, in fact it's quite common when you buy a radio to have speakers outside of the tuning device and you might put them ten feet away, you may have them the other part of the room, you may put it in another room.

But so far as Mr. Aiken's “performance” is concerned, he did nothing more than install this equipment.

He did not manipulate it once it was installed and is no different than if he had just one unit with the speakers incased in a cabinet so far as his function relative to the broadcast were concerned -- was concerned.

I think the reasoning of this Court in the Fortnightly and Teleprompter cases is dispositive of ASCAP's claim.

I think the Court of Appeals correctly perceive it to be.

It's certainly illogical, I would think to be clear that the function of a cable system has little in common with the function of a broadcaster, because like viewers and unlike broadcasters, they do not perform the programs they receive and carry, and then turn around and hold Mr. Aiken to be engaged in a performance.

Mr. Aiken is obviously on the listening side of the line.

As a matter of fact in the Fortnightly case and Teleprompter, many CATV systems serve commercial establishments as well as subscribers in there homes, to say on the one hand that the CATV system is on the listening side or the viewing side of the line, but Mr. Aiken who is a subscriber jumps over to the performing side of the line, seems to me to be arbitrary.

Justice William J. Brennan: Well, what's the situation of the Aikens if the new proposed new statute comes along?

Mr. Harold David Cohen: Well, the proposed new statute is rather complicated.

I must take issue with my friend Judge Rifkind.

Justice Mr. Justice White : Do you mean you're ought to be here even under the new statute making the same argument?

Mr. Harold David Cohen: I think the new statute attempts and the legislative history indicates that establishments such as Aiken's, small establishment or barbershops or so forth, would not be subject to liability.

And also, I may point out that the statute provides that there maybe transmissions even by a hotel to guest rooms without incurring any copyright liability.

As a matter of fact the legislative history will disclose that even ASCAP, Judge Rifkind's client did not attempt to enforce Jewell-LaSalle against hotels which piped music to guest rooms.

After the Statler case in New York was a victory for SCSACZAK which is a counterpart of ASCAP, there apparently was some question whether this was a performance for profit.

At any rate, the legislative history discloses that there was very little attempt to enforce the rights of the performing rights organization against hotels which transmitted programs to private rooms in hotel even though Jewell-LaSalle presumably gave them that right under the Jewell-LaSalle construction of the 1909 Act.

So, the answer to the question Mr. Justice Brennan is that I would be foolhardy if I attempted to prognosticate the effect of pending legislation.

As you know, there has been -- they have been studying the revision of the copyright law since 1955.

There was an authorization from Congress to the copyright office, extensive studies were made, there was, I refer to a report in 1961 as being the culmination of studies, but my opponent's reply brief says it was not the culmination but of course the foreword, though the report said, it is the culmination of studies.

At any rate, there were a lot of comments and discussions and compromises and they came out with a statute.

It passed one House, as Judge Rifkind pointed out, did not pass the other.

I do not know what may eventually come out of this.

But certainly, we are concerned here with the construction of an existing statute, and if this Court in 1931 decided a case on a premise or a doctrine which has been found not to be sound, not to be logical, it should be the responsibility of this Court to correct that decision not to wait for Congress to correct it.

Thank you.

Rebuttal of Simion H. Rifkind

Mr. Simion H. Rifkind: May I take advantage of the few minutes that I have.

Chief Justice Mr. Chief Justice Burger : for rebuttal, Mr. Rifkind.

Mr. Simion H. Rifkind: I gathered as I listened to my learned friend that there might be a distinction drawn between Jewell-LaSalle in this case and that the station in Jewell-LaSalle, the broadcast station was unlicensed and here it is licensed.

I think the argument advanced by one of the dissenting justices in Fortnightly, Mr. Justice Fortas.

Chief Justice Mr. Chief Justice Burger : The only dissenting justice, is it not?

Mr. Simion H. Rifkind: The only, excuse me, of course you are right.

I was thinking for a moment of Teleprompter.

In Fortnightly, he pointed out that the interpretation of the term performed cannot logically turn on the question on whether the material that is used is licensed or not licensed.

And I don't think there's any way of meeting that logical proposition.

More importantly, we have the distinction of a non-licensed station was a judicially first noticed and abandoned back in 1937 when Judge Woolsey in the southern district decided the Hotel Statler case, and since then and before then never once in all the literature of this subject, in all the discussions of the copyright office, in all the legislative discussion has there been so much of a trace of a distinction attributable to this coincidental fact.

I can see how logically it can play the role.

I heard the argument advanced that perhaps Aiken's performance was not for profit.

You heard a suggestion that the costumers only spent a little bit of time there and so on and so forth.

Well, on the merits of course that issue has been resolved by Herbert against Shanley where Mr. Justice Holmes made a cogent remark “It is true that music is not the sole object and neither is the food” he said.

If music didn't pay, it would be given up.

Mr. Aiken spent money to furnish music to his costumers.

He must have regarded it as money well spent.

I say, the issue below was treated as established.

Indeed it was not challenged seriously as the Court of Appeals pointed out, so that the issue is not really in this Court.

The petition for cert didn't mention it or neither did the answer to the petition for cert.

To suggest now at this late stage of this case that this Court should consider whether only music which is offered for sale by a ticket at the door is within the copyright statutes, I think that that's to extend the implications of this case far beyond what we are now confronting.

There was a question as to how many licenses of this kind were outstanding and the figure was given correctly, over 5000, But what was not stated that there are 75,000 establishments which used music, so I do not know and have no evidence of any information that there are lots of Aikens around this country.

But even if there were, that wouldn't change the fact if the copyright owners have a right against Aiken, they have a right to enforce it.

The suggestion was made that even though the implication of an -- the suggestion of an implied license is no longer tenable, in fact because the license to the radio station expressly excluded it that there was some kind of a doctrine by which ASCAP was prohibited from entering to that kind of an arrangement with the broadcast station.

Well, all I can say is that that's a startling notion.

Every time a piece of cheap music is installed at the corner store, it is -- gives confers authority upon the buyer to play it on his home.

That doesn't mean that he may give a performance for profit on that cheap music and escape royalty obligations.

Chief Justice Mr. Chief Justice Burger : Thank you gentlemen.

The case is submitted.