Copyrights-Liabilty of Store Owner for Sale of Infringing Phonograph Records by Concessionaire

Defendant H. L. Green Company licensed defendant Jalen Amusement Company as concessionaire of the record departments in twenty-three of its stores. The licensing agreement required Jalen’s employees to follow all Green’s rules and regulations and empowered Green to discharge any employee found to be conducting himself improperly. The gross receipts of the record department were collected by Green, Jalen receiving only the amount remaining after deductions for the license fee, salaries, and taxes. Although Jalen ordered and paid for the records and its employees made all the sales, record purchasers were unaware of Jalen’s autonomy in the record department. Plaintiff, copyright proprietor of several musical compositions, alleged that Jalen had manufactured recordings of these compositions in violation of section 101(e) of the Copyright Act. Plaintiff also alleged that Green had violated the same section by contributing to and participating actively in the sale of these recordings. The trial court found Jalen liable but dismissed the complaint as to Green. On appeal from the order dismissing Green, held, reversed and remanded for determination of damages. A concession licensor having control over the employees and benefiting proportionately from the sales of a licensee-vendor is liable in the amount of the statutory damages assessed for the sale of records infringing on copyrighted musical compositions. Shapiro, Bernstein b Co. v. H. L. Green Co., 316 F.2d 304 (2d Cir. 1963).