Scribner v. Straus

Background

Two lawsuits were brought by Charles Scribner’s Sons (one as a partnership, one as a corporation) against R. H. Macy & Company, a large department store. Several publishers formed the American Publishers’ Association in 1901 and agreed to sell copyrighted books only to retailers who would maintain the publishers’ retail prices for one year. Scribner’s invoices and catalogs warned that certain copyrighted books were sold on condition that prices be maintained. New dealers were asked to sign a pledge; Macy refused to join the association and sold some copyrighted books at lower prices after buying them from other dealers.

Reasoning

The Court reviewed whether the publishers’ notices and association rules created a copyright-based restriction that would let them stop Macy, and whether Macy had induced dealers to break their pledges. The lower courts found the notices did not reserve any copyright right to control resale prices. The Court of Appeals also explained the federal courts could not decide broader property claims apart from copyright because there was no diversity of citizenship and no $2,000 damage claim required to hear those separate rights. On the facts, both lower courts concluded there was not enough proof Macy induced dealers to violate their agreements, and the Supreme Court affirmed these findings.

Real world impact

As affirmed, the decision left Macy free to discount copyrighted books under the record here because the publishers’ notices did not create an enforceable copyright restriction and there was no proof of inducement. The ruling turns on the specific notices, the evidence about inducement, and the federal-court limits noted, so outcomes could differ with different facts or claims.