1984 Sony Betamax ruling (inside thread) what does it mean for recording HDTV?

Your thoughts???




Opinion of the Majority in

Sony Corp. v. Universal City Studios

464 U.S. 417, 104 S. Ct. 774, 78 L. Ed. 2d 574 (1984)


Argued on January 18, 1983; Reargued October 3, 1983

Decided on January 17, 1984


STEVENS, J., delivered the opinion of the Court in which BURGER, C. J., and BRENNAN, WHITE, and

O'CONNOR, JJ., joined. BLACKMUN, J., filed a dissenting opinion in which MARSHALL, POWELL, and

REHNQUIST, JJ., joined, post, p. 457.


JUSTICE STEVENS delivered the opinion of the Court.


Petitioners manufacture and sell home video tape recorders. Respondents own the copyrights on some of the television [p.420] programs that are broadcast on the public airwaves. Some members of the general ublic use video tape recorders sold by petitioners to record some of these broadcasts, as well as a large number of other broadcasts. The question presented is whether the sale of petitioners' copying equipment to the general public violates any of the rights conferred upon respondents by the Copyright

Act.


Respondents commenced this copyright infringement action against petitioners in the United States

District Court for the Central District of California in 1976. Respondents alleged that some individuals had

used Betamax video tape recorders (VTR's) to record some of respondents' copyrighted works which had

been exhibited on commercially sponsored television and contended that these individuals had thereby

infringed respondents' copyrights. Respondents further maintained that petitioners were liable for the

copyright infringement allegedly committed by Betamax consumers because of petitioners' marketing of

the Betamax VTR's. n1 Respondents sought no relief against any Betamax consumer. Instead, they

sought money damages and an equitable accounting of profits from petitioners, as well as an injunction

against the manufacture and marketing of Betamax VTR's.




--------------------------------------------------------------------------------


Notes

n1 The respondents also asserted causes of action under state law and Sect. 43(a) of the Trademark Act of 1946, 60 Stat. 441, 15 U. S. C. Section 1125(a). These claims are not before this Court.


--------------------------------------------------------------------------------


After a lengthy trial, the District Court denied respondents all the relief they sought and entered judgment for petitioners. 480 F.Supp. 429 (1979). The United States Court of Appeals for the Ninth Circuit reversed the District Court's judgment on respondents' copyright claim, holding petitioners liable for contributory infringement and ordering the District Court to fashion appropriate relief. 659 F.2d 963 (1981). [p.421]


We granted certiorari, 457 U.S. 1116 (1982); since we had not completed our study of the case last

Term, we ordered reargument, 463 U.S. 1226 (1983). We now reverse.


An explanation of our rejection of respondents' unprecedented attempt to impose copyright liability upon

the distributors of copying equipment requires a quite detailed recitation of the findings of the District

Court. In summary, those findings reveal that the average member of the public uses a VTR principally to record a program he cannot view as it is being televised and then to watch it once at a later time. This

practice, known as "time-shifting," enlarges the television viewing audience. For that reason, a significant amount of television programming may be used in this manner without objection from the owners of the copyrights on the programs. For the same reason, even the two respondents in this case, who do assert objections to time-shifting in this litigation, were unable to prove that the practice has impaired the

commercial value of their copyrights or has created any likelihood of future harm. Given these findings,

there is no basis in the Copyright Act upon which respondents can hold petitioners liable for distributing

VTR's to the general public. The Court of Appeals' holding that respondents are entitled to enjoin the

distribution of VTR's, to collect royalties on the sale of such equipment, or to obtain other relief, if

affirmed, would enlarge the scope of respondents' statutory monopolies to encompass control over an

article of commerce that is not the subject of copyright protection. Such an expansion of the copyright

privilege is beyond the limits of the grants authorized by Congress.


I


The two respondents in this action, Universal City Studios, Inc., and Walt Disney Productions, produce

and hold the copyrights on a substantial number of motion pictures and other audiovisual works. In the

current marketplace, they can exploit their rights in these works in a number of ways: [p.422] by

authorizing theatrical exhibitions, by licensing limited showings on cable and network television, by selling

syndication rights for repeated airings on local television stations, and by marketing programs on

prerecorded videotapes or videodiscs. Some works are suitable for exploitation through all of these

avenues, while the market for other works is more limited.


Petitioner Sony manufactures millions of Betamax video tape recorders and markets these devices

through numerous retail establishments, some of which are also petitioners in this action. n2 Sony's

Betamax VTR is a mechanism consisting of three basic components: (1) a tuner, which receives

electromagnetic signals transmitted over the television band of the public airwaves and separates them

into audio and visual signals; (2) a recorder, which records such signals on a magnetic tape; and (3) an

adapter, which converts the audio and visual signals on the tape into a composite signal that can be

received by a television set.




--------------------------------------------------------------------------------


Notes

n2 The four retailers are Carter Hawley Hales Stores, Inc., Associated Dry Goods Corp., Federated

Department Stores, Inc., and Henry's Camera Corp. The principal defendants are Sony Corporation, the

manufacturer of the equipment, and its wholly owned subsidiary, Sony Corporation of America. The

advertising agency of Doyle Dane Bernback, Inc., also involved in marketing the Betamax, is also a

petitioner. An individual VTR user, William Griffiths, was named as a defendant in the District Court, but

respondents sought no relief against him. Griffiths is not a petitioner. For convenience, we shall refer to

petitioners collectively as Sony.


--------------------------------------------------------------------------------


Several capabilities of the machine are noteworthy. The separate tuner in the Betamax enables it to

record a broadcast off one station while the television set is tuned to another channel, permitting the

viewer, for example, to watch two simultaneous news broadcasts by watching one "live" and recording

the other for later viewing. Tapes may be reused, and programs that have been recorded may be erased either before or after viewing. A timer in the Betamax can be used to activate and deactivate the

equipment at predetermined [p.423] times, enabling an intended viewer to record programs that are

transmitted when he or she is not at home. Thus a person may watch a program at home in the evening

even though it was broadcast while the viewer was at work during the afternoon. The Betamax is also

equipped with a pause button and a fast-forward control. The pause button, when depressed, deactivates the recorder until it is released, thus enabling a viewer to omit a commercial advertisement from the recording, provided, of course, that the viewer is present when the program is recorded. The

fast-forward control enables the viewer of a previously recorded program to run the tape rapidly when a

segment he or she does not desire to see is being played back on the television screen.


The respondents and Sony both conducted surveys of the way the Betamax machine was used by several hundred owners during a sample period in 1978. Although there were some differences in the surveys, they both showed that the primary use of the machine for most owners was "time-shifting" -- the practice of recording a program to view it once at a later time, and thereafter erasing it. Time-shifting enables viewers to see programs they otherwise would miss because they are not at home, are occupied with other tasks, or are viewing a program on another station at the time of a broadcast that they desire to watch. Both surveys also showed, however, that a substantial number of interviewees had accumulated libraries of tapes. n3 Sony's survey indicated [p.424] that over 80% of the interviewees watched at least as much regular television as they had before owning a Betamax. n4 Respondents offered no evidence of decreased television viewing by Betamax owners. n5




--------------------------------------------------------------------------------


Notes

n3 As evidence of how a VTR may be used, respondents offered the testimony of William Griffiths.

Griffiths, although named as an individual defendant, was a client of plaintiffs' law firm. The District Court summarized his testimony as follows:

"He owns approximately 100 tapes. When Griffiths bought his Betamax, he intended not only to time-shift

(record, play- back and then erase) but also to build a library of cassettes. Maintaining a library,

however, proved too expensive, and he is now erasing some earlier tapes and reusing them.


"Griffiths copied about 20 minutes of a Universal motion picture called 'Never Give An Inch,' and two

episodes from Universal television series entitled 'Baa Baa Black Sheep' and 'Holmes and Yo Yo.' He

would have erased each of these but for the request of plaintiffs' counsel that it be kept. Griffiths also

testified that he had copied but already erased Universal films called 'Alpha Caper' (erased before anyone

saw it) and 'Amelia Earhart.' At the time of his deposition Griffiths did not intend to keep any Universal

film in his library.


"Griffiths has also recorded documentaries, news broadcasts, sporting events and political programs such

as a rerun of the Nixon/Kennedy debate." 480 F.Supp. 429, 436-437 (1979).


Four other witnesses testified to having engaged in similar activity.


n4 The District Court summarized some of the findings in these surveys as follows:


"According to plaintiffs' survey, 75.4% of the VTR owners use their machines to record for time-shifting

purposes half or most of the time. Defendants' survey showed that 96% of the Betamax owners had used

the machine to record programs they otherwise would have missed.


"When plaintiffs asked interviewees how many cassettes were in their library, 55.8% said there were 10

or fewer. In defendants' survey, of the total programs viewed by interviewees in the past month, 70.4%

had been viewed only that one time and for 57.9%, there were no plans for further viewing." Id., at 438.


n5 "81.9% of the defendants' interviewees watched the same amount or more of regular television as

they did before owning a Betamax. 83.2% reported their frequency of movie going was unaffected by

Betamax." Id., at 439.




--------------------------------------------------------------------------------


Sony introduced considerable evidence describing television programs that could be copied without

objection from any copyright holder, with special emphasis on sports, religious, and educational

programming. For example, their survey indicated that 7.3% of all Betamax use is to record sports

events, and representatives of professional baseball, football, basketball, and hockey testified that they

had no objection to the recording of their televised events for home use. n6




--------------------------------------------------------------------------------


Notes

n6 See Defendants' Exh. OT, Table 20; Tr. 2447-2450, 2480, 2486-2487, 2515-2516, 2530-2534.


--------------------------------------------------------------------------------


[p.425] Respondents offered opinion evidence concerning the future impact of the unrestricted sale of

VTR's on the commercial value of their copyrights. The District Court found, however, that they had failed

to prove any likelihood of future harm from the use of VTR's for time-shifting. 480 F.Supp., at 469.


The District Court's Decision


The lengthy trial of the case in the District Court concerned the private, home use of VTR's for recording

programs broadcast on the public airwaves without charge to the viewer. n7 No issue concerning the

transfer of tapes to other persons, the use of home-recorded tapes for public performances, or the

copying of programs transmitted on pay or cable television systems was raised. See id., at 432-433, 442.




--------------------------------------------------------------------------------


Notes

n7 The trial also briefly touched upon demonstrations of the Betamax by the retailer petitioners which

were alleged to be infringements by respondents. The District Court held against respondents on this

claim, 480 F.Supp., at 456-457, the Court of Appeals affirmed this holding, 659 F.2d 963, 976 (1981),

and respondents did not cross-petition on this issue.


--------------------------------------------------------------------------------


The District Court concluded that noncommercial home use recording of material broadcast over the

public airwaves was a fair use of copyrighted works and did not constitute copyright infringement. It

emphasized the fact that the material was broadcast free to the public at large, the noncommercial

character of the use, and the private character of the activity conducted entirely within the home.

Moreover, the court found that the purpose of this use served the public interest in increasing access to

television programming, an interest that "is consistent with the First Amendment policy of providing the

fullest possible access to information through the public airwaves. Columbia Broadcasting System, Inc. v.

Democratic National Committee, 412 U.S. 94, 102." Id., at 454. n8 Even when an entire copyrighted work

was recorded, [p.426] the District Court regarded the copying as fair use "because there is no

accompanying reduction in the market for 'plaintiff's original work.'" Ibid.




--------------------------------------------------------------------------------


Notes

n8 The court also found that this "access is not just a matter of convenience, as plaintiffs have suggested.

Access has been limited not simply by inconvenience but by the basic need to work. Access to the better

program has also been limited by the competitive practice of counterprogramming." 480 F.Supp., at 454.

As an independent ground of decision, the District Court also concluded that Sony could not be held liable

as a contributory infringer even if the home use of a VTR was considered an infringing use. The District

Court noted that Sony had no direct involvement with any Betamax purchasers who recorded copyrighted

works off the air. Sony's advertising was silent on the subject of possible copyright infringement, but its

instruction booklet contained the following statement:


"Television programs, films, videotapes and other materials may be copyrighted. Unauthorized recording

of such material may be contrary to the provisions of the United States copyright laws." Id., at 436.


The District Court assumed that Sony had constructive knowledge of the probability that the Betamax

machine would be used to record copyrighted programs, but found that Sony merely sold a "product

capable of a variety of uses, some of them allegedly infringing." Id., at 461. It reasoned:


"Selling a staple article of commerce -- e. g., a typewriter, a recorder, a camera, a photocopying

machine -- technically contributes to any infringing use subsequently made thereof, but this kind of

'contribution,' if deemed sufficient as a basis for liability, would expand the theory beyond precedent and

arguably beyond judicial management.


. . . .


". . . Commerce would indeed be hampered if manufacturers of staple items were held liable as

contributory infringers whenever they 'constructively' knew that some purchasers on some occasions

would use their product [p.427] for a purpose which a court later deemed, as a matter of first

impression, to be an infringement." Ibid.


Finally, the District Court discussed the respondents' prayer for injunctive relief, noting that they had

asked for an injunction either preventing the future sale of Betamax machines, or requiring that the

machines be rendered incapable of recording copyrighted works off the air. The court stated that it had

"found no case in which the manufacturers, distributors, retailers and advertisers of the instrument

enabling the infringement were sued by the copyright holders," and that the request for relief in this case

"is unique." Id., at 465.


It concluded that an injunction was wholly inappropriate because any possible harm to respondents was

outweighed by the fact that "the Betamax could still legally be used to record noncopyrighted material or

material whose owners consented to the copying. An injunction would deprive the public of the ability to

use the Betamax for this noninfringing off-the-air recording." Id., at 468.


The Court of Appeals' Decision


The Court of Appeals reversed the District Court's judgment on respondents' copyright claim. It did not

set aside any of the District Court's findings of fact. Rather, it concluded as a matter of law that the home

use of a VTR was not a fair use because it was not a "productive use." n9 It therefore held that it was

unnecessary for plaintiffs to prove any harm to the potential market for the copyrighted works, but then

observed that it seemed clear that the cumulative effect of mass reproduction made possible by VTR's

would tend to diminish the potential market for respondents' works. 659 F.2d, at 974.




--------------------------------------------------------------------------------


Notes

n9 "Without a 'productive use,' i. e. when copyrighted material is reproduced for its intrinsic use, the

mass copying of the sort involved in this case precludes an application of fair use." 659 F.2d, at 971-972.




--------------------------------------------------------------------------------


[p.428] On the issue of contributory infringement, the Court of Appeals first rejected the analogy to staple

articles of commerce such as tape recorders or photocopying machines. It noted that such machines

"may have substantial benefit for some purposes" and do not "even remotely raise copyright problems."

Id., at 975. VTR's, however, are sold "for the primary purpose of reproducing television programming"

and "[virtually] all" such programming is copyrighted material. Ibid. The Court of Appeals concluded,

therefore, that VTR's were not suitable for any substantial noninfringing use even if some copyright

owners elect not to enforce their rights.


The Court of Appeals also rejected the District Court's reliance on Sony's lack of knowledge that home

use constituted infringement. Assuming that the statutory provisions defining the remedies for

infringement applied also to the nonstatutory tort of contributory infringement, the court stated that a

defendant's good faith would merely reduce his damages liability but would not excuse the infringing

conduct. It held that Sony was chargeable with knowledge of the homeowner's infringing activity because

the reproduction of copyrighted materials was either "the most conspicuous use" or "the major use" of

the Betamax product. Ibid.


On the matter of relief, the Court of Appeals concluded that "statutory damages may be appropriate" and

that the District Court should reconsider its determination that an injunction would not be an appropriate

remedy; and, referring to "the analogous photocopying area," suggested that a continuing royalty

pursuant to a judicially created compulsory license may very well be an acceptable resolution of the relief

issue. Id., at 976.


II


Article I, Section 8, of the Constitution provides:

"The Congress shall have Power . . . To Promote the Progress of Science and useful Arts, by securing for

limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries."


[p.429] The monopoly privileges that Congress may authorize are neither unlimited nor primarily

designed to provide a special private benefit. Rather, the limited grant is a means by which an important

public purpose may be achieved. It is intended to motivate the creative activity of authors and inventors

by the provision of a special reward, and to allow the public access to the products of their genius after

the limited period of exclusive control has expired.


"The copyright law, like the patent statutes, makes reward to the owner a secondary consideration. In

Fox Film Corp. v. Doyal, 286 U.S. 123, 127, Chief Justice Hughes spoke as follows respecting the

copyright monopoly granted by Congress, 'The sole interest of the United States and the primary object in

conferring the monopoly lie in the general benefits derived by the public from the labors of authors.' It is

said that reward to the author or artist serves to induce release to the public of the products of his

creative genius." United States v. Paramount Pictures, Inc., 334 U.S. 131, 158 (1948).


As the text of the Constitution makes plain, it is Congress that has been assigned the task of defining the

scope of the limited monopoly that should be granted to authors or to inventors in order to give the public

appropriate access to their work product. Because this task involves a difficult balance between the

interests of authors and inventors in the control and exploitation of their writings and discoveries on the

one hand, and society's competing interest in the free flow of ideas, information, and commerce on the

other hand, our patent and copyright statutes have been amended repeatedly. n10




--------------------------------------------------------------------------------


Notes

n10 In its Report accompanying the comprehensive revision of the Copyright Act in 1909, the Judiciary

Committee of the House of Representatives explained this balance:

"The enactment of copyright legislation by Congress under the terms of the Constitution is not based

upon any natural right that the author has in his writings, . . . but upon the ground that the welfare of the

public will be served and progress of science and useful arts will be promoted by securing to authors for

limited periods the exclusive rights to their writings. . . .


"In enacting a copyright law Congress must consider . . . two questions: First, how much will the

legislation stimulate the producer and so benefit the public; and, second, how much will the monopoly

granted be detrimental to the public? The granting of such exclusive rights, under the proper terms and

conditions, confers a benefit upon the public that outweighs the evils of the temporary monopoly." H. R.

Rep. No. 2222, 60th Cong., 2d Sess., 7 (1909).




--------------------------------------------------------------------------------


[p.430] From its beginning, the law of copyright has developed in response to significant changes in

technology. n11 Indeed, it was the invention of a new form of copying equipment - - the printing press --

that gave rise to the original need for copyright protection. n12 Repeatedly, as new developments have

[p.431] occurred in this country, it has been the Congress that has fashioned the new rules that new

technology made necessary. Thus, long before the enactment of the Copyright Act of 1909, 35 Stat.

1075, it was settled that the protection given to copyrights is wholly statutory. Wheaton v. Peters, 8 Pet.

591, 661-662 (1834). The remedies for infringement "are only those prescribed by Congress." Thompson

v. Hubbard, 131 U.S. 123, 151 (1889).




--------------------------------------------------------------------------------


Notes

n11 Thus, for example, the development and marketing of player pianos and perforated rolls of music,

see White-Smith Music Publishing Co. v. Apollo Co., 209 U.S. 1 (1908), preceded the enactment of the

Copyright Act of 1909; innovations in copying techniques gave rise to the statutory exemption for library

copying embodied in Section 108 of the 1976 revision of the copyright law; the development of the

technology that made it possible to retransmit television programs by cable or by microwave systems,

see Fortnightly Corp. v. United Artists Television, Inc., 392 U.S. 390 (1968), and Teleprompter Corp. v.

Columbia Broadcasting System, Inc., 415 U.S. 394 (1974), prompted the enactment of the complex

provisions set forth in 17 U. S. C. Section 111(d)(2)(B) and Section 111(d)(5) (1982 ed.) after years of

detailed congressional study, see Eastern Microwave, Inc. v. Doubleday Sports, Inc., 691 F.2d 125, 129

(CA2 1982).

By enacting the Sound Recording Amendment of 1971, 85 Stat. 391, Congress also provided the solution

to the "record piracy" problems that had been created by the development of the audio tape recorder.

Sony argues that the legislative history of that Act, see especially H. R. Rep. No. 92-487, p. 7 (1971),

indicates that Congress did not intend to prohibit the private home use of either audio or video tape

recording equipment. In view of our disposition of the contributory infringement issue, we express no

opinion on that question.


n12 "Copyright protection became necessary with the invention of the printing press and had its early

beginnings in the British censorship laws. The fortunes of the law of copyright have always been closely

connected with freedom of expression, on the one hand, and with technological improvements in means

of dissemination, on the other. Successive ages have drawn different balances among the interest of the

writer in the control and exploitation of his intellectual property, the related interest of the publisher, and

the competing interest of society in the untrammeled dissemination of ideas." Foreword to B. Kaplan, An

Unhurried View of Copyright vii-viii (1967).




--------------------------------------------------------------------------------


The judiciary's reluctance to expand the protections afforded by the copyright without explicit legislative

guidance is a recurring theme. See, e. g., Teleprompter Corp. v. Columbia Broadcasting System, Inc.,

415 U.S. 394 (1974); Fortnightly Corp. v. United Artists Television, Inc., 392 U.S. 390 (1968); White-

Smith Music Publishing Co. v. Apollo Co., 209 U.S. 1 (1908); Williams & Wilkins Co. v. United States, 203

Ct. Cl. 74, 487 F.2d 1345 (1973), aff'd by an equally divided Court, 420 U.S. 376 (1975). Sound policy, as

well as history, supports our consistent deference to Congress when major technological innovations alter

the market for copyrighted materials. Congress has the constitutional authority and the institutional ability

to accommodate fully the varied permutations of competing interests that are inevitably implicated by

such new technology.


In a case like this, in which Congress has not plainly marked our course, we must be circumspect in

construing the scope of rights created by a legislative enactment which never contemplated such a

calculus of interests. In doing so, we are guided by Justice Stewart's exposition of the correct approach to

ambiguities in the law of copyright:


"The limited scope of the copyright holder's statutory monopoly, like the limited copyright duration

required by the Constitution, reflects a balance of competing claims upon the public interest: Creative

work is to be [p.432] encouraged and rewarded, but private motivation must ultimately serve the cause

of promoting broad public availability of literature, music, and the other arts. The immediate effect of our

copyright law is to secure a fair return for an 'author's' creative labor. But the ultimate aim is, by this

incentive, to stimulate artistic creativity for the general public good. 'The sole interest of the United States

and the primary object in conferring the monopoly,' this Court has said, 'lie in the general benefits

derived by the public from the labors of authors.' Fox Film Corp. v. Doyal, 286 U.S. 123, 127. See Kendall

v. Winsor, 21 How. 322, 327-328; Grant v. Raymond, 6 Pet. 218, 241-242. When technological change

has rendered its literal terms ambiguous, the Copyright Act must be construed in light of this basic

purpose." Twentieth Century Music Corp. v. Aiken, 422 U.S. 151, 156 (1975) (footnotes omitted).


Copyright protection "subsists . . . in original works of authorship fixed in any tangible medium of

expression." 17 U. S. C. Section 102(a) (1982 ed.). This protection has never accorded the copyright

owner complete control over all possible uses of his work. n13 Rather, the Copyright Act grants the

[p.433] copyright holder "exclusive" rights to use and to authorize the use of his work in five qualified

ways, including reproduction of the copyrighted work in copies. Section 106. n14 All reproductions of the

work, however, are not within the exclusive domain of the copyright owner; some are in the public

domain. Any individual may reproduce a copyrighted wor for a "fair use"; the copyright owner does not

possess the exclusive right to such a use. Compare Section 106 with Section 107.




--------------------------------------------------------------------------------


Notes

n13 See, e. g., White-Smith Music Publishing Co. v. Apollo Co., 209 U.S., at 19; cf. Deep South Packing

Co. v. Laitram Corp., 406 U.S. 518, 530-531 (1972). While the law has never recognized an author's right

to absolute control of his work, the natural tendency of legal rights to express themselves in absolute

terms to the exclusion of all else is particularly pronounced in the history of the constitutionally sanctioned

monopolies of the copyright and the patent. See, e. g., United States v. Paramount Pictures, Inc., 334

U.S. 131, 156-158 (1948) (copyright owners claiming right to tie license of one film to license of another

under copyright law); Fox Film Corp. v. Doyal, 286 U.S. 123 (1932) (copyright owner claiming copyright

renders it immune from state taxation of copyright royalties); Bobbs- Merrill Co. v. Straus, 210 U.S. 339,

349-351 (1908) (copyright owner claiming that a right to fix resale price of his works within the scope of

his copyright); International Business Machines Corp. v. United States, 298 U.S. 131 (1936) (patentees

claiming right to tie sale of unpatented article to lease of patented device).

n14 Section 106 of the Act provides:

"Subject to sections 107 through 118, the owner of copyright under this title has the exclusive rights to do

and to authorize any of the following:


"(1) to reproduce the copyrighted work in copies or phonorecords;


"(2) to prepare derivative works based upon the copyrighted work;


"(3) to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of

ownership, or by rental, lease, or lending;


"(4) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and motion

pictures and other audiovisual works, to perform the copyrighted work publicly; and


"(5) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and pictorial,

graphic, or sculptural works, including the individual images of a motion picture or other audiovisual

work, to display the copyrighted work publicly."




--------------------------------------------------------------------------------


"Anyone who violates any of the exclusive rights of the copyright owner," that is, anyone who trespasses

into his exclusive domain by using or authorizing the use of the copyrighted work in one of the five ways

set forth in the statute, "is an infringer of the copyright." Section 501(a). Conversely, anyone who is

authorized by the copyright owner to use the copyrighted work in a way specified in the statute or who

makes a fair use of the work is not an infringer of the copyright with respect to such use.


The Copyright Act provides the owner of a copyright with a potent arsenal of remedies against an

infringer of his work, including an injunction to restrain the infringer from violating [p.434] his rights, the

impoundment and destruction of all reproductions of his work made in violation of his rights, a recovery

of his actual damages and any additional profits realized by the infringer or a recovery of statutory

damages, and attorney's fees. Sections 502-505. n15




--------------------------------------------------------------------------------


Notes

n15 Moreover, anyone who willfully infringes the copyright to reproduce a motion picture for purposes of

commercial advantage or private financial gain is subject to substantial criminal penalties, 17 U. S. C.

Section 506(a) (1982 ed.), and the fruits and instrumentalities of the crime are forfeited upon conviction,

Section 506(b).


--------------------------------------------------------------------------------


The two respondents in this case do not seek relief against the Betamax users who have allegedly

infringed their copyrights. Moreover, this is not a class action on behalf of all copyright owners who

license their works for television broadcast, and respondents have no right to invoke whatever rights

other copyright holders may have to bring infringement actions based on Betamax copying of their works.

n16 As was made clear by their own evidence, the copying of the respondents' programs represents a

small portion of the total use of VTR's. It is, however, the taping of respondents' own copyrighted

programs that provides them with standing to charge Sony with contributory infringement. To prevail,

they have the burden of proving that users of the Betamax have infringed their copyrights and that Sony

should be held responsible for that infringement.




--------------------------------------------------------------------------------


Notes

n16 In this regard, we reject respondents' attempt to cast this action as comparable to a class action

because of the positions taken by amici with copyright interests and their attempt to treat the statements

made by amici as evidence in this case. See Brief for Respondents 1, and n. 1, 6, 52, 53, and n. 116. The

stated desires of amici concerning the outcome of this or any litigation are no substitute for a class

action, are not evidence in the case, and do not influence our decision; we examine an amicus curiae

brief solely for whatever aid it provides in analyzing the legal questions before us.


--------------------------------------------------------------------------------


III


The Copyright Act does not expressly render anyone liable for infringement committed by another. In

contrast, the [p.435] Patent Act expressly brands anyone who "actively induces infringement of a patent"

as an infringer, 35 U. S. C. Section 271(b), and further imposes liability on certain individuals labeled

"contributory" infringers, Section 271(c). The absence of such express language in the copyright statute

does not preclude the imposition of liability for copyright infringements on certain parties who have not

themselves engaged in the infringing activity. n17 For vicarious liability is imposed in virtually all areas of

the law, and the concept of contributory infringement is merely a species of the broader problem of

identifying the circumstances in which it is just to hold one individual accountable for the actions of

another.





--------------------------------------------------------------------------------

Notes

n17 As the District Court correctly observed, however, "the lines between direct infringement,

contributory infringement and vicarious liability are not clearly drawn . . . ." 480 F.Supp., at 457-458. The

lack of clarity in this area may, in part, be attributable to the fact that an infringer is not merely one who

uses a work without authorization by the copyright owner, but also one who authorizes the use of a

copyrighted work without actual authority from the copyright owner.

We note the parties' statements that the questions of Sony's liability under the "doctrines" of "direct

infringement" and "vicarious liability" are not nominally before this Court. Compare Brief for Respondents

9, n. 22, 41, n. 90, with Reply Brief for Petitioners 1, n. 2. We also observe, however, that reasoned

analysis of respondents' unprecedented contributory infringement claim necessarily entails consideration

of arguments and case law which may also be forwarded under the other labels, and indeed the parties

to a large extent rely upon such arguments and authority in support of their respective positions on the

issue of contributory infringement.




--------------------------------------------------------------------------------


Such circumstances were plainly present in Kalem Co. v. Harper Brothers, 222 U.S. 55 (1911), the

copyright decision of this Court on which respondents place their principal reliance. In Kalem, the Court

held that the producer of an unauthorized film dramatization of the copyrighted book Ben Hur was liable

for his sale of the motion picture to jobbers, who in turn arranged for the commercial exhibition of the

film. Justice Holmes, writing for the Court, explained:


"The defendant not only expected but invoked by advertisement the use of its films for dramatic

reproduction [p.436] of the story. That was the most conspicuous purpose for which they could be used,

and the one for which especially they were made. If the defendant did not contribute to the infringement

it is impossible to do so except by taking part in the final act. It is liable on principles recognized in every

part of the law." Id., at 62-63.


The use for which the item sold in Kalem had been "especially" made was, of course, to display the

performance that had already been recorded upon it. The producer had personally appropriated the

copyright owner's protected work and, as the owner of the tangible medium of expression upon which

the protected work was recorded, authorized that use by his sale of the film to jobbers. But that use of

the film was not his to authorize: the copyright owner possessed the exclusive right to authorize public

performances of his work. Further, the producer personally advertised the unauthorized public

performances, dispelling any possible doubt as to the use of the film which he had authorized.


Respondents argue that Kalem stands for the proposition that supplying the "means" to accomplish an

infringing activity and encouraging that activity through advertisement are sufficient to establish liability

for copyright infringement. This argument rests on a gross generalization that cannot withstand scrutiny.

The producer in Kalem did not merely provide the "means" to accomplish an infringing activity; the

producer supplied the work itself, albeit in a new medium of expression. Sony in the instant case does

not supply Betamax consumers with respondents' works; respondents do. Sony supplies a piece of

equipment that is generally capable of copying the entire range of programs that may be televised: those

that are uncopyrighted, those that are copyrighted but may be copied without objection from the

copyright holder, and those that the copyright holder would prefer not to have copied. The Betamax can

be used to [p.437] make authorized or unauthorized uses of copyrighted works, but the range of its

potential use is much broader than the particular infringing use of the film Ben Hur involved in Kalem.

Kalem does not support respondents' novel theory of liability.


Justice Holmes stated that the producer had "contributed" to the infringement of the copyright, and the

label "contributory infringement" has been applied in a number of lower court copyright cases involving

an ongoing relationship between the direct infringer and the contributory infringer at the time the

infringing conduct occurred. In such cases, as in other situations in which the imposition of vicarious

liability is manifestly just, the "contributory" infringer was in a position to control the use of copyrighted

works by others and had authorized the use without permission from the copyright owner. n18 This case,

however, plainly does not fall [p.438] in that category. The only contact between Sony and the users of

the Betamax that is disclosed by this record occurred at the moment of sale. The District Court expressly

found that "no employee of Sony, Sonam or DDBI had either direct involvement with the allegedly

infringing activity or direct contact with purchasers of Betamax who recorded copyrighted works off-the-

air." 480 F.Supp., at 460. And it further found that "there was no evidence that any of the copies made by

Griffiths or the other individual witnesses in this suit were influenced or encouraged by [Sony's]

advertisements." Ibid.




--------------------------------------------------------------------------------


Notes

n18 The so-called "dance hall cases," Famous Music Corp. v. Bay State Harness Horse Racing & Breeding

Assn., Inc., 554 F.2d 1213 (CA1 1977) (racetrack retained infringer to supply music to paying customers);

KECA Music, Inc. v. Dingus McGee's Co., 432 F.Supp. 72 (WD Mo. 1977) (cocktail lounge hired musicians

to supply music to paying customers); Dreamland Ball Room, Inc. v. Shapiro, Bernstein & Co., 36 F.2d

354 (CA7 1929) (dance hall hired orchestra to supply music to paying customers), are often contrasted

with the so-called landlord-tenant cases, in which landlords who leased premises to a direct infringer for

a fixed rental and did not participate directly in any infringing activity were found not to be liable for

contributory infringement. E. g., Deutsch v. Arnold, 98 F.2d 686 (CA2 1938).

In Shapiro, Bernstein & Co. v. H. L. Green Co., 316 F.2d 304 (CA2 1963), the owner of 23 chainstores

retained the direct infringer to run its record departments. The relationship was structured as a licensing

arrangement, so that the defendant bore none of the business risk of running the department. Instead, it

received 10% or 12% of the direct infringer's gross receipts. The Court of Appeals concluded:


"[The dance- hall cases] and this one lie closer on the spectrum to the employer-employee model, than

to the landlord- tenant model. . . . [On] the particular facts before us, . . . Green's relationship to its

infringing licensee, as well as its strong concern for the financial success of the phonograph record

concession, renders it liable for the unauthorized sales of the 'bootleg' records.


. . . .


". . . [The] imposition of vicarious liability in the case before us cannot be deemed unduly harsh or unfair.

Green has the power to police carefully the conduct of its concessionaire . . .; our judgment will simply

encourage it to do so, thus placing responsibility where it can and should be effectively exercised." Id., at

308 (emphasis in original).


In Gershwin Publishing Corp. v. Columbia Artists Management, Inc., 443 F.2d 1159 (CA2 1971), the direct

infringers retained the contributory infringer to manage their performances. The contributory infringer

would contact each direct infringer, obtain the titles of the musical compositions to be performed, print

the programs, and then sell the programs to its own local organizations for distribution at the time of the

direct infringement. Id., at 1161. The Court of Appeals emphasized that the contributory infringer had

actual knowledge that the artists it was managing were performing copyrighted works, was in a position

to police the infringing conduct of the artists, and derived substantial benefit from the actions of the

primary infringers. Id., at 1163.


In Screen Gems-Columbia Music, Inc. v. Mark-Fi Records, Inc., 256 F.Supp. 399 (SDNY 1966), the direct

infringer manufactured and sold bootleg records. In denying a motion for summary judgment, the District

Court held that the infringer's advertising agency, the radio stations that advertised the infringer's works,

and the service agency that boxed and mailed the infringing goods could all be held liable, if at trial it

could be demonstrated that they knew or should have known that they were dealing in illegal goods.




--------------------------------------------------------------------------------


[p.439] If vicarious liability is to be imposed on Sony in this case, it must rest on the fact that tit has sold

equipment with constructive knowledge of the fact that its customers may use that equipment to make

unauthorized copies of copyrighted material. There is no precedent in the law of copyright for the

imposition of vicarious liability on such a theory. The closest analogy is provided by the patent law cases

to which it is appropriate to refer because of the historic kinship between patent law and copyright law.

n19




--------------------------------------------------------------------------------


Notes

n19 E. g., United States v. Paramount Pictures, Inc., 334 U.S., at 158; Fox Film Corp. v. Doyal, 286 U.S.,

at 131; Wheaton v. Peters, 8 Pet. 591, 657-658 (1834). The two areas of the law, naturally, are not

identical twins, and we exercise the caution which we have expressed in the past in applying doctrine

formulated in one area to the other. See generally Mazer v. Stein, 347 U.S. 201, 217-218 (1954);

Bobbs-Merrill Co. v. Straus, 210 U.S., at 345.


We have consistently rejected the proposition that a similar kinship exists between copyright law and

trademark law, and in the process of doing so have recognized the basic similarities between copyrights

and patents. The Trade-Mark Cases, 100 U.S. 82, 91-92 (1879); see also United Drug Co. v. Theodore

Rectanus Co., 248 U.S. 90, 97 (1918) (trademark right "has little or no analogy" to copyright or patent);

McLean v. Fleming, 96 U.S. 245, 254 (1878); Canal Co. v. Clark, 13 Wall. 311, 322 (1872). Given the

fundamental differences between copyright law and trademark law, in this copyright case we do not look

to the standard for contributory infringement set forth in Inwood Laboratories, Inc. v. Ives Laboratories,

Inc., 456 U.S. 844, 854-855 (1982), which was crafted for application in trademark cases. There we

observed that a manufacturer or distributor could be held liable to the owner of a trademark if it

intentionally induced a merchant down the chain of distribution to pass off its product as that of the

trademark owner's or if it continued to supply a product which could readily be passed off to a particular

merchant whom it knew was mislabeling the product with the trademark owner's mark. If Inwood's

narrow standard for contributory trademark infringement governed here, respondents' claim of

contributory infringement would merit little discussion. Sony certainly does not "intentionally [induce]" its

customers to make infringing uses of respondents' copyrights, nor does it supply its products to identified

individuals known by it to be engaging in continuing infringement of respondents' copyrights, see id., at

855.




--------------------------------------------------------------------------------


[p.440] In the Patent Act both the concept of infringement and the concept of contributory infringement

are expressly defined by statute. n20 The prohibition against contributory infringement is confined to the

knowing sale of a component especially made for use in connection with a particular patent. There is no

suggestion in the statute that one patentee may object to the sale of a product that might be used in

connection with other patents. Moreover, the Act expressly provides that the sale of a "staple article or

commodity of commerce suitable for substantial noninfringing use" is not contributory infringement. 35 U.

S. C. Section 271(c).




--------------------------------------------------------------------------------


Notes

n20 Title 35 U. S. C. Section 271 provides:

"(a) Except as otherwise provided in this title, whoever without authority makes, uses or sells any

patented invention, within the United States during the term of the patent therefor, infringes the patent.

"(b) Whoever actively induces infringement of a patent shall be liable as an infringer.


"(c) Whoever sells a component of a patented machine, manufacture, combination or composition, or a

material or apparatus for use in practicing a patented process, constituting a material part of the

invention, knowing the same to be especially made or especially adapted for use in an infringement of

such patent, and not a staple article or commodity of commerce suitable for substantial noninfringing use,

shall be liable as a contributory infringer.


"(d) No patent owner otherwise entitled to relief for infringement or contributory infringement of a patent

shall be denied relief or deemed guilty of misuse or illegal extension of the patent right by reason of his

having done one or more of the following: (1) derived revenue from acts which if performed by another

without his consent would constitute contributory infringement of the patent; (2) licensed or authorized

another to perform acts which if performed without his consent would constitute contributory

infringement of the patent; (3) sought to enforce his patent rights against infringement or contributory

infringement."




--------------------------------------------------------------------------------


When a charge of contributory infringement is predicated entirely on the sale of an article of commerce

that is used by the purchaser to infringe a patent, the public interest in access to that article of commerce

is necessarily implicated. A [p.441] finding of contributory infringement does not, of course, remove the

article from the market altogether; it does, however, give the patentee effective control over the sale of

that item. Indeed, a finding of contributory infringement is normally the functional equivalent of holding

that the disputed article is within the monopoly granted to the patentee. n21




--------------------------------------------------------------------------------


Notes

n21 It seems extraordinary to suggest that the Copyright Act confers upon all copyright owners

collectively, much less the two respondents in this case, the exclusive right to distribute VTR's simply

because they may be used to infringe copyrights. That, however, is the logical implication of their claim.

The request for an injunction below indicates that respondents seek, in effect, to declare VTR's

contraband. Their suggestion in this Court that a continuing royalty pursuant to a judicially created

compulsory license would be an acceptable remedy merely indicates that respondents, for their part,

would be willing to license their claimed monopoly interest in VTR's to Sony in return for a royalty.


--------------------------------------------------------------------------------


For that reason, in contributory infringement cases arising under the patent laws the Court has always

recognized the critical importance of not allowing the patentee to extend his monopoly beyond the limits

of his specific grant. These cases deny the patentee any right to control the distribution of unpatented

articles unless they are "unsuited for any commercial noninfringing use." Dawson Chemical Co. v. Rohm

& Hass Co., 448 U.S. 176, 198 (1980). Unless a commodity "has no use except through practice of the

patented method," id., at 199, the patentee has no right to claim that its distribution constitutes

contributory infringement. "To form the basis for contributory infringement the item must almost be

uniquely suited as a component of the patented invention." P. Rosenberg, Patent Law Fundamentals

Section 17.02[2] (2d ed. 1982). "[A] sale of an article which though adapted to an infringing use is also

adapted to other and lawful uses, is not enough to make the seller a contributory infringer. Such a rule

would block the wheels of commerce." Henry v. A. B. Dick Co., 224 U.S. 1, 48 (1912), overruled on other

grounds, [p.442] Motion Picture Patents Co. v. Universal Film Mfg. Co., 243 U.S. 502, 517 (1917).


We recognize there are substantial differences between the patent and copyright laws. But in both areas

the contributory infringement doctrine is grounded on the recognition that adequate protection of a

monopoly may require the courts to look beyond actual duplication of a device or publication to the

products or activities that make such duplication possible. The staple article of commerce doctrine must

strike a balance between a copyright holder's legitimate demand for effective -- not merely symbolic --

protection of the statutory monopoly, and the rights of others freely to engage in substantially unrelated

areas of commerce. Accordingly, the sale of copying equipment, like the sale of other articles of

commerce, does not constitute contributory infringement if the product is widely used for legitimate,

unobjectionable purposes. Indeed, it need merely be capable of substantial noninfringing uses.


IV


The question is thus whether the Betamax is capable of commercially significant noninfringing uses. In

order to resolve that question, we need not explore all the different potential uses of the machine and

determine whether or not they would constitute infringement. Rather, we need only consider whether on

the basis of the facts as found by the District Court a significant number of them would be noninfringing.

Moreover, in order to resolve this case we need not give precise content to the question of how much use

is commercially significant. For one potential use of the Betamax plainly satisfies this standard, however it

is understood: private, noncommercial time-shifting in the home. It does so both (A) because

respondents have no right to prevent other copyright holders from authorizing it for their programs, and

(B) because the District Court's factual findings reveal that even the unauthorized home time-shifting of

respondents' programs is legitimate fair use.


[p.443]


A. Authorized Time-Shifting


Each of the respondents owns a large inventory of valuable copyrights, but in the total spectrum of

television programming their combined market share is small. The exact percentage is not specified, but

it is well below 10%. n22 If they were to prevail, the outcome of this litigation would have a significant

impact on both the producers and the viewers of the remaining 90% of the programming in the Nation.

No doubt, many other producers share respondents' concern about the possible consequences of

unrestricted copying. Nevertheless the findings of the District Court make it clear that time-shifting may

enlarge the total viewing audience and that many producers are willing to allow private time-shifting to

continue, at least for an experimental time period. n23




--------------------------------------------------------------------------------


Notes

n22 The record suggests that Disney's programs at the time of trial consisted of approximately one hour

a week of network television and one syndicated series. Universal's percentage in the Los Angeles market

on commercial television stations was under 5%. See Tr. 532-533, 549-550.

n23 The District Court did not make any explicit findings with regard to how much broadcasting is wholly

uncopyrighted. The record does include testimony that at least one movie -- My Man Godfrey --falls within

that category, id., at 2300-2301, and certain broadcasts produced by the Federal Government are also

uncopyrighted. See 17 U. S. C. Section 105 (1982 ed.). Cf. Schnapper v. Foley, 215 U. S. App. D. C. 59,

667 F.2d 102 (1981) (explaining distinction between work produced by the Government and work

commissioned by the Government). To the extent such broadcasting is now significant, it further bolsters

our conclusion. Moreover, since copyright protection is not perpetual, the number of audiovisual works in

the public domain necessarily increases each year.




--------------------------------------------------------------------------------


The District Court found:


"Even if it were deemed that home-use recording of copyrighted material constituted infringement, the

Betamax could still legally be used to record noncopyrighted material or material whose owners

consented to the copying. An injunction would deprive the public of the ability to use the Betamax for this

noninfringing off-the-air recording.


[p.444] "Defendants introduced considerable testimony at trial about the potential for such copying of

sports, religious, educational and other programming. This included testimony from representatives of

the Offices of the Commissioners of the National Football, Basketball, Baseball and Hockey Leagues and

Associations, the Executive Director of National Religious Broadcasters and various educational

communications agencies. Plaintiffs attack the weight of the testimony offered and also contend that an

injunction is warranted because infringing uses outweigh noninfringing uses.


"Whatever the future percentage of legal versus illegal home- use recording might be, an injunction

which seeks to deprive the public of the very tool or article of commerce capable of some noninfringing

use would be an extremely harsh remedy, as well as one unprecedented in copyright law." 480 F.Supp.,

at 468.


Although the District Court made these statements in the context of considering the propriety of injunctive

relief, the statements constitute a finding that the evidence concerning "sports, religious, educational and

other programming" was sufficient to establish a significant quantity of broadcasting whose copying is

now authorized, and a significant potential for future authorized copying. That finding is amply supported

by the record. In addition to the religious and sports officials identified explicitly by the District Court, n24

two items in the record deserve specific mention.




--------------------------------------------------------------------------------


Notes

n24 See Tr. 2447-2450 (Alexander Hadden, Major League Baseball); id., at 2480, 2486-2487 (Jay Moyer,

National Football League); id., at 2515-2516 (David Stern, National Basketball Association); id., at

2530-2534 (Gilbert Stein, National Hockey League); id., at 2543-2552 (Thomas Hansen, National

Collegiate Athletic Association); id., at 2565-2572 (Benjamin Armstrong, National Religious Broadcasters).

Those officials were authorized to be the official spokespersons for their respective institutions in this

litigation. Id., at 2432, 2479, 2509-2510, 2530, 2538, 2563. See Fed. Rule Civ. Proc. 30(b)(6).


--------------------------------------------------------------------------------


[p.445] First is the testimony of John Kenaston, the station manager of Channel 58, an educational station

in Los Angeles affiliated with the Public Broadcasting Service. He explained and authenticated the station's

published guide to its programs. n25 For each program, the guide tells whether unlimited home taping is

authorized, home taping is authorized subject to certain restrictions (such as erasure within seven days),

or home taping is not authorized at all. The Spring 1978 edition of the guide described 107 programs.

Sixty-two of those programs or 58% authorize some home taping. Twenty-one of them or almost 20%

authorize unrestricted home taping. n26




--------------------------------------------------------------------------------


Notes

n25 Tr. 2863-2902; Defendants' Exh. PI.

n26 See also Tr. 2833-2844 (similar testimony by executive director of New Jersey Public Broadcasting

Authority). Cf. id., at 2592-2605 (testimony by chief of New York Education Department's Bureau of Mass

Communications approving home taping for educational purposes).




--------------------------------------------------------------------------------


Second is the testimony of Fred Rogers, president of the corporation that produces and owns the

copyright on Mister Rogers' Neighborhood. The program is carried by more public television stations than

any other program. Its audience numbers over 3,000,000 families a day. He testified that he had

absolutely no objection to home taping for noncommercial use and expressed the opinion that it is a real

service to families to be able to record children's programs and to show them at appropriate times. n27




--------------------------------------------------------------------------------


Notes

n27 "Some public stations, as well as commercial stations, program the 'Neighborhood' at hours when

some children cannot use it. I think that it's a real service to families to be able to record such programs

and show them at appropriate times. I have always felt that with the advent of all of this new technology

that allows people to tape the 'Neighborhood' off-the-air, and I'm speaking for the 'Neighborhood'

because that's what I produce, that they then become much more active in the programming of their

family's television life. Very frankly, I am opposed to people being programmed by others. My whole

approach in broadcasting has always been 'You are an important person just the way you are. You can

make healthy decisions.' Maybe I'm going on too long, but I just feel that anything that allows a person to

be more active in the control of his or her life, in a healthy way, is important." Id., at 2920-2921. See also

Defendants' Exh. PI, p. 85.


--------------------------------------------------------------------------------


[p.446] If there are millions of owners of VTR's who make copies of televised sports events, religious

broadcasts, and educational programs such as Mister Rogers' Neighborhood, and if the proprietors of

those programs welcome the practice, the business of supplying the equipment that makes such copying

feasible should not be stifled simply because the equipment is used by some individuals to make

unauthorized reproductions of respondents' works. The respondents do not represent a class composed

of all copyright holders. Yet a finding of contributory infringement would inevitably frustrate the interests

of broadcasters in reaching the portion of their audience that is available only through time-shifting.


Of course, the fact that other copyright holders may welcome the practice of time-shifting does not mean

that respondents should be deemed to have granted a license to copy their programs. Third- party

conduct would be wholly irrelevant in an action for direct infringement of respondents' copyrights. But in

an action for contributory infringement against the seller of copying equipment, the copyright holder may

not prevail unless the relief that he seeks affects only his programs, or unless he speaks for virtually all

copyright holders with an interest in the outcome. In this case, the record makes it perfectly clear that

there are many important producers of national and local television programs who find nothing

objectionable about the enlargement in the size of the television audience that results from the practice

of time-shifting for private home use. n28 The seller of the equipment that expands those producers'

audiences cannot be a contributory [p.447] infringer if, as is true in this case, it has had no direct

involvement with any infringing activity.




--------------------------------------------------------------------------------


Notes

n28 It may be rare for large numbers of copyright owners to authorize duplication of their works without

demanding a fee from the copier. In the context of public broadcasting, however, the user of the

copyrighted work is not required to pay a fee for access to the underlying work. The traditional method

by which copyright owners capitalize upon the television medium -- commercially sponsored free public

broadcast over the public airwaves -- is predicated upon the assumption that compensation for the value

of displaying the works will be received in the form of advertising revenues.

In the context of television programming, some producers evidently believe that permitting home viewers

to make copies of their works off the air actually enhances the value of their copyrights. Irrespective of

their reasons for authorizing the practice, they do so, and in significant enough numbers to create a

substantial market for a noninfringing use of the Sony VTR's. No one could dispute the legitimacy of that

market if the producers had authorized home taping of their programs in exchange for a license fee paid

directly by the home user. The legitimacy of that market is not compromised simply because these

producers have authorized home taping of their programs without demanding a fee from the home user.

The copyright law does not require a copyright owner to charge a fee for the use of his works, and as

this record clearly demonstrates, the owner of a copyright may well have economic or noneconomic

reasons for permitting certain kinds of copying to occur without receiving direct compensation from the

copier. It is not the role of the courts to tell copyright holders the best way for them to exploit their

copyrights: even if respondents' competitors were ill- advised in authorizing home videotaping, that would

not change the fact that they have created a substantial market for a paradigmatic noninfringing use of

Sony's product.




B. Unauthorized Time-Shifting


Even unauthorized uses of a copyrighted work are not necessarily infringing. An unlicensed use of the

copyright is not an infringement unless it conflicts with one of the specific exclusive rights conferred by

the copyright statute. Twentieth Century Music Corp. v. Aiken, 422 U.S., at 154-155. Moreover, the

definition of exclusive rights in Section 106 of the present Act is prefaced by the words "subject to

sections 107 through 118." Those sections describe a variety of uses of copyrighted material that "are not

infringements of copyright" "notwithstanding the provisions of section 106." The most pertinent in this

case is Section 107, the legislative endorsement of the doctrine of "fair use." n29




--------------------------------------------------------------------------------


Notes

n29 The Copyright Act of 1909, 35 Stat. 1075, did not have a "fair use" provision. Although that Act's

compendium of exclusive rights "to print, reprint, publish, copy, and vend the copyrighted work" was

broad enough to encompass virtually all potential interactions with a copyrighted work, the statute was

never so construed. The courts simply refused to read the statute literally in every situation. When

Congress amended the statute in 1976, it indicated that it "intended to restate the present judicial

doctrine of fair use, not to change, narrow, or enlarge it in any way." H. R. Rep. No. 94-1476, p. 66

(1976).


--------------------------------------------------------------------------------


[p.448] That section identifies various factors n30 that enable a court to apply an "equitable rule of

reason" analysis to particular claims of infringement. n31 Although not conclusive, the first [p.449] factor

requires that "the commercial or nonprofit character of an activity" be weighed in any fair use decision.

n32 If the Betamax were used to make copies for a commercial or profit-making purpose, such use would

presumptively be unfair. The contrary presumption is appropriate here, however, because the District

Court's findings plainly establish that time-shifting for private home use must be characterized as a

noncommercial, nonprofit activity. Moreover, when one considers the nature of a televised copyrighted

audiovisual work, see 17 U. S. C. Section 107(2) (1982 ed.), and that time-shifting merely enables a

viewer to see such a work which he had been invited to witness in its entirety free of charge, the fact

[p.450] that the entire work is reproduced, see Section 107(3), does not have its ordinary effect of

militating against a finding of fair use. n33




--------------------------------------------------------------------------------


Notes

n30 Section 107 provides:

"Notwithstanding the provisions of section 106, the fair use of a copyrighted work, including such use by

reproduction in copies or phonorecords or by any other means specified by that section, for purposes

such as criticism, comment, news reporting, teaching (including multiple copies for classroom use),

scholarship, or research, is not an infringement of copyright. In determining whether the use made of a

work in any particular case is a fair use the factors to be considered shall include --

"(1) the purpose and character of the use, including whether such use is of a commercial nature or is for

nonprofit educational purposes;


"(2) the nature of the copyrighted work;


"(3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and


"(4) the effect of the use upon the potential market for or value of the copyrighted work." 17 U. S. C.

Section 107 (1982 ed.).


n31 The House Report expressly stated that the fair use doctrine is an "equitable rule of reason" in its

explanation of the fair use section:


"Although the courts have considered and ruled upon the fair use doctrine over and over again, no real

definition of the concept has ever emerged. Indeed, since the doctrine is an equitable rule of reason, no

generally applicable definition is possible, and each case raising the question must be decided on its own

facts. . . .


. . . .


"General intention behind the provision


"The statement of the fair use doctrine in section 107 offers some guidance to users in determining when

the principles of the doctrine apply. However, the endless variety of situations and combinations of

circumstances that can rise in particular cases precludes the formulation of exact rules in the statute. The

bill endorses the purpose and general scope of the judicial doctrine of fair use, but there is no disposition

to freeze the doctrine in the statute, especially during a period of rapid technological change. Beyond a

very broad statutory explanation of what fair use is and some of the criteria applicable to it, the courts

must be free to adapt the doctrine to particular situations on a case-by-case basis." H. R. Rep. No.

94-1476, supra, at 65-66.


The Senate Committee similarly eschewed a rigid, bright- line approach to fair use. The Senate Report

endorsed the view "that off-the-air recording for convenience" could be considered "fair use" under some

circumstances, although it then made it clear that it did not intend to suggest that off-the-air recording for

convenience should be deemed fair use under any circumstances imaginable. S. Rep. No. 94-473, pp.

65-66 (1975). The latter qualifying statement is quoted by the dissent, post, at 481, and if read in

isolation, would indicate that the Committee intended to condemn all off-the-air recording for

convenience. Read in context, however, it is quite clear that that was the farthest thing from the

Committee's intention.


n32 "The Committee has amended the first of the criteria to be considered --'the purpose and character

of the use' -- to state explicitly that this factor includes a consideration of 'whether such use is of a

commercial nature or is for non-profit educational purposes.' This amendment is not intended to be

interpreted as any sort of not-for-profit limitation on educational uses of copyrighted works. It is an

express recognition that, as under the present law, the commercial or non-profit character of an activity,

while not conclusive with respect to fair use, can and should be weighed along with other factors in fair

use decisions." H. R. Rep. No. 94-1476, supra, at 66.


n33 It has been suggested that "consumptive uses of copyrights by home VTR users are commercial even

if the consumer does not sell the homemade tape because the consumer will not buy tapes separately

sold by the copyrightholder." Home Recording of Copyrighted Works: Hearing before the Subcommittee

on Courts, Civil Liberties and the Administration of Justice of the House Committee on the Judiciary, 97th

Cong., 2d Sess., pt. 2, p. 1250 (1982) (memorandum of Prof. Laurence H. Tribe). Furthermore, "[the]

error in excusing such theft as noncommercial," we are told, "can be seen by simple analogy: jewel theft

is not converted into a noncommercial veniality if stolen jewels are simply worn rather than sold." Ibid.

The premise and the analogy are indeed simple, but they add nothing to the argument. The use to which

stolen jewelry is put is quite irrelevant in determining whether depriving its true owner of his present

possessory interest in it is venial; because of the nature of the item and the true owner's interests in

physical possession of it, the law finds the taking objectionable even if the thief does not use the item at

all. Theft of a particular item of personal property of course may have commercial significance, for the

thief deprives the owner of his right to sell that particular item to any individual. Time- shifting does not

even remotely entail comparable consequences to the copyright owner. Moreover, the time-shifter no

more steals the program by watching it once than does the live viewer, and the live viewer is no more

likely to buy prerecorded videotapes than is the time- shifter. Indeed, no live viewer would buy a

prerecorded videotape if he did not have access to a VTR.




--------------------------------------------------------------------------------


This is not, however, the end of the inquiry because Congress has also directed us to consider "the effect

of the use upon the potential market for or value of the copyrighted work." Section 107(4). The purpose

of copyright is to create incentives for creative effort. Even copying for noncommercial purposes may

impair the copyright holder's ability to obtain the rewards that Congress intended him to have. But a use

that has no demonstrable effect upon the potential market for, or the value of, the copyrighted work need

not be prohibited in order to protect the author's incentive to create. The prohibition of such

noncommercial uses would [p.451] merely inhibit access to ideas without any countervailing benefit. n34




--------------------------------------------------------------------------------


Notes

n34 Cf. A. Latman, Fair Use of Copyrighted Works (1958), reprinted in Study No. 14 for the Senate

Committee on the Judiciary, Copyright Law Revision, Studies Prepared for the Subcommittee on Patents,

Trademarks, and Copyrights, 86th Cong., 2d Sess., 30 (1960):

"In certain situations, the copyright owner suffers no substantial harm from the use of his work. . . . Here

again, is the partial marriage between the doctrine of fair use and the legal maxim de minimus non curat

lex."




--------------------------------------------------------------------------------


Thus, although every commercial use of copyrighted material is presumptively an unfair exploitation of

the monopoly privilege that belongs to the owner of the copyright, noncommercial uses are a different

matter. A challenge to a noncommercial use of a copyrighted work requires proof either that the

particular use is harmful, or that if it should become widespread, it would adversely affect the potential

market for the copyrighted work. Actual present harm need not be shown; such a requirement would

leave the copyright holder with no defense against predictable damage. Nor is it necessary to show with

certainty that future harm will result. What is necessary is a showing by a preponderance of the evidence

that some meaningful likelihood of future harm exists. If the intended use is for commercial gain, that

likelihood may be presumed. But if it is for a noncommercial purpose, the likelihood must be

demonstrated.


In this case, respondents failed to carry their burden with regard to home time-shifting. The District Court

described respondents' evidence as follows:


"Plaintiffs' experts admitted at several points in the trial that the time-shifting without librarying would

result in 'not a great deal of harm.' Plaintiffs' greatest concern about time- shifting is with 'a point of

important philosophy that transcends even commercial judgment.' They fear that with any Betamax

usage, 'invisible boundaries' are passed: 'the copyright owner has lost control over his program.'" 480

F.Supp., at 467.


[p.452] Later in its opinion, the District Court observed:


"Most of plaintiffs' predictions of harm hinge on speculation about audience viewing patterns and ratings,

a measurement system which Sidney Sheinberg, MCA's president, calls a 'black art' because of the

significant level of imprecision involved in the calculations." Id., at 469. n35




--------------------------------------------------------------------------------


Notes

n35 See also 480 F.Supp., at 451:

"It should be noted, however, that plaintiffs' argument is more complicated and speculative than was the

plaintiff's in Williams & Wilkins. . . . Here, plaintiffs ask the court to find harm based on many more

assumptions. . . . As is discussed more fully in Part IV infra, some of these assumptions are based on

neither fact nor experience, and plaintiffs admit that they are to some extent inconsistent and illogical."


--------------------------------------------------------------------------------


There was no need for the District Court to say much about past harm. "Plaintiffs have admitted that no

actual harm to their copyrights has occurred to date." Id., at 451.


On the question of potential future harm from time- shifting, the District Court offered a more detailed

analysis of the evidence. It rejected respondents' "fear that persons 'watching' the original telecast of a

program will not be measured in the live audience and the ratings and revenues will decrease," by

observing that current measurement technology allows the Betamax audience to be reflected. Id., at 466.

n36 It rejected respondents' prediction "that live television [p.453] or movie audiences will decrease as

more people watch Betamax tapes as an alternative," with the observation that "[there] is no factual

basis for [the underlying] assumption." Ibid. n37 It rejected respondents' "fear that time- shifting will

reduce audiences for telecast reruns," and concluded instead that "given current market practices, this

should aid plaintiffs rather than harm them." Ibid. n38 And it declared that respondents' suggestion that

"theater or film rental exhibition of a program will suffer because of time-shift recording of that program"

"lacks merit." Id., at 467. n39




--------------------------------------------------------------------------------


Notes

n36 "There was testimony at trial, however, that Nielsen Ratings has already developed the ability to

measure when a Betamax in a sample home is recording the program. Thus, the Betamax owner will be

measured as a part of the live audience. The later diary can augment that measurement with information

about subsequent viewing." Id., at 466.

In a separate section, the District Court rejected plaintiffs' suggestion that the commercial attractiveness

of television broadcasts would be diminished because Betamax owners would use the pause button or

fast-forward control to avoid viewing advertisements:


"It must be remembered, however, that to omit commercials, Betamax owners must view the program,

including the commercials, while recording. To avoid commercials during playback, the viewer must

fast-forward and, for the most part, guess as to when the commercial has passed. For most recordings,

either practice may be too tedious. As defendants' survey showed, 92% of the programs were recorded

with commercials and only 25% of the owners fast-forward through them. Advertisers will have to make

the same kinds of judgments they do now about whether persons viewing televised programs actually

watch the advertisements which interrupt them." Id., at 468.


n37 "Here plaintiffs assume that people will view copies when they would otherwise be watching

television or going to the movie theater. There is no factual basis for this assumption. It seems equally

likely that Betamax owners will play their tapes when there is nothing on television they wish to see and

no movie they want to attend. Defendants' survey does not show any negative effect of Betamax

ownership on television viewing or theater attendance." Id., at 466.


n38 "The underlying assumptions here are particularly difficult to accept. Plaintiffs explain that the

Betamax increases access to the original televised material and that the more people there are in this

original audience, the fewer people the rerun will attract. Yet current marketing practices, including the

success of syndication, show just the opposite. Today, the larger the audience for the original telecast,

the higher the price plaintiffs can demand from broadcasters from rerun rights. There is no survey within

the knowledge of this court to show that the rerun audience is comprised of persons who have not seen

the program. In any event, if ratings can reflect Betamax recording, original audiences may increase and,

given market practices, this should aid plaintiffs rather than harm them." Ibid.


n39 "This suggestion lacks merit. By definition, time- shift recording entails viewing and erasing, so the

program will no longer be on tape when the later theater run begins. Of course, plaintiffs may fear that

the Betamax owners will keep the tapes long enough to satisfy all their interest in the program and will,

therefore, not patronize later theater exhibitions. To the extent that this practice involves librarying, it is

addressed in section V. C., infra. It should also be noted that there is no evidence to suggest that the

public interest in later theatrical exhibitions of motion pictures will be reduced any more by Betamax

recording than it already is by the television broadcast of the film." Id., at 467.




--------------------------------------------------------------------------------


[p.454] After completing that review, the District Court restated its overall conclusion several times, in

several different ways. "Harm from time-shifting is speculative and, at best, minimal." Ibid. "The audience

benefits from the time- shifting capability have already been discussed. It is not implausible that benefits

could also accrue to plaintiffs, broadcasters, and advertisers, as the Betamax makes it possible for more

persons to view their broadcasts." Ibid. "No likelihood of harm was shown at trial, and plaintiffs admitted

that there had been no actual harm to date." Id., at 468-469. "Testimony at trial suggested that Betamax

may require adjustments in marketing strategy, but it did not establish even a likelihood of harm." Id., at

469. "Television production by plaintiffs today is more profitable than it has ever been, and, in five weeks

of trial, there was no concrete evidence to suggest that the Betamax will change the studios' financial

picture." Ibid.


The District Court's conclusions are buttressed by the fact that to the extent time-shifting expands public

access to freely broadcast television programs, it yields societal benefits. In Community Television of

Southern California v. Gottfried, 459 U.S. 498, 508, n. 12 (1983), we acknowledged the public interest in

making television broadcasting more available. Concededly, that interest is not unlimited. But it supports

an interpretation of the concept of "fair use" that requires the copyright holder to demonstrate some

likelihood of harm before he may condemn a private act of time-shifting as a violation of federal law.


When these factors are all weighed in the "equitable rule of reason" balance, we must conclude that this

record amply [p.455] supports the District Court's conclusion that home time-shifting is fair use. In light of

the findings of the District Court regarding the state of the empirical data, it is clear that the Court of

Appeals erred in holding that the statute as presently written bars such conduct. n40




--------------------------------------------------------------------------------


Notes

n40 The Court of Appeals chose not to engage in any "equitable rule of reason" analysis in this case.

Instead, it assumed that the category of "fair use" is rigidly circumscribed by a requirement that every

such use must be "productive." It therefore concluded that copying a television program merely to enable

the viewer to receive information or entertainment that he would otherwise miss because of a personal

scheduling conflict could never be fair use. That understanding of "fair use" was erroneous.

Congress has plainly instructed us that fair use analysis calls for a sensitive balancing of interests. The

distinction between "productive" and "unproductive" uses may be helpful in calibrating the balance, but it

cannot be wholly determinative. Although copying to promote a scholarly endeavor certainly has a

stronger claim to fair use than copying to avoid interrupting a poker game, the question is not simply two-

dimensional. For one thing, it is not true that all copyrights are fungible. Some copyrights govern material

with broad potential secondary markets. Such material may well have a broader claim to protection

because of the greater potential for commercial harm. Copying a news broadcast may have a stronger

claim to fair use than copying a motion picture. And, of course, not all uses are fungible. Copying for

commercial gain has a much weaker claim to fair use than copying for personal enrichment. But the

notion of social "productivity" cannot be a complete answer to this analysis. A teacher who copies to

prepare lecture notes is clearly productive. But so is a teacher who copies for the sake of broadening his

personal understanding of his specialty. Or a legislator who copies for the sake of broadening her

understanding of what her constituents are watching; or a constituent who copies a news program to

help make a decision on how to vote.


Making a copy of a copyrighted work for the convenience of a blind person is expressly identified by the

House Committee Report as an example of fair use, with no suggestion that anything more than a

purpose to entertain or to inform need motivate the copying. In a hospital setting, using a VTR to enable

a patient to see programs he would otherwise miss has no productive purpose other than contributing to

the psychological well-being of the patient. Virtually any time-shifting that increases viewer access to

television programming may result in a comparable benefit. The statutory language does not identify any

dichotomy between productive and nonproductive time-shifting, but does require consideration of the

economic consequences of copying.




--------------------------------------------------------------------------------


[p.456] In summary, the record and findings of the District Court lead us to two conclusions. First, Sony

demonstrated a significant likelihood that substantial numbers of copyright holders who license their

works for broadcast on free television would not object to having their broadcasts time- shifted by private

viewers. And second, respondents failed to demonstrate that time-shifting would cause any likelihood of

nonminimal harm to the potential market for, or the value of, their copyrighted works. The Betamax is,

therefore, capable of substantial noninfringing uses. Sony's sale of such equipment to the general public

does not constitute contributory infringement of respondents' copyrights.


V


"The direction of Art. I is that Congress shall have the power to promote the progress of science and the

useful arts. When, as here, the Constitution is permissive, the sign of how far Congress has chosen to go

can come only from Congress." Deepsouth Packing Co. v. Laitram Corp., 406 U.S. 518, 530 (1972).


One may search the Copyright Act in vain for any sign that the elected representatives of the millions of

people who watch television every day have made it unlawful to copy a program for later viewing at

home, or have enacted a flat prohibition against the sale of machines that make such copying possible.


It may well be that Congress will take a fresh look at this new technology, just as it so often has

examined other innovations in the past. But it is not our job to apply laws that have not yet been written.

Applying the copyright statute, as it now reads, to the facts as they have been developed in this case, the

judgment of the Court of Appeals must be reversed.


It is so ordered.