Sony Corp. of America v. Universal City Studios, Inc.

Last updated

Sony Corp. of America v. Universal City Studios, Inc.
Seal of the United States Supreme Court.svg
Argued January 18, 1983
Reargued October 3, 1983
Decided January 17, 1984
Full case nameSony Corporation of America et al. v. Universal City Studios, Inc., et al.
Citations464 U.S. 417 ( more )
104 S. Ct. 774; 78 L. Ed. 2d 574; 1984 U.S. LEXIS 19; 52 U.S.L.W. 4090; 220 U.S.P.Q. (BNA) 665; 224 U.S.P.Q. (BNA) 736; 55 Rad. Reg. 2d (P & F) 156
Argument Oral argument
Case history
PriorUnfair competition claims dismissed, 429 F. Supp. 407 (C.D. Cal. 1977); judgment for defendants, 480 F. Supp. 429 (C.D. Cal. 1979); affirmed in part, reversed in part and remanded, 659 F.2d 963 (9th Cir. 1981); rehearing denied, 9th Circuit, 1982; cert. granted, 457 U.S. 1116(1982); reargument scheduled, 463 U.S. 1226(1983).
SubsequentRehearing denied, 465 U.S. 1112(1984)
Holding
Manufacturers of home video recording machines could not be liable for contributory copyright infringement for the potential uses by its purchasers, because the devices were sold for legitimate purposes and had substantial non-infringing uses. Personal use of the machines to record broadcast television programs for later viewing constituted fair use. Ninth Circuit Court of Appeals reversed.
Court membership
Chief Justice
Warren E. Burger
Associate Justices
William J. Brennan Jr.  · Byron White
Thurgood Marshall  · Harry Blackmun
Lewis F. Powell Jr.  · William Rehnquist
John P. Stevens  · Sandra Day O'Connor
Case opinions
MajorityStevens, joined by Burger, Brennan, White, O'Connor
DissentBlackmun, joined by Marshall, Powell, Rehnquist
Laws applied
17 U.S.C. § 101 et seq. (Copyright Act of 1976)

Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417 (1984), also known as the "Betamax case", is a decision by the Supreme Court of the United States which ruled that the making of individual copies of complete television shows for purposes of time shifting does not constitute copyright infringement, but can instead be defended as fair use. [1] [2] The court also ruled that the manufacturers of home video recording devices, such as Betamax or other VCRs (referred to as VTRs in the case), cannot be liable for contributory infringement. The case was a boon to the home video market, as it created a legal safe harbor for the technology. [3]

Contents

The broader legal consequence of the Supreme Court's decision was its establishment of a general test for determining whether a device with copying or recording capabilities ran afoul of copyright law. This test has created some interpretative challenges for courts when applying the precedent to more recent file sharing technologies available for use on home computers and over the Internet. [3]

Background

In the 1970s, Sony developed the Betamax video tape recording format. Universal Studios and the Walt Disney Company were among the entertainment companies who were wary of this development, but were also aware that the U.S. Congress was in the final stages of a major revision of copyright law and would likely be hesitant to undertake any new protections for the film industry. The companies therefore opted to sue Sony and its distributors in the U.S. District Court for the Central District of California in 1976, alleging that because Sony was manufacturing a device that could be used for copyright infringement, the company was thus liable for any infringement committed by purchasers of the device. The complaint additionally included an unfair competition claim under the Lanham Act, but this was dismissed early in the course of the lawsuit. [4]

Two years later, the district court ruled for Sony, on the basis that noncommercial home use recording was considered fair use, and that access to free public information is a First Amendment public interest served by this use. [5] However, this ruling was reversed in part by the Ninth Circuit Court, which held Sony liable for contributory copyright infringement. That court also held that the main purpose of Betamax was copying. The circuit court went on to suggest damages, injunctive relief, and compulsory licenses in lieu of other relief. [6] Sony then appealed to the Supreme Court.

Supreme Court ruling

Majority opinion

The Supreme Court ruled 5-4 to reverse the Ninth Circuit, ruling in favor of Sony. The ruling was largely focused on whether the technology in question had significant non-infringing uses, and how the plaintiffs were unable to prove otherwise. [1]

On the question of whether Sony could be described as contributing to copyright infringement, the court stated:

The question is thus whether the Betamax is capable of commercially significant noninfringing uses ... one potential use of the Betamax plainly satisfies this standard, however it is understood: private, noncommercial time-shifting in the home. [7] [...] [W]hen one considers the nature of a televised copyrighted audiovisual work... 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... that the entire work is reproduced... does not have its ordinary effect of militating against a finding of fair use. [8]

Combined with the noncommercial, nonprofit nature of time-shifting, the court concluded that it such behavior indeed qualified as fair use. [1]

Children's television personality Mr. Rogers' testimony supporting the manufacturers of VCRs before the district court was taken into consideration for the Supreme Court's decision. The high court stated that Rogers' views were a notable piece of evidence "that many [television] producers are willing to allow private time-shifting to continue" and even quoted his testimony in a footnote. [9]

Dissenting opinion

Justice Harry Blackmun dissented, joined by Justices Marshall, Powell, and Rehnquist. With regard to the issue of unauthorized time-shifting, Blackmun wrote: "Section 106 of the 1976 [Copyright] Act grants the owner of a copyright a variety of exclusive rights in the copyrighted work, including [...] the right 'to reproduce the copyrighted work in copies or phonorecords.' [...] Although the word 'copies' is in the plural in 107(1), there can be no question that under the Act the making of even a single unauthorized copy is prohibited." [10]

Subsequent developments

The case centered around Sony's manufacture of the Betamax VCR, which used cassettes like this to store potentially copyrighted information. Kaseta wideo w systemie Beta ubt.jpeg
The case centered around Sony's manufacture of the Betamax VCR, which used cassettes like this to store potentially copyrighted information.

Immediately after their loss at the Supreme Court, the entertainment companies lobbied Congress to pass legislation that would protect them from the effects of home copying. However, in the eight years that had passed since the suit was initially filed, the use of home recording devices had become so widespread that Congress was not prepared to take any action detrimental to the significant population of VCR owners. The film industry lobbied Congress to impose a small statutory royalty on the sale of blank videotapes, but Congress would not do so, noting the increased profits for film studios in the home video rental and sales market. [11]

Renting movies every day encourages [people] to go see them when they first come out

Film producer Jeff Lourie, 1987 [12]

Rather than destroying film studios, videotape sales became increasingly important to their revenue. The press discussed the VCR "and the viewing habits it has engendered — the Saturday night trip down to the tape rental store to pick out for a couple of bucks the movie you want to see when you want to see it." [13] Film studios opened new divisions to produce prerecorded tapes, [14] and by 1985 home video sales were about the same as box office revenue. [15] The Associated Press reported that "because of the VCR, even a bad movie can make money." Although the VCR received blame for a 25% decline in the summer 1985 box office compared to 1984's, and was blamed for failing movie theaters, [14] by 1987 it was credited with contributing to a record-high box office season, as videotapes' popularity encouraged consumers' interest in films and watching them in theaters. [12] Cable movie channels worried about VCRs affecting subscriptions, [13] but began to offer more films for owners who wanted to build a home library, [14] even encouraging time shifting by broadcasting the movies during the night so VCRs could record them while their owners slept. [16]

In 1989 Sony purchased Columbia Pictures and became the owner of its own Hollywood studio. [17] By 1995 more than half of Hollywood's American revenue came from home video compared to less than a quarter from movie theaters. [18] Forbes wrote in 2001 that the VCR was no longer "arguably believed to be the death knell of the movie business. Instead it became arguably its savior" because consumers preferred buying or renting films to recording their own onto blank tapes. [19] Pamela Samuelson has remarked that "the Sony decision is the most significant legacy of Justice Stevens in the field of intellectual property law and its significance is likely to continue in mediating disputes between copyright industries and creative information technology developers and users of information technology." [3]

The Digital Millennium Copyright Act of 1998 modified some aspects of copyright law that informed the Sony decision in several ways, causing new interpretations to be handed down in later disputes. Many of the same points of law that were litigated in this case have been argued in digital copyright cases, particularly peer-to-peer lawsuits; for example, in A&M Records, Inc. v. Napster, Inc. in 2001, the Ninth Circuit Court of Appeals rejected a fair use "space shifting" argument raised as an analogy to the time-shifting argument that prevailed in Sony. The Ninth Circuit further distinguished the cases because the Napster defendants operated a system that allowed them to monitor and control the potentially infringing activities of its users. [20] In MGM Studios, Inc. v. Grokster, Ltd. in 2005, the Supreme Court extended this analysis to advanced video file-sharing systems. [21]

Related Research Articles

Fair use is a doctrine in United States law that permits limited use of copyrighted material without having to first acquire permission from the copyright holder. Fair use is one of the limitations to copyright intended to balance the interests of copyright holders with the public interest in the wider distribution and use of creative works by allowing as a defense to copyright infringement claims certain limited uses that might otherwise be considered infringement. Unlike "fair dealing" rights that exist in most countries that were part of the British Empire in the 20th century, the fair use right is a general exception that applies to all different kinds of uses with all types of works and turns on a flexible proportionality test that examines the purpose of the use, the amount used, and the impact on the market of the original work.

Grokster Ltd. was a privately owned software company based in Nevis, West Indies that created the Grokster peer-to-peer file-sharing client in 2001 that used the FastTrack protocol. Grokster Ltd. was rendered extinct in late 2005 by the United States Supreme Court's decision in MGM Studios, Inc. v. Grokster, Ltd. The court ruled against Grokster's peer-to-peer file sharing program for computers running the Microsoft Windows operating system, effectively forcing the company to cease operations.

<span class="mw-page-title-main">Video rental shop</span> Physical retail business that rents home videos

A video rental shop/store is a physical retail business that rents home videos such as movies, prerecorded TV shows, video game discs and other media content. Typically, a rental shop conducts business with customers under conditions and terms agreed upon in a rental agreement or contract, which may be implied, explicit, or written. Many video rental stores also sell previously viewed movies astores rented VHS and Betamax tapes of movies, although most stores dropped Beta tapes when VHS won the format war late in the decade. In the 2000s, video rental stores began renting DVDs, a digital format with higher resolution than VHS. In the late 2000s, stores began selling and renting Blu-ray discs, a format that supports high definition resolution.

Ripping is extracting all or parts of digital content from a container. Originally, it meant to rip music out of Commodore 64 games. Later, the term was used to mean to extract WAV or MP3 format files from digital audio CDs, but got applied as well to extract the contents of any media, including DVD and Blu-ray discs, and video game sprites.

<span class="mw-page-title-main">Audio Home Recording Act</span>

The Audio Home Recording Act of 1992 (AHRA) amended the United States copyright law by adding Chapter 10, "Digital Audio Recording Devices and Media". The act enabled the release of recordable digital formats such as Sony and Philips' Digital Audio Tape without fear of contributory infringement lawsuits.

MGM Studios, Inc. v. Grokster, Ltd., 545 U.S. 913 (2005), is a United States Supreme Court decision in which the Court ruled unanimously that the defendants, peer-to-peer file sharing companies Grokster and Streamcast, could be held liable for inducing copyright infringement by users of their file sharing software. The plaintiffs were a consortium of 28 entertainment companies, led by Metro-Goldwyn-Mayer studios.

<i>A&M Records, Inc. v. Napster, Inc.</i> US legal case

A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004 was a landmark intellectual property case in which the United States Court of Appeals for the Ninth Circuit affirmed the district court ruling that the defendant, peer-to-peer file sharing service Napster, could be held liable for contributory infringement and vicarious infringement of copyright. This was the first major case to address the application of copyright laws to peer-to-peer file sharing.

Williams & Wilkins Co. v. United States, 487 F.2d 1345, was an important intellectual property decision by the federal Court of Claims, later affirmed by a per curiam opinion from an evenly divided United States Supreme Court, with only eight justices voting. The decision held that it was a fair use for libraries to photocopy articles for use by patrons engaged in scientific research.

<i>In re Aimster Copyright Litigation</i>

In re Aimster Copyright Litigation, 334 F.3d 643, was a case in which the United States Court of Appeals for the Seventh Circuit addressed copyright infringement claims brought against Aimster, concluding that a preliminary injunction against the file-sharing service was appropriate because the copyright owners were likely to prevail on their claims of contributory infringement, and that the services could have non-infringing users was insufficient reason to reverse the district court's decision. The appellate court also noted that the defendant could have limited the quantity of the infringements if it had eliminated an encryption system feature, and if it had monitored the use of its systems. This made it so that the defense did not fall within the safe harbor of 17 U.S.C. § 512(i). and could not be used as an excuse to not know about the infringement. In addition, the court decided that the harm done to the plaintiff was irreparable and outweighed any harm to the defendant created by the injunction.

Secondary liability, or indirect infringement, arises when a party materially contributes to, facilitates, induces, or is otherwise responsible for directly infringing acts carried out by another party. The US has statutorily codified secondary liability rules for trademarks and patents, but for matters relating to copyright, this has solely been a product of case law developments. In other words, courts, rather than Congress, have been the primary developers of theories and policies concerning secondary liability.

<i>BMG Music v. Gonzalez</i> U.S. court case

BMG Music v. Gonzalez, 430 F.3d 888, was a court decision in which the United States Court of Appeals for the Seventh Circuit ruled that a record company could sue a person who engaged in online sharing of music files for copyright infringement. The decision is noteworthy for rejecting the defendant's fair use defense, which had rested upon her contention that she was merely "sampling" songs with the intention of possibly purchasing the downloaded songs in the future, a practice known informally as "try before you buy".

In broadcasting, time shifting is the recording of programming to a storage medium to be viewed or listened to after the live broadcasting. Typically, this refers to TV programming but it can also refer to radio shows via podcasts.

<span class="mw-page-title-main">Digital Millennium Copyright Act</span> United States copyright law

The Digital Millennium Copyright Act (DMCA) is a 1998 United States copyright law that implements two 1996 treaties of the World Intellectual Property Organization (WIPO). It criminalizes production and dissemination of technology, devices, or services intended to circumvent measures that control access to copyrighted works. It also criminalizes the act of circumventing an access control, whether or not there is actual infringement of copyright itself. In addition, the DMCA heightens the penalties for copyright infringement on the Internet. Passed on October 12, 1998, by a unanimous vote in the United States Senate and signed into law by President Bill Clinton on October 28, 1998, the DMCA amended Title 17 of the United States Code to extend the reach of copyright, while limiting the liability of the providers of online services for copyright infringement by their users.

<i>Elektra Records Co. v. Gem Electronic Distributors, Inc.</i>

Elektra Records Co. v. Gem Electronic Distributors, Inc., 360 F. Supp. 821, was an important case before the United States District Court for the Eastern District of New York that concerned copyright infringement, which held that secondary persons or entities could be liable for that tort under certain circumstances, and is also called the "'make-a-tape' case".

<span class="mw-page-title-main">Videocassette recorder</span> Device designed to record and playback content stored on videocassettes, most commonly VHS

A videocassette recorder (VCR) or video recorder is an electromechanical device that records analog audio and analog video from broadcast television or other AV sources and can play back the recording after rewinding. The use of a VCR to record a television program to play back at a more convenient time is commonly referred to as timeshifting. VCRs can also play back prerecorded tapes, which were widely available for purchase and rental starting in the 80s and 90s. Blank tapes were sold to make recordings.

<i>Cartoon Network, LP v. CSC Holdings, Inc.</i> American legal case

Cartoon Network, LP v. CSC Holdings, Inc., 536 F.3d 121, was a United States Court of Appeals for the Second Circuit decision regarding copyright infringement in the context of DVR systems operated by cable television service providers. It is notable for partially overturning the Ninth Circuit precedent MAI Systems Corp. v. Peak Computer, Inc., regarding whether a momentary data stream is a "copy" per copyright law.

<i>Recording Industry Assn of America v. Diamond Multimedia Systems, Inc.</i> 1999 United States legal case

Recording Indus. Ass’n of Am. v. Diamond Multimedia Sys., Inc., 180 F.3d 1072, 51 U.S.P.Q.2d (BNA) 1115 was a case decided by the United States Court of Appeals for the Ninth Circuit in 1999. The court applied the Audio Home Recording Act to the Rio digital audio player manufactured by Diamond Multimedia, concluding that the Rio was not a "digital audio recording device" under that statute.

A&M Records, Inc. v. Napster, Inc., 114 F.Supp.2d 896 (2000), was the district court case which preceded the landmark intellectual property case of A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004 (2001). The case was heard by Judge Marilyn Hall Patel of the United States District Court for the Northern District of California. Napster appealed this case to United States Court of Appeals for the Ninth Circuit.

Contributory copyright infringement is a way of imposing secondary liability for infringement of a copyright. It is a means by which a person may be held liable for copyright infringement even though he or she did not directly engage in the infringing activity. In the United States, the Copyright Act does not itself impose liability for contributory infringement expressly. It is one of the two forms of secondary liability apart from vicarious liability. Contributory infringement is understood to be a form of infringement in which a person is not directly violating a copyright but induces or authorises another person to directly infringe the copyright.

<i>RealNetworks, Inc. v. Streambox, Inc.</i>

RealNetworks, Inc. v. Streambox, Inc., 2000 WL 127311, was a copyright law case of the United States District Court for the Western District of Washington, over the anti-circumvention provisions of the Digital Millennium Copyright Act and whether those provisions are violated by a service that enables Internet users to circumvent the copyright protection controls used by a streaming platform.

References

  1. 1 2 3 Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417 (1984). PD-icon.svg This article incorporates public domain material from this U.S government document.
  2. "Sony Corp. of Am. v. Universal City Studios, Inc" (PDF). Copyright.gov.
  3. 1 2 3 Pamela Samuelson (2006). "The Generativity Of Sony v. Universal: The Intellectual Property Legacy Of Justice Stevens" (PDF). Fordham Law Review. 74: 1831.
  4. Universal City Studios v. Sony Corp. of America, 429F. Supp.407 ( C.D. Cal. 1977).
  5. Universal City Studios v. Sony Corp. of America, 480F. Supp.429 (C.D. Cal.1979).
  6. Universal City Studios v. Sony Corp. of America, 659F.2d963 ( 9th Cir. 1982).
  7. 464 U.S. at 442.
  8. 464 U.S. at 449-50.
  9. 464 U.S. at 445.
  10. 464 U.S. at 461-63 (Blackmun, J., dissenting).
  11. Jeffrey P. Cunard (1996). "Past as Precedent: Some Thoughts on Novel Approaches to the Nexus of Digital Technologies and the Arts". Leonardo. The MIT Press. 29 (3): 245–247. doi:10.2307/1576263. JSTOR   1576263. S2CID   193110648.
  12. 1 2 Thompson, Anne (May 10, 1987). "VCRs Sending People Back to Theaters / Video use is leading to record box-office boom". San Francisco Chronicle. p. 29. ProQuest   302128658.
  13. 1 2 Sonasky, Steven (June 10, 1986). "VCRs give cable TV firms a common enemy". Boca Raton News. Knight-Ridder Newspapers. pp. 4D. Retrieved January 25, 2015.
  14. 1 2 3 De Atley, Richard (September 7, 1985). "VCRs put entertainment industry into fast-forward frenzy". The Free Lance-Star. Associated Press. pp. 12–TV. Retrieved January 25, 2015.
  15. Advokat, Stephen (December 26, 1985). "Small screen begins to dominate Hollywood thinking". St. Petersburg Evening Independent. Knight-Ridder Newspapers. pp. 3B. Retrieved May 23, 2011.
  16. Holsopple, Barbara (June 5, 1985). "Pay-TV looks elsewhere as theatrical movies lose their appeal". The Pittsburgh Press. pp. C12. Retrieved January 25, 2015.
  17. Richter, Paul (September 27, 1989). "Sony to Buy Columbia, Says Americans Will Run Studio : 1st Sale of Film Maker to Japanese". Los Angeles Times. Retrieved June 19, 2014.
  18. Nichols, Peter M. (July 12, 1996). "Where the VCR Rules". The New York Times. Retrieved March 31, 2012.
  19. Ackman, Dan (August 17, 2001). "Movie Studios Get Hip With The Future". Forbes. Retrieved July 18, 2011.
  20. A&M Records, Inc. v. Napster, Inc. , 239F.3d1004 (9th Cir.2001).
  21. MGM Studios, Inc. v. Grokster, Ltd. , 545 U.S. 913 (2005).

Further reading