| Sony Corp. of America v. Universal City Studios, Inc. | ||||||
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Supreme Court of the United States |
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| Argued January 18, 1983 Reargued October 3, 1983 Decided January 17, 1984 |
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| Full case name | Sony Corporation of America et al. v. Universal City Studios, Inc., et al. | |||||
| Citations | 464 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 |
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| Prior history | Unfair 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) | |||||
| Subsequent history | Rehearing 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 | ||||||
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| Case opinions | ||||||
| Majority | Stevens, joined by Burger, Brennan, White, O'Connor | |||||
| Dissent | Blackmun, 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),[1] 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 is fair use. 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 infringement. The case was a boon to the home video market as it created a legal safe haven for the technology, which also significantly benefited the entertainment industry through the sale of pre-recorded movies.
The broader legal consequence of the 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 to courts in applying the case to more recent file sharing technologies available for use on home computers and over the Internet.
Contents |
In the 1970s, Sony developed Betamax, a video tape recording format (VHS would later overtake Betamax). Universal Studios and the Walt Disney Company were among the film industry members 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 U.S. 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 potentially be used for copyright infringement, they were thus liable for any infringement that was committed by its purchasers. The complaint additionally included an unfair competition claim under the Lanham Act, but this was dismissed early in the course of the lawsuit.
Two years later, the District Court ruled for Sony, on the basis that noncommercial home use recording was considered fair use, that access to free public information is a First Amendment public interest served by this use. However, this ruling was reversed in part by the United States Court of Appeals for the Ninth Circuit, which held Sony liable for contributory infringement. The court also held that the Betamax was not a staple article because its main purpose was copying. It went on to suggest damages, injunctive relief and compulsory licenses in lieu of other relief.
After hearing oral arguments in the case, the Supreme Court was conflicted as to the outcome. The papers of Justice Thurgood Marshall, released nearly a decade later, reveal that a majority of justices were initially inclined to affirm the Ninth Circuit. Justice Blackmun was assigned to write a majority opinion to that effect, while Justice John Paul Stevens drafted a dissenting opinion. Sensing that some members of the Court might be persuaded to change their votes, Stevens wrote a dissent that read like a majority opinion, and could be changed to one with the substitution of a few words.
Stevens, in his initial draft, expressed great concern with the possibility that an individual might be liable for copyright infringement for copying a single program in his own home, and for his own use. At the same time, Justice Brennan was wavering on affirming based on the presence of non-infringing uses of the technology—but Brennan was not prepared to say that making home copies for repeated personal use did not constitute an infringement. Justice White, noting Brennan's position, suggested that Stevens shift the basis of his opinion away from arguments about whether home-use was, in fact, an infringement. White pointed out that the issue need not be resolved, because the suit was not against home-users, but against the producers of the technology that enabled them.
Justice O'Connor, also initially inclined to affirm the Ninth Circuit, had concerns about the potential to shift the burden of proving harm away from the plaintiff. The District Court had found that the plaintiffs had failed to prove that they were harmed; O'Connor was unable to come to terms with Blackmun's reluctance to agree that the actual harm must be provable.
Stevens therefore adjusted his draft to accommodate the positions taken by Brennan and O'Connor. In so doing, he shifted the vote of the Court from a 6-3 majority for affirming the Ninth Circuit to a 5-4 majority for reversing the Ninth Circuit.
The Court's 5-4 ruling to reverse the Ninth Circuit in favor of Sony hinged on the possibility that the technology in question had significant non-infringing uses, and that the plaintiffs were unable to prove otherwise.
On the question of whether Sony could be described as "contributing" to copyright infringement, the Court stated:
Combined with the noncommercial, nonprofit nature of time-shifting, he concluded that it was indeed a fair use.
Justice Harry Blackmun dissented, joined by Justices Marshall, Powell, and Rehnquist. With regard to the issue of unauthorized time-shifting, he wrote:
One commentator, 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."[2]
Immediately after their loss in the Supreme Court, the plaintiffs 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 actions to the detriment of 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.[3]
| “ | Renting movies every day encourages [people] to go see them when they first come out | ” |
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—Film producer Jeff Lourie, 1987[4] |
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Rather than destroying film studios, videotape sales became increasingly important to their revenue. By 1985 sales of prerecorded tapes were about the same as box office revenue,[5] and by 1987 the VCR was credited with causing a "record box-office pace" as videotapes' popularity encouraged consumers' interest in film, thus "sending viewers back to the theaters".[4] By 2001, the VCR was no longer "arguably believed to be the death knell of the movie business. Instead it became arguably its savior" because consumers much preferred buying or renting films to recording their own onto blank tapes.[6]
The DMCA modified the law that the Sony decision was based upon in several ways, and new interpretations are still being handed down. Many of the same points of law that were litigated in this case are still being argued in various cases, particularly in light of recent peer-to-peer lawsuits; for example, in A&M Records, Inc. v. Napster, Inc. 239 F.3d (9th Cir. 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.
In August 2004, in the case of MGM Studios, Inc. v. Grokster, Ltd.,[7] the Ninth Circuit Court of Appeals ruled in Grokster's favor due to its "substantial noninfringing uses". The Supreme Court heard oral arguments in the case on March 29, 2005. The Supreme Court decision of June 27, 2005 reversed the decision of the Ninth Court of Appeals "Because substantial evidence supports MGM on all elements, summary judgment for the respondents was error. On remand, reconsideration of MGM's summary judgment motion will be in order." pp. 23–24 380 F.3d 1154, vacated and remanded. The Supreme Court unanimously concurred that Grokster could be liable for inducing copyright infringement. In the opinion, Justice Souter stated that "[t]he rule on inducement of infringement as developed in the early cases is no different today. [A]dvertising an infringing use or instructing how to engage in an infringing use, show an affirmative intent that the product be used to infringe, and a showing that infringement was encouraged overcomes the law's reluctance to find liability when a defendant merely sells a commercial product suitable for some lawful use…"
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