Sony Corporation of America v. Universal City Studios, Inc. – Oral Argument – January 18, 1983

Media for Sony Corporation of America v. Universal City Studios, Inc.

Audio Transcription for Opinion Announcement – January 17, 1984 in Sony Corporation of America v. Universal City Studios, Inc.

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Warren E. Burger:

Before we hear the arguments in Sony Corporation against Universal City Studios, in case counsel were not in the courtroom at 10:00 o’clock this morning, I’m authorized to announce that Mr. Justice Brennan is unavoidably absent, attending the funeral of a member of his family, and he will participate in these cases on the basis of the papers and the recording, the tape recording of the oral arguments.

[Laughter]

Mr. Dunlavey, you may proceed whenever you’re ready.

Dean C. Dunlavey:

Mr. Chief Justice and may it please the Court:

The first issue presented by this case is whether a person who receives a free off the air television broadcast in his home by use of a video tape recorder, as distinguished from a television set, is thereby committing direct copyright infringement on the program that he is receiving.

Now, in this case no remedy is sought against any so called direct infringer, but the Ninth Circuit has answered the question yes, and if the Ninth Circuit is upheld then there are some five million plus video tape recorder owners who will be at the mercy of any copyright owner who seeks to take advantage of the situation.

The second issue before the Court is whether there has been contributory copyright infringement by the Petitioners in this case, and bear in mind that they are the manufacturer, the American distributor, and the American national advertiser of a video tape recorder whose brand name is Betamax.

Again, the Ninth Circuit has answered that question yes, and Universal has moved immediately to exploit the situation by filing a second action in the Ninth Circuit against some 50 additional VTR suppliers, and also has filed a second suit against the same Petitioners in this action alleging that, on information and belief, one or more video tape… one or more Betamax owners has copied every single production that Universal has put on television since genesis and must account for that in statutory damages.

Now, the pernicious point in the contributory infringement aspect is that Universal is seeking either an injunction… and they are dead serious about it… an injunction against the video tape recorder and/or statutory damages.

And when we talk statutory damages, it’s $250 for every owner for every program, and that’s the financial liability that they seek to assess upon the Petitioners.

So it only takes common sense to realize that the ultimate issue before the Court in this case is whether under the current law all Americans are going to be denied the benefit of time shift home television viewing because a few program owners object.

If there is to be time shift viewing, and by that I mean a viewing of a program at some time not too long after the broadcast, then manifestly there has to be a record of that program to exist between the time of the broadcast and the time of the viewing.

In this case that something is a video tape.

It, by definition of Congress at least, is a copy, and thereby comes the rub, because the copyright law says that only the copyright owner has the right to make a copy of his copyrighted work, unless of course he gives consent.

So the direct infringement question here is whether that copy that exists in the form of the videotape between the broadcast and the playback is an infringing copy or is it an example of fair use.

There is no problem with the playback.

The playback is authorized specifically by statute.

The problem lies with the copy.

The case has been presented by the Respondents through four individual owners.

Now, three of those owners really are atypical if you want to look at it from the standpoint of the American public.

One of them had 100 tapes, one of them had 170 tapes, one of them had 340 tapes… all this at a time when the norm was 30 tapes.

Amongst those four, however, there is a commonality that gives the issue to the Court this morning.

Whatever else they did, they copied 32 programs that belonged either to Universal or to Disney.

Nothing else; the issues to this case reside solely within those 32 copies.

Each of these persons made his copy at home.

There is no commercial aspect of it.

It never got out of his house.

It was only intended for his use and perhaps his friends in a couple of instances, and the usage was singularly of the kind we call time shift.

As the opinion states, it’s the recording, the holding for a short period of time, then watching and then erasing, and the erasing is automatic as you record something else.

Because of the trial judge’s wishes, there are surveys in the case.

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Dean C. Dunlavey:

They have to do with the use of the Betamax generally by the persons who were surveyed.

But it must be borne in mind that none of those surveys has anything to do with the particular works which have been infringed allegedly.

None of those surveys pertains to Respondents’ work at all, neither those in issue nor of any other kind.

And again specifically, none of those surveys shows any librarying of Respondents’ work.

Now, librarying is the other kind of home use that creeps into the case.

If a person keeps his tape for a prolonged period of time… and that’s never been defined… and looks at it for a number of times… and the number has never been defined… then at least theoretically there becomes a time when he becomes saturated with that program.

But if that happens, it’s outside of this case, because it is not a factor as to any of the 32 works that are in issue.

The trial judge’s only comments, a summarization of his comments with respect to librarying, was simply that it has not been proven that many persons will library to any significant extent.

The trial judge also ruled out certain additional uses that can be made of these tapes if the owner is so inclined.

You can duplicate them, theoretically.

That is, once you’ve got one tape you can make a copy from it.

Or you can record from pay television.

Or, having made your copy, you can take it outside the home for one purpose or another.

Or you can swap.

All of those things are theoretically possible, but there is no evidence in this case that any of that was done with respect to any of the Respondents’ works.

So the trial judge specifically said, there are problems inherent in modern technology that are not in this case and that this case does not purport to resolve.

Harry A. Blackmun:

Mr. Dunlavey, you keep using the word “theoretically”.

I suppose it’s really possible, as opposed to just theoretically possible.

Dean C. Dunlavey:

It is possible, but it’s not in the evidence.

Warren E. Burger:

Would it not make any difference, Mr. Dunlavey, whether it was used once or 25 times under the Ninth Circuit’s holding, the second run?

Dean C. Dunlavey:

No.

As far as the Ninth Circuit is concerned, the number of times it’s run is immaterial.

The infringement occurs instantly that the copy is made.

Warren E. Burger:

The first copy.

Dean C. Dunlavey:

The copy per se is the infringement.

Lewis F. Powell, Jr.:

If the use was time shifting today, could it not be librarying tomorrow?

Dean C. Dunlavey:

Could it?

Lewis F. Powell, Jr.:

Yes.

Dean C. Dunlavey:

Yes, it could.

Lewis F. Powell, Jr.:

And how would one know, really?

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Dean C. Dunlavey:

One can only find out what’s going on with surveys.

The surveys… if you get outside the evidence, and I don’t want to do that because my emphasis is to stay within the evidence.

If you get outside the evidence, librarying is on the decrease because these prerecorded copies are being made available, which are better and they serve the purpose.

Librarying also is something that the owner first thinks of when he buys his machine.

Here he’s got a device for built in home entertainment.

But as a matter of fact it turns out to be very expensive, and even one or two of our owners in issue bought with the intent of librarying and then said specifically that they didn’t.

So could it take place?

Yes, but in fact it’s decreasing.

Now, looking at the Betamax… and realize there’s only one public television game going on in this country, everybody has to abide by the same rules, so in trying to find out what kind of a machine is being sold, the District Court looked at evidence of a number of kinds of uses of this machine, which where clearly not infringement, or the owners of the copyright who might have otherwise said it was infringement instead said they consented to it.

Many program owners, in addition to the public in general, are in favor of Betamax, because many program owners would rather be seen as a second choice sometime later than to be missed entirely.

The trial judge said that this was a staple item of commerce, that it was suitable for a variety of non infringing uses, and in that finding, he had all kinds of backed up evidence, because we had specific owners of various kinds of programs, who said that they did not object to or consented to the recording.

Without wasting time on the details, they included sports program copyright owners, religious owners, childrens’ programming owners, entertainment programming owners, and as an aside, the American Broadcasting Company right now is on the verge of broadcasting programs at night, or early in the morning, really, from 2 a.m. to 6 a.m., intended for reception with a VTR so somebody can watch them later on during waking hours.

And there were also educational programs.

And although Universal prevailed upon the court to find that there was no legitimate use for the Betamax… on the Ninth Circuit Court… Universal itself is a signatory to an agreement called Guidelines, which is a type of agreement between copyright owners and educators.

It has been given the dignity in the House Committee report and sanctioned by the Senate Committee, the Conference Committee report that followed it, that what they could agree upon would be deemed a fair use.

William H. Rehnquist:

Mr. Dunlavey, this was a finding of fact, was it, by the district court, that it was a staple of commerce?

Dean C. Dunlavey:

Yes, it was.

William H. Rehnquist:

And the Court of Appeals upset that finding of fact?

Dean C. Dunlavey:

The Court of Appeals rolled over it like it wasn’t even there.

The Court of Appeals–

William H. Rehnquist:

So you must be saying that the Court of Appeals what, misapplied the clearly erroneous test?

Dean C. Dunlavey:

–The Court of Appeals really didn’t apply the clearly erroneous test at all.

It ignored the findings.

It didn’t take a single finding and say that this finding is wrong.

It simply substituted its own impressions in every respect.

William H. Rehnquist:

I certainly got the impression from reading Judge Kilkenny’s opinion that the opinion said in effect this finding was wrong.

I realize, he didn’t say in so many words it was “clearly erroneous”.

Dean C. Dunlavey:

Judge Kilkenny said that the machine was not suitable for substantial non infringing use.

But to the extent that he gave any reason for it, it was that all broadcast programs now can be copyrighted, from the time they’re broadcast at least, and since the Betamax is intended to record a television program, ergo it must follow that it was designed only to copy something that was copyrighted.

What the Ninth Circuit missed was that there are a lot of copyright owners, far more than those who object in fact, who consent to copying.

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Dean C. Dunlavey:

Yes, they may have copyrights, but they have agreed that the Betamax may copy it.

Also, there’s another category of copyright owner, at least in the first instance, who might have had copyright protection, but before he can bring an infringement suit he has to register his work and thereby lay the groundwork for having an infringement suit to follow it.

No registration, no infringement.

And there are a number of stations around the country which don’t go to the trouble of registering or copyrighting their programs.

They use their tape for one broadcast and then turn around and reuse it for another.

They have decided, apparently, that it’s not worthwhile copyrighting it.

It is our contention that those people have knowingly forfeited their right to enjoin home recording, and that that kind of programming, even without their specific consent, is also a legitimate use.

Sandra Day O’Connor:

Mr. Dunlavey, what are the practical effects of finding that it’s a staple item of commerce?

And that’s a doctrine that was developed in the patent field.

Are there cases that have adapted it to the copyright area?

And as a practical matter what would be the effect of such a finding?

Dean C. Dunlavey:

The answer is yes, it has been alluded to in the copyright area, but it was a long time ago.

It was Justice Holmes in the Kalem case, and he was confronted with a motion picture which had been made without authority of a copyrighted book called “Ben Hur”.

And nobody even questioned that the makers of the camera and the film were infringers, but there was a question as to whether the person who had made the film was a contributory infringer when the person he gave it to exhibited it… exhibited it.

And Justice Holmes made a very terse but pointed comment that there are a lot of things in society that when you sell them they might be useable for a wrongful purpose, and you set your mind to inquiring when the man makes and sells that product, does he really have cause to know that it’s going to be used for a wrongful purpose?

So the staple item concept came up.

Justice Holmes said that if you have an indifferent supposition, that the buyer might be going to use your product for a wrongful purpose, that certainly does not suffice to make you a contributory infringer.

By the same token, if you’re selling something that’s a staple item of commerce… and by definition that is something that has got legitimate uses… then you as a manufacturer cannot have the buyer’s motive imputed to you.

That’s where the staple item is important.

Sandra Day O’Connor:

So in your view that would protect both the manufacturers and the retailers and wholesalers?

Dean C. Dunlavey:

And the distributor and the advertiser.

Sandra Day O’Connor:

Distributors.

Dean C. Dunlavey:

There are so many legitimate uses to which this machine can be put that it’s grossly unfair to hold the manufacturer if somebody misapplies it, assuming that it is a misapplication.

Now, the other thing of course that the supplier–

Byron R. White:

What would you say, Mr. Dunlavey, if every program that came over television was not only copyrighted, but the copyright owners didn’t want their programs copied on a Betamax?

Let’s just assume that.

Then what about the contributor?

What about the Betamax manufacturer?

Dean C. Dunlavey:

–If it were the case that no substantial number of copyright owners wanted their televised programs copied, then the argument that I have just made wouldn’t have much weight to it.

Byron R. White:

Yes.