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When Sony Corporation (“Sony”), a Japanese-owned firm, started making state-of-the-art technologies in the 1970s, the world was caught off-guard. Americans were amazed, thrilled, and alarmed, all at the same time with regards to this emerging technological powerhouse that offered among other things, miniaturized music players, reliable cars, and machinery. It was not a long time ago when this tiny nation was humbled by American forces in World War II. But decades later two prominent American firms, Universal City Studios, Inc. (“Universal”) and Walt Disney Studios (“Disney”) sued Sony, a move that can be explained by one or all of the following factors: a) need to reassert control; b) ignorance of the technology; and c) greed. The Supreme Court decided that the respondents, Universal and Disney had no case against Sony, stating that the use of Betamax Video Tape Recorders (“Betamax”) to record movies and shows does not make Sony guilty of copyright infringement or even of contributory infringement.
Background
For a very long time companies like Universal Studios, Inc. and Walt Disney had total control over their products. In the early part of the 20th century and even after the Second World War, these firms had mastered the intricacies of the moviemaking business and even TV broadcasting. Since the adoring public continued to clamor for movies and other entertainment products created by these companies there was a constant flow of money from a captive audience. From the point of view of the paying public, there is no other way to view these highly entertaining films except to go to the movie houses and pay for tickets.
When the Television set was invented and became popular in the 1950s, Universal and Walt Disney’s cash flow was never threatened. In fact, the emergence of this new technology allowed them to expand and took a bigger slice of the market. For those who find it inconvenient to get out of their homes and go to the cinema, watching movies on their TV sets is the best alternative. But entertainment behemoths like Universal and Walt Disney were protected by copyright laws. TV stations had to pay them every time they use films and other media production created by the aforementioned companies. The cash flow of Universal and Walt Disney was never threatened even as the 1960s came to a close.
But thousands of miles away, a technological powerhouse was about to rise from the ashes of war. The Japanese economy was rebuilt, brick by brick by the same people who a few decades earlier threatened to conquer all of Asia. There was no warning when the Japanese finally landed in the United States and with Sony Corporation and Sony Corporation of America began to challenge American firms, especially those that are linked to the music and entertainment industry. Although Sony did not start to imitate media giants like Universal and Walt Disney, it was able to create products that threatened to upset the balance of power in the said industry.
Sony was so successful because it was able to create products that serve the needs of the people. The leaders at Sony Corp. had an uncanny knack for figuring out what Europeans, Americans, and Asians wanted in their electronic gadgets. They want it small and yet high-tech. It did not take long before the Japanese invented a device that would allow home viewers the capability to watch movies without the aid of projectors, TV stations, or other complexes yet unwieldy devices. They invented VTRs, tapes provided the means not only to watch movies whenever users feel like watching. It is also a device that can copy whatever is being shown on TV at the moment and then watch the same show at a later time. This process is called “time-shifting”, a great way to save time. But from the point of view of respondents, this is purely copyright infringement.
The Case
There are two respondents in this case, Universal Studios and Disney Studios and their case against Sony was described as a “…copyright infringement action against petitioners in the United States District Court for the Central District of California in 1976” (464 U.S. 417, par. 2). The American consumers were mostly thrilled by the features of the 1970s model of the Betamax videotape recorder. It allows them to record their favorite shows and build a library composed of these tape-recorded shows in Betamax format and they could enjoy watching it over and over again or as long as the tape will last. The same can be said of movies broadcasted over public airwaves and beamed to their TV sets. They can use their VTRs to record these movies.
But aside from the recording of favorite shows and movies in a process described earlier, another popular use of Sony’s VTR’s is to record shows airing on TV while the owner of the device is not at home. This is called “time-shifting”, something that has to do with time management. If the owner is at work there is no need to take a break just to watch a show or a televised event broadcasted live. The consumer can simply program the VTR so that it will record the exact time, copying everything on TV, as if he or she was watching the whole program.
The respondents would not let Sony sidetrack them and they insisted that there is clear evidence that Betamax VTR’s is capable of being used to make illegal copies of copyrighted works. According to the respondents, the petitioner is helping others, “…to record some of respondents’ (Universal) copyrighted works which had been exhibited on commercially sponsored television and contended that these individuals had thereby infringed respondents’ copyrights” (464 U.S. 417, par.2). Universal and Walt Disney would like to link Sony and the individuals who violated copyright laws, for the respondents, Sony and the consumers who infringe on copyright are one and the same.
But the petitioner argued that the Betamax VTRs were never created to infringe on copyrighted works. Instead the petitioner argued that there can be other ways to use the said device. Sony, therefore, presented considerable evidence, “…describing television programs that could be copied without objection from any copyright holder, with special emphasis on sports, religious, and educational programming” (464 U.S. 417, par. 10). This is one of the highlights of the case and this part here can help explain why Sony was not forced to pay damages and give up a portion of its profits from the sale of Betamax recorders to the two respondents.
The Decision
The decision of the Supreme Court can be understood through the following arguments (Band & McLaughlin, 1993):
- There is an exemption to the 1976 Copyright Law – home video recording.
- Betamax users were not liable to copyright infringement because they were protected by the fair use doctrine. This means that watching recorded movies and shows in the comfort of one’s own home is considered fair use.
- Sony had no knowledge that manufacturing Betamax VTR’s is already an infringement of copyright.
- The copied programs were voluntarily sold by the respondents for free broadcast over public airwaves.
Aside from taking shelter in the exemptions found in the 1976 Copyright Law, there are other reasons why Sony was not held liable for the alleged infringement violations. First of all, Sony created something that improved the lives of people. The Betamax VTR was a very important time-saving device. It helps in making people more productive. Instead of waiting for the shows and watch at the exact time when it is being aired, the consumer can simply record the event, show, movie, etc. and come back to watch at his or her leisure.
U.S. Courts could also not deny the capability of VTR’s to help increase access to information. As stated earlier, owners of VTR’s can record religious and education shows and build libraries containing helpful topics. They can access these tapes at a later time so that others can enjoy their content. From the point of view of educators, especially those serving in poor countries this device is heaven-sent. In a non-commercial environment education shows can be replayed over and over again without worrying about copyright violations.
Control, Ignorance, and Greed
As mentioned earlier Universal Studios and Walt Disney Studios are used to being on top of their game. They are well aware of the intricacies of their trade and mastered the technology required to maintain their dominant position in the industry. But when Sony Corporation came introducing their Betamax VTR’s their position was severely threatened. They no longer have full control. In the past Americans had to go to their stores and buy original products just so they can enjoy watching their favorite shows and movies.
But with the VTR’s American consumers now can enjoy movies and their favorite shows by recording what was previously made available through “free broadcast over public airwaves” (Band & McLaughlin, 1993). If the respondents would not act now then they would forever lose control over their copyrighted works.
But in this case, respondents made some very interesting statements, Sony was liable for the copyright infringement committed by users of Betamax because Sony produced the technology that allowed them to do so. But there is more, respondents sought no relief against any Betamax consumer but instead are asking money damages and equitable accounting of profits from Sony. If they are serious about copyright infringement then they should go after those who allegedly committed the crime. So why attack a firm having no direct control over those who are using the VTR’s to record copyrighted shows and movies?
It is also possible that aside from trying to wrest control of the burgeoning industry of home entertainment, the two respondents did not fully understand the technology behind Betamax VTR’s. They constantly argued that copying movies and shows while being broadcasted over public airwaves is tantamount to recording the same show or movie while in production as if the consumer was right there in the middle of Universal Studios or Walt Disney Studios filming the whole event. Today, the technology is very easy to understand but perhaps very advanced for top executives at Universal and Walt Disney in the 1970s.
The basis for this assertion is the fact that it took years before the Supreme Court was able to fully grasp the problem. They needed more time to review the case, signifying that the technology involved was too advanced for its time. Imagine this, Betamax VTR’s can record a show on a different channel while the owner of the device is watching another show in yet again a different channel. But some may say that this argument is not logical because the respondents had the resources to do research and they would be able to understand this new technology in no time.
If ignorance of cutting-edge technology is not the main reason for erroneously suing Sony Corporation for copyright infringement then it can be argued that greed is the central motivation as to why Universal and Disney wanted the Courts to order Sony to pay them in damages as well as a slice of the profit from the sale of Betamax recorders. This argument can be expounded by looking at the many incomes streams available for the two companies. According to the U.S. Supreme Court, the two respondents can exploit their rights in their copyrighted works through the following:
- Authorizing theatrical exhibitions;
- Licensing limited showings on cable and network TV;
- Marketing pre-recorded videotapes or videodiscs (464 U.S. 417, par. 5).
In other words, the respondents already made money out of the broadcasted shows when they asked TV stations to pay them for the use of their copyrighted works. The best way to understand their greed is through the use of the following remarks, when U.S. Courts decided in favor of Sony, “The district court’s opinion focused on the fact that the taping took place in private homes for private, non-commercial home use, and on the fact that the copied programs were voluntarily sold by the copyright holders for free broadcast over public airwaves” (Band & McLaughlin, 1993). The TV stations already paid for the right to air it publicly. Therefore what was broadcasted free of charge can also be considered public property.
Relevance in the 21st Century
This was a landmark case. The decision of the Supreme Court enforced the spirit of the law, specifically the copyright law. The original intent of the copyright law was not to make authors and inventors wealthy beyond their dreams and to continue earning from their works in perpetuity but to encourage them to produce innovative ideas and create great works to enrich human lives. Thus, there should be an end to the “monopoly” but before that time will come they are allowed to make money out of their work. But clearly, the goal was not for profit but merely an incentive.
Universal Studios and Walt Disney Studios bid to force Sony Corporation to pay damages and to give-up, a portion of their earnings from the lucrative sale of Betamax VTR’s, plus an injunction on the future sales of the device is a blatant disregard for the true purpose of the copyright law. They simply want to have control and to make as much money as they can from their copyrighted works. The Supreme Court saw their desire to expand the coverage of the copyright law by asking Sony to pay for being an indirect link to copyright infringement activities.
In the 21st century some did not fully agree to the 1984 decision of the Supreme Court to allow VTR users the ability to record copyrighted shows and videos. Critics are clamoring to review the ruling made on the said case, especially when it comes to “contributory copyright infringements” (Hamilton, 2007). While the Supreme Court was correct in ruling that Sony Corporation was not guilty of copyright infringement, the landmark decision did not anticipate that the day will come when videos recorded at home can be sent halfway around the globe to be enjoyed by a total stranger.
When the Supreme Court penned its decision in 1984 there was a prevailing belief that the Betamax tapes stay home and therefore only to be enjoyed among family members. But this is not the case in a highly global world where everything is interconnected. There is a need to look into this new development when it comes to recording and storage of copyrighted works.
Conclusion
The case of Sony versus two respondents, Universal Studios and Walt Disney Studios was a defining moment in the legislative history of the Copyright Law. As a result many issues were resolved by the ruling while at the same time creating new ones. The Supreme Court must be commended for the tough ruling because the Courts were able to see beyond the surface and able to shift through all the technical jargon as well as complex money-making schemes resulting from the sale and reproduction of copyrighted works.
One of the most important aspects of this ruling is how the Courts demonstrated how to correctly interpret the law and to stand firm against those who seek to monopolize a particular industry and to think of nothing else but profit. The essential purpose of copyright laws is not to transform talented inventors and authors into multi-millionaires but to encourage talented people to share what they know with others. Therefore, copyright laws were established so that others will be blessed by the talents of others. But respondents Universal and Walt Disney had only one thing in mind and that is to make as much money as they could from the sale and licensing of their copyright products.
The respondents were not even content to seek an injunction on the future sale of Betamax VTR’s the two companies also wanted a share of the profits made by Sony Corporation. The greed was so palpable that the Supreme Court was able to detect that respondents were trying to expand the scope of the laws and to make it work to their advantage. One of the main arguments that sealed the decision in favor of Sony is those concerning home use of the Betamax tapes as well as the fact that the material recorded in the VTR’s came from authorized use of copyright material that was broadcasted free over public airwaves.
References
Band, Jonathan & Andrew McLaughlin. (1993). The Marshall Papers: A Peek Behind the Scenes at the Making of Sony v. Universal. Columbia-VLA Journal of Law & the Arts. 2009. Web.
Hamilton, Marci. (2007). It’s Time for the Supreme Court’s Sony Betamax Decision to be Reversed: The Latest in Online Copyright Infringement – Offering Menus of Links to Illegal Video Copies of Television Shows and Movies. 2009. Web.
Sony Corp. of Amer. v. Universal City Studios, Inc., 464 U.S. 417 (1984). 2009. Web.
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