Copyright Law: Legalizing Home Taping of Audio and Video Recordings

Various Members of Congress have proposed amendments to the Copyright Act that would provide a blanket exemption for noncommercial home audio and video off-air recording. The major thrust of the copyright owners' opposing position is if you cannot protect what you own, or at least receive some compensation for its use, you own nothing. This is countered by those who feel the purpose of the copyright law is to promote broad public availability of artistic products and when the copyright owners decide to use the distribution mechanism of the public airwaves, they have to accept the premises of the public airwaves.

COPYRIGET LAW: LEGALIZING HOME TAPING OF AUDIO AND VIDEO RECORDINGS ISSUE BRIEF NUMBER IB82075 UPDATED 05/31/84 AUTHOR: Paul S. Wallace, Jr. American Law Division T H E LIBRARY OF CONGRESS CONGRESSIONAL RESEARCH SERVICE MAJOR ISSUES SYSTEM D A T E ORIGINATED 07/08/82 FOR ADDITIONAL INFORMATION CALL 287-5700 0531 CRS- 1 ISSUE DEFINITION Various Members of Congress have proposed amendments to the Copyright Act that would provide a blanket exemption for noncommercial home audio and video off-air recording. The major thrust of the copyright owners' opposing position is if you cannot protect what you own, or a t least receive some compensation for its use, you own nothing. This is countered by those who feel the purpose of the copyright law i s to promote broad public availability of artistic products and when the copyright owners decide to use the distribution mechanism of the public airwaves, they have to accept the premises of the public airwaves. There is a general consensus among all groups that no one seeks to forbid anyone from taping either audiovisual works or sound recordings, whether copyrighted or not. The main concern a t this time is whether copyright owners shall in some way be reasonably compensated for the home taping use of their copyrighted works. Or, Jan. 1 7 , 1984, the Supreme Court pronounced ,its decision in Sony Corporation of America v. Universal City Studios. The Court decided, i n a 5-to-4 decision, that home video recording does not violate the copyright law when the tapes of television programs are for private use. BACKGROUND AND POLICY ANALYSIS In November 1975, the Sony Corporation began marketing the Betamax, a videotape recorder (VTR) that enables television owners to record broadcasts using a "pause switch" during and replay them on their own Sets, and to eliminate recording or a "fast-forward switchw during playback commercials. Universal City Studios and Walt Disney Productions, both owners of copyrighted films that Betamax owners can tape from television broadcasts, sued to enjoin the manufacture and sale of the videotape, alleging copyright infringement, for which Sony was said to be directly, contributorily, or vicariously liable. Universal City Studios, Inc. v. Sony Corp., 480 F. Supp. 4 2 9 , 432 (C.D. Cal. 1979). The defendants argued that home-use videorecording did not infringe the plaintiff's copyright and that even if it did, the VTR manufacturer could not be held liable for infringement under any theory of liability. Id. at 432. -- -- The District Court first addressed the question of whether home videotaping constitutes infringement, characterizing its inquiry as a search for the proper balance between "the need for wide availablity of audiovisual works against the need for monetary reward to authors to assure production of these works.!' Id. After reviewing the legislative history of the copyright that protection accorded sound recordings in 1971, the court determined "Congress did not intend intend to restrain the home use [video] copying at issue here." Id. at 447. In 1971 Congress dealt with the growing problem of record piracy(see S.Rept. 92-72, 92d Congress, 1st session, 7-8 [1971]) by amending the 1909 law to give sound recordings limited copyright protection. 391 Sound Recording Amendment of 1971, P.L. 92-140, section 1 (a), 85 Stat. (amending 1 7 U.S.C. 1 (1970) (current version at 1 7 U.S.C. 114(b) [ ~ u p p . I1 19781). The District Court found that the legislative history of this amendment indicates that Congress did not intend to give the holders of sound recording copyrights protection against non-commercial home recording, . CRS- 2 IB82075 UPDATE-05/31/84 because granting such protection was not "worth the privacy and enforcement problems (480 F. Supp. at 446) which restraint of home-use recording would create." 480 F. Supp. a t 446. Reasoning that the home-use sound-recording exemption was carried over to the Ommibus 1976 Copyright Act (Id. at 444-45), the court extended the rationale of that exclusion to home videorecording and they found an implied exception to section 106 for such non-commecial use. The District Court also was convinced that the challenged practices in the case, qualify as a "fair use" exemption under the "fair use" criteria set forth in section 1 0 7 of the 1976 Copyright Act, 1 7 U.S.C. 107. On Oct. 1 9 , 1981, a three-judge panel of the U.S. Court of Appeals for the Ninth Circuit reversed four of the five C 0 n C l U s i O n ~ of law of the District Court. Universal City Studios v. Sony Corp. of America, 6 5 S F F . d 963 (9th Cir. 1981). It affirmed only the holding that retail store demonstration recording was a "fair use." The appellate court's conclusions were decided on the basis of two questions: (a) whether the District Court committed error in finding a n implied videorecording exception in the exclusive rights given to copyrighted owners under section 106 of the Copyright Act of 1976, and (b) whether home videorecording constitutes "fair use." The Ninth Circuit found, among other things, that the "fair usev doctrine that allows use of copyrighted materials for news reporting, teaching, scholarship and research when such use does not compete with the reasons for which the material was made is not applicable to unauthorized home videotapes of copyrigkted material. While the District Court was heavily influenced by the fact that in-home taping of sound recordings had not been halted by the copyright laws and therefore concluded that there was a similarly implied home videorecording exception (apart from the fair use doctrine), the Court of Appeals stated that this conclusion was erroneous. "While the sound recording situation is analogous, there are a number of reasons why sound recordings should receive different judicial treatment... First, the copyright statute treats sound recordings and audiovisual works as separate categories of protected materials.... Second, much of the underlying rationale for the home recording of sound recordings is simply not applicable to videorecording." 6 5 9 F.2d 966-67. The Ninth Circuit Court of Appeals ruled that it could find no explicit exemption from copyright law for home videorecording in the Copyright Act of 1976 (P.L. 94-533). Following the decision by the Court of Appeals in Universal City Studios v. Sony Corp. of America, congressional reaction was swift. Several bills have been introduced to overturn the ruling by exempting home off-air videotaping from copyright liability. The comparative analysis regarding the judicial treatment of sound recordings and audiovisual works by the Court of Appeals gave rise to discussions which suggested that the unauthorized home audio recording of copyrighted works also was subject to protection under the 1976 Copyright Act. The answer to this question is not clear and legislation has been proposed to permit noncommercial audio, as well as video recording in private homes. General Review . CRS- 3 IB82075 UPDATE-05/31/84 Within days of the Appellate Universal City Studios, Inc. v. Sony Corp. of America (Betamax) decision, two bills were introduced to overturn the ruling by exempting home videotaping from copyright liability. First to propose (S. i756) and legislation (Oct. 2 1 , 1981) were Senator D e Concini Representative Parris (H.R. 4808). These bills would protect owners of video recorders (estimated a t 3 million i n the U.S.) from being charged with copyright violations a s long as they record television programs for their own use. The bills provide that the recording of copyrighted works on a video recorder is not an infringement of copyright if "the recording is made for private use and the reccrding is not used in a commercial nature." Supporters of S. 1758 and H.R. 4808 argued that home video recorders are not used to create movie libraries, but rather to enable owners to view programs at a'time other than that scheduled by the television station. This is commonly referred to as "time shifting." Opponents of S. 1758 and H.R. 4808 argued that opposition was most visible from segments of the entertainment indnstry with direct interest in creative property; legislation expressive of their case was soon forthcoming. On Dec. 1 6 , 1981, Senator Mathias introduced an amendment (Amendment No. 1242) to S. 1758, which included Senator De Concini's language protecting individual tapers but would require the manufacturers of video recorders and blank tape to pay a royalty on each machine and blank tape sold. The amount of the royalty would be set by the Copyright Xoyalty Tribunal, which was established under the 1976 Copyright Act. The Tribunal would also be responsible for distributing the royalty fees to those who own the copyrighted material. 5705, which was On Feb. 9 , 1982, Representative Edwards introduced H.R. similar to S. 1758. On Mar. 3 , 1982, H.R. 5705 was amended to include audio machines (tape recorders). On Mar. 4 , 1982, Senator Mathias' legislation was similarly amended (Amendment No. 1333). Both of these proposals were the before the House focus of hearings held on Apr. 12-14, and on June 2 0 , Subcommittee on Courts, Civil Liberities, and the Administration of Justice. In hearings before the House subcommittee, as reported in the Patent, 2 2 , 1982, at p. 1 , Jack Trademark and Copyright Journal, No. 576, Apr. Valenti, President of the Motion Picture Association of America, Inc., testified that his membership vigorously Supports H.R. 5705. According to Mr. Valenti, H.R. 5705 "is a compromise to complex legal and legislative problems and is thoroughly hospitable to the Constitution itself." The bill, (VCRs) he said, would permit home use of audio and video cassette recorders and protect the property rights of authors and entrepreneurs in their creations. It achieves these dual goals, Mr. Valenti stated, with six key provisions: First, it provides an exemption for individuals from any liability for infringement of copyrignt if the audio or video recording is made for private use of family members and others in their immediate household; Second, it requires chat importers or manufacturers of audio and video recording devices and audio tapes register .with the U.S. Copyright Office and thereafter on a semi-annual basis deposit with the Register of Copyrights CRS- 4 information relating to the number of recorders manufactured and distributed; IB82075 and blank UPDATE-05/31/84 tapes imported, Third, it directs the Copyright Royalty Tribunal to determine appropriate and reasonable royalty fees to be paid by the manufacturers and importers who distribute audio and video recorders and tapes in order to provide copyright owners of motion pictures, other audiovisual works and musical works with fair compensation for the use of their creations; Fourth, it establishes a system for the distribution of the royalty fees to copyright owners on a yearly basis through the Copyright Royalty Tribunal; Fifth, it imposes penalties for violation of these with existing copyright law; and provisions consistent (2) Sixth, it allows owners of (1) phonorecords of sound recordings or copies of motion pictures or other audiovisual works to dispose of such phonorecords or copies by rental, lease or lending for commercial advantage, only with the permission of copyright owners. This is called the "fair marketingtt amendment. Mr. Valenti indicated thac legislation such as H.R. 4 8 0 e and S.1758 not Only fail to recognize the property rights of copyright owners, but they also fall to compensate the owners of copyrighted programs for u n ~ u s t caking of their property, thus clearly v ~ o l a t i n gthe Fifth Amendment. According to Mr. Stanley M. Gortikov, President of the Recording Industry Association of America (RIAA), H.R. 5705 establishes a copyright royalty system that will create a fair incentive for the recording of music. Other organizations that testified in Support of H.R. 5705 included the Directors Guild of America, Inc., the International Alliance of Theatrical Stage Employees and Moving Picture Machine Operators of the United States and Canada, the American Guild of Authors and Composers, and the National Music Publishers' Association, Inc. Opposition to the compulsory license (statutory license permitting use of the copyrighted work without the express permission of the copyright owner in exchange for payment of royalties and fulfillment of the statutory termsj provision of H.R. 5705 was led by attorney Charles D. Ferris, who appeared on behalf of the Home Recording Rights Coalition. In summary, Mr. Ferris stated that the Coalition believed the tremendous service VCRs provide the American people in the video marketplace is one important factor in determining whether their home use should be viewed as a "fair use" exemption to the copyright laws. The ultimate goal of the copyright law is to promote the First Amendment value of increased access to diverse speech. This same goal is furthered by the unfettered availability and use of VCRs. According to the coalition, copyright holders are not harmed by such u s e , as was noted by the District Court. In light of their benefits and the absence of harm, Congress should follow the reasoning of the District Court in the Betamax case and grant an exemption to the copyright laws for the home use of VCRs. Rewarding artists, Mr. Ferris maintained, "is not the sole, nor even the dominant, purpose of the copyright statute." Balanced against the need to compensate authors, he stated, "is the public need for access to their works. Economist Nina W. Cornell indicated that the mechanisms for collection and . CRS- 5 IB82075 UPDATE-05/31/84 disbursment of the royalties would themselves "require the establishment of a new, continuous, and costly regulatory program within an agency that has not been notably successful at running the programs already entrusted to its ca[r]e." With respect to the proposed abolition of the "first sale" doctrine, Ms. Cornell argued that such a proposal, if enacted, would raise the rental price to consumers significantly and greatly increase the costs of enforcing the she stated, copyright laws. "If the first sale doctrine was abolished,'' "anyone who sells o r rents a cassette without permission would be liable [for infringement]." Eugene H. Kummel, Also testifying against the compulsory license, Mr. Chairman of the Board of McCann-Erickson Worldwide, an advertising agency, maintained that most people will not cut out the commercials when they tape programs. q9Therefore,1q he said, "we will continue to sponsor free TV and to pay for audiences that include tapers." Legislators and lobbyists on both sides believed that some type of legislation would pass the 97th Congress, but no one was sure of what form it would take. On Mar. 1 2 , 1982, the Supreme Court was called upon to resolve the question of whether in-home videotapinq of copyrighted works constitutes a copy right infringement. Sony Corp. of America 5 Universal City Studios, 1981), cert. granted, June 1 4 , 1982 (Nc. InC., 659 F . 2 6 963 (9th Cir. 81-1687). According to the petitioners, the Ninth Circuit erred in ruling that a finding of l1fair useN is not justified where the copies made by home videorecording are used for the same purpose as the original. This "intrinsic usef1 argument, petitioners contend was rejected by the U.S. Court 1973), of Claims in Williams & Wilkens Co. v. U.S., 4 8 7 F. 26 1345 (Ct. Cls. a f f l d by an equally divided Court, 420 U.S. 376 (1975). The petitioners also challenge the Ninth Circuit's conclusion that manufacturers of VCRs are liable, per se, a s contributory infringers. the Finally, the petitioners protested the Ninth Circuit's suggestion that "a judicially created compulsory license" might resolve the conflict. "[Tlhere is no statutory provision nor decisional precedent for compulsory licensing as a remedy for any copyright infringementN, they argue. While the petitioners noted that the Ninth Circuit's decision prompted instant congressional reaction, they contend that only the Supreme Court "can settle the question of whether home videorecording has been, now i s , or will infringement." be ... On Jan. 1 7 , 1 9 8 4 , the Supreme Court decieed that a home use of a video The Court's disposition tape recorder is a "fair usew of copyrighted works. of the case was based upon its conclusion that time-shifting is the primary use of VTRs. The Court described time-shifting as the procedure whereby a VTR is used to record a broadcast program at its time of transmission for subsequent viewing a t the convenience of the individual. Although no bills were enacted in the 97th Congress, congressional opponents of the ninth circuit's "Betamaxl' decision quickly renewed their efforts to change the controversial ruling. In the 98th Congress, Senator Charles McC. Mathias and Representative Don Edwards introduced three bills (S. 31/H.R. 1030, S. 32/H.R. 1027, and S. 33/H.R. 1029) in an effort to , IB82075 CRS- 6 UPDATE-05/31/84 resolve t h e controversy surroundings in-home taping of copyrighted works. Three bills were proposed instead of t h e o m n i b u s bills (s. 1 7 3 8 / ~ . R . 5705) proposed i n t h e 9 7 t h C o n g r e s s , i t was r e p o r t e d , because t h e i s s u e s a d d r e s s different concerns which merit separate consideration by Congress. Under t h e " H o m e Recording Act of 1 9 8 3 , " (S. 31/H.R. 1030), a n individual would be exempt from liability if t h e recording i s f o r t h e p r i v a t e u s e of individual or members of h i s family. I n return f o r t h e exemption, manufacturers a n d i m p o r t e r s o f video a n d a u d i o recording e q u i p m e n t and blank tapes would b e required t o pay a r o y a l t y f e e t o the c o p y r i g h t owners. 1 7 5 8 and H.R. However, S. 3 1 a n d H.R. 1 0 3 0 a r e unlike Amendment 1 3 3 3 to S. 5705, introduced in the 9 7 t h C o n g r e s s , b e c a u s e they encourage royalty r a t e s based upon t h e f r e e market, rather than r a t e s established by t h e Copyright Royalty Tribunal. Specifically S. 3 1 and H.R. 1 0 3 0 e n c o u r a g e private negotiation between the parties to the controversy. Under this a r r a n g e m e n t , voluntary a g r e e m e n t s entered i n t o pursuant t o this process would be binding o n the parties. T h o s e w h o a r e unable to reach a n a g r e e m e n t , would b e required to submit t o compulsory binding arbitration under t h e supervision of the Register of Copyrights. In his statement on t h e i n t r o d u c t i o n of H.R. l C 3 0 , Representative Edwards said "there i s n o requirement, nor shouid there that t h e copyright owner prove economic harm in order be such a requirement to establish infringement." 1 2 9 Cong.Rec.H.198 (daily ed. Canuary 27, 1983). ... -- Two separate bilio S. 32/H.R. 1 0 2 7 ("Record R e n t a l Amendment o f 1983") and S. 33/H.R. 1 C 2 3 !"Consumer Video Sales-Rental of 1933) w e r e introduced b y Senator Mathias and Represent,ative Edwards to make clear t h a t , under the copyright l a w s , prerecorded video cassettes a n d a u d i o records a n d tapes may not be rented unless authorized by t h e c o p y r i g h t owner. T h e n e t effect of which would clarify t h e Copyright Act's " f i r s t s a l e w d o c t r i n e , 1 7 U.S.C. 109 (a), to establish explicitly a commercial lending right in t h e copyright owner share i n t h e revenues produced i n t h e rental market. The. bills and t h e introductory remarks appear in the Congressional Record. 129Cong.Rec. S254-261 (daily ed. Jan. 2 6 , 1983); 1 2 9 Cong. Rec. H197-200 (daily ed. Jan. 2 7 , 1983). LEGISLATION Amends the copyright l a w to exempt t h e h o m e recording of copyrighted works on home video recorders f o r private h o m e , noncommerical u s e f r o m copyright infringement. Introduced Jan. 3 , 1 9 8 3 ; referred t o the C o m m i t t e e o n t h e Judiciary. Referred to Subcommittee on C o u r t s , Civil L i b e r t i e s , and t h e Administration of J u s t i c e , Feb. 4, 1983. S. 3 2 (~athis)/H.R. 1 0 2 7 (Edwards) Amends t h e copyright l a w with respect t o r e n t a l , l e a s e o r l e n d i n g of sound recordings. Introduced Jan. 2 7 , 1 9 8 3 ; referred to the C o m m i t t e e on the Judiciary. Referred to Subcommittee on C o u r t s , Civil L i b e r t i e s , and t h e Administration of J u s t i c e , F e b . 4, 1983. S. 33 athi his) /H.R. 1 0 2 9 (Edwards) Amends t h e copyright l a w with respect t o rental, lease, or lending of CRS- 7 IB82075 UPDATE-O~/~~/ motion pictures and other audio-visual works. Introduced Jan. 27, 1983; referred to the Committee on the Judiciary. Referred to Subcommittee on Courts, Civil Liberties, and the Administration of Justice, Feb. 4 , 1983. Amends the copyright law to exempt from liability individuals who tape video and audio programming for private use. Would establish a mechanism for compensating copyright owners for the use of their property. Introduced Jan. 26, 1983; referred to the Committee on the Judiciary. Referred to Subcommittee on Patents, Copyrights and Trademarks, Feb. 25, 1983. Amends the copyright law to exempt the private, non-commercial recording and use of copyrighted works on a video recorder from being considered copyright infringement. Introduced Jan. 25, 1983; referred to Committee on the Judiciary. Referred to Subcommittee on Patents, Copyrights and Trademarks, Feb. 2 2 , 1983. HEARINGS U.S. Congress. Senate. Committee on the Judiciary. Copyright infringements (audio and video recorders). Hearings, 97th Congress, 1st and 26 sessions, on S. 175E. Nov. 3 0 , 1981, and Apr. 21, 1982. Washington, U.S. Govt. Print. Off., 1982. 1384 p. Serial No. 5-97-84. U.S. Congress. Senate. Committee on the Judiciary. Subcommittee on Patents, Copyrights and Trademarks. Video and audio home taping. Hearing, 98th Congress, 1st session. Oct. 25, 1983. Washington, U.S. Govt. Print. Off., 1984. "Serial no. 5-98-75" U.S. Congress. House. Committee on the Judiciary. Subcommittee on Courts, Civil Liberties, and the Administration of Justice. Hearings, 9 7 t h . C o n g . , Home recording of copyrighted words. 2nd sess., on H.R. 4783, H.R. 4794, H.R. 4808, H.R. 5250, H.R. 5488, and H.R. 5705. April 1 2 , 1 3 , 1 4 , June 24, August 11, September 22 and 23, 1982. Serial No. 9 7 , Part I. Washington, U.S. Govt. Print. Off., 1983. 6 9 9 p. Part 11. Hearings, 97th Cong., 2nd sess., Wahsington, U.S. Govt. Print. Off., 1983. 1359 p. CHRONOLOGY OF EVENTS 01/17/84 -- The U.S. Supreme Court pronounced its decision in Sony Corp. of America v. Universal City Studios Inc. (Betamax) which reversed the U.S. Court of Appeals for the Ninth Circuit. In a 5-to-4 decision, the Court decided that home use of a video tape recorder is a "fair u s e w of copyrighted works. CRS- 8 IB82075 UPDATE-05/31/84 07/06/83 -- The Supreme Court restored Sony Corp. of America v. Universal City Studios Inc. (Betamax) to the calendar for reargument during the October 1983 term. 01/18/83 -- The Srpreme Court heard oral arguments in Sony Corp. of America v. Universal City Studios Inc. (Case No. 81-1667). 06/24/82 -- 06/14/82 -- 04/21/82 -- 04/14/82 -- 03/12/82 -- l0/19/81 -- 10/02/81 -- House Subcommittee on Courts, Civil Liberties, and Administration of Justice held a hearing on H.R. 5705, Home Recording Act of 1982. The Supreme court granted cert. in sony Corp. of America v. Universal City Studios, Inc. Senate Committee on Judiciary held hearings on S.1758. House Subcommittee on Courts, Civil Liberties, and the Administration of Justice held hearings on several copyright audio/video bills. The Supreme Court was asked to review the Sony Corp. of America v. Universal City Studios, Inc.= (Betamax) decision. The U.S. Court of Appeals for the Ninth Circuit pronounced its decision in Sony Corp. of America v. Universal City Studios, Inc., which reversed the U.S. District Court for Central California. The U.S. District for Central California decided in Sony Corp. of America v. Universal City Studios that noncommercial home use video recording of material broadcast over the airwaves does not constitute infringement. ADDITIONAL REFERENCE SOURCES -- Bara, J. All's Fair in Love and Private Video Recording The Copyright Infringement Issues in the Sony Case. Catholic University Law Review, v. 30, 1981: 621-651. C.H.R., "Fair Useg1 111. Universal City Studios, Inc. v. Sony Corp.: Looks Different on Videotape. Virginia Law Review, v. 6 6 , 1980: 1005-1027. Gilscrap, R. Videotape Recorders: Copyright Infringement? Review, v. 33, 1961: 695-706. Ladd, D. Home Recording and Reproduction of Protected Works. Bar Association Journal, v. 68, 1982: 42-45. Baylor Law American