Today in 1984: The Supreme Court decides the Sony “Betamax case”

January 17, 2014

Today in Legal HistoryOver the past 30 years, technology has seen monumental leaps forward, and the law has been scrambling to keep up.

But a Supreme Court ruling on uses of technology that is today celebrating its thirtieth birthday remains as relevant today as it did three decades ago.

Decided on January 17, 1984, the ruling, Sony of America v. Universal City Studios, more commonly known as “the Betamax case,” held that a company was not liable for manufacturing a technology that some customers may use for copyright-infringing purposes, so long as the technology is capable of substantial “noninfringing uses.”

In Sony, the technology in question were VCRs (well, actually, they were Betamax-brand “VTR’s” or “video tape recorders,” but their function is the same), and the manufacturer was Sony.

In 1976, Sony was sued by a group of TV and film industry corporations, including Universal Studios and the Walt Disney Company, for copyright infringement over its video tape recorder, citing to some of Sony’s consumers who used the recording devices to record copyrighted programs shown on TV for later viewing.

The Supreme Court held five to four in favor of Sony, finding Sony’s Betamax was “capable of commercially significant noninfringing uses.”

In the context of this case, an “infringing use” would be a home user recording a copyrighted motion picture from a TV broadcast and maintaining that recording for later, repeated viewings.

So what would be a “noninfringing use”?  According to the Court, “private, noncommercial time-shifting in the home satisfies this standard of noninfringing uses.”  “Time-shifting” here refers to a consumer using the device to record a program that he or she is unable to view during the initial broadcast, and then erasing (or recording over) the program.

The Court concluded that, even though Disney and Universal (and other studios like them) objected to Betamax owners’ practice of “time-shifting” TV broadcasts for later viewing, there was a not insignificant group of broadcast copyright holders – primarily those who own the rights to televised sports events, religious broadcasts, and educational programs – who did not object.  Notably, Fred Rogers, president of the corporation that produces and owns the copyright on Mr. Rogers’ Neighborhood, testified at the district court level that he had “absolutely no objection to home taping for noncommercial use” and further stated that the practice “is a real service to families to be able to record children’s programs and to show them at appropriate times.”

Furthermore, the Court held, even the time-shifting of those TV broadcasts that are objected to by their respective copyright owners is fair use, since the use was noncommercial and it had not “adversely affect the potential market for the copyrighted work,” nor would it in the future.

Thus, the Supreme Court protected video-recording technologies, enabling the boom of the home video market (and allowing for the rise of DVDs and Blu-Ray technologies).

Despite the historical significance of Sony, there is some question as to its continuing relevance – specifically with the March 2005 MGM v. Grokster Supreme Court decision.

The Court ruled in Grokster that “one who distributes a device with the object of promoting its use to infringe copyright…is liable for the resulting acts of infringement by third parties.”  In this case, the “device” was not a VCR, but person-to-person file-sharing software.

Although the Court ruled unanimously in Grokster, there was no consensus among the justices as to how to apply Sony to the set of facts then before the Court.  All of the justices agreed, however, that the level of Grokster’s inducement of copyright infringement to its users was such that Sony would not shield it from liability.

Interestingly, though, Sony was shown to have been actively inducing infringing uses through its Betamax marketing materials, which invited potential consumers to record “favorite shows” and “movies” and to “build a library.”

Whether this change in judicial opinions is due to increased influence of Hollywood copyright holders or some form of judicial prejudice against file-sharing technologies (or some combination thereof) is unknown, but it seems clear that peer-to-peer and other forms of file-sharing services will unlikely be able to avail themselves of Sony’s protections against infringement liability without a Supreme Court ruling otherwise.

Regardless, Sony still stands as an example of how a new technological innovation which was claimed by major copyright holders to be primarily infringing in its uses could spark major economic growth and further technological innovation if sheltered from such liability and given time to mature and fully develop.