The difference is as elementary and axiomatic as that

between an Act of Congress forbidding further manufacture and sale of burglar's tools arguably a non-taking even as against the investor in the production of such tools -- and an Act of Congress suddenly legalizing the profitable sale and subsequent use of such burglar's tools, without payment of rent or royalty by their producer and seller, for raiding a law-abiding citizen's pre-existing inventory of valuable properties, tangible or intangible a taking by anybody's definition regardless of how private the setting in which, or personal and innocent the reasons for which, those tools might ultimately be turned by their buyers to this confiscatory use. (See Part IV-C, infra.)

Such congressional action is either (1) a constitutionally void taking of the inventory owner's property for the private benefit of the manufacturer and seller of the equipment that makes possible the theft that Congress has chosen to legalize; or (2) a taking of such property for public benefit, subject to a constitutional command of just compensation. On no defensible view of relevant constitutional principles, however, is such congressional action valid in the absence of fair compensation compensation measured by market value lost to the owner

-

made available by public law either from

public revenues or, perhaps more fairly, from a royalty pool

collected from those who profit by the manufacture and sale of the equipment in question.

IV.

END RUNS AROUND THE COPYRIGHTHOLDER'S
CLAIM THAT WIND UP GOING IN CIRCLES

Against the claim that copyrightholders would be deprived of vested and valuable property rights by congressional cancellation of pre-existing copyright privilege or by congressional creation (and application to existing works) of an additional fair use exemption to the copyright laws, VTR manufacturers argue that copyrightholders never really had an exclusive right to control the copying of their productions. The arguments that lead to this view can be grouped under three headings:

(A) Copyrights were created by Congress; what Congress itself created, it may destroy.

(B) There has always been a fair use exception to the copyright laws for noncommercial, in-home recording, an exception correctly perceived by the District Court, misunderstood by the Court of Appeals, and simply set straight by the proposed bills.

(C) Copyrightholders' works were always in the "public domain" once they were broadcast on the public airwaves and into private homes; the First Amendment may require that the public have access to televised works, and it at least permits Congress to promote the public's right to listen by allowing free recording.

These three,arguments are linked by a shared misunderstanding of the right to speak, to listen, and to legislate.

trespass laws, even the central right to exclude intruders, much less the power to bring to court transgressors of all sorts -- trespassers, shoplifters, contract breachers, copy

property can be securely enjoyed without the assistance of the state, it can be argued that the state has created all property and so, as some claim Congress may do with the copyright species of property, the state may take the property it has created without compensating its owners. And the advocates of this position could add that no one's expectations would be unfairly disappointed if such a thing came to pass because every owner knew that the state might change the rules of 67/ the property game at any timethe invisible fine print But if

-

at the bottom of every deed, contract or copyright. that were the case, then neither the takings clause nor the clause forbidding the state to impair contracts would have any

66/ See Board of Regents v. Roth, 409 U.S. 564 (1972); PerryY

v. Sinderman, 408 U.S. 593 (1972); Fuentes v. Shevin, 407 U.S. 67 (1972).

67/

See discussion of Home Building & Loan Association v. Blaisdell, text at notes 73-75, infra.

meaning at all.

68/ No property would be secure, and every change in governments would carry with it a profound threat to the integrity of all existing economic arrangements. Fortunately, this possibility has been routinely resisted by the constitutional cases that have raised it. Mr. Justice Holmes, writing 69/ for the Court in Pennsylvania Coal Co. v. Mahon, noted -:.. that 'some values are enjoyed under an implied limitation and must yield to the police power. 70/ But he stressed: "obviously

the implied limitation must have its limits, or the contract
and due process clauses are gone."71/ The limit drawn there,
and still observed, was that when the government's actions sub-
stantially diminish the values incident to a property right,
"in most if not in all cases, there must be

compensation

to sustain the act."72/ And in the case of the bills under
current consideration by Congress, there could scarcely be a
plainer, or more patently "substantial", reduction in the value
of the affected copyrightholders' rights than to eliminate
their control over when and on what terms their property
their films will be available for viewing, an availability
that, after all, constitutes the only real value of their film

properties.

-

See, e.g., L.Tribe, American Constitutional Law 467, 469 (1978).

68

69/

260 U.S. 393 (1922).

The Supreme Court has allowed government significantly to impair the beneficial value of important property rights i.e., to "take" property -- without compensation only in the most limited and extreme circumstances. In Home Building &

73/

Loan Association v. Blaisdell,- the Supreme Court upheld the Minnesota Mortgage Moratorium Law of 1933, which allowed state courts to extend the period of redemption from mortgage foreclosure sales for a "just and equitable" time not beyond May 1, 1935. But this measure was enacted at the trough of the Depression and required that extensions be granted only after issuing an order that the mortgagor pay all or a reasonable part of the property's income or rental value. The Court's reliance, in dictum, on the state's argument that all contracts are made subject to the power of the state to change 74/ their terms has been rejected by subsequent cases. NO remotely comparable emergency, and no similar guarantee of subsequent payment, can sustain Congress' retroactive taking of the property owned by current copyrightholders of works

that may be broadcast by television.? 75/ And there can be no

737

74/

290 U.S. 398 (1934).

See Allied Structural Steel Co. v. Spannaus, 438 U.S. 234 (1978).

75/

Congress' taking, it should be remembered, may include expectations going as far back as the common law, see note 23, supra; 1909, when the first Copyright Act was passed; 1912, when Congress created special protection for motion pictures; or 1976, when the new Act was passed.

96-601 0-82--8