14 VI THIS COURT SHOULD RESOLVE THE ISSUES The Court of Appeals' test for contributory infringement represents an unprecedented expansion of contributory liability. Such a test will disrupt copyright and patent law unless corrected by this Court. The Court of Appeals addressed the issue of contributory infringement by again ignoring the record and the trial court's findings of fact and declaring, on the sole basis of a treatise, that VTRs are not "suitable for substantial noninfringing use" (Pet. App. at 26). This is simply wrong. The trial court found to the contrary and it is indisputable that a wide range of VTR uses, e.g., display of prerecorded videotapes, teletext, videotext, electronic photographs and home movies and the display of the extremely broad range of broadcast material which is either not copyrighted or of which the copyright holder has no objection to such use (see, e.g., Pet. App. at 114). Indeed, the evidence at trial was that respondents' programming represents less than five percent of all commercial programming and none of the programming on public television (R.T. 314-15, 523-33, 54950). The Court of Appeals' only response to these facts was the assertion: That some copyright holders choose, for one reason or another, not to enforce their rights does not preclude those who legitimately choose to do so from protecting theirs (Pet. App. at 26). With respect, we submit that this assertion misses the point. The issue here is whether sale of a product, VTRs, should be unlawful as an act of contributory infringement. If noncommercial home taping were found to be 15 an infringement, but VTR sales were not held to be contributory infringement, respondents would not be "preclude [d]" from "protecting" their rights by suing the infringing parties. It would be absurd, however, to bar the sale of VTRS because a minority of producers objected to VTR use while the majority favored, or did not object to, VTR use, because of the benefits that VTRs bring such broadcasters and copyright holders. The Court of Appeals is allowing a tiny minority of producers to "preclude" all consumers, copyright holders and broadcasters from using VTRS for all purposes even purposes which are admitted to be noninfringing and beneficial to other copyright holders. If respondents prevail on their general infringement theory, let them, if they wish, enforce their rights against such infringement, but do not allow them to impose their will on others under a contributory infringement rationale.26 The Court of Appeals again assumed facts contrary to the trial record and the trial court's finding of facts in discussing whether VTR manufacturers met the definition of contributory infringement. We adopt the district court's definition: "[0]ne who, with knowledge of the infringing activity, induces, causes or materially contributes to the infringing conduct of another, may be held liable as a 'contributory' infringer. "There can be no doubt that the corporate appellees meet this definition (Pet. App. at 27). 26 Respondents might find enforcement against the direct infringers impractical. This is doubtless true of copyright holders experiencing infringements through the use of photocopiers, cameras and tape recorders. It has never been suggested, however, that enforcement difficulties warrant a finding of contributory infringement. Respondents' enforcement problems result from their own decision to broadcast their programs over the public airwaves into the privacy of tens of millions of American homes in conjunction with a vast number of other producers who do not object to VTR use. 16 The trial court, however, found that the respondents had presented "no evidence" that petitioners' activities had induced or caused any of the acts of alleged infringement introduced at trial (Pet. App. at 96-97). It would expand the doctrine of contributory infringement to an enormous size capable of devouring the photocopier, camera and audio tape recorder industries as well-to hold that a new technology was unlawful on the theory that without the technology the infringement would not occur. VII THE REMEDIES SUGGESTED BY THE COURT OF The Court of Appeals, after concluding that petitioners were liable as contributory infringers, directed the district court to consider an array of remedies including an injunction, statutory damages or a continuing royalty (Pet. App. at 28-29). It also instructed the district court that the "prospective harm" and "continued profitability of [petitioners'] businesses is of secondary concern" as there is "no right to expect a return on investment from activities which violate the copyright laws" (Pet. App. at 29). An injunction on the sale of VTRS would eliminate the VTR industry in this country. An injunction against VTR sales would deprive the public of a device which provides numerous benefits, most of which are not even arguably infringing and many of which accrue to copyright holders.27 Statutory damages would also destroy the VTR industry in this country. The minimum amount of statutory damages per infringement is two hundred fifty dollars 27 See, supra at 2-4, 11-14. 17 ($250), which under respondents' theory of contributory infringement would cause an astronomical damage award. The Court of Appeals' suggestion that a continuing royalty be imposed by the district court demonstrates the extraordinary judicial activism engaged in by the Court of Appeals. Not only is this suggestion an unprecedented expansion of judicial authority, but it is an outright usurpation of congressional authority. Moreover, the proposal is completely unworkable. Unfortunately, it will stand as precedent until and unless this Court acts. VIII CONCLUSION As the representative of nearly all VTR and blank video tape manufacturers and sellers of these products at the manufacturer's level, EIA/CEG urges the grant of the Petition for Writ of Certiorari filed by Sony Corporation of America in this case. The issues involve the viability, and perhaps the survival, of a major, rapidly growing, new industry. Respectfully submitted, J. EDWARD DAY (Counsel of Record) WILLIAM K. BLACK GARY J. SHAPIRO SQUIRE, SANDERS & DEMPSEY 1201 Pennsylvania Avenue, N.W. Washington, D.C. 20004 (202) 626-6600 Attorneys for Amicus Curiae Consumer Electronics Group of the Electronic Industries Association |