While statutes should not be stretched to apply to new situations in a radio broadcast 7 is consciously addressing a great, The ruling in this case was generally accepted in practice by broadcasters and other concerned parties. In addition, the ruling in this case determined that the public performance was "for profit" if the broadcast was over a commercial station that was used as a medium for advertising, regardless of the fact that the broadcast listeners did not pay an admission fee. A similar result ensued in the case of Leo Feist, Inc. v. Lew Tendler Tavern in 1958, which extended the public performance concept from broadcasting to wire transmissions. In this case, music transmitted over wire from a central location to a restaurant and then made audible there for the benefit of restaurant patrons was found to be a public performance for profit. The 1976 Act codified these results by assigning the copyright owner the exclusive right (with certain exemptions) of public performance and display; and by including in the definition of public performance and display transmission or communication to the public "by means of any device or process, whether the members of the public capable of receiving the performance or display receive it in the same place or in separate places and at the same time or at different times" (Section 101). 3.4.1 Retransmissions of Broadcasts A question that was to have very important ramifications 35 years later for cable television retransmissions was raised in the case of Buck v. Jewell-La Salle Realty Co. in 1931 before the U.S. Supreme Court. In that case, a hotel maintained a master radio set which was wired to loud speakers from which the radio programs could be heard in all of the public and private rooms of the hotel. The Court held that the hotel's reproduction of the broadcast performance, through its receiving set and loudspeakers, for the entertainment of its guests, was itself a public performance under the 1909 Statute and therefore not exempt from the implications of the Statute for royalty payment. The opinion in this case by Justice Brandeis for the Court is quoted from extensively in Section A.2.4.2 of Appendix A of this report and is a prime example of reasoning by analogy in determining the law with respect to new technological devices not previously considered by Congress. Another similar case which confirmed the copyright owners' rights to retransmissions in a hotel situation was SESAC v. New York Hotel Statler Co. decided in 1937. 3.5 COPYRIGHT IN CABLE TELEVISION RETRANSMISSIONS By the middle of the 1960s, commercial enterprises had sprung up whose functions were to provide TV viewers with programs that the viewers were unable to receive satisfactorily with standard antennae. This industry, because it serviced subscribers via cable, a non-broadcast mode, became known as CATV, community antenna television, or cable television. The industry obtained much of its program material from broadcasted TV which it acquired with more sensitive receiving equipment and more sophisticated or better situated antennae than its subscribers were capable of providing for themselves individually. In the opinion of copyright owners, significant copyright problems existed. The primary over-the-air boradcasters obtained licenses from copyright owners for the motion pictures, plays, music, and other works that they broadcast. Was the retransmission of the broadcasted programs by the cable system to its subscribers to be treated as a further public performance of the copyrighted works which infringed the copyright owners exclusive rights? This question came before the courts in 1966 through 1968 in the case of United Artists Television, Inc. v. Fortnightly Corp. The District and Circuit Courts held for the copyright owners, relying on the previous decisions described above, i.e. Remick, Jewell-LaSalle, and SESAC, that the retransmission, as a public performance for profit, was covered by the Copyright Act then in force. It is not surprising, in light of previous decisions quoted, that the District Court in this case spoke about "accomodating the statute to the realities of modern science and technology." However, to the surprise of many, the Supreme Court reversed the lower court findings by essentially determining that cable television program providers were acting as viewers' agents rather than as secondary producers. The Court reasoned that: "...while both broadcasters and viewers play crucial roles in "When CATV is considered in this framework, we conclude that The Court carried forward this precedent-breaking decision and similarly found no infringement in the 1974 case of CBS v. Teleprompter. The issue in the latter case was a possible distinction between the retransmission over cable of local signals that could have been received over the air by cable subscribers and the retransmission of far distant signals not originally intended for the cabled locale. The Supreme Court found no distinction and determined that there was no infringement in either case. The more complete discussion of Section A.2.6 of Appendix A provides some rationales for these Supreme Court decisions. As noted there, a major element in the decisionmaking appeared to be a desire to prevent the CATV industry from being retroactively liable for royalties and infringement damages. The majority opinion in the Fortnightly decision had said in a footnote, that a decision consistent with Jewell-La Salle would be such "as retroactively to impose copyright liability where it has never been acknowledged to exist before." Here the Court is implying that a judicial decision for the copyright owners (unlike a legislated decision) could not cause royalties to flow from that time on, but would be forced to require that the CATV industry be responsible for all past royalties it should have paid. These back royalties might be large enough to destroy many of these small operations. The fact that Congress was considering major revisions to the Copyright Act during the times of the Fortnightly and Teleprompter litigations cannot be ignored as a factor in the Supreme Court's decisionmaking. As noted in Section A.2.6, both the majority and dissenting opinions in Fortnightly, as well as in the lower court decisions, in both Fortnightly and Teleprompter, took cognizance of the on-going considerations by Congress of the copyright problem of cable retransmissions in the context of the general revision of copyright law. Justice Fortas, in his dissent in Fortnightly had commented: "Our major object, I suggest, should be to do as little damage as possible to traditional copyright principles and to business relationships, until the Congress legislates and relieves the embarrassment which we and the interested parties face. Similarly, the Circuit Court of Appeals noted in Teleprompter: "The complex problems represented by the issues in this case Thus the judiciary in general, saw the issues as more complex than a simple extension of principle as embodied in Buck v. Jewell-La Salle. The interaction of basic communications policy in the public interest and the economic interests of the concerned parties demanded a legislative solution. Ultimately, the approximately ten years of negotiation among the various concerned parties resulted in the provisions of Section 111 of the 1976 General Revision of Copyright Law. This 1976 General Revision makes cable retransmissions subject to the restrictions of copyright, thereby validating at least the principle of the dissent in Teleprompter which was based on the precedent of Buck v. Jewell-La Salle. However, a cable company now may obtain a compulsory license for retransmission of programs from those stations whose signals the system is authorized to carry by the Federal Communications Commission, and it is not liable for any royalties before the effective date of the new Act. 3.6 COPYRIGHT IN PHOTOCOPIES The issue of photocopying as a serious concern to copyright proprietors of printed matter dates from the 1930s. During that period, microphotography came to be extensively used, because it was a process that enabled printed matter to be reproduced at a reasonable cost. In the 1930s, discussions took place between the predecessor to the Association of American Publishers and organizations of scholarly users such as the American Council of Learned Societies and the Social Science Research Council in order to define the boundaries of acceptable noninfringing photocopying. These discussions resulted in the "Gentlemen's Agreement" of 1935 which, although not binding, provided guidelines that were followed by many libraries and which stood as a basis governing library photocopying for a generation. The significant paragraphs of the Gentlemen's Agreement are as follows: "A library, archives, office, museum, or similar institution (1) that the person receiving it is given due notice in (2) that such reproduction is made and furnished without This was an important effort on the part of opposing interest groups to solve a national copyright problem among themselves without recourse to Government instrumentalities. From the 1960s onward, the photocopying problem became progressively more acute as new photocopying technologies and improved mechanical paper-handling systems combined to reduce significantly the cost per copy and to increase significantly the speed of multi-copying. Publishers, especially of scientific and technical journals and of educational texts, expressed fears that loss of sales due to photocopying might force them to discontinue certain publications. However, the several opposing interests groups agreed that in the revision bills Congress considered in the late 1960s, the doctrine of fair use would be incorporated rather than any specific rules for photocopying. The groups hoped to work out the details of an agreement among themselves using the fair use doctrine as a basis. This doctrine, as it had been developed by the courts, was contained in Section 107 of the copyright bill passed by the House of Representatives in 1966 but never enacted into law. Section 107 of the 1966 bill included the following: "...the fair use of a copyrighted work such as criticism, (1) the purpose and character of the use; (3) the amount and substantiality of the portion used in (4) the effect of the use upon the potential market for or However, final agreement between librarians and publishers was not able to be worked out at that time. It foundered on the essential question of the specific boundary between fair use and infringement, and the quantity and purposes of copying which crossed the boundary. 3.6.1 Williams & Wilkins v. United States In 1971, a suit was instituted in the U.S. Court of Claims in which the plaintiff, a publisher of medical journals and books, charged that two Government libraries, The National Institutes of Health library and the National Library of Medicine, had infringed the copyright in several of its medical journals. The plaintiff claimed that the copying done by those institutions in supplying journal articles to other medical libraries, research institutes, individual researchers, and practitioners exceeded fair use. This case was Williams & Wilkins Co. v. United States. The initial opinion of the Commissioner hearing the case (1972) held that photocopying practices of the two Government libraries exceeded fair use. The full Court (1973) reversed this decision, 4 to 3, basing its majority opinion on essentially three criteria: "First, plaintiff has not in our view shown, and there is in- "second, we are convinced that medicine and medical research "third, since the problem of accomodating the interests of |