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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
the total television process, a line is drawn between them.
One is treated as active performer; the other as passive
beneficiary.

"When CATV is considered in this framework, we conclude that
it falls on the viewer's side of the line...

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 busi-
ness 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
are not readily amenable to judicial resolution....We hope
that the Congress will in due course legislate a fuller and
more flexible accomodation of competing copyright, anti-trust,
and communications policy considerations, consistent with
the challenge of modern CATV technology."

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 enabied 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
owning books or periodical volumes in which copyright still
subsists may make and deliver a single photographic reproduc-
tion or reduction of a part thereof to a scholar representing
in writing that he desires such reproduction in lieu of loan
of such publication or in place of manual transcription and
solely for the purpose of research; provided
(1) that the person receiving it is given due notice in

writing that he is not exempt from liability to the
copyright proprietor for any infringement of copyright
by misuse of the reproduction constituting an infringe-

ment under the copyright law;
(2) that such reproduction is made and furnished without

profit to itself by the institution making it."

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,
comment, news reporting, teaching, scholarship or research,
is not an infringement of copyright. In determining whether
the use made of a work in any particular case is a fair use,
the factors to be considered shall include--
(1) the purpose and character of the use;
(2) the nature of the copyrighted work;
(3) the amount and substantiality of the portion used in

relation to the copyrighted work as a whole; and
(4) the effect of the use upon the potential market for or

value of the copyrighted work."

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-
adequate reason to believe that it is being or will be harmed
substantially by these specific practices of NIH and NLM;

"second, we are convinced that medicine and medical research
will be injured by holding these particular practices to be an
infringement; and
"third, since the problem of accomodating the interests of

science with those of the publishers (and authors) calls
fundamentally for legislative solution or guidance, which
has not yet been given, we should not, during the period be-
fore congressional action is forthcoming, place such a risk
of harm upon science and medicine. "18

The three dissenting judges of the Court of Claims noted, in opposition:

"What we have before us is a case of wholesale copying, and
distribution of copyrighted material by defendant's libraries
on a scale so vast that it dwarfs the output of many small
publishing companies... This is the very essence of wholesale
copying and, without more, defeats the defense of fair use."

Thus, the two sides differed materially on the interpretation of the facts. The situation is reminiscent of the cable TV cases, Fortnightly and Teleprompter, where Court majorities were of the opinion that the situation demanded a legislative answer that was more flexible, involving components of right from both sides, rather than the limited yes-no answer of a judicial decision. As in those cases, the Court refrains here from providing the decision that would tend more to permanently end the controversy and would tend to end it with a greater detriment to one side than the Court feels that the losing side deserves. This interpretation may be supported with this quote from the majority opinion in Williams & Wilkins:

"The Courts are now precluded, both by the Act and by the na-
ture of the judicial process, from contriving pragmatic or
compromise solutions which would reflect the legislature's
choice of policy and its mediation among the competing inter-
ests... Hopefully, the result in the present case will be but
a 'holding operation' in the interim period before Congress
enacts its preferred solutions."

The Williams & Wilkins case was accepted for review by the Supreme Court, where, after the arguments were heard, the Court split 4 to 4 without an exposition of the reasoning on the two sides. This had the effect of affirming the decision of the full Court of Claims.

3.6.2 The 1976 General Revision

Certain provisions included in the 1976 General Revision of Copyright Law were the result of hard bargaining among authors, publishers, educators, and librarians. Section 107 of the 1976 Act contains the fair use concept essentially as reproduced above (in Section 3.6) except for the addition of two phrases as concessions to educators. A purpose of use for which fair use is allowable is now teaching "(including multiple copies for classroom use)." In addition, a factor to be considered in determining whether a particular use is a fair use is "whether such use is of a commercial nature or is for nonprofit educational purposes." The House of Representatives report on the proposed 1976 Act (Report No.

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