10 in Section 107 of the Act from the decision. Moreover, the implication that four judges of this Court voted to affirm a "Dred Scott" decision demonstrates the rhetorical excesses that have been substituted for legal reasoning. There is an urgent need for decision by this Court to resolve this serious conflict in the interpretation of fair use. V THIS COURT SHOULD RESOLVE THE ISSUE OF VTRS are unprecedented. Their primary uses, time shifting and display of prerecorded video tapes, benefit copyright holders. The goal of a television broadcaster is to induce as many people as possible to watch its programs. Some potential viewers, however, cannot be home or are doing something else when a program they would like to watch. is broadcast. By using a VTR to "time shift," which the trial court found to be the primary use of VTRS, those potential viewers are able to become actual viewers and the goal of the broadcaster 20 is enhanced by the VTR. The trial court found that VTRS had this potential to benefit copyright holders by expanding viewing of their programs (Pet. App. at 110, 112). The Court of Appeals did not declare that finding, or the trial court's finding that the plaintiffs below were not injured by VTR usage, to be clearly erroneous. The Court of Appeals, however, concluded on the basis of a 20 Maximum viewership is also the goal of advertisers and producers who sell copyright interests to broadcasters. Projected audience size determines advertising rates and sales prices for copyrighted productions. Thus, VTR time shifting usage indirectly provides greater economic incentives to authors. See Pet. App. at 51. 11 priori reasoning that there must be injury. Its logic was two-fold. First, the Court of Appeals declared that: It is clear that home users assign economic value to their ability to have control over access to copyrighted works. The copyright laws would seem to require that the copyright owner be given the opportunity to exploit this market (Pet. App. at 24). With respect, this is a non sequitur. The copyright holder does not control access to televised programming in the sense envisioned by this quotation. Once broadcast, anyone can view a normal television signal-no license is required, only a television receiver. The commercial networks spend millions of dollars trying to maximize viewership. Viewers "assign economic value" to a television receiver because it gives them "access to copyrighted works," but they pay no fee to copyright holders when they purchase the receiver. As noted above, copyright holders "exploit this market" through payments they receive based on projected viewers of their program and the resultant advertising rates. Thus, copyright holders already "exploit" the VTR market and they do so in the identical manner in which they exploit the general television market.21 The Court of Appeals' second resort to a priori reasoning was the following: The court, in analyzing the fourth fair use factor, did not pay sufficient attention to the cumulative effect of mass reproduction of copyrighted works made possible by videorecorders. It seems clear that absent an inquiry which takes into consideration the full scope of the "infringing" practice, copyright plaintiffs, in cases of this sort, would face insupera 21 Note that in both cases there is no control over whether the viewers will actually watch the advertising that is the economic base for commercial broadcasting. 12 ble obstacles to the protection of their rights. And, where one looks at the full scope of the activity in question, it seems clear that it tends to diminish the potential market for appellants' works (Pet. App. at 24-25) (emphasis in original). Again, things were "clear" 22 to the Court of Appeals without any citation to the trial record, indeed, directly contrary to the trial court's findings of no injury and potential financial benefit from VTR usage. Even a brief examination reveals that there is no a priori means of finding that the cumulative effect must tend to diminish the copyright holder's potential market. The alleged infringement in time shifting is recording a program, that the viewer ordinarily would have missed, for viewing at a later time. A priori reasoning suggests that this "infringement" increases viewership of the "infringed" program. A study commissioned by the Federal Communications Commission confirms this reasoning. Because both major rating services-A. C. Nielsen and Arbitron-now include an indication of VCR use, this time-shift phenomenon should actually be an asset to the networks and broadcasters. Shows which would have been missed can now be recorded for later viewing. Because rating services are prepared to report such time-shifting, broadcasters should actually be helped by this consumer convenience. An audience that was previously unavailable to them is now viewing, and the viewing is properly attributed in audience reports.23 22 The Court of Appeals used the same phrase "it seems clear" or a variant thereof four times in a single page of the official reporter (659 F.2d at 974) in its discussion of injury. No citation to the trial record was made in that entire discussion. See Pet. App. at 22-25. 23 Federal Communications Commission-Network Inquiry Special Staff, Appendix by D. Agostino "Home Video: A Report on the 13 The cumulative effect as VTR ownership expands is to increase significantly the copyright holder's market. Indeed, the "genius of Betamax" is that it converts a potential market for the "infringed" program into actual viewers by allowing time shifting. Similarly, the growing use of VTRS to display prerecorded videotapes has created an entirely new market for copyright holders that brings them many hundreds of millions of dollars.24 Other VTR uses, e.g., home movies, teletext, electronic photography, present no copyright dangers and may also create new markets for copyright holders. Even so-called "librarying" was found by the trial court not to injure copyright holders (Pet. App. at 112-13).25 In sum, a priori reasoning suggests that VTR use benefits copyright holders and converts potential markets into actual viewers. Moreover, the cumulative effect as VTR usage grows will be to increase these benefits. Most importantly, however, the evidence at trial and the trial court's findings support this same conclusion. The Court of Appeals has created an irrebuttable presumption of injury which is contrary both to fact and logic. Once more the Court of Appeals said that it need not reach the issue of injury given the intrinsic use of VTRS. The Court of Appeals did not explain why this was the case. The entire equitable, balancing test nature of the fair use doctrine is perverted by the holding that a use which benefited the copyright holder can not be a fair use. Status, Projected Development and Consumer Use of Videocassette Recorders and Videodisc Players" p. 61 (1980). 24 Approximately six million prerecorded video cassettes were sold in the United States in 1981 at an estimated wholesale value of over $400 million. See, e.g., Variety, March 10, 1982, pp. 35-36. 25 Moreover, the dramatic growth of prerecorded video tapes has greatly reduced any incentive for librarying. Prerecorded tapes have no commercials, they are not edited for television, their quality is superior to home "off-air" taping, and they are cheaper to rent than the cost of blank tape for home taping. 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 |