SHEINBERG: Well, quite frankly, we're not concerned with the man. We're concerned with the people who make the machine, the people who make the tapes. We want to be sure that our property isn't taken without being compensated.] KOPPEL: All right, Mr. Wayman, is there something reasonable about that? Mr. Wayman, I should point out, is senior Vice-President at the Electronics Industry Association. Anything unreasonable about trying to protect what you own? JACK WAYMAN (ELECTRONICS INDUSTRY ASSOCIATION): No, we believe that the copyright owners and the motion picture industry is well compensated, as it exists. We believe the court decision, by the appellate court, was erroneous. We hope that it will be reversed, reconsidered and if not we think that Congress will step in on behalf of the American public, and amend the copyright laws to keep up with our modern technology, such as a VCR represents. KOPPEL: All right, we will talk in greater detail with Mr. Sheinberg and Mr. Wayman later in this broadcast. But, first, let's focus on what this controversy is all about. Here's Robin Groth. (FILM SHOWN) ROBIN GROTH: It's a simple process, just turn the power on, set the time, put in a tape cassette, push a couple of buttons and you're taping a movie, off television, in the privacy of your own home. There's only one thing wrong here, it's illegal. STEPHEN KROFT (UNIVERSAL-DISNEY ATTORNEY): It's always been our position that the copying in the home or outside the home is the same. Copying is copying and it's illegal. GROTH: Stephen Kroft is the attorney representing Universal Studios and Disney Productions. They are bringing legal action against the Sony Corporation of America and the betamax. KROFT: It's really important, I think, to focus on the fact that we're not talking about one man, or two people with betamax. We're talking about hundreds of thousands of these machines. GROTH: Bill Baker, a Vice-President of Sony, doesn't believe the studios have a case. Well, obviously Sony BILL BAKER (SONY CORPORATION): Corporation of America strongly disagrees with the decision of the Circuit Court of Appeals. A number of legislators, both on the House 96-601 0-82--22 CONSUMER ELECTRONICS DAILY October 27, 1981 RIAA Rejoices Over Sony Decision; Mentions Audio Recording Industry Assoc. of America issues statement hailing federal court's video copyright ruling. And report doesn't neglect to hint decision might have effect on audio industry as well. RIAA pres. Stanley Gortikov reports, "I have not yet read the decision, only published newspaper commentaries. The decision supports our conviction that copyrighted audio/video productions deserve protection." Statement adds rights of copyright holders "are imperilled by advancing technology." Echoing opinion of RIAA is John Fleming, law prof. at UC Berkeley who tells GEDally: "There is obviously an audio corollary to the Court of Appeal's ruling. If taping coyprighted material off TV for home use is copyright infringement, then audio taping a record for home use is infringement, too. If the one is illegal then so is the other." A ruling that threatens video recorder sales An unexpected decision handed down on Oct. 19 seems to threaten the booming billion-dollar video recorder business. The U.S. Court of Appeals in San Francisco ruled that the manufacturing of videotape recording equipment is illegal because it contributes to the infringement of copyrights held by movie and television programmers. However, the court hinted strongly that future manufacture and sale will not be enjoined. The ruling came in a case brought in 1976 by Universal City Studios Inc. and Walt Disney Productions against Sony Corp. of America, manufacturer of the Betamax video recorder. The plaintiffs charged that when purchasers of video recorders tape programs broadcast on television they are infringing on the owners' copyrights. Sony, they insisted, contributed to this violation of the federal Copyright Act because the Betamax is sold "for the primary purpose of reproducing television programming." In 1976 a federal district court in Los Angeles dismissed the plaintiffs' claims after a five-week nonjury trial. In largely reversing and returning the case to the lower court on Oct. 19, the unanimous three-judge appellate panel declared that the Copyright Act distinguishes between phono recording and video recording and that there is no "fair use" exemption for recording telecasts. "The copyright laws would seem to require that the copyright owner be given the opportunity to exploit" the market for home viewing, wrote Judge John F. Kilkenny in the court's opinion. Moreover, because the Betamax is not “suit BUSINESS WEEK November 2, 1981 able for substantial noninfringing use,” Sony-along with its advertising agency, Doyle Dane Bernbach International Inc.-is liable for the infringement. Complex relief. Declaring that the manufacture of video recorders is unlawful jeopardizes a business whose sales have risen from 100,000 units in 1977 to a current annual rate of 1.6 million. September, 1981, sales reportedly are up 64% from September, 1980. In addition to Sony's Betamax, which is sold by Sears Roebuck and Zenith, as well as Sony, Matsushita makes a VTR-called VHSsold by RCA and General Electric. Significantly, the court did not mandate an injunction against further manufacture of video recorders. Instead, it noted that “the relief question is exceedingly complex" and suggested that on remand the district court could consider imposing a compulsory license, coupled with royalty payments. Universal's and Disney's attorney, Stephen A. Kroft, a partner in the Beverly Hills law firm of Rosenfeld, Meyer & Susman, said that the plaintiffs “will definitely ask for an injunction" and that "stopping the machines entirely is within the realm of possibility." He refused to speculate on the form in which a possible royalty could be paid if the court refuses an injunction. Sony said it plans to appeal to the U.S. Supreme Court, which has discretion to refuse to review the case. The "ruling is just one step in what has been a long legal case and which will no doubt continue for several years," the company said. In the meantime, the appellate ruling does not prevent Sony from continuing to sell the Betamax. COPYRIGHT INFRINGEMENTS (Audio and Video Recorders) WEDNESDAY, APRIL 21, 1982 U.S. SENATE, COMMITTEE ON THE JUDICIARY, The committee convened, pursuant to notice, at 9:29 a.m., in room 2228, Dirksen Senate Office Building, Hon. Charles McC. Mathias, Jr. (acting chairman of the committee) presiding. Also present: Senators DeConcini, Dole, Specter, Denton, Baucus, Metzenbaum, and Leahy. Staff present: Eric Hultman, general counsel. Subcommittee on Criminal Law staff present: Ralph Oman, staff director; Linda Colancecco, Charles Borden, and Peggy Williams, professional staff members; Grace Rienhoff, chief clerk; and Hamilton Peterson, staff assistant. OPENING STATEMENT OF SENATOR MATHIAS Senator MATHIAS. The committee will come to order. We are meeting today to consider the home taping copyright issue. What the committee wants to do is to strike a fair balance between the creative artists who make movies, television programs, and records; the home viewers and listeners who record these copyrighted works; and the manufacturers and retailers of newly developed taping equipment. The committee held a hearing last year on the bill that was introduced by Senator DeConcini to exempt home video taping from copyright liability. I think there is a general agreement about that. I think we ought to move as quickly as possible to make it clear that the Government does not intend to hinder anybody's ability to tape, at home or elsewhere, for private and personal use. We have all seen those cartoons that have appeared in the newspaper with sinister figures looking in at the windows, waiting to break in at the very first indication that somebody has activated a recording device. But, while protecting the public, I have a very strong sense that we also need to protect the rights of the creative artists-the writers, musicians, and film-makers, those who, after all, create the desire, who make it desirable, to do this home recording. So, preserving the copyright system's incentives to these artists to continue to produce artistic works of the very highest quality is clearly in (333) the interest of the public. We might, I suppose, call them the taping public. I recall that it was Dr. Samuel Johnson who observed two centuries ago that, "No man but a blockhead ever wrote except for money. My amendment to S. 1758 would protect all sides by exempting home taping for private purposes from copyright infringement while creating a compulsory license for copyrighted audio and video works, with the manufacturers paying a small royalty payment. The amount of the royalty would be set by the Copyright Royalty Tribunal. I believe this amendment is true to the Constitution, which provides, in article I, section 8, that: Congress shall have Power To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries. We are fortunate to have with us today a long list of eminent witnesses. I have asked them to limit their remarks here to 5 minutes to save some time for discussion. Written statements will be included in full in the hearing record, which will be kept open for 3 weeks for submissions by interested parties who were not able to be scheduled this morning. Our second witness today is Miss Beverly Sills, the general manager of the New York City Opera. I know that Miss Sills could tell us that Puccini's heroine, Tosca, could live for art, but I think she would also agree that the modern artist needs something more to make ends meet. And I think we all know, as has been said, that, "A kiss may be grand, but it won't pay the rental on your humble flat, or help you at the automat." So we are here today to see if we can figure out a way to give our creative people more than just a grateful kiss as a response for their contributions to our society. Before we begin with the first witness I wish to place a copy of my amendment No. 1333. [Amendment to S. 1758 follows:] |