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However, Professor Nimmer demonstrates that none of

these factors justifies the conclusion that home audio taping of copyrighted sound recordings should be considered a fair use. (Appendix Six, at 19-26.)

First, the judicial doctrine of fair use is generally limited to those cases where the purpose of the use is "productive," i.e., where it involves use by a second author of a first author's work for purposes such as criticism, comment, news reporting, teaching, scholarship or research. The doctrine is not applicable where the user makes a copy merely for purposes of entertainment. Yet that is precisely the purpose

involved in home audio taping of records. Such use clearly does not satisfy the first fair use factor.22/

Second, a claim of fair use is less likely to

be accepted where the nature of the work may be characterized as "entertainment" rather than information. [Footnote continued]

22/

"(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." 17 U.S.C. § 107.

Nor can the purpose of home audio taping be characterized as "educational" or "noncommercial" within the meaning of the copyright law.

Home audio taping of records obviously constitutes the copying of entertainment, not information.

Third, the fair use defense is generally

unavailable in cases where the entire copyrighted work is copied. Yet home audio taping invariably involves the reproduction of an entire musical composition or sound recording.

Fourth, the defense of fair use is less and

less applicable as the economic effect of the copying on the potential market for the copyrighted work becomes more and more severe. The studies, market statistics and economic analysis discussed in section II, above, vividly demonstrate the negative effect of home audio taping on the sales of records and pre-recorded tapes. Whatever the precise number of lost sales, there can be no doubt that it is substantial in the range of

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$1 billion. And, as Professor Nimmer states:

"[These] studies merely confirm what
is empirically obvious. There can
be no doubt that audio home recording
does have a devastating impact upon
the potential market for music and
sound recordings. If ever this fourth
fair use factor were to militate against
application of the fair use defense,
it must do so in this case." (Appendix
Six, at 25.)

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A separate consideration sometimes cited in

support of the fair use defense is that audio home taping occurs in private homes. Professor Nimmer emphasizes

that this does not make home taping a fair use:

"This assumption that property rights
of others somehow cease to operate
within the confines of one's home is
plainly fallacious." (Appendix Six,
at 27 n.49.)

No one would argue that one may destroy a book borrowed from a library as long as it is done within the four walls of one's home, or that one may freely use gas, electric and water services merely because those utilities have sent their property into private homes. Thus, while it may be difficult and certainly undesirable to enforce copyright infringement liability against

an individual home taper, this difficulty does not render lawful an otherwise infringing act.

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Although home audio taping constitutes copyright infringement under current law, there is in fact no

adequate mechanism to compensate copyright owners whose works are thereby appropriated.

On the contrary, a'

series of legal actions to recover damages from individual home tapers would be both undesirable and impractical. Legal action against manufacturers and distributors of audio recorders and tape would be almost as difficult. Nor is there any assurance that such litigation would result in the creation of a fair, workable and enforceable royalty system for the future.

RIAA therefore believes that the home taping problem should be resolved with comprehensive legislation in the Congress, not through piecemeal litigation in the courts.23/

Just such a mechanism was suggested

by the Court of Appeals in the "Betamax" case, when it indicated that a continuing royalty on the sale of recording equipment and tape "may very well be an

23/

The courts themselves evidently agree. The District Court in the "Betamax" case stated that:

· . . . .

"[T]he full resolution of these issues
is preeminently a problem for Congress
The choices involve economic,
social and policy factors which are
far better sifted by a legislature.
The possible intermediate solutions
are also of the pragmatic kind
legislatures, not courts, can and should
fashion." Universal City Studios Inc.
v. Sony Corp. of America, 480 F. Supp.
at 469. See also Universal City Studios
Inc. v. Sony Corp. of America, 659
F.2d at 971.

acceptable resolution in this context."24/ As Professor Nimmer points out, such a royalty system would negate any concerns with the privacy implications of legal action against individual home tapers, while at the same time protect the interests of copyright owners. (Appendix Six, at 26-31.) And while noting that such a royalty system could be imposed by judicial decree, he adds that the "far more efficient" approach would be for such a system to be adopted by legislation. (Id. at 30.)

Professor Nimmer's conclusion, with which RIAA strongly concurs, is that "[t]he proposed Mathias Amendment No. 1333 and Edwards Bill H.R. 5705 would

accomplish exactly such a salutary objective." at 31.)

(Id.

IV. BASIC CONSTITUTIONAL PRINCIPLES MANDATE
COMPENSATION FOR HOME AUDIO TAPING

The purpose of the home taping legislation introduced by Representative Don Edwards and Senator Mathias is not merely to compensate copyright owners for the economic losses attributable to home audio taping, nor merely to provide an enforceable remedy for the infringement of existing legal rights, important

24/

Universal City Studios Inc. v. Sony Corp. of America, 659 F.2d at 976.

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