of a VTR were treated as a separate act of infringement, then each year, copyrightholders could, depending upon the number of units sold ་་་ the profits of VTR manufacturers are roughly dependent on the uses to which their products are put, then the vast majority of these profits would have to be returned to copyrightholders. That is, however, the most generous interpretation: few, if any, consumers would buy the machine if they could not tape the copyrighted material they now record, and VTR manufacturers' profits would then be entirely dependent on the infringing uses of their machines. The value to copyrightholders who sued for these ill-gotten profits would also be sizeable. And the proposed congressional abolition of their claims would be total. C. THE VALUE OF THE RIGHT TO ENJOIN Finally, there is the separate and distinct value to copyrightholders of the power to enjoin infringing uses. That 51/ 52/ See Broadcasting, Oct. 24, 1977, supra note 35. 17 U.S.C. App. §504 (b) (1976); see Sheldon v. Metro- is the claim that was brought successfully to the Ninth Circuit Court of Appeals. Under the Ninth Circuit's holding, if the defendants wish the plaintiffs to forego their injunctive rights, the defendants may propose to compensate the plaintiffs for such forebearance. Of course, the plaintiffs' right to reject such an offer under the Ninth Circuit's holding is of great economic value. Indeed, the Appeals Court suggested that a just measure of that value to the plaintiffs 54/ might be a royalty on the sale of VTR's and blank tapes. Such royalties could then be distributed to various claimants pro rata from the pool of total royalties collected. That is 55/ the solution recently adopted in West Germany; it is the 56/ solution advocated by a welter of scholarly authorities;it is the solution adopted by Congress to compensate copyright owners whose programs are received and cablecast by community antennae television; 57/ and it is the solution advocated in Congress by the affected copyrightholders. This solution also suggests the value of the rights possessed by those whose 55/ 56/ Law of Sept. 9, 1975, art. 53(5), BGBI 1273 (W.Ger.). See Arieff, Home Taping Will Be Tribunal's First Battle, Record World, Dec. 17, 1977, at 18; Traiman, EIA/CEG & Suppliers Eveing Home Video "Copyright Levy," Billboard, April 23, 1977, at 53, 55. 57/ 17 U.S.c. ss111 (c), (d) (1976). interests would be simply and literally taken by bills which on VTR hardware and blank tape software, whose amount could D. COSTS OF ADMINISTRATION AND BENEFITS OF TAKINGS This effect - - that the value of distinct elements of copyrightholders' property rights would be greatly debased by the proposed bills is sufficient to constitute a constitutionally compensable taking of property. Courts have required that an owner's property be substantially diminished in value before the state is required to pay for its actions for two reasons: government could hardly function under a requirement that it identify and pay for literally every adverse effect of its 59/ actions; and a substantial loss in the value of an individual's property is strong proof that the claimant has suffered the sort of focused injury that is not likely to be offset by the more general advantages of allowing such governmental conduct 60/ to go on without compensation. Even if we forget for a minute that the proposed bills would cause losses to the owners of copyrights 58/ See note 35, supra. 59/ See Michelman, note 6, supra, at 1192-96. Id. at 1217. that are far beyond merely "substantial," it should be plain that neither of these two mitigating factors is presented by the bills pending before Congress. The success of the Copyright Royalty Tribunal in compensating the owners of copyrights to sound recordings establishes that the administrative machinery needed to process the claims of audiovisual copyright owners would be neither complicated nor expensive.61/ In fact, that cost is almost nonexistent because the Tribunal could simply add the compensation of this further group to its existing duties, and Congress would be spared the start-up costs of a new bureaucracy. 62/ Furthermore, copyrightholders harmed by the proposed bills are not like those property owners whom the courts have held unentitled to compensation because they have received other, indirect benefits from the rule in question. For example, in United States v. Sponenbarger, the government was not required to compensate a property owner for flood damage to a portion of his property caused by a government, flood control program which substantially reduced flooding on other portions of his land. Nor need the police pay a homeowner whose door they knock down to get at a burglar inside. 61/ See generally, 3 Nimmer on Copyright, $14.11 (1981 ed.) at 14-13-14-75. 303 U.S. 256 (1939). No such offsetting compensation exists here. In addition, if the benefits alleged to redound to the owners of copyrights are benefits that they enjoy as members of the general public, and if these benefits are high enough to warrant incurring the substantial losses caused, then the benefits conferred on the public must be more than sufficient to cover the losses at issue, and it is a mystery why the public should be unwilling to pay for them. Such unwillingness to pay thus further fuels the suspicion that only a small group will actually benefit from the proposed bills. Moreover, even if some benefits are given to copyright owners in the form of increased first-run audience size, as Sony contends, and even if that effect could be measured with sufficient reliability to be of benefit to copyrightholders in their bargaining with advertisers, VTR manufacturers should not thereby be excused from paying for the other damage they do to the value of copyright property. However the cablecast of local signals to distant areas may increase the size of the advertising audience enjoyed by those programs, Congrest rightly understood that local advertisers have little to gain by having their messages sent to inaccessible markets. Its compulsory licensing scheme for cable transmissions exempts all local transmissions and all distant transmissions of network broadcasts precisely because the relevant market is better 631 penetrated by these' signals. Similarly, courts and Congress See 17 U.S.C. App. $111 (d) (2) (B) (i) (1976). |