CASE 1.1

Sony Corporation of America v. Universal City Studios, Inc.

464 U.S. 417 (1984)

Tape Delay: Contributory Infringement or Fair Use?

Facts                                                                      equipment with constructive knowledge of the fact that Sony Corporation (petitioner) manufactures millions of their customers may use that equipment to make unau- Betamax video tape recorders (VTRs) and sells them     thorized copies of copyrighted material. There is no

through retailers (also included as petitioners in the precedent in the law of copyright for the imposition of case). The Betamax can record a broadcast off one sta-      vicarious liability on such a theory.

tion while the TV set is tuned to another channel. Tapes           The question is thus whether the Betamax is capable can be erased and reused. A timer in the Betamax can be             of commercially significant noninfringing uses. In  this used to turn on the equipment at predetermined  times          case, there are many important producers of national       so that programs can be recorded even when no one  is           and   local   television   programs   who   find nothing    at home.         objectionable about the enlargement in the size of    the Universal  City  Studios,  Inc.  and   Walt    Disney television audience that results from  the  practice   of Productions (respondents) hold the copyrights on     a time-shifting (recording a show for later viewing)    for substantial number of motion pictures and other audio-     private  home  use.  The  seller  of  the  equipment that visual works. They can earn additional returns on these     expands those producers’ audiences cannot be a     con- works by licensing limited showings on cable and  net-    tributory infringer if, as is true in this case, it has had no

work television, by selling syndicated rights for re-      direct involvement with any infringing activity.

peated airings on local TV, and by marketing videotapes             If  the  Betamax  were  used  to  make  copies  for a or videodiscs.                                                                                commercial or profit-making purpose, such use would

Universal  and  Walt  Disney  brought  a copyright       presumptively be unfair.

infringement  action  against  Sony  and  its   retailers.              Today, the larger the audience for the original  tele- Universal and Walt Disney claimed that Betamax con- cast, the higher the price plaintiffs can demand from sumers  were  using  their  machines  to  record  copy-      broadcasters from rerun rights.

righted works from commercially sponsored television.            . . . [We] must conclude that this record amply  sup- The District Court found no infringement and    de-   ports the District Court’s conclusion that home     time-

nied relief. The Court of Appeals held that Universal     shifting is fair use. and  Walt  Disney were  entitled to  enjoin the  sales of      Reversed.

Betamax VTRs or to collect a royalty on each sale. Sony

appealed.                                                                                       Case Questions

1. What is  “time-shifting” and  why  does the  court

Judicial Opinion                                                       think this activity is important in the decision?

STEVENS, Justice                                                                             2. What is the standard for imposing “vicarious liabil- The Betamax can be used to make authorized or  unau-                 ity for infringement”? What does the court examine thorized uses of copyrighted works, but the range of its                 in  determining copyright vicarious infringement potential use is much broader.              liability?

The only contact between Sony and the users of the         3. What  is  the  difference  between  Sony  selling its Betamax . . . occurred at the moment of sale.                                  Betamax and a company selling bootleg copies of a If vicarious liability is to be imposed on  petitioners        movie? What is different about these two activities?

in this case, it must rest on the fact that they have   sold             What is the same?