Sony Corporation of America v. Universal City Studios, Inc

Brief Fact Summary. Movie studios (Plaintiff) that owned copyrights in movies and other television programming argued that Sony (Defendant) contributed to copyright infringement of their copyrighted works by marketing videocassette recorders (VCRs or VTRs) that enabled users to record the programs.

Synopsis of Rule of Law. One who supplies the way to accomplish an infringing activity and encourages that activity through advertisement is not liable for copyright infringement.

Facts. Sony Corp. (Sony) (Defendant) marketed Betamax videocassette recorders (VCRs or VTRs), which allowed home recording of televised programs.  Several movie studios (Plaintiff), holders of copyrights on televised movies and other televised programs, brought an action for contributory copyright infringement on the theory that Defendant was contributorily liable for infringement by consumers of VTRs of the studios’ (Plaintiff) copyrighted works on the basis of Sony’s (Defendant) marketing and distribution of the VTRs.  The district court, finding, inter alia, that no Sony (Defendant) employee had either direct involvement with the allegedly infringing activity or direct contact with purchasers of Betamax who recorded copyrighted works off-the-air, and that there was no evidence that any of the copies made by individuals were influenced or encouraged by Defendant’s advertisements, held that Defendant was not liable for direct or contributory copyright infringement.  The court of appeals reversed.  The United States Supreme Court granted certeriori.

Issue. Is one who supplies the way to accomplish an infringing activity and encourages that activity through advertisement liable for copyright infringement?

Held.(Stevens, J.)  No.  One who supplies the way to accomplish an infringing activity and encourages that activity through advertisement is not liable for copyright infringement.  The protection given to copyrights is wholly statutory, and, in a case like this, in which Congress has not plainly marked the course to be followed by the judiciary, the Court must be circumspect in construing the scope of rights created by a statute that never contemplated such a calculus of interests based on technological advances.  In proceeding, the Court must balance the encouraging and rewarding of authors to create new works with the public good.  This case does not fall in the category of those in which it is manifestly just to impose vicarious liability because the “contributory†infringer was in a position to control the use of copyrighted works by others and had authorized the use without permission from the copyright owner.  In this case, the only contact between Defendant and the users of the VTR’s occurred at the moment of sale.  However, there is no precedent for imposing vicarious liability on the theory that Sony (Defendant) sold the VTR’s with constructive knowledge that its customers might use the equipment to make unauthorized copies of copyrighted material.  The sale of copying equipment, like the sale of other articles of commerce, does not constitute contributory infringement if the product is widely used for legitimate, unobjectionable purposes, or actually, is merely capable of substantial noninfringing uses.  In this case, a large portion of the public’s use of VTRs does not implicate copyright at all, and also time-shifting, the most common use for the Betama, constitutes a fair use.  Reversed.

Discussion. Justice Blackmun, in a dissent, faulted the majority for deferring to congressional action in the face of major technological advancements, saying that the Court was thereby “evad[ing] the hard issues when they arise in the area of copyright law.â€Â  He proposed instead a test for indirect liability for copyright infringement based on whether the primary use of technology is infringing.  Even under this test, however, Sony (Defendant) would have prevailed given the determination of the majority that the predominant use of VTRs (time-shifting) constituted fair use.