Ask the Scholar
Document scope · 1 page
Scholar
Ask about this object, its catalog metadata, its source description, or the page inventory.
For page-specific OCR and visual context, open one of the page chats.
Scholar Source Context
Document identity
localId
135838048
label
Copyright (Audio and Video Issues) (5)
core
doc
dtoType
document
citationUrl
pageCount
1
Source metadata
id
135838048
contentType
document
title
Copyright (Audio and Video Issues) (5)
citationUrl
identifierLocal
35
collections
Records of the White House Office of Policy Development (Reagan Administration)
William P. Barr's Office Files
thumbnailUrl
largeImageUrl
imageCount
1
hasImages
yes
source
import
hasTranscription
no
Source extras
naId
135838048
coverageEndDate
logicalDate
1983-12-31
year
1983
coverageStartDate
logicalDate
1982-01-01
year
1982
levelOfDescription
fileUnit
recordType
description
ocrSource
nara-archive
Single page context
seq
1
pageIndex
0
type
document
mediaId
60ab0384ddfa99c2
ocrText
Ronald Reagan Presidential Library
Digital Library Collections
This is a PDF of a folder from our textual collections.
Collection: Barr, William: Files
Folder Title: Copyright (Audio and Video Issues) (5)
Box: 4
To see more digitized collections visit:
https://reaganlibrary.gov/archives/digital-library
To see all Ronald Reagan Presidential Library inventories visit:
https://reaganlibrary.gov/document-collection
Contact a reference archivist at: [email protected]
Citation Guidelines: https://reaganlibrary.gov/citing
National Archives Catalogue: https://catalog.archives.gov/
\
7.30.82
Bell -
Reveiue tlet's discuss
whend return.
file X
fleopyright
CBS
CBS Inc.,
1800 M Street, N.W., Suite 300N
Washington, D.C. 20036
(202) 457-4501
Donald D. Wear, Jr.
Vice President, Washington Affairs
Dear Mr. Uhlman:
July 19, 1982
You were very kind to meet with Lloyd Cutler and me some time ago
and to hear our views on the home taping question. It is an issue
of enormous concern to CBS both as a matter of principle and because
of its tangible economic impact.
CBS is engaged in a wide variety of businesses ranging from its
television network to home entertainment to publishing and
children's toys. What unites all these businesses is that they
involve distributing creative materials to the consumer primarily
for enjoyment in the home. That business depends on the continuing
contributions of composers, writers, performers and other artists.
The incentive for these creative efforts is a copyright system that
rewards creative people by giving them royalties when their works
are copied. That system is short-circuited by home taping. It is
vital to the continued supply of creative product to preserve the
integrity of the copyright system so that the reward to creators is
not curtailed by technological developments.
Enclosed are two documents which further amplify our views. The
first is a letter from Walter Yetnikoff, President, CBS Records
Group, detailing the economic and creative impact of home taping.
The second is a memorandum prepared by Wilmer, Cutler and Pickering,
under the supervision of Mr. Cutler and his partner Louis Cohen,
analyzing some of the issues you will confront in considering the
proposed legislative solutions which are now pending in Congress.
We believe that the appropriate and fair solution is embodied in the
Mathias Amendment to the DeConcini legislation .1333: permit home
taping (which is now jeopardized by the court ruling declaring it an
infringement) but impose reasonable royaties on recording equipment
and blank tapes to compensate copyright owners for the use of their
property. We are also particularly concerned about the swift growth
of commercial record rental stores which rent records for short
periods so that home tapes can be made in lieu of purchases. This
practice is addressed by the "first sale" provision of the pending
Mr. Uhlmann
Page 2
July 19, 1982
legislation, which will give the copyright owner control of
commercial record rentals, again for the purpose of ensuring that
they receive fair compensation for their work.
We appreciate your taking the time to meet with us and to consider
this matter, and we are hopeful the Administration will take an
interest in it.
Sincerely,
Willican
Mr. Michael Uhlmann
Special Assistant to the President
Office of Policy Development
Old Executive Office Building
Room 228
Washington, DC 20500
CBS
CBS Inc.. 51 West 52 Street
New York. New York 10019
(212) 975-5383
Walter R. Yetnikoff, President
CBS/Records Group
CBS Records
CBS Records International
CBS Video Enterprises
Columbia House
CBS Songs
Dear Mr. Uhlmann:
July 19, 1982
As President of CBS Records, I am writing to tell you about the
critical economic importance of the audio home taping issue to
CBS Records and to the composers and artists whose creative
work we record and sell.
Our national and international manufacturing and distribution
network (the largest in the world) gives us a firsthand view of
the damage that home taping does--not only to our own record
production and sales, but also to the many small record
companies that come to us for various services.
Various studies indicate that home taping of albums and single
records has grown dramatically in recent years and that home
taping displaces record sales that are a principal source of
income to creative people. Statistics show that:
Industry record shipments declined from 727 million
units in 1978 to 593 million units in 1981;
Record companies released 32% fewer new albums in 1981
than in 1978;
At the same time, factory shipments of blank audio
cassettes nearly doubled between 1971 and 1981, from
125 million to 228 million units;
In 1980, home tapers copied the equivalent of 455
million albums (vs. 491 million albums sold by the
recording industry);
Record companies lose $800 million to $1 billion of
revenues each year at suggested lists prices to home
taping.
These losses seem likely to increase dramatically
because of the swift growth of commercial record rental
stores, which rent records for short periods so that
home tapes can be made.
Page 2
This decline in record sales has a direct effect on the incomes
of composers and performers, who receive a royalty each time a
record or prerecorded tape is sold, but nothing when their
music is home-taped instead. The decline also has another
serious effect: it reduces the ability of a major record
company, like CBS Records, to take risks on new artists, or to
subsidize the recording of songs and artists that might not be
assured of commercial success. While we can be confident that
a Billy Joel, Neil Diamond, Barbra Streisand, or Willie Nelson
can be a safe risk, our ability to respond to new or more
specialized musical tastes is not so clear.
In 1979 expenditures for new artists by our company alone were
approximately $22MM. By 1981, despite the effects of inflation
on recording costs, this expenditure had dropped to $14MM or a
decline of 36%. Let me cite some specific examples:
The CBS Record Group's worldwide classical music
operation--Columbia Masterworks--makes many classical
records that are not profitable. The ability to
continue to subsidize series like Masterworks is
threatened by the loss of sales from more commercially
successful artists.
During 1981, CBS Records launched a new gospel music
label, Priority Records. Our ability to undertake such
experiments and bring music to people with more
specialized tastes is in increasing jeopardy.
CBS is one of the leading recorders of high quality
jazz music. Just like our classical records, these are
not best-selling records, and the ability to continue
to record them is diminished as home taping erodes our
record sales.
Perhaps as important as the economic concerns, however, are the
serious concerns we have about whether Congress will continue
to support and reinforce this non-governmental economic
incentive authorized by the Constitution for creative work. If
the copyright system does not respond to new technologies and
creators are therefore denied copyright compensation for their
work, we could see a dramatic drying up of creative activity.
The trends that I have cited, and the many studies that provide
data about these trends, are extremely disturbing to those of
us who want to preserve the recorded music industry. Please
Page 3
consider the implications of home taping on these quesions, and
lend your support to the preservation of the copyright system
that is reflected in the Mathias-Edwards proposals which we
believe constitute a fair and balanced approach to the
problem.
I hope these comments about the experiences and views of CBS
Records are useful to you. Please do not hesitate to contact
me if I can provide any further information.
Sincerely,
Special Assistant to the President
Office of Policy Development
Old Executive Office Building
Room 228
Washington, DC 20500
Working Draft
6/4/82
WILMER, CUTLER & PICKERING
'566 K STREET, N.W.
WASHINGTON, D. C.20006
PROPOSED LEGISLATION ON HOME TAPING
OF AUDIO MATERIALS
The purpose of this memorandum is to set forth
the reasons why the Administration should support legis-
1/
lation such as the Mathias-Edwards bill to amend the
Copyright Act to deal clearly and fairly with "home
taping" of audio materials. The legislation would do
three things: (1) It would make it lawful for an
individual to taperecord copyrighted audio materials,
either "off-the-air" or from records or prerecorded
tapes, in a private home for personal use. (2) It
would establish a system of royalties on recording
equipment and blank tape to compensate copyright owners
for this use of their property. (3) It would confer
on copyright owners the right to control, and hence
charge royalties for, commercial (for-profit) rental
of records that facilitates home taping.
This memorandum is in five parts:
Part one describes the purpose of copyright
protection, to stimulate artistic creation, and the
1/
Amendment No. 1333 to S. 1758 and H.R. 5705.
- 2 -
effect of home taping in undermining the effectiveness
of the copyright system.
Part two describes the growth of home audio
taping to the point where it now constitutes a very
large and still growing percentage of the recorded
music acquired by consumers.
Part three describes the effect of this
explosive growth on the composers and performers who
are deprived of royalties for the enjoyment of their
creative works, on the recording companies that make
up a major American industry, and on consumers, who
will have less music to enjoy as home taping reduces
the incentive for artists to create or for recording
companies to take risks.
Part four describes the present legal status
of home taping: it is copyright infringement,
theoretically subject to the remedial provisions of
the Copyright Act, but no one believes that forbidding
or monitoring taping in private homes is an acceptable
solution to the problem.
Part five describes what CBS believes to be
a fair and appropriate solution to the home taping
problem: legislation such as the Mathias-Edwards
Bill, which would make it legal to tape at home for pri-
vate use but would impose royalties on the manufacture
- 3 -
of recording equipment and tape destined for use
in home taping, and require the copyright owner's
permission before a sound recording can be rented
for commercial purposes.
Part One
The Copyright System
The philosophy of the copyright system is
to promote creative effort by giving songwriters and
other artists a property right in their creations, SO
that they may demand payment when those creations
2/
are copied. When the intended audience for a
creative work is able to make copies without direct
or indirect payment to the copyright owner, as is the
case when listeners tape records at home, the economic
incentive for creativity declines or disappears.
Part Two
The Growth of Home Taping
The development of modern audio recording
equipment and audio cassettes has made it convenient
to obtain a copy of a musical performance, without
2/
Copyright protection is thus both a reward for
the creator's labor and an incentive for future creativ-
ity. See, e.g., Twentieth Century Music Corp. V. Aiken,
422 U.S. 151, 156 (1975) ("The immediate effect of our
copyright law is to secure a fair return for an 'author's'
creative labor. But the ultimate aim is, by this incen-
tive, to stimulate artistic creativity for the general
public good. ").
- 4 -
paying royalties to those whose talent and effort
created the music, by recording "off the air"
or from a borrowed or rented record. In this way,
one can build a library of recorded music without
purchasing a record.
Many people appear to be doing just that.
Home taping of prerecorded music has exploded in
recent years. In the last decade, for example,
factory shipments of blank audio cassettes nearly
3/
doubled, from 125 million to 228 million units.
In 1980, almost half of all households owned at least
4/
one tape recorder. Today, there are 98 million home
5/
tape recorders in the United States.
Home tapers now are estimated to copy the
equivalent of 455 million record albums a year, nearly
as many as the recording industry sells. Home taping
displaces record sales: most home tapers acknowledge
3/
Billboard Magazine Tape Spotlight, August
26, 1972, at 44, 48; Merchandising Magazine Statis-
tical Issue, March 1982, at 24.
4/
Warner Communications Inc., A Consumer
Survey: Home Taping ("WCI Survey"), March 1982,
at 5.
5/
Forbes, February 15, 1982, at 126.
6/
WCI Survey at 20.
- 5 -
7/
that they tape to avoid buying records, and an
analysis by economist Alan Greenspan found that
roughly 40% of all records would be purchased
8/
instead if home taping were not possible.
The popularity of home audio taping has
spawned a new problem that itself contributes to
the growth of home taping -- the establishment of
retail stores that rent sound recordings for indivi-
duals to tape at home. Record rental stores offer
a wide variety of albums, at a modest price, for a
few days' rental. The very purpose of such stores
is to facilitate the taping of albums at home.
The record rental business began in Japan
9/
just two years ago. By February 1982, there were
7/
WCI Survey at 16; CBS Records Market Research,
Blank Tape Buyers: Their Attitudes and Impact on Pre-
Recorded Music Sales ("CBS Survey"), Fall 1980, at 11.
8/
Statement of Alan Greenspan re: Amendment 1333
to S. 1758 before the Senate Committee on the Judiciary
("Greenspan Analysis"), April 21, 1982, at 5. Accord,
Warner Communications Inc., "1981 Estimate of Loss Due
to Home Taping: Tapers' Reports of Replacement,'
April 1982, at 1, 6, 8.
It is not just teenagers who tape music; almost
90% of record album taping is done by persons over 20.
WCI Survey at 26.
9/
See "Japanese Disc Production Off; Rental
Blamed, Billboard, February 27, 1982, at 1.
- 6 -
10/
more than 1,100 record rental outlets in that country,
and record sales by stores in the vicinity of the
11/
rental outlets had dropped by 30%.
Record rental stores next appeared in Canada,
and the phenomenon quickly spread to the United States
where rental outlets have been established or are
12/
planned in most major cities.
These commercial
rental outlets promise to have a substantial impact
on record sales by encouraging home taping. Indeed,
the first of such outlets in the United States not
only rents albums but also sells blank tape and,
during its opening week, handed out free cassettes
13/
to its customers.
Part Three
The Harm Done by Home Taping
The price of a record or prerecorded tape
includes compensation to the songwriters, lyricists,
musicians and vocalists who make the music the public
likes to hear. The home taper pays nothing to these
10/
Letter from J. Kamei, Executive Director,
Japan Phonograph Record Association to the President
of the Recording Industry Association of America,
Inc., March 9, 1982.
11/
"Japanese Disc Production Off; Rental Blamed,"
Billboard, February 27, 1982, at 1. In 1981, Japanese
record production fell, for the first time in 25 years,
by 15%. Id.
12/
See "Rent-A-Record Bows Unit in U.S.," Bill-
board, August 19, 1981, at 3.
13/
Id. The outlet has been a smash success. Id.
- 7 -
creators and artists. Every time a home taper uses
their property for nothing, these people are deprived
of compensation that is rightfully theirs. Without this
compensation, the continuing efforts of these talented
people and their contributions to American music can
no longer be assured. And as the sources of new music
dry up, all those who make music and all those who
enjoy music, both those who tape and those who do not,
are hurt.
Home taping hurts consumers in another way as
well. Fewer record sales mean that recording company
fixed costs must be spread over a smaller number of
units. As a result, those consumers who buy records
pay more so that those who tape can pay nothing.
Record sales lost to home taping also trans-
late into a real and substantial economic loss for
recording companies. Record shipments have declined
from 736 million units (with a value of $4.13 billion)
in 1978 to 594 million units (with a value of $3.6
14/
billion) in 1981. Estimates are that the recording
14/
The Wall Street Journal, February 18, 1982,
at 31.
- 8 -
industry loses $800 million to $1 billion of
revenues to home taping each year: 15/ These losses
have hurt not only the recording companies themselves
but also their employees, suppliers, distributors
and retailers.
The loss of record sales to home taping
also leaves recording companies with fewer resources
to experiment and diversify their product. Recording
companies can no longer afford the risks of experi-
mentation and diversification. In 1981, the industry
16/
released 32% fewer new albums than in 1978. Recording
companies have been forced to take fewer chances on
new talent and to reduce their subsidization of
15/
Greenspan Analysis at 5; The Wall Street
Journal, February 18, 1982, at 31; CBS Survey at
15.
The explosive growth of home taping comes
at a very bad time for the recording industry, which
is already suffering from the combined effects of
record piracy and counterfeiting and a generally
sluggish economy. In 1979, for example, the industry
lost more than $200 million on domestic sales. Cam-
bridge Research Institute, Economic Study of the
Recording Industry, April 7, 1930.
16/
Recording Industry Association of America,
Inc., 1981 Release Survey, April 1982.
- 9 -
classical, jazz, gospel, ethnic and other specialty
recordings. This means fewer opportunities for song-
writers and performing artists to get recorded and
less musical diversity for the listening public.
Finally, home taping has a negative impact
on the nation's balance of trade. The United States
has traditionally exported far more phonograph records
and prerecorded tapes than it has imported. Most home
taping equipment and blank tape bought in the United
States has been imported, principally from Japan.
Home taping thus replaces a primarily American product
with a primarily imported product.
Part Four
The Present Legal Status of Home Taping
The Copyright Act of 1909 protected composers
against the unauthorized mechanical reproduction of their
musical works. The Sound Recording Amendment of 1971
created an additional copyright protecting performing
artists, record companies and others against the unauth-
orized reproduction of a particular recorded rendition
of a musical work. Home audio taping violates both the
1909 copyright that protects the song itself and the
1971 copyright that protects the particular rendition
of a song embodied in the sound recording.
- 10 -
Relying on language that appeared in the House
Report after the 1971 Amendment passed the Senate,
proponents of "free" home audio taping claim that home
taping is exempt from the proscriptions of the 1976
Copyright Act or, even if not exempt, that it is a
"fair use" of the copyrighted material embodied in a
17/
record.
Neither argument is correct. As Professor
Melville B. Nimmer, America's leading copyright scholar,
has concluded, "[t]here is not and never has been an
exemption from copyright liability for home audio taping"
and home audio taping of copyrighted works does not
18/
constitute fair use.
17/
In Universal City Studios, Inc. V. Sony
Corporation of America, 480 F. Supp. 429 (C.D. Cal.
1979), rev'd in part and aff'd in part, 659 F.2d 963
(9th Cir. 1981), the district court, relying on this
legislative history, found in the 1976 Act an unstated
exemption for home copying of audio materials, which
it then extended to the audiovisual materials involved
in the case before it. The court of appeals disagreed.
It held that home recording of copyrighted works is
an infringement of copyright. The Sony case, now pend-
ing before the Supreme Court, does not involve audio
material; it involves only the off-the-air, video taping
of copyrighted television programming. It should be
noted, however, that the implied-exemption argument
on which the district court relied was wrong: there
is no unstated exemption for home copying of audio
materials.
18/
See "The Legal Status of Home Audio Recording
of Copyrighted Works" by Melville B. Nimmer, attached
hereto, at 1.
- 11 -
As Professor Nimmer points out, remarks in
the House Report that form the basis for the home
taping exemption argument were never joined in by the
Senate, and they contain no hint of an intention to
amend the composer's copyright that had existed since
1909 or to carve out any special exemption from the
19/
new sound recording (rendition) copyright.
Nor is
there any hint that Congress intended to enlarge the
definition of fair use to cover a type of copying that
would not previously have qualified as fair use under
established principles.
This conclusion is reinforced by the 1976
Copyright Act. The 1976 Act preserved both the musical
copyright and the sound recording copyright. There is
20/
nothing in the legislative history or the language of
19/
As David Ladd, Register of Copyrights and
Assistant Librarian of Congress for Copyright Services,
notes, these remarks "were made in the context of
granting new protection to sound recordings against
tape piracy; home taping was not the focus of [the 1971]
legislation." Statement of David Ladd before the
Senate Committee on the Judiciary, April 21, 1982, at 37.
20/
While the legislative history of the 1976 Act
incorporates verbatim much of the language of the
House Report accompanying the 1971 Amendment, it omits
the passage referring to home taping.
- 12 -
the statute to suggest that home taping enjoys any
special exemption from the general proscriptions of
21/
the copyright law.
Nor does home audio taping fall within the
fair use exception to copyright liability. Under
the 1976 Act and case law fair use is limited to
incidental use of copyrighted works for productive
purposes such as research, news reporting, criticism
and teaching. The home taping of an entire record
album for personal enjoyment and to save money is not
an incidental, productive and hence "fair" use of that
22/
album; it is an infringement of copyright.
21/
To the contrary, the 1976 Act was "not intended
to give [taping] any special status under the fair use
provision or to sanction any reproduction beyond the
normal and reasonable limits of fair use. H.R. Rep.
No. 1476, 94th Cong., 2d Sess. 66 (1976), reprinted
in 1976 U.S. Code Cong. & Ad. News 5659, 5679. See
generally 3 Nimmer on Copyright $ 13.05 [F] [5], at
13-95-96, n. 159 (1981).
22/
Moreover, the 1976 Act protects in separate
subsections the copyright owner's exclusive right to
"reproduce" his work and his right to "distribute
copies or phonorecords," making it clear that unauth-
orized reproduction is infringement even if there is
no distribution.
- 13 -
Part Five
A Legislative Solution to the Problem of Home Taping
While home audio taping constitutes copyright
infringement under current law, there is now no avail-
able mechanism by which copyright owners whose works
are appropriated thereby can be compensated. Monitoring
or prohibiting taping done in private homes is neither
desirable nor practical. Suing individual home tapers
for damages resulting from their infringement is
equally undesirable. But the inability to monitor and
collect damages for home audio taping does not mean
that the copyright owner should be denied recompense
for the use of his property; it means only that spe-
cial means have to be created to assure proper compen-
sation under the conditions that technology has created.
These special means cannot be created by piece-
meal litigation. Indeed, even the courts agree that
"[t]he choices involve economic, social and policy
23/
factors which are far better sifted by a legislature.
23/
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.
- 14 -
It will require legislation to assure that the copy-
right law accomodates itself to the technological
developments that have made home taping possible by
ensuring the public the benefits of the new technology
while protecting the right of copyright owners to fair
24/
compensation. Only through comprehensive legislation
can an equitable, workable and enforceable royalty
system be developed.
The Mathias-Edwards bill is a fair and sensible
25/
solution to the problem of home audio taping. It
accomodates the property interest of the copyright
owner by establishing a royalty system to compensate
copyright owners whose intellectual property is
appropriated by home taping, and it accomodates the
privacy right of the individual by exempting home
tapers from liability for copyright infringement.
Under the bill, royalty fees would be payable
by the importers and manufacturers of audio recording
equipment and blank tapes. The royalties would be paid
into an interest-bearing pool. The pool would then be
24/
Legislative responses have been developed in
the past to accomodate the conflicting rights of
creators of intellectual property and the consuming
public as, for example, in the cases of cable T.V.
systems and computer software use.
25/
These bills are currently sponsored by 24
Senators and 76 members of the House, respectively.
- 15 -
allocated among the copyright owners whose works were
available to the public for taping during the relevant
period. The allocation would be by voluntary agree-
ment among the copyright owners, either individually
or through trade groups like ASCAP, or, failing agree-
ment, by the Copyright Royalty Tribunal which has
similar responsibility for allocating among copyright-
owner claimants the pools of royalties paid by cable
T.V. systems and by jukebox operators.
The Mathias-Edwards bill also tackles the
problem posed by the growing number of commercial
record rental stores by amending the so-called "first
sale" doctrine SO as to require the copyright owner's
permission before the owner of a particular copy of
a sound recording may rent that recording for commer-
26/
cial purposes. This provision would not apply to non-
commercial rentals or to private lending and borrowing.
26/
Under the "first sale" doctrine, a copyright
owner's exclusive right to distribute copies of his
creative work to the public is (unlike the other
exclusive rights granted to copyright owners) ex-
hausted after the first sale of a particular copy
of the work to an individual. Thus, under current
law, the purchaser of a record, such as a rental store,
is free to dispose of the record by sale, rental,
lease or lending without copyright liability.
- 16 -
* * *
Home taping undermines the copyright system
by depriving creators and artists of the compensation
that is the impetus for their efforts and, in so
doing, it imperils the continued availability of new
musical works to the public and the economic health
of a major American industry. Legislation has been
proposed that provides a fair solution to the taping
problem. We believe that this legislation merits the
support of the Administration.
STATEMENT OF
RECORDING INDUSTRY ASSOCIATION OF AMERICA
AND
NATIONAL MUSIC PUBLISHERS' ASSOCIATION
In January 1982, the Recording Industry Association
of America and the National Music Publishers' Association
requested Professor Melville Nimmer to prepare a compre-
hensive legal memorandum expressing his views under the
copyright laws concerning audio home taping, and to ap-
pear as an expert witness at the Congressional hearings
on this subject. Professor Nimmer agreed to do so, and
in accordance with that agreement, he prepared the Memo-
randum reproduced here as Appendix Seven. That Memorandum
reflects the legal views previously expressed by Professor
Nimmer in his treatise, Nimmer on Copyright.
On Friday, April 9, 1982, Professor Nimmer informed
us that, because of a potential conflict with other
clients of Sidley & Austin, the law firm to which Professor
Nimmer is Of Counsel, the firm had decided that he could
not testify as an expert witness at the Congressional
hearings, and that he had to withdraw his authorization
to submit his Memorandum of Law. He expressly reaffirmed
his views on the legal issues set forth in the Memorandum,
however, explaining that the withdrawal of authorization
related solely and entirely to the wishes of his law firm.
Counsel for RIAA and NMPA have carefully considered
the claim of conflict of interest perceived by Sidley &
Austin, and have concluded that there is no conflict which
would bar Professor Nimmer from appearing as an expert
witness. In any event, owing to the lateness of the
action taken by Sidley & Austin, it was neither possible
nor fair to RIAA and NMPA that the Memorandum be withheld
from Congress. Accordingly, the Memorandum of Law pre-
pared by Professor Nimmer is being submitted herewith.
THE LEGAL STATUS OF HOME AUDIO RECORDING
OF COPYRIGHTED WORKS
by Melville B. Nimmer
THE LEGAL STATUS OF HOME AUDIO RECORDING
OF COPYRIGHTED WORKS
by Melville B. Nimmer 1
INTRODUCTION
The recent decision in Universal City Studios, Inc. V.
Sony Corporation 2 (referred to as the Betamax case) held that
the vidéo recording of copyrighted works in the home for
private use constitutes copyright infringement. Those opposed
to this decision have argued that since there is an exemption
for audio recording, there is no justification for a different
rule as to video recording. This Memorandum, based upon the
analyses contained in my treatise Nimmer on Copyright, is
intended in the first place to dispel the premise contained
in that argument: There is not and never has been an exemption
from copyright liability for home audio recording. This
Memorandum further maintains that an otherwise infringing
reproduction of a copyrighted work will not be subject to the
defense of fair use simply because such reproduction is made
by the process of audio taping, or other recording, and is
1
Professor of law, U.C.L.A. School of Law. (These are the
personal views of the writer, and do not imply any
institutional endorsement.)
2 659 F.2d 963 (9th Cir. 1981).
- 2 -
intended for the private use of the person engaged in such
audio recording. Finally, it will be argued that problems of
enforceability and privacy may be met through the imposition
of a royalty on manufacturers of audio equipment and tape. 3
II
THERE IS NO EXEMPTION FOR
AUDIO HOME RECORDING UNDER
THE CURRENT COPYRIGHT ACT
The district court decision in the Betamax case, 4
although later reversed upon appeal, 5 is the source of a widely
voiced assumption that audio home recording is subject to a
special exemption under the Copyright Act. The district court
decision, in holding video home recording to be noninfringing,
rested its decision in part on a supposed exemption for audio
home recording, which it then concluded was applicable to video
home recording as well. Specifically, it held that
notwithstanding the apparently contrary wording of Section
3 The issue of video home taping presents certain different
questions which are not here considered, as they are beyond
the scope of this Memorandum.
4
Universal City Studios, Inc. V. Sony Corporation, 480 F.
Supp. 429 (C.D. Cal. 1979).
5 659 F.2d 963 (9th Cir. 1981).
- 3 -
106 (1) of the Copyright Act, 6 "the Congressional intent
[vis-a-vis Section 106(1)] was that home-use sound recording
was not prohibited." Then, as an alternative holding, the
district court concluded that, in any event, the defendants'
activities were defensible as "fair use" under Section 107.7
The fair use defense is considered later in this Memorandum. 8
Focusing now on the supposed exemption, the district court's
conclusion in this regard rests on two premises, each of which
is in error. The first erroneous premise is that an audio home
recording exemption was created as a part of the Sound
Recording Amendment of 1971. The second erroneous premise is
that such an exemption was incorporated in the current
Copyright Act of 1976. We now proceed to an analysis of each
of these premises.
6 "Subject to sections 107 through 118, the owner of copyright
under this title has the exclusive rights to do and to
authorize any of the following: (1) to reproduce the
copyrighted work in copies or phonorecords
=
17
U.S.C.
$ 106.
7 The district court found that "the legislative history of
the new Act shows that Congress did not intend to restrain the
home-use copying at issue here." 480 F. Supp. at 447. It then
added that "even if this finding were erroneous," the doctrine
of fair use would constitute a defense. Id.
8 See T III infra.
- 4 -
A. The Sound Recording Amendment of
1971 Did Not Create an Exemption
for Audio Home Recording
The Sound Recording Amendment of 1971 9 amended the
Copyright Act of 1909 SO as to provide for the first time
copyright in sound recordings. 10 The text of the Amendment
itself contained no special mention of audio home recording,
nor was there any such mention in the Senate proceedings which
preceded its enactment of the Amendment. After Senate
enactment, the measure went to the House Judiciary Committee,
and its Report on the Amendment included a passage which was
heavily relied upon by the district court in the Betamax case,
and is the main source of the claim that a statutory exemption
for audio home recording was adopted in the 1971 Amendment.
That passage reads as follows:
9 Act of October 15, 1971; P.L. 92-140, 85 Stat. 391.
10 This is to be contrasted with copyright in the musical or
other underlying works which may be the subject of such
recording. Copyright in such underlying works had been
recognized under the 1909 Act since its inception (as well as
under prior copyright laws). Those not familiar with copyright
are sometimes puzzled by the distinction between a copyright
in a musical work and a copyright in a sound recording of such
musical work. The copyright in the musical work inheres in
the composer of the music, whose rights may be acquired by a
music publisher. The copyright in a sound recording inheres
in those responsible for the artistic rendition of such musical
work as captured in phonorecord (e.g., phonograph record or
tape) form. This includes the orchestra, the singer, the
record company, etc. See generally Nimmer on Copyright, $
2.10[A][2] (1981).
- 5 -
"In approving the creation of a limited copyright in
sound recordings it is the intention of the Committee
that this limited copyright not grant any broader rights
than are accorded to other copyright proprietors under
the existing title 17. Specifically, it is not the
intention of the Committee to restrain the home
recording, from broadcasts or from tapes or records,
of recorded performances, where the home recording is
for private use and with no purpose of reproducing or
otherwise capitalizing commercially on it. This
practice is common and unrestrained today, and the
record producers and performers would be in no different
position from that of the owners of copyright in
recorded musical compositions over the past 20
years. "ll
Does the above passage justify the conclusion of the
Betamax district court that an audio home recording exemption
(apart from the general doctrine of fair use) was contained
in the Sound Recording Amendment of 1971? There are several
different reasons which compel the contrary conclusion that
no such exemption was created. There is first the fact that
the 1971 Amendment was itself legislation limited to the
creation of copyright in sound recordings, and did not (in this
context) purport to affect the copyright in musical or other
works which may be contained in such sound recordings.
Therefore, the purported noninfringing status of "home
recording" referred to in the House Report could at most be
applicable to the sound recording copyright, not to the
copyright in any underlying works which may be contained
11 H.R. Rep. No. 92-487, 92d Cong., 1st Sess. 7 (1971).
- 6 -
therein. It is true that the House Report offers the opinion
that home recording would not infringe the copyright in any
such underlying works, but this could be nothing more than the
1971 Congress' opinion as to the meaning of the 1909 Act, and
as such not a statement of legislative intent. 12
In addition there is the fact that the above-quoted
statement in the House Report was never joined in by the
Senate. As far as that body is concerned, there is only the
language of the statutory amendment itself, which certainly
on its face carries no implication of any form of exemption.
Even if one assumed that all of the voting members from the
House side intended that a home recording exemption should be
regarded as implicit in the statutory language, without
evidence of a similar intent upon the part of those voting on
the Senate side there is no justification for reading the
exemption into the 1971 Amendment.
Finally, and perhaps most fundamentally, the above-
quoted statement in the House Report in itself does not purport
to create an exemption apart from the general doctrine of fair
use. The Committee statement that "it is not the intention
to restrain
home recording" must be read within
12 United States V. Price, 361 U.S. 304, 313 (1960); Rainwater
V. United States, 356 U.S. 591, 593 (1958).
- 7 -
the context of the preceding and succeeding sentences. The
preceding sentence states that "it is the intention of the
Committee that this limited [sound recording] copyright not
grant any broader rights than are accorded to other copyright
proprietors under the existing title 17." The succeeding
sentence makes the point even more explicit: "the record
producers and performers would be in no different position from
that of the owners of copyright in recorded musical
compositions over the past 20 years." This, then, directly
contradicts the Betamax district court's assumption that the
1971 Amendment created a special home recording exemption.
To the contrary, sound recording copyright owners are to be
"in no different position" than other copyright owners had been
prior to the 1971 Amendment. Since there is no basis
whatsoever for a claim (and no one appears to make a claim)
that pre-1971 there was, apart from the doctrine of fair use,
any, basis for exempting home recording of copyrighted works
from the reach of the Copyright Act, it follows that no such
exemption was created under the 1971 Amendment.
If there were any disparity in this regard as between
the House Committee Report and the individual statements of
legislators and others, the Report would, of course, prevail.
It will be seen, however, that the Betamax district court's
further reliance upon such individual statements by Chairman
- 8 -
Kastenmeier (see 480 F. Supp. at 446) and by Assistant Register
of Copyrights Barbara Ringer (see 480 F. Supp. at 445) is also
ill-based. Consider first the colloquy on the House floor as
between Chairman Kastenmeier and Representative Kazen:
"Mr. Kazen: Am I correct in assuming that the bill
protects copyrighted material that is duplicated for
commercial purposes only?
Mr. Kastenmeier: Yes.
Mr. Kazen: In other words, if your child were to record
off of a program which comes through the air on the
radio or television, and then used it for her own
personal pleasure, for listening pleasure, this would
not be included under the penalties of this bill?
Mr. Kastenmeier: This is not included in the bill.
I am glad the gentleman raises the point. On page 7
of the report, under "Home Recordings," Members will
note that under the bill the same practice which
prevails today is called for; namely, this is considered
both presently and under the proposed law to be fair
use. The child does not do this for commercial
purposes. This is made clear in the report.
13
The underlined portion of the above statement by
Chairman Kastenmeier makes it very clear that he did not view
the 1971 Amendment as creating any separate exemption, but that
to the contrary he was referring to, and only to, the doctrine
of fair use.
The statements of Miss Ringer relied upon by the Betamax
district court occurred in a colloquy with Representative
Beister. It proceeded as follows:
13 117 Cong. Rec. 34, 748 (1971) (emphasis added).
- 9 -
"Mr. Beister: I do not know that I can add very much
to the questions which you have been asked so far.
I can tell you I must have a small pirate in my own
home.
My son has a cassette tape recorder, and as a particular
record becomes a hit, he will retrieve it onto his
little set. Now, he may retrieve in addition something
else onto his recording, but nonetheless, he does
retrieve the basic sound, and this legislation, of
course, would not point to his activities, would it?
Miss Ringer: I think the answer is clearly, "No, it
would not."
I have spoken at a couple of seminars on video cassettes
lately, and this question is usually asked: "What about
the home recorders?"
The answer I have given and will give again is that this
is something you cannot control.
You simply cannot control it.
My own opinion, whether this is philosophical dogma or
not, is that sooner or later there is going to be a
crunch here. But that is not what this legislation is
addressed to, and I do not see the crunch coming in the
immediate future.
Other countries have felt it more directly than we,
partly because record prices are lower here than, say,
in Germany. In that situation there is a range of legal
devices for trying to keep the practice under reasonable
control. But I do not see anybody going into anyone's
home and preventing this sort of thing, or forcing
legislation that would engineer a piece of equipment
not to allow home taping.
.14
14
Hearings on S.646 Before Subcommittee No. 3 of the House
Judiciary Committee, 92d Cong., 1st Sess. 22 (1971).
- 10 - -
It will be seen that in the above-quoted statement, Miss
Ringer is careful not to claim that the then proposed
legislation would create a home recording exemption, or even
that it would constitute fair use. Rather, she states that
such legislation would not "point to" home recording in that
"this is something you cannot control." That is, her remarks
were directed simply to the practicality of enforcement, not
to the theoretical reach of the 1971 Amendment. (For further
on the practicality of enforcement, see " IV infra.) Indeed,
Miss Ringer's statement further suggests that the need for
"reasonable control" of home recording (what she refers to as
"philosophical dogma") may be reconciled with the
practicalities of enforcement by the possible application of
a royalties system such as that adopted by West Germany. She
suggests that without such a reconciliation "sooner or later
there is going to be a crunch here," but in 1971 she did "not
see the crunch coming in the immediate future." Given the
current devastating impact of home recording upon the music
and recording business (see T III.B.4. infra), it is obvious
that "the crunch" is now upon us.
The Betamax district court relied upon an additional
statement by Miss Ringer in a manner which displayed a
misunderstanding of its significance. The statement appeared
in the following further exchange between Representative
Beister and Miss Ringer:
- 11 -
"Mr. Beister: Secondly, with respect to video
cassettes, are we approaching an additional problem,
not with respect to private use, but with respect to
public distribution after it has been retrieved over
a home set?
Miss Ringer: The answer is very definitely "yes."
For years the motion picture industry has been faced
with bootlegging problems, much of it deriving from the
10 mm prints that were distributed to the Armed Forces
and got out of control. The film industry has had a
very active policing activity for years.
I think that this problem is going to undergo a quantum
increase when video cassette recorders are freely
available. But I would say that there is a big
difference, and I think it is something that you might
consider. In that area, they have got copyright
protection, and in this area, who knows? It is
certainly not protectable under the Federal statute. .15
In this context, Miss Ringer's statement "It is
certainly not protectable under the Federal statute" referred
only to the noncopyrightability of sound recordings (as
compared with the protected status of motion pictures,
including video cassettes) prior to enactment of the 1971
Amendment. Indeed, it was the fact that sound recordings were
"not protectable under the Federal statute" which created the
need for the 1971 Amendment. This statement does not remotely
imply that once such protected status was accorded by the 1971
Amendment, it would then be subject to a home recording
exemption.
15 Id. at 22-23 (emphasis by Betamax district court).
- 12 -
B. In Any Event, There Is No Exemp-
tion for Audio Home Recording
Under the Copyright Act of 1976
Even if the preceding reasoning were rejected, and it
be assumed that an audio home recording exemption were somehow
contained in the 1971 Amendment, it must be concluded that any
such exemption was not carried over into the general revision
of copyright law as embodied in the Copyright Act of 1976.
The Betamax district court in finding such a home recording
exemption relied primarily upon the "Home Recording" statement
in the House Report relating to the 1971 Amendment. Without
that statement even the pretense of a home recording exemption
would dissipate. Nothing in the statutory language of the 1971
Amendment suggested any such exemption. Yet, when that
statutory language was incorporated into the Act of 1976, it
is most significant that neither the House nor Senate Judiciary
Committees saw fit to incorporate in their respective committee
reports the commentary on "Home Recording" as contained in the
1971 Committee report. This omission cannot be ascribed to
an assumption by the Judiciary Committees that their
commentaries upon the 1971 statutory language would be assumed
to be applicable to the same language as incorporated in the
1976 Act. If that were the case it would have been unnecessary
to repeat in the 1976 Committee Reports any of the commentary
- 13 -
that had been contained in the 1971 Reports. Yet, in fact much
of the 1971 House Report commentary is incorporated verbatim
in the 1976 House Report. 16 The failure to include in the 1976
Report the "Home Recording" statement from the 1971 Report is
doubly significant in view of the fact that whereas the 1971
Amendment did not by its terms affect copyright in musical
works, the 1976 Act clearly did. Thus while the "Home
Recording" statement in the 1971 Report could not constitute
a statement of legislative intent regarding home recording of
musical works, 17 such a statement in the 1976 Report would have
had such an impact.
Finally, any question as to whether the Copyright Act
of 1976 includes an exemption (not based upon fair use) for
home recording would seem to be definitively set at rest by
the following passage from the House Report for the 1976 Act:
"it is not intended to give [taping] any special status under
the fair use provision or to sanction any reproduction beyond
the normal and reasonable limits of fair use. 18 This
16 Compare, for example, H.R. Rep. No. 92-487, 92d Cong., 1st
Sess. 6 (1971) (bottom paragraph) with H.R. Rep. No. 94-1476,
94th Cong., 2d Sess. 56 (1976) (second full paragraph).
17 See text at footnote 10.
18 H.R. Rep. No. 94-1476, 94th Cong., 2d Sess. 65 (1976).
- 14 -
conclusion is further bolstered by the fact that Congress did
specifically consider audio and video tape recorders and the
problem of off-the-air taping in connection with the current
Copyright Act, and approved certain narrow exemptions while
withholding approval for a general home recording exemption. 19
19
For example, Congress explicitly provided an exemption for
off-the-air video taping of audio-visual news programs by
nonprofit libraries for distribution to scholars and
researchers.. See 17 U.S.C. $ 108 (h) and the House Report
commentary:
"It is intended to permit libraries and archives
subject to the general conditions of this
section, to make off-the-air video tape
recordings of daily network newscasts for
limited distribution to scholars and researchers
for use in research purposes." H.R. Rep. No.
94-1476, 94th Cong., 2d Sess. 77 (1976)
(hereinafter "H. Rep. ").
An exemption was also provided for audio or video off-the-
air taping taken from public broadcasting entity transmissions
of published nondramatic musical works as well as video taping
of published pictorial, graphic and sculptural works by
governmental and other nonprofit bodies for use in classroom
teaching activities provided the tapes are destroyed within
seven days of initial broadcast. See 17 U.S.C. § 118 (d) (3)
and the House Report Commentary: "It is the intent of the
Committee that schools be permitted to engage in off-the-air
reproduction to the extent and under the conditions provided
in 118(d) (3) " H. Rep. at 120. The Conference Committee
report also expressed the view that "as long as clear-cut
restraints are imposed and enforced, the doctrine of fair use
is broad enough to permit the making of an off-the-air fixation
of a television program within a nonprofit, educational
institution for the deaf and hearing impaired
= Remarks
of Representative Kastenmeier at page H10875 of the
Congressional Record of September 22, 1976, adopted in H.R.
Rep. No. 94-1733, 94th Cong., 2d Sess. 70 (1976). It is clear,
then, that Congress did specifically consider the issue of off-
the-air tape recording by audio and video cassette recorders,
and provided an exemption only in these explicit areas. Beyond
that, the House Report stated that "It is not intended to give
[Footnote continued on following page.]
- 15 -
The Copyright Act provides for a broad reproduction
right under Section 106 (1), subject to certain express
exemptions in Sections 107-18. To conclude that in addition
to these express exemptions there is also an implied home
recording exemption would be exactly contrary to what the
Supreme Court has said "must" be presumed. In Tennessee Valley
Authority V. Hill, 20 the Court observed: "In passing the
Endangered Species Act of 1973, Congress was also aware of
certain instances in which exceptions to the statute's broad
sweep would be necessary. Thus [the statute in certain cited
sections] creates a number of limited 'hardship exceptions,'
none of which would even remotely apply to the [present
case]
[U]nder the maxim expressio unius est exclusio
alterius, we must presume that these were the only 'hardship
cases' Congress intended to exempt. .21
Footnote 19 continued from preceding page]
[taping] any special status under the fair use provision or
to sanction any reproduction beyond the normal and reasonable
limits of fair use. H. Rep. at 66.
20
437 U.S. 153 (1978).
21 437 U.S. at 188.
- 16 -
III
AUDIO HOME RECORDING DOES NOT CONSTITUTE
FAIR USE
If, as argued in Paragraph II, there is no special home
recording exemption under the Copyright Act, may it be said
that this conduct is nevertheless defensible as fair use? That
inquiry must be responded to on two different levels. First,
does the "Home Recording" statement in the House Report
relating to the 1971 Amendment determine the fair use issue
in relation to audio home recording, and if not, do the general
fair use factors as set forth in Section 107 of the current
Act justify a conclusion of fair use?
A. The "Home Recording" Statement in
the 1971 House Report Does Not
Determine the Fair Use Issue
It may be argued that the "Home Recording" statement
as contained in the 1971 House Report 22 constitutes an opinion
that audio home recording constitutes fair use. 23 As a matter
of law it can constitute no more than a statement of opinion,
22
See " II.A. above.
23
Alternatively, the statement may be read as merely an
observation that the statutory prohibition against unauthorized
recording is unenforceable as against individual home
duplicators. On the issue of enforceability, see IT IV below.
- 17 -
and not an expression of legislative intent, as regards the
copyright in musical works. 24 But even as to the copyright
in sound recordings, which was the subject of the 1971
Amendment, the statement itself at most merely equates the fair
use status of sound recordings with that of other copyrighted
works. That is, if (but only if) audio home recording of other
copyrighted works is fair use (an issue as to which the House
Report on the 1971 Amendment may claim no special competence),
then by reason of the 1971 Statement audio home duplication
of sound recordings would have the same status. This leaves
open the issue of the general status of audio home recording
under fair use principles, a subject which is discussed below.
But even if the 1971 Statement were read as creating
under the 1909 Act an absolute fair use rule vis-a-vis home
duplication of sound recordings, 25 for several different
reasons this does not determine the fair use issue under the
Copyright Act of 1976. There is first the significant fact
that the "Home Recording" statement was not repeated in the
24
See the text to footnote 10 above.
25
The statement of Chairman Kastenmeier quoted in the text
to footnote 11 above may be read as assuming such an absolute
rule. There was, of course, no similar statement from the
Senate side.
- 18 -
Committee Reports for the Current Copyright Act. 26 Of even
greater significance is the manner in which the general issue
of fair use is treated under the Copyright Act of 1976.
Section 107 of the current Act states certain general criteria
to be taken into account in the determination of whether a
given use is "fair." There is no attempt to define fair use,
nor to determine on the legislative level whether any
particular act of duplication would or would not constitute
fair use. This approach is summed up in the Committee Reports
with the statement:
"The bill endorses the purpose and general scope of the
judicial doctrine of fair use, but there is no
disposition to freeze the doctrine in the statute,
especially during a period of rapid technological
change. Beyond a very broad statutory explanation of
what fair use is and some of the criteria applicable
to it, the courts must be free to adapt the doctrine
to particular situations on a case-by-case basis.
Section 107 is intended to restate the present judicial
doctrine of fair 77 use, not to change, narrow, or enlarge
it in any way.
Thus, it is the judicial doctrine of fair use that had been
developed under the 1909 Act which was adopted by the 1976 Act,
not any prior legislative directives, including a directive
that home recording shall be regarded as fair use, even if such
26
See T II.B. supra.
27 H.R. Rep. No. 94-1476, 94th Cong., 2d Sess. 66 (1976)
(emphasis added). See also S. Rep. No. 94-473, 94th Cong.,
1st Sess. 62 (1975).
- 19 -
a directive had in fact been articulated in the 1971 Amendment.
The point is further amplified in the House Report, which
states that" it is not intended to give [taping] any special
status under the fair use provision
.
.28 The conclusion
is, then, inescapable that audio home recording was not singled
out by Congress for special fair use treatment under the
Copyright Act of 1976. The question remains as to whether,
applying the general judicial doctrine of fair use as codified
in the Section 107 criteria, the defense of fair use is
nevertheless applicable to audio home recording. We turn now
to that topic.
B. Audio Home Recording Does Not
Constitute Fair Use
Section 107 of the Copyright Act lists the following
four criteria, codified from prior fair use cases, which are
intended to give guidance to the courts in determining whether
a given use is "fair":
28
H.R. Rep. No. 94-1476, 94th Cong., 2d Sess. 66 (1976).
- 20 -
1. The Purpose and Character of
29
the Use
The preamble to Section 107 specifies certain "purposes"
which fall within the core of fair use. These are:
"criticism, comment, news reporting, teaching (including
multiple copies for classroom use), scholarship, or research."
It will be seen that in each of these instances the use is to
be within the context of a further commentary or exposition
by the person making the "use. 30 Thus, as the court of
appeals in the Betamax case observed, fair use involved "the
use by a second author of a first author's work. ..31 It is only
when the user is himself an author, and is using a portion of
29
In referring to "the purpose and character of the use,"
Section 107 (1) adds: "including whether such use is of a
commercial nature or is for nonprofit educational purposes."
Nevertheless, the fact that a given use is not "commercial"
but is rather for "nonprofit educational purposes" does not
necessarily mean that such use if "fair." See, e.g., Wihtol
V. Crow, 309 F.2d 777 (8th Cir. 1962) (nonprofit reproduction
for school and church purposes held not fair use). In any
event, audio home recording for fair use purposes may be
regarded as "commercial." This point is explored in T II.B.4.
below.
30
Such commentary or exposition will ordinarily be set forth
in a writing which accompanies the reproduction of the
copyrighted work. In the case of "teaching" this may not be
the case, but even then the teacher will virtually always add
an oral commentary or exposition.
31
Universal City Studios, Inc. V. Sonv Corp. of America, 659
F.2d 963, 970 (9th Cir. 1981), quoting Seltzer, Exemptions and
Fair Use in Copyright 24 (1978).
- 21 -
a prior work in order to formulate more effectively his new
work that the scope of copyright in the prior work may be
limited under the doctrine of fair use. In such circumstances
the public benefit from the dissemination of the new work may
be said sometimes to outweigh the earlier author's interest
in the full enforcement of his copyright. 32 The doctrine of
fair use as applied by the courts has been limited to those
instances where the purpose of the copier is to further his
own authorship. 33 The Betamax court of appeals properly found
that the established judicial doctrine of fair use is not
applicable where the user makes a reproduction merely for his
own "convenience" or "entertainment .34 Yet, it is precisely
32 "The doctrine of fair use, originally created and
articulated in case law, permits courts to avoid rigid
application of the copyright statute when, on occasion, it
would stifle the very creativity which that law is designed
to foster." Meerobol V. Nizer, 560 F.2d 1061, 1068 (2d Cir.
1977), quoted in Rubin V. Boston Magazine Co., 645 F.2d 80,
83 (lst Cir. 1981) (emphasis added).
33 The court of appeals in the Betamax case cited as the one
case which did not conform to this principle that of Williams
& Wilkins Co. V. United States, 487 F.2d 1345 (Ct. Cl. 1973),
which held library photocopying to be fair use. The Betamax
court disapproved of Williams & Wilkins for its failure to
comply with this "productive use" principle. In fact, however,
Williams & Wilkins may conform to the "productive use"
principle in that photocopies were furnished only for the
purpose of "study and research," which implies a use that it
is hoped will result in further scientific authorship.
34
See 659 F.2d at 970.
- 22 -
an "entertainment" use, and only that, which is involved in
most home audio recording. It can hardly be said, then, that
the "purpose and character" of a home recording use comports
with fair use requirements.
2. The Nature of the Copy-
righted Work
The defense of fair use is less applicable when the work
which is copied is "creative, imaginative, and original 35 than
it is when the work is one "more of diligence than of
originality or inventiveness, ..36 such as a catalog, index, or
other compilation. The Betamax court of appeals was, thus,
correct in its conclusion that "the scope of fair use is
greater when informational type works, as opposed to more
creative products are involved
....
If a work is more
appropriately characterized as entertainment, it is less likely
that a claim of fair use will be accepted. ..37 Musical works,
and the sound recordings thereof, which constitute the subject
matter of most audio home recording, obviously fall within the
"entertainment" characterization. As such, the doctrine of
fair use is most constricted in these circumstances.
35
MCA, Inc. V. Wilson, 211 U.S.P.Q. 577 (2d Cir. 1981).
36
New York Times Co. V. Roxbury Data Interface, Inc., 434
F. Supp. 217 (D.N.J. 1977).
37
Universal Citv Studios, Inc. v. Sony Corp. of America, 659
F.2d 963, 972 (9th Cir. 1981).
- 23 -
3. The Amount and Substan-
tiality of the Portion
Used
Audio home recording of musical works and of the sound
recordings thereof almost always involves the reproduction of
an entire work. It is the song itself, and not merely a
particular passage from it, which the home recorder wishes to
reproduce. It is obvious, then, that the application of this
third fair use factor militates against a fair use defense.
Indeed, it is generally held that the defense of fair use is
38
never available to immunize copying of an entire work.
4. The Effect upon the Plain-
tiff's Potential Market
This fourth fair use factor, which is often said to be
the most significant of all, 39 most dramatically negates any
claim that audio home recording may constitute fair use.
38
Walt Disney Productions V. Air Pirates, 581 F.2d 751 (9th
Cir. 1978); Wihtol V. Crow, 309 F.2d 777 (8th Cir. 1962); see
Rosemont Enterprises, Inc. V. Random House, Inc., 366 F.2d 303,
310 (2d Cir. 1966); Encyclopaedia Britannica Educational Corp.
v. Crooks, 447 F. Supp. 243 (W.D.N.Y. 1978).
39
Triangle Publications, Inc. V. Knight-Ridder Newspapers,
Inc., 626 F.2d 1171 (5th Cir. 1980); H.C. Wainwricht & Co. V.
Wall Street Transcript Corp., 418 F. Supp. -620 (S.D.N.Y. 1976),
aff'd, 558 F.2d 91 (2d Cir. 1977); Williams & Wilkins Co. V.
United States, 487 F.2d 1345 (Ct. Cl. 1973).
- 24 -
Although the precise numerical amount of lost sales of
phonograph records and pre-recorded tapes which annually occur
by reason of audio home recording practices may be the subject
of debate, the Roper Organization concluded in a 1979 study
that "there is no doubt that substantial record and pre-
recorded tape sales are lost through taping. 40 The
Hamilton
Study, prepared for the Copyright Royalty Tribunal, concluded
that "consumers taping music does have an impact on their
purchases of prerecorded music. "41 The CBS Records Market
Research Study, released in Fall, 1980, found that audio home
taping costs the pre-recorded music industry up to 100 million
units annually, which at list prices amounts to an annual loss
of 700 to 800 million dollars. 42 It further concluded that
pre-recorded sales would be 20% greater without blank
43
taping.
And the most recent study on home taping released
by Warner Communications Inc. found that "during the 1980
40
A Study on Tape Recording Practices Among the General
Public (The Roper Organization, June 1979), Summary and
Conclusions, at 3.
41
Report of the Committee on Home Taping (Copyright Royalty
Tribunal, 1979), at 3.
42
Blank Tape Buyers -- Their Attitudes and Impact on Pre-
Recorded Music Sales (CBS Records Market Research, Fall, 1980),
at 15.
43
Id. at 16.
- 25 -
survey year, over $600 million worth of blank tape was used
by some 39 million people to bring over $2.85 billion worth
of music (and other professional entertainment) into their
homes. 44 The study concluded: "Were home taping not
possible, tapers would be spending hundreds of millions of
additional dollars on records and prerecorded tapes. 45
The above 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. It further demonstrates the fallacy
of those who argue that audio home recording should be regarded
as fair use because it is "noncommercial." The individual who
in his home engages in audio home recording may not be seeking
a "commercial advantage" in that he is not in the business of
selling such recordings. His motivation is nevertheless
"commercial" for fair use purposes in the sense that by home
recording he thereby avoids the cost of purchasing records or
pre-recorded tapes. In this sense, what occurs in the home
44 Home Taping: A Consumer Survey, Warner Communications
Inc., March, 1982, p. 2.
45 Id.
- 26 -
is no less "commerce" than that which occurs in the record
shop. 46
IV
ENFORCEABILITY, PRIVACY AND CONTRIBUTORY LIABILITY
Opposition to the application of the Copyright Act to
audio home recording is often based upon two general themes
which should now be considered. First, it is argued that a
rule of law rendering audio home recording copyright
infringement would be entirely unenforceable, since there is
no way of policing what goes on in the privacy of the home.
The second frequently voiced theme (which somewhat contradicts
the first) is that to enforce such a rule of law would be to
create an intolerable invasion of the privacy of the home.
Standing alone, one must agree that there is merit in both of
these concerns. Unquestionably, the fact that copyright
infringement actions have not been brought against individuals
who engage in audio home recording for their own use attests
to both the difficulty of enforcement as against the
individual, and to the shield of privacy that might properly
46 See Wickard V. Filburn, 317 U.S. 111 (1942), which held
that since wheat grown for home consumption has "a substantial
economic effect" on the amount of wheat sold in interstate
commerce, it is thereby subject to interstate commerce
regulation.
- 27 -
be invoked if this were attempted. 47
There is a response that meets both of these concerns,
and which nevertheless adequately protects the copyright
interest. Before suggesting that response, it should first
be made clear that the problems of enforceability and privacy
do not convert that which would otherwise constitute copyright
infringement into fair use. If given conduct is unlawful, as
for example the unlawful possession of firearms, 48 the fact
that such conduct occurs in the privacy of the home may make
it very difficult to enforce the law, and in some instances
enforcement might require unacceptable invasions of privacy,
but this does not in itself make possession of firearms in the
home lawful. Likewise, enforceability and privacy problems
may deter civil copyright infringement actions for audio home
recording, but that in itself does not make such recording fair
use. 49
47 See Stanley V. Georgia, 394 U.S. 557 (1967).
48 The example constitutes criminal conduct. Despite some
common misconceptions, home recording for home use, whether
audio or video, gives rise to only civil, not criminal
liability. See 17 U.S.C. § 506(a). The point made in the text
is equally applicable, however, whether the law in question
creates civil or criminal liability.
49 This assumption that property rights of others somehow
cease to operate within the confines of one's home is plainly
fallacious. Would anyone argue that I may destroy a book
borrowed from a library if I do so within the four walls of
my house? Does a library lose its property right in the
tangible book because it has consented to its being brought
[Footnote continued on following page]
- 28 -
Copyright owners of musical works and of sound
recordings may be protected against the wholesale dilution of
their property rights fostered by the new technology of home
recording without confronting either the enforcement or privacy
problems referred to above. This may occur through the
approach suggested by the court of appeals in the Betamax case.
The court there held that the defendant manufacturers and
sellers of videotape recorders and tapes were liable as
contributory infringers. This was based upon such defendants'
knowledge that the equipment sold would be "used to reproduce
copyrighted materials. 50 The Betamax case, of course,
involved video rather than audio home recording. But such
knowledge by the sellers of intended infringing use of audio
equipment is surely no less than it is in the case of sales
of video equipment.
51
Footnote 49 continued from preceding page]
into my house? Are utility companies without recourse if
within my house I turn off the gas and electric meters and
proceed to appropriate their property without paying for it?
50 659 F.2d at 975.
51 For analogous holdings in the case of audio equipment see
Stewart V. Southern Music Distributing Co., Inc., 503 F. Supp.
258 (M.D. Fla. 1980) (owner-lessor of juke boxes said to be
liable as contributory infringer where lessee used the juke
box for infringing performances) ; Duchess Music Corp. V. Stern,
458 F.2d 1305 (9th Cir. 1972) (recording machines and blank
cassettes held subject to seizure as "means for making
...
infringing copies").
- 29 -
The Betamax court of appeals remanded to the district
court for determination of the appropriate remedy. In doing
so, the court of appeals suggested that instead of the
imposition of an injunction, a court could "when a great public
injury would result from an injunction
award damages or
a continuing royalty. 52 In a broad hint, the court of appeals
added: "This may very well be an acceptable resolution in this
.53
context.
This pregnant statement of direction from the
appellate. court strongly suggests that in its view a proper
resolution of the dispute will be found not in an injunction
banning use of the machines but rather in a court-imposed
compulsory license royalty as against the machine and tape
manufacturers and sellers.
Note that this approach solves both the enforceability
and privacy problems adverted to above. There is no longer
a problem of enforcement as against the individual who engages
in home recording since the payment of the court-imposed
royalty by the manufacturer relieves from infringement
liability the subsequent recording activities of those who
purchase equipment from such manufacturer. Application of the
52
659 F.2d 976.
53 Id.
- 30 -
royalty decree as against the manufacturer by reason of its
sales presents no problems of enforceability. Similarly, the
privacy problem is resolved since there is no longer a need
to determine whether the home user is recording in the privacy
of his home since such recording is, in any event, validated
by the manufacturer's royalty payment. This is what the
Betamax court of appeals had in mind when it stated: "It seems
more appropriate to address the privacy concerns raised by the
District Court in fashioning the appropriate relief. ..54
There remains the problem of apportioning the royalty
funds collected among the claimant copyright owners. This
presents a complex, but by no means insuperable problem.
Indeed, it is just such a royalty mechanism, imposed by statute
rather than by a court, which has been adopted in the current
Copyright Act in connection with cable television.
55
All
of
this could be done in the audio home recording context by
judicial decree. It is obvious, however, that it would be far
more efficient if such a procedure were adopted by legislation.
54 659 F.2d at 972.
55
Under Section 111 (d) of the Copyright Act a compulsory
license is imposed upon operators of cable television systems
whereby they are required to pay a percentage of their gross
receipts into a fund which is disbursed by the Copyright
Royalty Tribunal among copyright claimants. The procedure for
determining the identity and participation of such claimants
has worked reasonably well.
- 31 -
The proposed Mathias Amendment No. 1333 and Edwards Bill H.R.
5705 would accomplish exactly such a salutary objective.
CONCLUSION
Audio home recording is not the subject of any special
exemption. Neither does it constitute fair use under the
Copyright Act of 1976. Problems of enforceability and of
consumer privacy will be avoided by a recognition that the
manufacturers of recorders and tapes are contributory
infringers, and should be subject to a royalty payment. If
the copyright system is to function effectively in concert with
the new recording technology such a royalty system is
essential.