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

464 U.S. 417 (1984)

   Part 1 of 2  

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Supreme Court of the United States

Argued Jan. 18, 1983

Reargued Oct. 3, 1983

Decided Jan. 17, 1984

Rehearing Denied Mar. 19, 1984

Appeal from 9th Cir.

Reversed

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              Dean C. Dunlavey reargued the cause for petitioners.  With him on the briefs were Donald E. Sloan and Marshall Rutter.

              Stephen A. Kroft reargued the cause for respondents.  With him on the brief was Sondra E. Berchin.

              Briefs of amici curiae urging reversal were filed for the Virginia Citizens' Consumer Council, Inc., et al. by William A. Dobrovir;  for the American Library Association by Newton N. Minow;  for the Consumer Electronics Group by J. Edward Day;  for the Educators Ad Hoc Committee on Copyright Law by Michael H. Cardozo, August W. Steinhilber, and Gwendolyn H. Gregory;  for General Electric Co. et al. by Alfred B. Engelberg, Morton Amster, Jesse Rothstein, and Joel E. Lutzker;  for Hitachi, Ltd., et al. by John W. Armagost and Craig B. Jorgensen;  for McCann-Erickson, Inc., et al. by John A. Donovan, A. Howard Matz, and David Fleischer;  for Minnesota Mining and Manufacturing Co. et. al. by Sidney A. Diamond and Grier Curran Raclin;  for the National Retail Merchants Association by Peter R. Stern, Theodore S. Steingut, and Robert A. Weiner;  for Sanyo Electric, Inc., by Anthony Liebig;  for Sears, Roebuck and Co. by Max L. Gillam and Mary E. Woytek;  for TDK Electronics Co., Ltd., by Ko- Yung Tung and Adam Yarmolinsky;  for Toshiba Corp. et al. by Donald J. Zoeller and Herve Gouraige;  for Pfizer Inc. by Steven C. Kany;  and for Viare Publishing by Peter F. Marvin.

              Briefs of amici curiae urging affirmance were filed for the Association of American Publishers, Inc., et al. by Charles H. Lieb and Jon A. Baumgarten; for the Authors League of America, Inc., by Irwin Karp;  for CBS Inc. by Lloyd N. Cutler, Louis R. Cohen, and George Vradenburg III;  for Creators and Distributors of Programs by Stuart Robinowitz and Andrew J. Peck;  for the International Alliance of Theatrical Stage Employees and Moving Picture Machine Operators of the United States and Canada, AFL-CIO, by Leo Geffner;  for the Motion Picture Association of America, Inc., by Richard M. Cooper, Ellen S. Huvelle, and William Nix;  for the National Music Publishers' Association, Inc., by Jon A. Baumgarten;  for the Recording Industry Association of America, Inc., by James F. Fitzpatrick, Cary H. Sherman, and Ernest S. Meyers;  for Volunteer Lawyers for the Arts, Inc., by I. Fred Koenigsberg;  and for the Writers Guild of America, West, Inc., et al. by Paul P. Selvin, Jerome B. Lurie, and Paul S. Berger.

              Briefs of amici curiae were filed for the State of Missouri et al. by John Ashcroft, Attorney General of Missouri, and by the Attorneys General for their respective States as follows:  Charles A. Graddick of Alabama, John Steven Clark of Arkansas, Michael J. Bowers of Georgia, Tany S. Hong of Hawaii, Tyrone C. Fahner of Illinois, Thomas J. Miller of Iowa, William J. Guste, Jr., of Louisiana, William A. Allain of Mississippi, Michael T. Greely of Montana, Rufus L. Edmisten of North Carolina, William J. Brown of Ohio, Jan Eric Cartwright of Oklahoma, Dennis J. Roberts II of Rhode Island, John J. Easton of Vermont, Gerald L. Baliles of Virginia, and Bronson C. La Follette of Wisconsin;  and for the Committee on Copyright and Literary Property of the Association of the Bar of the City of New York by Michael S. Oberman and David H. Marks.

              Justice STEVENS delivered the opinion of the Court.

              Petitioners manufacture and sell home video tape recorders.   Respondents own the copyrights on some of the television programs that are broadcast on the public airwaves.   Some members of the general public use video tape recorders sold by petitioners to record some of these broadcasts, as well as a large number of other broadcasts.   The question presented is whether the sale of petitioners' copying equipment to the general public violates any of the rights conferred upon respondents by the Copyright Act.

              Respondents commenced this copyright infringement action against petitioners in the United States District Court for the Central District of California in 1976.   Respondents alleged that some individuals had used Betamax video tape recorders (VTR's) to record some of respondents' copyrighted works which had been exhibited on commercially sponsored television and contended that these individuals had thereby infringed respondents' copyrights.   Respondents further maintained that petitioners were liable for the copyright infringement allegedly committed by Betamax consumers because of petitioners' marketing of the Betamax VTR's. [FN1]  Respondents sought no relief against any Betamax consumer.   Instead, they sought money damages and an equitable accounting of profits from petitioners, as well as an injunction against the manufacture and marketing of Betamax VTR's.

FN1. The respondents also asserted causes of action under state law and 43(a) of the Trademark Act of 1946, 60 Stat. 441, 15 U.S.C. 1125(a).   These claims are not before this Court.

              After a lengthy trial, the District Court denied respondents all the relief they sought and entered judgment for petitioners.  480 F.Supp. 429 (1979). The United States Court of Appeals for the Ninth Circuit reversed the District Court's judgment on respondent's copyright claim, holding petitioners liable for contributory infringement and ordering the District Court to fashion appropriate relief.  F.2d 963  (1981).   We granted certiorari, 457 U.S. 1116, 102 S.Ct. 2926, 73 L.Ed.2d 1328 (1982);  since we had not completed our study of the case last Term, we ordered reargument, 463 U.S. 1226, 103 S.Ct. 3568, 77 L.Ed.2d 1409 (1983).   We now reverse.

              An explanation of our rejection of respondents' unprecedented attempt to impose copyright liability upon the distributors of copying equipment requires a quite detailed recitation of the findings of the District Court.   In summary, those findings reveal that the average member of the public uses a VTR principally to record a program he cannot view as it is being televised and then to watch it once at a later time.   This practice, known as "time- shifting," enlarges the television viewing audience.   For that reason, a significant amount of television programming may be used in this manner without objection from the owners of the copyrights on the programs.   For the same reason, even the two respondents in this case, who do assert objections to time-shifting in this litigation, were unable to prove that the practice has impaired the commercial value of their copyrights or has created any likelihood of future harm.   Given these findings, there is no basis in the Copyright Act upon which respondents can hold petitioners liable for distributing VTR's to the general public.   The Court of Appeals' holding that respondents are entitled to enjoin the distribution of VTR's, to collect royalties on the sale of such equipment, or to obtain other relief, if affirmed, would enlarge the scope of respondents' statutory monopolies to encompass control over an article of commerce that is not the subject of copyright protection.   Such an expansion of the copyright privilege is beyond the limits of the grants authorized by Congress.

I

              The two respondents in this action, Universal Studios, Inc. and Walt Disney Productions, produce and hold the copyrights on a substantial number of motion pictures and other audiovisual works.   In the current marketplace, they can exploit theirrights in these works in a number of ways:  by authorizing theatrical exhibitions, by licensing limited showings on cable and network television, by selling syndication rights for repeated airings on local television stations, and by marketing programs on prerecorded videotapes or videodiscs.   Some works are suitable for exploitation through all of these avenues, while the market for other works is more limited.

              Petitioner Sony manufactures millions of Betamax video tape recorders and markets these devices through numerous retail establishments, some of which are also petitioners in this action. [FN2]  Sony's Betamax VTR is a mechanism consisting of three basic components:  (1) a tuner, which receives electromagnetic signals transmitted over the television band of the public airwaves and separates them into audio and visual signals;  (2) a recorder, which records such signals on a magnetic tape;  and (3) an adapter, which converts the audio and visual signals on the tape into a composite signal that can be received by a television set.

FN2. The four retailers are Carter, Hawley, Hales, Stores, Inc.; Associated Dry Goods Corp.;   Federated Department Stores, Inc.;   and Henry's Camera Corp.   The principal defendants are Sony Corporation, the manufacturer of the equipment, and its wholly owned subsidiary, Sony Corporation of America.   The advertising agency of Doyle, Dane, Burnbock, Inc., also involved in marketing the Betamax, is also a petitioner.   An individual VTR user, Willis Griffiths, was named as a defendant in the District Court, but respondent sought no relief against him.   Griffiths is not a petitioner.   For convenience, we shall refer to petitioners collectively as Sony.

              Several capabilities of the machine are noteworthy.   The separate tuner in the Betamax enables it to record a broadcast off one station while the television set is tuned to another channel, permitting the viewer, for example, to watch two simultaneous news broadcasts by watching one "live" and recording the other for later viewing.   Tapes may be reused, and programs that have been recorded may be erased either before or after viewing.   A timer in the Betamax can be used to activate and deactivate the equipment at predetermined times, enabling an intended viewer to record programs that are transmitted when he or she is not at home.   Thus a person may watch a program at home in the evening even though it was broadcast while the viewer was at work during the afternoon.   The Betamax is also equipped with a pause button and a fast-forward control.   The pause button, when depressed, deactivates the recorder until it is released, thus enabling a viewer to omit a commercial advertisement from the recording, provided, of course, that the viewer is present when the program is recorded.   The fast forward control enables the viewer of a previously recorded program to run the tape rapidly when a segment he or she does not desire to see is being played back on the television screen.

              The respondents and Sony both conducted surveys of the way the Betamax machine was used by several hundred owners during a sample period in 1978.   Although there were some differences in the surveys, they both showed that the primary use of the machine for most owners was "time-shifting,"--the practice of recording a program to view it once at a later time, and thereafter erasing it.   Time-shifting enables viewers to see programs they otherwise would miss because they are not at home, are occupied with other tasks, or are viewing a program on another station at the time of a broadcast that they desire to watch.   Both surveys also showed, however, that a substantial number of interviewees had accumulated libraries of tapes. [FN3]  Sony's survey indicated that over 80% of the interviewees watched at least as much regular television as they had before owning a Betamax. [FN4]  Respondents offered no evidence of decreased television viewing by Betamax owners. [FN5]

FN3. As evidence of how a VTR may be used, respondents offered the testimony of William Griffiths.   Griffiths, although named as an individual defendant, was a client of plaintiffs' law firm.   The District Court summarized his testimony as follows: 

  "He owns approximately 100 tapes.   When Griffiths bought his Betamax, he intended not only to time-shift (record, play-back and then erase) but also to build a library of cassettes.   Maintaining a library, however, proved too expensive, and he is now erasing some earlier tapes and reusing them. 

  "Griffiths copied about 20 minutes of a Universal motion picture called 'Never Give An Inch,' and two episodes from Universal television series entitled 'Baa Baa Black Sheep' and 'Holmes and Yo Yo.'   He would have erased each of these but for the request of plaintiffs' counsel that it be kept.   Griffiths also testified that he had copied but already erased Universal films called 'Alpha Caper' (erased before anyone saw it) and 'Amelia Earhart.'   At the time of his deposition Griffiths did not intend to keep any Universal film in his library. 

  "Griffiths has also recorded documentaries, news broadcasts, sporting events and political programs such as a rerun of the Nixon/Kennedy debate."  480 F.Supp., at 436-437. 

  Four other witnesses testified to having engaged in similar activity.

FN4. The District Court summarized some of the findings in these surveys as follows: 

  "According to plaintiffs' survey, 75.4% of the VTR owners use their machines to record for time-shifting purposes half or most of the time. Defendants' survey showed that 96% of the Betamax owners had used the machine to record programs they otherwise would have missed. 

  "When plaintiffs asked interviewees how many cassettes were in their library, 55.8% said there were 10 or fewer.   In defendants' survey, of the total programs viewed by interviewees in the past month, 70.4% had been viewed only that one time and for 57.9%, there were no plans for further viewing."  480 F.Supp., at 438.

FN5. "81.9% of the defendants' interviewees watched the same amount or more of regular television as they did before owning a Betamax.   83.2% reported their frequency of movie going was unaffected by Betamax."  480 F.Supp., at 439.

              Sony introduced considerable evidence describing television programs that could be copied without objection from any copyright holder, with special emphasis on sports, religious, and educational programming.   For example, their survey indicated that 7.3% of all Betamax use is to record sports events, and representatives of professional baseball, football, basketball, and hockey testified that they had no objection to the recording of their televised events for home use. [FN6]

FN6. See Def.Exh. OT, Table 20;  Tr. 2447-2450, 2480, 2486-2487, 2515-2516, 2530-2534.

              Respondents offered opinion evidence concerning the future impact of the unrestricted sale of VTR's on the commercial value of their copyrights. The District Court found, however, that they had failed to prove any likelihood of future harm from the use of VTR's for time-shifting.  Id., at 469.

              The District Court's Decision

              The lengthy trial of the case in the District Court concerned the private, home use of VTR's for recording programs broadcast on the public airwaves without charge to the viewer. [FN7]  No issue concerning the transfer of tapes to other persons, the use of home-recorded tapes for public performances, or the copying of programs transmitted on pay or cable television systems was raised.   See 480 F.Supp. 429, 432-433, 442 (1979).

FN7. The trial also briefly touched upon demonstrations of the Betamax by the retailer petitioners which were alleged to be infringements by respondents.   The District Court held against respondents on this claim, 480 F.Supp., at 456-457, the Court of Appeals affirmed this holding, 659 F.2d, at 976, and respondents did not cross-petition on this issue.

              The District Court concluded that noncommercial home use recording of material broadcast over the public airwaves was a fair use of copyrighted works and did not constitute copyright infringement.   It emphasized the fact that the material was broadcast free to the public at large, the noncommercial character of the use, and the private character of the activity conducted entirely within the home.   Moreover, the court found that the purpose of this use served the public interest in increasing access to television programming, an interest that "is consistent with the First Amendment policy of providing the fullest possible access to information through the public airwaves.  Columbia Broadcasting System, Inc. v. Democratic National Committee, 412 U.S. 94, 102 [93 S.Ct. 2080, 2086, 36 L.Ed.2d 772]."  480 F.Supp., at 454. [FN8]  Even when an entire copyrighted work was recorded, the District Court regarded the copying as fair use "because there is no accompanying reduction in the market for 'plaintiff's original work.' "  Ibid.

FN8. The court also found that this "access is not just a matter of convenience, as plaintiffs have suggested.   Access has been limited not simply by inconvenience but by the basic need to work.   Access to the better program has also been limited by the competitive practice of counterprogramming."  480 F.Supp., at 454.

              As an independent ground of decision, the District Court also concluded that Sony could not be held liable as a contributory infringer even if the home use of a VTR was considered an infringing use.   The District Court noted that Sony had no direct involvement with any Betamax purchasers who recorded copyrighted works off the air.   Sony's advertising was silent on the subject of possible copyright infringement, but its instruction booklet contained the following statement: 

           "Television programs, films, videotapes and other materials may be copyrighted.   Unauthorized recording of such material may be contrary to the provisions of the United States copyright laws."  Id., at 436.

           The District Court assumed that Sony had constructive knowledge of the probability that the Betamax machine would be used to record copyrighted programs, but found that Sony merely sold a "product capable of a variety of uses, some of them allegedly infringing."  Id., at 461.   It reasoned: 

           "Selling a staple article of commerce e.g., a typewriter, a recorder, a camera, a photocopying machine technically contributes to any infringing use subsequently made thereof, but this kind of 'contribution,' if deemed sufficient as a basis for liability, would expand the theory beyond precedent and arguably beyond judicial management. 

           "Commerce would indeed be hampered if manufacturers of staple items were held liable as contributory infringers whenever they 'constructively' knew that some purchasers on some occasions would use their product for a purpose which a court later deemed, as a matter of first impression, to be an infringement."  Ibid.

           Finally, the District Court discussed the respondents' prayer for injunctive relief, noting that they had asked for an injunction either preventing the future sale of Betamax machines, or requiring that the machines be rendered incapable of recording copyrighted works off the air.   The court stated that it had "found no case in which the manufacturers, distributors, retailers, and advertisors of the instrument enabling the infringement were sued by the copyright holders," and that the request for relief in this case "is unique." 480 F.Supp., at 465.

           It concluded that an injunction was wholly inappropriate because any possible harm to respondents was outweighed by the fact that "the Betamax could still legally be used to record noncopyrighted material or material whose owners consented to the copying.   An injunction would deprive the public of the ability to use the Betamax for this noninfringing off-the-air recording." 480 F.Supp., at 468.

           The Court of Appeals' Decision

           The Court of Appeals reversed the District Court's judgment on respondents' copyright claim.   It did not set aside any of the District Court's findings of fact.   Rather, it concluded as a matter of law that the home use of a VTR was not a fair use because it was not a "productive use."  [FN9]  It therefore held that it was unnecessary for plaintiffs to prove any harm to the potential market for the copyrighted works, but then observed that it seemed clear that the cumulative effect of mass reproduction made possible by VTR's would tend to diminish the potential market for respondents' works.  659 F.2d, at 974.

FN9. "Without a 'productive use', i.e. when copyrighted material is reproduced for its intrinsic use, the mass copying of the sort involved in this case precludes an application of fair use."  659 F.2d, at 971-972.

              On the issue of contributory infringement, the Court of Appeals first rejected the analogy to staple articles of commerce such as tape recorders or photocopying machines.   It noted that such machines "may have substantial benefit for some purposes" and do not "even remotely raise copyright problems."  Id., at 975.   VTR's, however, are sold "for the primary purpose of reproducing television programming" and "virtually all" such programming is copyrighted material.  Ibid.  The Court of Appeals concluded, therefore, that VTR's were not suitable for any substantial noninfringing use even if some copyright owners elect not to enforce their rights.

              The Court of Appeals also rejected the District Court's reliance on Sony's lack of knowledge that home use constituted infringement.   Assuming that the statutory provisions defining the remedies for infringement applied also to the non-statutory tort of contributory infringement, the court stated that a defendant's good faith would merely reduce his damages liability but would not excuse the infringing conduct.   It held that Sony was chargeable with knowledge of the homeowner's infringing activity because the reproduction of copyrighted materials was either "the most conspicuous use" or "the major use" of the Betamax product.  Ibid.

              On the matter of relief, the Court of Appeals concluded that "statutory damages may be appropriate," that the District Court should reconsider its determination that an injunction would not be an appropriate remedy;  and, referring to "the analogous photocopying area," suggested that a continuing royalty pursuant to a judicially created compulsory license may very well be an acceptable resolution of the relief issue.  659 F.2d, at 976.

II

              Article I, Sec. 8 of the Constitution provides that: 

           "The Congress shall have Power ... to Promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries."

           The monopoly privileges that Congress may authorize are neither unlimited nor primarily designed to provide a special private benefit. Rather, the limited grant is a means by which an important public purpose may be achieved.   It is intended to motivate the creative activity of authors and inventors by the provision of a special reward, and to allow the public access to the products of their genius after the limited period of exclusive control has expired. 

           "The copyright law, like the patent statute, makes reward to the owner a secondary consideration.   In Fox Film Corp. v. Doyal, 286 U.S. 123, 127 [52 S.Ct. 546, 547, 76 L.Ed. 1010], Chief Justice Hughes spoke as follows respecting the copyright monopoly granted by Congress, 'The sole interest of the United States and the primary object in conferring the monopoly lie in the general benefits derived by the public from the labors of authors.'   It is said that reward to the author or artist serves to induce release to the public of the products of his creative genius."  United States v. Paramount Pictures, 334 U.S. 131, 158, 68 S.Ct. 915, 929, 92 L.Ed. 1260.

  As the text of the Constitution makes plain, it is Congress that has been assigned the task of defining the scope of the limited monopoly that should be granted to authors or to inventors in order to give the public appropriate access to their work product.   Because this task involves a difficult balance between the interests of authors and inventors in the control and exploitation of their writings and discoveries on the one hand, and society's competing interest in the free flow of ideas, information, and commerce on the other hand, our patent and copyright statutes have been amended repeatedly. [FN10]

FN10. In its report accompanying the comprehensive revision of the Copyright Act in 1909, the Judiciary Committee of the House of Representatives explained this balance: 

  "The enactment of copyright legislation by Congress under the terms of the Constitution is not based upon any natural right that the author has in his writings, ... but upon the ground that the welfare of the public will be served and progress of science and useful arts will be promoted by securing to authors for limited periods the exclusive rights to their writings.

*

  "In enacting a copyright law Congress must consider ... two questions: First, how much will the legislation stimulate the producer and so benefit the public, and, second, how much will the monopoly granted be detrimental to the public?   The granting of such exclusive rights, under the proper terms and conditions, confers a benefit upon the public that outweighs the evils of the temporary monopoly."   H.R.Rep. No. 2222, 60th Cong., 2d Sess. 7 (1909).

              From its beginning, the law of copyright has developed in response to significant changes in technology. [FN11]  Indeed, it was the invention of a new form of copying equipment--the printing press--that gave rise to the original need for copyright protection. [FN12] Repeatedly, as new developments have occurred in this country, it has been the Congress that has fashioned the new rules that new technology made necessary.   Thus, long before the enactment of the Copyright Act of 1909, 35 Stat. 1075, it was settled that the protection given to copyrights is wholly statutory.   Wheaton v. Peters, 33 U.S. (8 Peters) 591, 661-662, 8 L.Ed. 1055 (1834).   The remedies for infringement "are only those prescribed by Congress."  Thompson v. Hubbard, 131 U.S. 123, 151, 9 S.Ct. 710, 720, 33 L.Ed. 76 (1889).

FN11. Thus, for example, the development and marketing of player pianos and perforated roles of music, see White-Smith Music Publishing Co. v. Apollo Co., 209 U.S. 1, 28 S.Ct. 319, 52 L.Ed. 655 (1908), preceded the enactment of the Copyright Act of 1909;  innovations in copying techniques gave rise to the statutory exemption for library copying embodied in 108 of the 1976 revision of the Copyright law;  the development of the technology that made it possible to retransmit television programs by cable or by microwave systems, see Fortnightly Corp. v. United Artists, 392 U.S. 390, 88 S.Ct. 2084, 20 L.Ed.2d 1176 (1968), and Teleprompter Corp. v. CBS, 415 U.S. 394, 94 S.Ct. 1129, 39 L.Ed.2d 415 (1974), prompted the enactment of the complex provisions set forth in 17 U.S.C. 111(d)(2)(B) and 111(d)(5) after years of detailed congressional study, see Eastern Microwave, Inc. v. Doubleday Sports, Inc., 691 F.2d 125, 129 (CA2 1982). By enacting the Sound Recording Amendment of 1971, 85 Stat. 391, Congress also provided the solution to the "record piracy" problems that had been created by the development of the audio tape recorder.   Sony argues that the legislative history of that Act, see especially H.Rep. No. 487, 92nd Cong., 1st Sess., p. 7, indicates that Congress did not intend to prohibit the private home use of either audio or video tape recording equipment. In view of our disposition of the contributory infringement issue, we express no opinion on that question.

FN12. "Copyright protection became necessary with the invention of the printing press and had its early beginnings in the British censorship laws.   The fortunes of the law of copyright have always been closely connected with freedom of expression, on the one hand, and with technological improvements in means of dissemination, on the other. Successive ages have drawn different balances among the interest of the writer in the control and exploitation of his intellectual property, the related interest of the publisher, and the competing interest of society in the untrammeled dissemination of ideas."   Foreword to B. Kaplan, An Unhurried View of Copyright vii-viii (1967).

              The judiciary's reluctance to expand the protections afforded by the copyright without explicit legislative guidance is a recurring theme.   See, e.g., Teleprompter Corp. v. CBS, 415 U.S. 394, 94 S.Ct. 1129, 39 L.Ed.2d 415 (1974);  Fortnightly Corp. v. United Artists, 392 U.S. 390, 88 S.Ct. 2084, 20 L.Ed.2d 1176 (1968);  White-Smith Music Publishing Co. v. Apollo Co., 209 U.S. 1, 28 S.Ct. 319, 52 L.Ed. 655 (1908);  Williams and Wilkins v. United States, 487 F.2d 1345, 203 Ct.Cl. 74 (1973), affirmed by an equally divided court, 420 U.S. 376, 95 S.Ct. 1344, 43 L.Ed.2d 264 (1975).   Sound policy, as well as history, supports our consistent deference to Congress when major technological innovations alter the market for copyrighted materials. Congress has the constitutional authority and the institutional ability to accommodate fully the varied permutations of competing interests that are inevitably implicated by such new technology.

              In a case like this, in which Congress has not plainly marked our course, we must be circumspect in construing the scope of rights created by a legislative enactment which never contemplated such a calculus of interests.   In doing so, we are guided by Justice Stewart's exposition of the correct approach to ambiguities in the law of copyright: 

           "The limited scope of the copyright holder's statutory monopoly, like the limited copyright duration required by the Constitution, reflects a balance of competing claims upon the public interest:  Creative work is to be encouraged and rewarded, but private motivation must ultimately serve the cause of promoting broad public availability of literature, music, and the other arts.   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 incentive, to stimulate artistic creativity for the general public good.  'The sole interest of the United States and the primary object in conferring the monopoly,' this Court has said, 'lie in the general benefits derived by the public from the labors of authors.'  Fox Film Corp. v. Doyal, 286 U.S. 123, 127 [52 S.Ct. 546, 547, 76 L.Ed. 1010].  See Kendall v. Winsor, 21 How. 322, 327-328 [16 L.Ed. 165];  Grant v. Raymond, 6 Pet. 218, 241-242 [8 L.Ed. 376].  When technological change has rendered its literal terms ambiguous, the Copyright Act must be construed in light of this basic purpose."  Twentieth Century Music Corp. v. Aiken, 422 U.S. 151, 156, 95 S.Ct. 2040, 2043, 45 L.Ed.2d 84 (footnotes omitted).

           Copyright protection "subsists ... in original works of authorship fixed in any tangible medium of expression."  17 U.S.C. 102(a).   This protection has never accorded the copyright owner complete control over all possible uses of his work. [FN13]  Rather, the Copyright Act grants the copyright holder "exclusive" rights to use and to authorize the use of his work in five qualified ways, including reproduction of the copyrighted work in copies.  Id., 106. [FN14]  All reproductions of the work, however, are not within the exclusive domain of the copyright owner; some are in the public domain.   Any individual may reproduce a copyrighted work for a "fair use;"  the copyright owner does not possess the exclusive right to such a use.   Compare id., 106 with id., 107.

FN13. See, e.g., White-Smith Music Publishing Co. v. Apollo Co., 209 U.S. 1, 19, 28 S.Ct. 319, 323, 52 L.Ed. 655 (1908);  cf. Deep South Packing Co. v. Lathram Corp., 406 U.S. 518, 530-531, 92 S.Ct. 1700, 1707- 1708, 32 L.Ed.2d 273 (1972).   While the law has never recognized an author's right to absolute control of his work, the natural tendency of legal rights to express themselves in absolute terms to the exclusion of all else is particularly pronounced in the history of the constitutionally sanctioned monopolies of the copyright and the patent.   See e.g., United States v. Paramount Pictures, 334 U.S. 131, 156-158, 68 S.Ct. 915, 928-929, 92 L.Ed. 1260 (1948) (copyright owners claiming right to tie license of one film to license of another under copyright law);  Fox Film Corp. v. Doyal,286 U.S. 123, 52 S.Ct. 546, 76 L.Ed. 1010 (1932) (copyright owner claiming copyright renders it immune from state taxation of copyright royalties);  Bobbs-Merrill Co. v. Straus, 210 U.S. 339, 349-351, 28 S.Ct. 722, 725-726, 52 L.Ed. 1086 (1908) (copyright owner claiming that a right to fix resale price of his works within the scope of his copyright);  International Business Machines v. United States, 298 U.S. 131, 56 S.Ct. 701, 80 L.Ed. 1085 (1936) (patentees claiming right to tie sale of unpatented article to lease of patented device).

FN14. Section 106 of the Act provides: 

  " '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; 

  (2) to prepare derivative works based upon the copyrighted work; 

  (3) to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending; 

  (4) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and motion pictures and other audiovisual works, to perform the copyrighted work publicly;  and (5) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and pictorial, graphic, or sculptural works, including the individual images of a motion picture or other audiovisual work, to display the copyrighted work publicly."

              "Anyone who violates any of the exclusive rights of the copyright owner," that is, anyone who trespasses into his exclusive domain by using or authorizing the use of the copyrighted work in one of the five ways set forth in the statute, "is an infringer of the copyright."  Id., 501(a). Conversely, anyone who is authorized by the copyright owner to use the copyrighted work in a way specified in the statute or who makes a fair use of the work is not an infringer of the copyright with respect to such use.

              The Copyright Act provides the owner of a copyright with a potent arsenal of remedies against an infringer of his work, including an injunction to restrain the infringer from violating his rights, the impoundment and destruction of all reproductions of his work made in violation of his rights, a recovery of his actual damages and any additional profits realized by the infringer or a recovery of statutory damages, and attorneys fees.  Id., 502-505. [FN15]

FN15. Moreover, anyone who willfully infringes the copyright to reproduce a motion picture for purposes of commercial advantage or private financial gain is subject to criminal penalties of one year imprisonment and a $25,000 fine for the first offense and two years imprisonment and a $50,000 fine for each subsequent offense, 17 U.S.C. 506(a), and the fruits and instrumentalities of the crime are forfeited upon conviction, id., 506(b).

              The two respondents in this case do not seek relief against the Betamax users who have allegedly infringed their copyrights.   Moreover, this is not a class action on behalf of all copyright owners who license their works for television broadcast, and respondents have no right to invoke whatever rights other copyright holders may have to bring infringement actions based on Betamax copying of their works. [FN16]  As was made clear by their own evidence, the copying of the respondents' programs represents a small portion of the total use of VTR's.   It is, however, the taping of respondents own copyrighted programs that provides them with standing to charge Sony with contributory infringement.   To prevail, they have the burden of proving that users of the Betamax have infringed their copyrights and that Sony should be held responsible for that infringement.

FN16. In this regard, we reject respondent's attempt to cast this action as comparable to a class action because of the positions taken by amici with copyright interests and their attempt to treat the statements made by amici as evidence in this case.   See Brief for Respondent, at 1, and n. 1, 6, 52, 53 and n. 116.   The stated desires of amici concerning the outcome of this or any litigation are no substitute for a class action, are not evidence in the case, and do not influence our decision;  we examine an amicus curiae brief solely for whatever aid it provides in analyzing the legal questions before us.

III

              The Copyright Act does not expressly render anyone liable for infringement committed by another.   In contrast, the Patent Act expressly brands anyone who "actively induces infringement of a patent" as an infringer, 35 U.S.C. 271(b), and further imposes liability on certain individuals labeled "contributory" infringers, id., 271(c).   The absence of such express language in the copyright statute does not preclude the imposition of liability for copyright infringements on certain parties who have not themselves engaged in the infringing activity. [FN17]  For vicarious liability is imposed in virtually all areas of the law, and the concept of contributory infringement is merely a species of the broader problem of identifying the circumstances in which it is just to hold one individual accountable for the actions of another.

FN17. As the District Court correctly observed, however, "the lines between direct infringement, contributory infringement, and vicarious liability are not clearly drawn...."  480 F.Supp. 457-458.   The lack of clarity in this area may, in part, be attributable to the fact that an infringer is not merely one who uses a work without authorization by the copyright owner, but also one who authorizes the use of a copyrighted work without actual authority from the copyright owner. 

  We note the parties' statements that the questions of petitioners' liability under the "doctrines" of "direct infringement" and "vicarious liability" are not nominally before this Court.   Compare Respondents' Brief, at 9, n. 22, 41, n. 90 with Petitioners' Reply Brief, at 1, n. 2. We also observe, however, that reasoned analysis of respondents' unprecedented contributory infringement claim necessarily entails consideration of arguments and case law which may also be forwarded under the other labels, and indeed the parties to a large extent rely upon such arguments and authority in support of their respective positions on the issue of contributory infringement.

              Such circumstances were plainly present in Kalem Co. v. Harper Brothers, 222 U.S. 55, 32 S.Ct. 20, 56 L.Ed. 92 (1911), the copyright decision of this Court on which respondents place their principal reliance.   In Kalem, the Court held that the producer of an unauthorized film dramatization of the copyrighted book Ben Hur was liable for his sale of the motion picture to jobbers, who in turn arranged for the commercial exhibition of the film.   Justice Holmes, writing for the Court, explained: 

           "The defendant not only expected but invoked by advertisement the use of its films for dramatic reproduction of the story.   That was the most conspicuous purpose for which they could be used, and the one for which especially they were made.   If the defendant did not contribute to the infringement it is impossible to do so except by taking part in the final act. It is liable on principles recognized in every part of the law."  222 U.S., at 63, 32 S.Ct., at 22.

           The use for which the item sold in Kalem had been "especially" made was, of course, to display the performance that had already been recorded upon it. The producer had personally appropriated the copyright owner's protected work and, as the owner of the tangible medium of expression upon which the protected work was recorded, authorized that use by his sale of the film to jobbers.  But that use of the film was not his to authorize:  the copyright owner possessed the exclusive right to authorize public performances of his work.  Further, the producer personally advertised the unauthorized public performances, dispelling any possible doubt as to the use of the film which he had authorized.

           Respondents argue that Kalem stands for the proposition that supplying the  "means" to accomplish an infringing activity and encouraging that activity through advertisement are sufficient to establish liability for copyright infringement.   This argument rests on a gross generalization that cannot withstand scrutiny.   The producer in Kalem did not merely provide the "means" to accomplish an infringing activity;  the producer supplied the work itself, albeit in a new medium of expression.   Petitioners in the instant case do not supply Betamax consumers with respondents' works;  respondents do. Petitioners supply a piece of equipment that is generally capable of copying the entire range of programs that may be televised:  those that are uncopyrighted, those that are copyrighted but may be copied without objection from the copyright holder, and those that the copyright holder would prefer not to have copied.   The Betamax can be used to make authorized or unauthorized uses of copyrighted works, but the range of its potential use is much broader than the particular infringing use of the film Ben Hur involved in Kalem.   Kalem does not support respondents' novel theory of liability.

           Justice Holmes stated that the producer had "contributed" to the infringement of the copyright, and the label "contributory infringement" has been applied in a number of lower court copyright cases involving an ongoing relationship between the direct infringer and the contributory infringer at the time the infringing conduct occurred.   In such cases, as in other situations in which the imposition of vicarious liability is manifestly just, 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.  [FN18]  This case, however, plainly does not fall in that category.  The only contact between Sony and the users of the Betamax that is disclosed by this record occurred at the moment of sale.   The District Court expressly found that "no employee of Sony, Sonam or DDBI had either direct involvement with the allegedly infringing activity or direct contact with purchasers of Betamax who recorded copyrighted works off-the-air."  480 F.Supp., at 460.   And it further found that "there was no evidence that any of the copies made by Griffiths or the other individual witnesses in this suit were influenced or encouraged by [Sony's] advertisements."  Ibid.

FN18. The so-called "dance hall cases," Famous Music Corp. v. Bay State Harness Horse Racing and Breeding Ass'n, 554 F.2d 1213 (CA1 1977) (racetrack retained infringer to supply music to paying customers); KECA MUSIC, Inc. v. Dingus McGee's Co., 432 F.Supp. 72 (W.D.Mo.1977) (cocktail lounge hired musicians to supply music to paying customers);  Dreamland Ball Room v. Shapiro, Bernstein & Co., 36 F.2d 354 (CA7 1929) (dance hall hired orchestra to supply music to paying customers) are often contrasted with the so-called landlord-tenant cases, in which landlords who leased premises to a direct infringer for a fixed rental and did not participate directly in any infringing activity were found not to be liable for contributory infringement.   E.g., Deutsch v. Arnold, 98 F.2d 686 (CA2 1938). In Shapiro, Bernstein & Co. v. H.L. Green Co., 316 F.2d 304 (CA2 1963) the owner of twenty-three chain stores retained the direct infringer to run its record departments.   The relationship was structured as a licensing arrangement, so that the defendant bore none of the business risk of running the department.   Instead, it received 10% or 12% of the direct infringer's gross receipts.   The Court of Appeals concluded: 

  "[The dance-hall cases] and this one lie closer on the spectrum to the employer-employee model, than to the landlord-tenant model.   On the particular facts before us, ... Green's relationship to its infringing licensee, as well as its strong concern for the financial success of the phonograph record concession, renders it liable for the unauthorized sales of the 'bootleg' records. 

  "[T]he imposition of vicarious liability in the case before us cannot be deemed unduly harsh or unfair.   Green has the power to police carefully the conduct of its concessionaire;  our judgment will simply encourage it to do so, thus placing responsibility where it can and should be effectively exercised."  Id., at 308 (emphasis in original). In Gershwin Publishing Corp. v. Columbia Artists Management, Inc., 443 F.2d 1159 (CA2 1971), the direct infringers retained the contributory infringer to manage their performances.   The contributory infringer would contact each direct infringer, obtain the titles of the musical compositions to be performed, print the programs, and then sell the programs to its own local organizations for distribution at the time of the direct infringement.  Id., at 1161.   The Court of Appeals emphasized that the contributory infringer had actual knowledge that the artists it was managing were performing copyrighted works, was in a position to police the infringing conduct of the artists, and derived substantial benefit from the actions of the primary infringers.  Id., at 1163. 

  In Screen Gems-Columbia Music, Inc. v. Mark-Fi Records, Inc., 256 F.Supp. 399 (SDNY 1966), the direct infringer manufactured and sold bootleg records.   In denying a motion for summary judgment, the District Court held that the infringer's advertising agency, the radio stations that advertised the infringer's works, and the service agency that boxed and mailed the infringing goods could all be held liable, if at trial it could be demonstrated that they knew or should have known that they were dealing in illegal goods.

              If vicarious liability is to be imposed on petitioners in this case, it must rest on the fact that they have sold equipment with constructive knowledge of the fact that their customers may use that equipment to make unauthorized copies of copyrighted material.   There is no precedent in the law of copyright for the imposition of vicarious liability on such a theory.   The closest analogy is provided by the patent law cases to which it is appropriate to refer because of the historic kinship between patent law and copyright law.  [FN19]

FN19. E.g., United States v. Paramount Pictures, 334 U.S. 131, 158, 68 S.Ct. 915, 929, 92 L.Ed. 1260 (1948);  Fox Film Corp. v. Doyal, 286 U.S. 123, 131, 52 S.Ct. 546, 548, 76 L.Ed. 1010 (1932);  Wheaton and Donaldson v. Peters and Grigg, 33 U.S. (8 Pet.) 591, 657-658, 8 L.Ed. 1055 (1834).   The two areas of the law, naturally, are not identical twins, and we exercise the caution which we have expressed in the past in applying doctrine formulated in one area to the other.   See generally, Mazer v. Stein, 347 U.S. 201, 217-218, 74 S.Ct. 460, 470, 98 L.Ed. 630 (1954); Bobbs-Merrill Co. v. Straus, 210 U.S. 339, 345, 28 S.Ct. 722, 724, 52 L.Ed. 1086 (1908). We have consistently rejected the proposition that a similar kinship exists between copyright law and trademark law, and in the process of doing so have recognized the basic similarities between copyrights and patents. The Trade-Mark Cases, 100 U.S. 82, 91-92, 25 L.Ed. 550 (1879);  see also, United Drug Co. v. Rectanus Co., 248 U.S. 90, 97, 39 S.Ct. 48, 50, 63 L.Ed. 141 (1918) (trademark right "has little or no analogy" to copyright or patent);  McLean v. Fleming, 96 U.S. 245, 254 (1877); Canal Co. v. Clark, 13 Wall. 311, 322, 20 L.Ed. 581 (1871).   Given the fundamental differences between copyright law and trademark law, in this copyright case we do not look to the standard for contributory infringement set forth in Inwood Laboratories v. Ives Laboratories, 456 U.S. 844, 854-855, 102 S.Ct. 2182, 2188, 72 L.Ed.2d 606 (1982), which was crafted for application in trademark cases.   There we observed that a manufacturer or distributor could be held liable to the owner of a trademark if it intentionally induced a merchant down the chain of distribution to pass off its product as that of the trademark owner's or if it continued to supply a product which could readily be passed off to a particular merchant whom it knew was mislabeling the product with the trademark owner's mark.   If Inwood's narrow standard for contributory trademark infringement governed here, respondents' claim of contributory infringement would merit little discussion.   Sony certainly does not "intentionally induce[ ]" its customers to make infringing uses of respondents' copyrights, nor does it supply its products to identified individuals known by it to be engaging in continuing infringement of respondents' copyrights, see id., at 855, 102 S.Ct., at 2188.

              In the Patent Code both the concept of infringement and the concept of contributory infringement are expressly defined by statute. [FN20]  The prohibition against contributory infringement is confined to the knowing sale of a component especially made for use in connection with a particular patent.   There is no suggestion in the statute that one patentee may object to the sale of a product that might be used in connection with other patents.   Moreover, the Act expressly provides that the sale of a "staple article or commodity of commerce suitable for substantial noninfringing use" is not contributory infringement.

FN20. 35 U.S.C. 271 provides: 

  "(a) Except as otherwise provided in this title, whoever without authority makes, uses or sells any patented invention, within the United States during the term of the patent therefor, infringes the patent. 

  "(b) Whoever actively induces infringement of a patent shall be liable as an infringer. "(c) Whoever sells a component of a patented machine, manufacture, combination or composition, or a material or apparatus for use in practicing a patented process, constituting a material part of the invention, knowing the same to be especially made or especially adapted for use in an infringement of such patent, and not a staple article or commodity of commerce suitable for substantial noninfringing use, shall be liable as a contributory infringer. 

  "(d) No patent owner otherwise entitled to relief for infringement or contributory infringement of a patent shall be denied relief or deemed guilty of misuse or illegal extension of the patent right by reason of his having done one or more of the following:  (1) derived revenue from acts which if performed by another without his consent would constitute contributory infringement of the patent;  (2) licensed or authorized another to perform acts which if performed without his consent would constitute contributory infringement of the patent;  (3) sought to enforce his patent rights against infringement or contributory infringement."

              When a charge of contributory infringement is predicated entirely on the sale of an article of commerce that is used by the purchaser to infringe a patent, the public interest in access to that article of commerce is necessarily implicated.   A finding of contributory infringement does not, of course, remove the article from the market altogether;  it does, however, give the patentee effective control over the sale of that item.   Indeed, a finding of contributory infringement is normally the functional equivalent of holding that the disputed article is within the monopoly granted to the patentee.  [FN21]

FN21. It seems extraordinary to suggest that the Copyright Act confers upon all copyright owners collectively, much less the two respondents in this case, the exclusive right to distribute VTR's simply because they may be used to infringe copyrights.   That, however, is the logical implication of their claim.   The request for an injunction below indicates that respondents seek, in effect, to declare VTR's contraband. Their suggestion in this Court that a continuing royalty pursuant to a judicially created compulsory license would be an acceptable remedy merely indicates that respondents, for their part, would be willing to license their claimed monopoly interest in VTR's to petitioners in return for a royalty.

              For that reason, in contributory infringement cases arising under the patent laws the Court has always recognized the critical importance of not allowing the patentee to extend his monopoly beyond the limits of his specific grant. These cases deny the patentee any right to control the distribution of unpatented articles unless they are "unsuited for any commercial noninfringing use."  Dawson Chemical Co. v. Rohm & Hass Co., 448 U.S. 176, 198, 100 S.Ct. 2601, 2614, 65 L.Ed.2d 696 (1980).   Unless a commodity "has no use except through practice of the patented method," ibid, the patentee has no right to claim that its distribution constitutes contributory infringement.  "To form the basis for contributory infringement the item must almost be uniquely suited as a component of the patented invention."   P. Rosenberg, Patent Law Fundamentals 17.02[2] (1982).  "[A] sale of an article which though adapted to an infringing use is also adapted to other and lawful uses, is not enough to make the seller a contributory infringer.   Such a rule would block the wheels of commerce."  Henry v. A.B. Dick Co., 224 U.S. 1, 48, 32 S.Ct. 364, 379, 56 L.Ed. 645 (1912), overruled on other grounds, Motion Picture Patents Co. v. Universal Film Mfg. Co., 243 U.S. 502, 517, 37 S.Ct. 416, 421, 61 L.Ed. 871 (1917).

              We recognize there are substantial differences between the patent and copyright laws.   But in both areas the contributory infringement doctrine is grounded on the recognition that adequate protection of a monopoly may require the courts to look beyond actual duplication of a device or publication to the products or activities that make such duplication possible.   The staple article of commerce doctrine must strike a balance between a copyright holder's legitimate demand for effective--not merely symbolic--protection of the statutory monopoly, and the rights of others freely to engage in substantially unrelated areas of commerce.   Accordingly, 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.   Indeed, it need merely be capable of substantial noninfringing uses.

IV

              The question is thus whether the Betamax is capable of commercially significant noninfringing uses.   In order to resolve that question, we need not explore all the different potential uses of the machine and determine whether or not they would constitute infringement.   Rather, we need only consider whether on the basis of the facts as found by the district court a significant number of them would be non-infringing.   Moreover, in order to resolve this case we need not give precise content to the question of how much use is commercially significant.   For one potential use of the Betamax plainly satisfies this standard, however it is understood:  private, noncommercial time-shifting in the home.   It does so both (A) because respondents have no right to prevent other copyright holders from authorizing it for their programs, and (B) because the District Court's factual findings reveal that even the unauthorized home time-shifting of respondents' programs is legitimate fair use.

              A. Authorized Time Shifting

              Each of the respondents owns a large inventory of valuable copyrights, but in the total spectrum of television programming their combined market share is small.   The exact percentage is not specified, but it is well below 10%.  [FN22]  If they were to prevail, the outcome of this litigation would have a significant impact on both the producers and the viewers of the remaining 90% of the programming in the Nation.   No doubt, many other producers share respondents' concern about the possible consequences of unrestricted copying. Nevertheless the findings of the District Court make it clear that time- shifting may enlarge the total viewing audience and that many producers are willing to allow private time-shifting to continue, at least for an experimental time period. [FN23]

FN22. The record suggests that Disney's programs at the time of trial consisted of approximately one hour a week of network television and one syndicated series.   Universal's percentage in the Los Angeles market on commercial television stations was under 5%.   See Tr. 532-533, 549-550.

FN23. The District Court did not make any explicit findings with regard to how much broadcasting is wholly uncopyrighted.   The record does include testimony that at least one movie--My Man Godfrey --falls within that category, Tr. 2300-2301, and certain broadcasts produced by the federal government are also uncopyrighted.   See 17 U.S.C. 105.   Cf. Schnapper v. Foley, 667 F.2d 102 (CADC 1981) (explaining distinction between work produced by the government and work commissioned by the government).   To the extent such broadcasting is now significant, it further bolsters our conclusion.   Moreover, since copyright protection is not perpetual, the number of audiovisual works in the public domain necessarily increases each year.

              The District Court found:

           "Even if it were deemed that home-use recording of copyrighted material constituted infringement, the Betamax could still legally be used to record noncopyrighted material or material whose owners consented to the copying.   An injunction would deprive the public of the ability to use the Betamax for this noninfringing off-the-air recording. 

           "Defendants introduced considerable testimony at trial about the potential for such copying of sports, religious, educational and other programming.   This included testimony from representatives of the Offices of the Commissioners of the National Football, Basketball, Baseball and Hockey Leagues and Associations, the Executive Director of National Religious Broadcasters and various educational communications agencies.   Plaintiffs attack the weight of the testimony offered and also contend that an injunction is warranted because infringing uses outweigh noninfringing uses." 

           "Whatever the future percentage of legal versus illegal home-use recording might be, an injunction which seeks to deprive the public of the very tool or article of commerce capable of some noninfringing use would be an extremely harsh remedy, as well as one unprecedented in copyright law."  480 F.Supp., at 468.