Opinion ID: 111062
Heading Depth: 2
Heading Rank: 2

Heading: Unauthorized Time-Shifting

Text: Even unauthorized uses of a copyrighted work are not necessarily infringing. An unlicensed use of the copyright is not an infringement unless it conflicts with one of the specific exclusive rights conferred by the copyright statute. Twentieth Century Music Corp. v. Aiken, 422 U. S., at 154-155. Moreover, the definition of exclusive rights in § 106 of the present Act is prefaced by the words subject to sections 107 through 118. Those sections describe a variety of uses of copyrighted material that are not infringements of copyright notwithstanding the provisions of section 106. The most pertinent in this case is § 107, the legislative endorsement of the doctrine of fair use. [29] That section identifies various factors [30] that enable a court to apply an equitable rule of reason analysis to particular claims of infringement. [31] Although not conclusive, the first factor requires that the commercial or nonprofit character of an activity be weighed in any fair use decision. [32] If the Betamax were used to make copies for a commercial or profitmaking purpose, such use would presumptively be unfair. The contrary presumption is appropriate here, however, because the District Court's findings plainly establish that time-shifting for private home use must be characterized as a noncommercial, nonprofit activity. Moreover, when one considers the nature of a televised copyrighted audiovisual work, see 17 U. S. C. § 107(2) (1982 ed.), and that time-shifting merely enables a viewer to see such a work which he had been invited to witness in its entirety free of charge, the fact that the entire work is reproduced, see § 107(3), does not have its ordinary effect of militating against a finding of fair use. [33] This is not, however, the end of the inquiry because Congress has also directed us to consider the effect of the use upon the potential market for or value of the copyrighted work. § 107(4). The purpose of copyright is to create incentives for creative effort. Even copying for noncommercial purposes may impair the copyright holder's ability to obtain the rewards that Congress intended him to have. But a use that has no demonstrable effect upon the potential market for, or the value of, the copyrighted work need not be prohibited in order to protect the author's incentive to create. The prohibition of such noncommercial uses would merely inhibit access to ideas without any countervailing benefit. [34] Thus, although every commercial use of copyrighted material is presumptively an unfair exploitation of the monopoly privilege that belongs to the owner of the copyright, noncommercial uses are a different matter. A challenge to a noncommercial use of a copyrighted work requires proof either that the particular use is harmful, or that if it should become widespread, it would adversely affect the potential market for the copyrighted work. Actual present harm need not be shown; such a requirement would leave the copyright holder with no defense against predictable damage. Nor is it necessary to show with certainty that future harm will result. What is necessary is a showing by a preponderance of the evidence that some meaningful likelihood of future harm exists. If the intended use is for commercial gain, that likelihood may be presumed. But if it is for a noncommercial purpose, the likelihood must be demonstrated. In this case, respondents failed to carry their burden with regard to home time-shifting. The District Court described respondents' evidence as follows: Plaintiffs' experts admitted at several points in the trial that the time-shifting without librarying would result in `not a great deal of harm.' Plaintiffs' greatest concern about time-shifting is with `a point of important philosophy that transcends even commercial judgment.' They fear that with any Betamax usage, `invisible boundaries' are passed: `the copyright owner has lost control over his program.'  480 F. Supp., at 467. Later in its opinion, the District Court observed: Most of plaintiffs' predictions of harm hinge on speculation about audience viewing patterns and ratings, a measurement system which Sidney Sheinberg, MCA's president, calls a `black art' because of the significant level of imprecision involved in the calculations. Id., at 469. [35] There was no need for the District Court to say much about past harm. Plaintiffs have admitted that no actual harm to their copyrights has occurred to date. Id., at 451. On the question of potential future harm from time-shifting, the District Court offered a more detailed analysis of the evidence. It rejected respondents' fear that persons `watching' the original telecast of a program will not be measured in the live audience and the ratings and revenues will decrease, by observing that current measurement technology allows the Betamax audience to be reflected. Id., at 466. [36] It rejected respondents' prediction that live television or movie audiences will decrease as more people watch Betamax tapes as an alternative, with the observation that [t]here is no factual basis for [the underlying] assumption. Ibid. [37] It rejected respondents' fear that time-shifting will reduce audiences for telecast reruns, and concluded instead that given current market practices, this should aid plaintiffs rather than harm them. Ibid. [38] And it declared that respondents' suggestion that theater or film rental exhibition of a program will suffer because of time-shift recording of that program lacks merit. Id., at 467. [39] After completing that review, the District Court restated its overall conclusion several times, in several different ways. Harm from time-shifting is speculative and, at best, minimal. Ibid. The audience benefits from the time-shifting capability have already been discussed. It is not implausible that benefits could also accrue to plaintiffs, broadcasters, and advertisers, as the Betamax makes it possible for more persons to view their broadcasts. Ibid. No likelihood of harm was shown at trial, and plaintiffs admitted that there had been no actual harm to date. Id., at 468-469. Testimony at trial suggested that Betamax may require adjustments in marketing strategy, but it did not establish even a likelihood of harm. Id., at 469. Television production by plaintiffs today is more profitable than it has ever been, and, in five weeks of trial, there was no concrete evidence to suggest that the Betamax will change the studios' financial picture. Ibid. The District Court's conclusions are buttressed by the fact that to the extent time-shifting expands public access to freely broadcast television programs, it yields societal benefits. In Community Television of Southern California v. Gottfried, 459 U. S. 498, 508, n. 12 (1983), we acknowledged the public interest in making television broadcasting more available. Concededly, that interest is not unlimited. But it supports an interpretation of the concept of fair use that requires the copyright holder to demonstrate some likelihood of harm before he may condemn a private act of time-shifting as a violation of federal law. When these factors are all weighed in the equitable rule of reason balance, we must conclude that this record amply supports the District Court's conclusion that home time-shifting is fair use. In light of the findings of the District Court regarding the state of the empirical data, it is clear that the Court of Appeals erred in holding that the statute as presently written bars such conduct. [40] In summary, the record and findings of the District Court lead us to two conclusions. First, Sony demonstrated a significant likelihood that substantial numbers of copyright holders who license their works for broadcast on free television would not object to having their broadcasts time-shifted by private viewers. And second, respondents failed to demonstrate that time-shifting would cause any likelihood of nonminimal harm to the potential market for, or the value of, their copyrighted works. The Betamax is, therefore, capable of substantial noninfringing uses. Sony's sale of such equipment to the general public does not constitute contributory infringement of respondents' copyrights.