The nearly 3 million Americans who own home videotape recorders are breaking the law when they record copyrighted movies and programs on television, the 9th U.S. Circuit Court of Appeals said today.
The appeals court ruled that home recording of movies and other copyrighted programs without permission of the producers violates federal copyright law, even if the videotaped programs are for private use.
The decision, declaring manufacturers and retailers of the home recorders liable for damages, could deal a devastating blow to the new multibillion-dollar industry if upheld. It is not, however, expected to have an immediate effect, because any ban on home recording will probably be delayed until the Supreme Court has ruled on the issue. An out-of-court settlement or a change in the copyright law are also possible.
"We find no congressional intent to create a blanket home-use exception to copyright protection and that home video recording does not constitute fair use," the court's opinion said.
It said the defendants in the case, including Sony Corp. of America, which sells Betamax recorders, "are legally responsible for" stopping such use.
A spokesman for Walt Disney Productions, which joined Universal Studios in filing the suit five years ago, said, "We are extremely pleased with the decision." Some television industry observers, however, called the decision ironic because Disney and Universal are now successful in selling their own videotape cassettes.
The videotape recording industry is "one of those things that's gone too far to stop," said David Lachenbruch, editorial director of the trade publication, Television Digest. He said about 2.5 million recorders had been sold by the end of September, and Christmas is expected to bring many more sales.
Spokesmen for Sony and three other defendants said they could not comment on the decision until their attorneys had studied it. Officials on both sides said they expected Sony and the other defendants to appeal.
The San Francisco-based appellate court sent the case back to U.S. District Court Judge Warren J. Ferguson and directed him to consider damages and an injunction against Sony Corp. of America; Sony Corp.; its advertising agency, Doyle Dane Bernbach, and four Los Angeles retail stores.
The only other defendant in the suit, designed as a test case for the industry, is Los Angeles resident and video recorder owner William Griffiths.
The suit was filed in late 1976, shortly after Sony began selling the first video recorders in this country. The popularity of the devices began to climb sharply. RCA entered the field with its VHS system in 1977, too late to be named a defendant in the suit, and movie producers like Universal and Disney rushed to market their own products for home viewing, while still trying to stop "off-the-air" recording.
In late 1979 Ferguson ruled that recording material broadcast over the airwaves did not constitute copyright infringement as long as the recordings were not used commercially by the home recorder owners.
In overturning Ferguson's decision, the appeals court said the manufacturer, distributor, seller and ad agency retained by the distributor are liable for damages and infringement of their activities in selling the devices if they knew the recorders would be used to record copyrighted programs "and induced, caused or materially contributed to the infringing conduct."
Lachenbruch, considered an expert on the infant videotape recording industry, predicted the two sides would reach a settlement eventually that will not seriously affect sales. In the future, he said, movie production companies like Universal "may be making more from video than they do from theaters."
Frank McCann, vice president for consumer affairs at RCA's consumer electronics division, agreed. "We are confident that . . . the outcome will not be detrimental to consumers."