Several creators and producers of copyrighted television
programs brought this suit claiming that defendants had infringed
their copyrights by intercepting broadcast transmissions of
copyrighted material and rechanneling these programs through
various community antenna television (CATV) systems to paying
subscribers. The District Court dismissed the complaint on the
ground that the cause of action was barred by this Court's decision
in
Fortnightly Corp. v. United Artist Television,
392 U. S. 390. On
appeal, the Court of Appeals divided CATV systems into two
categories for copyright purposes: (1) those where the broadcast
signal was already "in the community" served by the system, and
could be received there either by a community antenna or by
standard rooftop or other antennae belonging to the owners of
television sets; and (2) those where the systems imported "distant"
signals from broadcasters so far away from the CATV community that
the foregoing local facilities could not normally receive adequate
signals. Holding that CATV reception and retransmission of
non-"distant" signals do not constitute copyright infringement, but
that reception and retransmission of "distant" signals amount to a
"performance," and thus constitute copyright infringement, the
court affirmed as to those systems in the first category, but
reversed and remanded as to the remaining systems.
Held:
1. The development and implementation, since the
Fortnightly decision, of new functions of CATV systems --
program origination, sale of commercials, and interconnection with
other CATV systems -- even though they may allow the systems to
compete more effectively with the broadcasters for the television
market, do not convert the entire CATV operation, regardless of
distance from
Page 415 U. S. 395
the broadcasting station, into a "broadcast function," thus
subjecting the CATV operators to copyright infringement liability,
but are extraneous to a determination of such liability, since in
none of these functions is there any nexus with the CATV operators'
reception and rechanneling of the broadcasters' copyrighted
materials. Pp.
415 U. S.
402-405.
2. The importation of "distant" signals from one community into
another does not constitute a "performance" under the Copyright
Act. Pp.
415 U. S.
406-415.
(a) By importing signals that could not normally be received
with current technology in the community it serves, a CATV system
does not, for copyright purposes, alter the function it performs
for its subscribers, as the reception and rechanneling of these
signals for simultaneous viewing is essentially a viewer function,
irrespective of the distance between the broadcasting station and
the ultimate viewer. P.
415 U. S.
408.
(b) Even in exercising its limited freedom to choose among
various "distant" broadcasting stations, a CATV operator cannot be
viewed as "selecting" broadcast signals, since, when it chooses
which broadcast signals to rechannel, its creative function is then
extinguished, and it thereafter "simply carr[ies], without editing,
whatever programs [it] receive[s],"
Fortnightly Corp. v. United
Artists Television, supra, at
392 U. S. 400.
Nor does a CATV system importing "distant" signals procure and
propagate them to the public, since it is not engaged in converting
the sights and sounds of an event or a program into electronic
signals available to the public, the signals it receives and
rechannels having already been "released to the public" even though
not normally available to the specific segment of the public served
by the CATV system. Pp.
415 U. S.
409-410.
(c) The fact that there have been shifts in current business and
commercial relationships in the communications industry as a result
of the CATV systems' importation of "distant" signals, does not
entail copyright infringement liability, since by extending the
range of viewability of a broadcast program, the CATV systems do
not interfere in any traditional sense with the copyright holders'
means of extracting recompense for their creativity or labor from
advertisers on the basis of all viewers who watch the particular
program. Pp.
415 U. S.
410-414.
476 F.2d 338, affirmed in part, reversed in part, and remanded
to District Court.
Page 415 U. S. 396
STEWART, J., delivered the opinion of the Court, in which
BRENNAN, WHITE, MARSHALL, POWELL, and REHNQUIST, JJ., joined.
BLACKMUN, J., filed an opinion dissenting in part,
post,
p.
415 U. S. 415.
DOUGLAS, J., filed dissenting opinion, in which BURGER, C.J.,
joined,
post, p.
415 U. S.
416.
MR. JUSTICE STEWART delivered the opinion of the Court.
The plaintiffs in this litigation, creators and producers of
televised programs copyrighted under the provisions of the
Copyright Act of 1909, as amended, 17 U.S.C. § 1
et seq.,
commenced suit in 1964 in the United States District Court for the
Southern District of New York, claiming that the defendants had
infringed their copyrights by intercepting broadcast transmissions
of copyrighted
Page 415 U. S. 397
material and rechanneling these programs through various
community antenna television (CATV) systems to paying subscribers.
[
Footnote 1] The suit was
initially
Page 415 U. S. 398
stayed by agreement of the parties, pending this Court's
decision in
Fortnightly Corp. v. United Artists
Television, 392 U. S. 390. In
that case, decided in 1968, we held that. the reception and
distribution of television broadcasts by the CATV systems there
involved did not constitute a "performance" within the meaning of
the Copyright Act, and thus did not amount to copyright
infringement. [
Footnote 2]
After that decision, the plaintiffs in the present litigation filed
supplemental pleadings in which they sought to distinguish the five
CATV systems challenged here from those whose operations had been
found not to constitute copyright infringement in
Fortnightly. [
Footnote
3] The District Court subsequently dismissed the complaint on
the ground that the plaintiffs' cause of action was barred by the
Fortnightly decision.
355 F.
Supp. 618. On appeal to the United States Court of Appeals for
the
Page 415 U. S. 399
Second Circuit, the judgment was affirmed in part and reversed
in part, and the case was remanded to the District Court for
further proceedings. 476 F.2d 338. Both the plaintiffs and the
defendants petitioned for certiorari, and, because of the seemingly
important questions of federal law involved, we granted both
petitions. 414 U.S. 817.
I
The complaint alleged that copyright infringements occurred on
certain dates at each of five illustrative CATV systems located in
Elmira, New York; Farmington, New Mexico; Rawlins, Wyoming; Great
Falls, Montana; and New York City. The operations of these systems
typically involved the reception of broadcast beams by means of
special television antennae owned and operated by Teleprompter,
transmission of these electronic signals by means of cable or a
combination of cable and point-to-point microwave [
Footnote 4] to the homes of
Page 415 U. S. 400
subscribers, and the conversion of the electromagnetic signals
into images and sounds by means of the subscribers' own television
sets. [
Footnote 5] In some
cases, the distance between the point of original transmission and
the ultimate viewer was relatively great -- in one instance, more
than 450 miles -- and reception of the signals of those stations by
means of an ordinary rooftop antenna, even an extremely high one,
would have been impossible because of the curvature of the earth
and other topographical factors. In others, the original broadcast
was relatively close to the customers' receiving sets, and could
normally have been received by means of standard television
equipment. Between these extremes were systems involving
intermediate distances where the broadcast signals could have been
received by the customers' own television antennae only
intermittently, imperfectly, and sporadically. [
Footnote 6]
Among the various actual and potential CATV operations described
at trial, the Court of Appeals discerned,
Page 415 U. S. 401
for copyright purposes, two distinct categories. One category
included situations where the broadcast signal was already "in the
community" served by a CATV system, and could be received there
either by standard rooftop or other antennae belonging to the
owners of television sets or by a community antenna erected in or
adjacent to the community. Such CATV systems, the court found,
performed essentially the same function as the CATV systems in
Fortnightly in that they "no more than enhance the
viewer's capacity to receive the broadcaster's signals," 392 U.S.
at
392 U. S. 399.
The second category included situations where the CATV systems
imported "distant" signals from broadcasters so far away from the
CATV community that neither rooftop nor community antennae located
in or near the locality could normally receive signals capable of
providing acceptable images. The Court of Appeals determined
that
"[w]hen a CATV system is performing this second function of
distributing signals that are beyond the range of local antennas, .
. . to this extent, it is functionally equivalent to a broadcaster,
and thus should be deemed to 'perform' the programming distributed
to subscribers on these imported signals."
476 F.2d at 349. The Court of Appeals found that, in two of the
operations challenged in the complaint -- those in Elmira and New
York City -- the signals received and rechanneled by the CATV
systems were not "distant" signals, and, as to these claims, the
court affirmed the District Court's dismissal of the complaint. As
to the three remaining systems, the case was remanded for further
findings in order to apply the appellate court's test for
determining whether or not the signals were "distant." [
Footnote 7] In No. 72-1633, the
plaintiffs
Page 415 U. S. 402
ask this Court to reverse the determination of the Court of
Appeals that CATV reception and retransmission of signals that are
not "distant" do not constitute copyright infringement. In No.
72-1628, the defendants ask us to reverse the appellate court's
determination that reception and retransmission of "distant"
signals amount to a "performance," and thus constitute copyright
infringement on the part of the CATV systems.
II
We turn first to the assertions of the petitioners in No.
72-1633 that, irrespective of the distance from the broadcasting
station, the reception and retransmission of its signal by a CATV
system constitute a "performance" of a copyrighted work. These
petitioners contend that a number of significant developments in
the technology and actual operations of CATV systems mandate a
reassessment of the conclusion reached in
Fortnightly that
CATV systems act only as an extension of a television
Page 415 U. S. 403
set's function of converting into images and sounds the signals
made available by the broadcasters to the public. In
Fortnightly this Court reviewed earlier cases in the
federal courts and determined that, while analogies to the
functions of performer and viewer envisioned by the Congress in
1909 -- that of live or filmed performances watched by audiences --
were necessarily imperfect, a simple line could be drawn:
"Broadcasters perform. Viewers do not perform." 392 U.S. at
392 U. S. 398
(footnotes omitted). Analysis of the function played by CATV
systems and comparison with those of broadcasters and viewers
convinced the Court that CATV systems fall "on the viewer's side of
the line."
Id. at
392 U. S. 399 (footnote omitted).
"The function of CATV systems has little in common with the
function of broadcasters. CATV systems do not, in fact, broadcast
or rebroadcast. Broadcasters select the programs to be viewed; CATV
systems simply carry, without editing, whatever programs they
receive. Broadcasters procure programs and propagate them to the
public; CATV systems receive programs that have been released to
the public and carry them by private channels to additional
viewers. We hold that CATV operators, like viewers and unlike
broadcasters, do not perform the programs that they receive and
carry."
Id. at
392 U. S.
400-401 (footnotes omitted).
The petitioners claim that certain basic changes in the
operation of CATV systems that have occurred since
Fortnightly bring the systems in question here over to the
broadcasters' "side of the line." In particular, they emphasize
three developments that have taken place in the few years since the
Fortnightly decision. First, they point out that many CATV
systems, including some of
Page 415 U. S. 404
those challenged here, originate programs wholly independent of
the programs that they receive off-the-air from broadcasters and
rechannel to their subscribers. [
Footnote 8] It is undisputed that such CATV systems
"perform" those programs which they produce and program on their
own; but it is contended that, in addition, the engagement in such
original programing converts the entire CATV operation into a
"broadcast function," and thus a "performance" under the Copyright
Act. Second, these petitioners assert that Teleprompter, unlike the
CATV operators sued in
Fortnightly, sells advertising time
to commercial interests wishing to sell goods or services in the
localities served by its CATV systems. The sale of such
commercials, they point out, was considered in the
Fortnightly opinion as a function characteristically
performed by broadcasters.
Id. at
392 U. S. 400
n. 28, citing
Intermountain Broadcasting & Television Corp.
v. Idaho Microwave, Inc., 196 F.
Supp. 315, 325. Finally, they contend that, by engaging in
interconnection with other CATV systems -- whereby one CATV system
that originates a program sells the right to redistribute it to
other CATV systems that carry it simultaneously to their own
subscribers -- the CATV operators have similarly transferred their
functions into that of broadcasters, thus subjecting themselves to
copyright infringement liability. [
Footnote 9]
Page 415 U. S. 405
The copyright significance of each of these functions -- program
origination, sale of commercials, and interconnection -- suffers
from the same logical flaw: in none of these operations is there
any nexus with the defendants' reception and rechanneling of the
broadcasters' copyrighted materials. As the Court of Appeals
observed with respect to program origination,
"[e]ven though the origination service and the reception service
are sold as a package to the subscribers, they remain separate and
different operations, and we cannot sensibly say that the system
becomes a 'performer' of the broadcast programming when it offers
both origination and reception services, but remains a nonperformer
when it offers only the latter."
476 F.2d at 347. Similarly, none of the programs accompanying
advertisements sold by CATV or carried via all interconnection
arrangement among CATV systems involved material copyrighted by the
petitioners. [
Footnote
10]
For these reasons, we hold that the Court of Appeals was correct
in determining that the development and implementation of these new
functions, even though they may allow CATV systems to compete more
effectively with the broadcasters for the television market, are
simply extraneous to a determination of copyright infringement
liability with respect to the reception and retransmission of
broadcasters' programs.
Page 415 U. S. 406
III
In No. 72-1628 Teleprompter and its subsidiary, Conley
Electronics Corp., seek a reversal of that portion of the Court of
Appeals' judgment that determined that the importation of "distant"
signals from one community into another constitutes a "performance"
under the Copyright Act. In concluding that rechanneling of
"distant" signals constitutes copyright infringement while a
similar operation with respect to more nearby signals does not, the
court relied in part on a description of CATV operations contained
in this Court's opinion in
United States v. Southwestern Cable
Co., 392 U. S. 157,
announced a week before the decision in
Fortnightly:
"CATV systems perform either or both of two functions. First,
they may supplement broadcasting by facilitating satisfactory
reception of local stations in adjacent areas in which such
reception would not otherwise be possible; and second, they may
transmit to subscribers the signals of distant stations entirely
beyond the range of local antennae."
Id. at
392 U. S. 163.
The Court in
Southwestern Cable, however, was faced with
conflicting assertions concerning the jurisdiction of the Federal
Communications Commission to regulate in the public interest the
operations of CATV systems. Insofar as the language quoted had
other than a purely descriptive purpose, it was related only to the
issue of regulatory authority of the Commission. In that context,
it did not and could not purport to create any separation of
functions with significance for copyright purposes. [
Footnote 11]
Page 415 U. S. 407
In the briefs and at oral argument, various rationales for the
distinction adopted by the Court of Appeals have been advanced. The
first, on which the court itself relied, is the assertion that, by
importing signals from distant communities, the CATV systems do
considerably more than "enhance the viewer's capacity to receive
the broadcaster's signals,"
Fortnightly, 392 U.S. at
392 U. S. 399,
and instead "bring signals into the community that would not
otherwise be receivable on an antenna, even a large community
antenna, erected in that area." 476 F.2d at 349. In concluding that
such importation transformed the CATV systems into performers, the
Court of Appeals misconceived the thrust of this Court's opinion in
Fortnightly.
In the
Fortnightly case, the Court of Appeals had
concluded that a determination of whether an electronic function
constituted a copyright "performance" should depend on "how much
did the [CATV system] do to bring about the viewing and hearing of
a copyrighted
Page 415 U. S. 408
work." 377 F.2d 872, 877. This quantitative approach was
squarely rejected by this Court:
"[M]ere quantitative contribution cannot be the proper test to
determine copyright liability in the context of television
broadcasting. . . . Rather, resolution of the issue before us
depends upon a determination of the function that CATV plays in the
total process of television broadcasting and reception."
392 U.S. at
392 U. S.
397.
By importing signals that could not normally be received with
current technology in the community it serves, a CATV system does
not, for copyright purposes, alter the function it performs for its
subscribers. When a television broadcaster transmits a program, it
has made public for simultaneous viewing and hearing the contents
of that program. The privilege of receiving the broadcast
electronic signals and of converting them into the sights and
sounds of the program inheres in all members of the public who have
the means of doing so. The reception and rechanneling of these
signals for simultaneous viewing is essentially a viewer function,
irrespective of the distance between the broadcasting station and
the ultimate viewer.
In
Fortnightly, the Court reasoned that
"[i]f an individual erected an antenna on a hill, strung a cable
to his house, and installed the necessary amplifying equipment, he
would not be 'performing' the programs he received on his
television set,"
id. at
392 U. S. 400,
and concluded that "[t]he only difference in the case of CATV is
that the antenna system is erected and owned not by its users, but
by an entrepreneur."
Ibid. In the case of importation of
"distant" signals, the function is essentially the same. While the
ability or inclination of an individual to erect his own antenna
might decrease with respect to distant signals because of the
increased cost of bringing
Page 415 U. S. 409
the signal to his home, his status as a "nonperformer" would
remain unchanged. Similarly, a CATV system does not lose its status
as a nonbroadcaster, and thus a "nonperformer" for copyright
purposes, when the signals it carries are from distant, rather than
local sources.
It is further argued that, when a CATV operator increases the
number of broadcast signals that it may receive and redistribute,
it exercises certain elements of choice and selection among
alternative sources, and that this exercise brings it within scope
of the broadcaster function. It is pointed out that some of the
CATV systems importing signals from relatively distant sources
could with equal ease and cost have decided to import signals from
other stations at no greater distance from the communities they
serve. In some instances, the CATV system here involved
"leapfrogged" nearer broadcasting stations in order to receive and
rechannel more distant programs. [
Footnote 12] By choosing among the alternative
broadcasting stations, it is said, a CATV system functions much
like a network affiliate which chooses the mix of national and
local program material it will broadcast.
The distinct functions played by broadcasters and CATV systems
were described in
Fortnightly in the following terms:
"Broadcasters select the programs to be viewed; CATV systems
simply carry, without editing, whatever programs they receive.
Broadcasters procure programs and propagate them to the public;
CATV systems receive programs that have been released to
Page 415 U. S. 410
the public and carry them by private channels to additional
viewers."
Id. at
392 U. S. 400.
Even in exercising its limited freedom to choose among various
broadcasting stations, a CATV operator simply cannot be viewed as
"selecting," "procuring," or "propagating" broadcast signals as
those terms were used in
Fortnightly. When a local
broadcasting station selects a program to be broadcast at a certain
time, it is exercising a creative choice among the many possible
programs available from the national network with which it is
affiliated, from copyright holders of new or rerun motion pictures,
or from its own facilities to generate and produce entirely
original program material. The alternatives are myriad, and the
creative possibilities limited only by scope of imagination and
financial considerations. An operator of a CATV system, however,
makes a choice as to which broadcast signals to rechannel to its
subscribers, and its creative function is then extinguished.
Thereafter it "simply carr[ies], without editing, whatever programs
[it] receive[s]."
Ibid. Moreover, a CATV system importing
"distant" signals does not procure programs and propagate them to
the public, since it is not engaged in converting the sights and
sounds of an event or a program into electronic signals available
to the public. The electronic signals it receives and rechannels
have already been "released to the public" even though they may not
be normally available to the specific segment of the public served
by the CATV system.
Finally, it is contended that importation of "distant" signals
should entail copyright infringement liability because of the
deleterious impact of such retransmission upon the economics and
market structure of copyright licensing. When a copyright holder
first licenses a copyrighted program to be shown on broadcast
television, he
Page 415 U. S. 411
typically cannot expect to recoup his entire investment from a
single broadcast. Rather, after a program has had a "first run" on
the major broadcasting networks, it is often later syndicated to
affiliates and independent stations for "second run" propagation to
secondary markets. The copyright holders argue that, if CATV
systems are allowed to import programs and rechannel them into
secondary markets, they will dilute the profitability of later
syndications, since viewer appeal, as measured by various rating
systems, diminishes with each successive showing in a given market.
We are told that, in order to ensure "the general benefits derived
by the public from the labors of authors,"
Fox Film Corp. v.
Doyal, 286 U. S. 123,
286 U. S. 127,
and "
the incentive to further efforts for the same important
objects,'" id. at
286 U. S. 127-128, citing Kendall v.
Winsor, 21 How. 322, 62 U. S. 328,
current licensing relationships must be maintained. In the
television industry, however, the commercial relations between the
copyright holders and the licensees, on the one hand, and the
viewing public, on the other, are such that dilution or dislocation
of markets does not have the direct economic or copyright
significance that this argument ascribes to it. Unlike propagators
of other copyrighted material, such as those who sell books,
perform live dramatic productions, or project motion pictures to
live audiences, holders of copyrights for television programs or
their licensees are not paid directly by those who ultimately enjoy
the publication of the material -- that is, the television viewers
-- but by advertisers who use the drawing power of the copyrighted
material to promote their goods and services. Such advertisers
typically pay the broadcasters a fee for each transmission of an
advertisement based on an estimate of the expected number and
characteristics of the viewers who will watch the program. While,
as members of the
Page 415 U. S. 412
general public, the viewers indirectly pay for the privilege of
viewing copyrighted material through increased prices for the goods
and services of the advertisers, they are not involved in a direct
economic relationship with the copyright holders or their
licensees. [
Footnote 13]
By extending the range of viewability of a broadcast program,
CATV systems thus do not interfere in any traditional sense with
the copyright holders' means of extracting recompense for their
creativity or labor. When a broadcaster transmits a program under
license from the copyright holder, he has no control over the
segment of the population which may view the program -- the
broadcaster cannot beam the program exclusively to the young or to
the old, only to women or only to men -- but rather he gets paid by
advertisers on the basis of all viewers who watch the program. The
use of CATV does not significantly alter this situation. Instead of
basing advertising fees on the number of viewers within the range
of direct transmission plus those who may receive "local signals"
via a CATV system, broadcasters whose reception ranges have been
extended by means of "distant" signal CATV rechanneling will merely
have a different and larger viewer market. [
Footnote 14] From the point of
Page 415 U. S. 413
view of the broadcasters, such market extension may mark a
reallocation of the potential number of viewers each station may
reach, a fact of no direct concern under the Copyright Act. From
the point of view of the copyright holders, such market changes
will mean that the compensation a broadcaster will be willing to
pay for the use of copyrighted material will be calculated on the
basis of the size of the direct broadcast market augmented by the
size of the CATV market. [
Footnote 15]
Page 415 U. S. 414
These shifts in current business and commercial relationships,
while of significance with respect to the organization and growth
of the communications industry, simply cannot be controlled by
means of litigation based on copyright legislation enacted more
than half a century ago, when neither broadcast television nor CATV
was yet conceived. Detailed regulation of these relationships, and
any ultimate resolution of the many sensitive and important
problems in this field, must be left to Congress. [
Footnote 16]
Page 415 U. S. 415
The judgment of the Court of Appeals is affirmed in part and
reversed in part, and these cases are remanded to the District
Court with directions to reinstate its judgment.
It is so ordered.
* Together with No. 72-1633,
Columbia Broadcasting System,
Inc., et al. v. Teleprompter Corp. et al., also on certiorari
to the same court.
[
Footnote 1]
The exclusive rights of copyright owners are specified in § 1 of
the Copyright Act:
"Any person entitled thereto, upon complying with the provisions
of this title, shall have the exclusive right:"
"(a) To print, reprint, publish, copy, and vend the copyrighted
work;"
"(b) To translate the copyrighted work into other languages or
dialects, or make any other version thereof, if it be a literary
work; to dramatize it if it be a nondramatic work; to convert it
into a novel or other nondramatic work if it be a drama; to arrange
or adapt it if it be a musical work; to complete, execute, and
finish it if it be a model or design for a work of art;"
"(c) To deliver, authorize the delivery of, read, or present the
copyrighted work in public for profit if it be a lecture, sermon,
address or similar production, or other nondramatic literary work;
to make or procure the making of any transcription or record
thereof by or from which, in whole or in part, it may in any manner
or by any method be exhibited, delivered, presented, produced, or
reproduced; and to play or perform it in public for profit, and to
exhibit, represent, produce, or reproduce it in any manner or by
any method whatsoever. The damages for the infringement by
broadcast of any work referred to in this subsection shall not
exceed the sum of $100 where the infringing broadcaster shows that
he was not aware that he was infringing and that such infringement
could not have been reasonably foreseen; and"
"(d) To perform or represent the copyrighted work publicly if it
be a drama or, if it be a dramatic work and not reproduced in
copies for sale, to vend any manuscript or any record whatsoever
thereof; to make or to procure the making of any transcription or
record thereof by or from which, in whole or in part, it may in any
manner or by any method be exhibited, performed, represented.
produced, or reproduced; and to exhibit, perform, represent,
produce, or reproduce it in any manner or by any method whatsoever;
and"
"(e) To perform the copyrighted work public for profit if it be
a musical composition; and for the purpose of public performance
for profit, and for the purposes set forth in subsection (a)
hereof, to make any arrangement or setting of it or of the melody
of it in any system of notation or any form of record in which the
thought of an author may be recorded and from which it may be read
or reproduced. . . ."
17 U.S.C. § 1.
[
Footnote 2]
Although the Copyright Act does not contain an explicit
definition of infringement, it is settled that unauthorized use of
copyrighted material inconsistent with the "exclusive rights"
enumerated in § 1, constitutes copyright infringement under federal
law.
See 1 I. Nimmer, Copyright § 100, p. 376 (1973). Use
of copyrighted material not in conflict with a right secured by §
1, however, no matter how widespread, is not copyright
infringement. "The fundamental [is] that
use' is not the same
thing as `infringement,' that use short of infringement is to be
encouraged. . . ." B. Kaplan, An Unhurried View of Copyright 57
(1967).
It appears to be conceded that liability in this case depends
entirely on whether the defendants did "perform" the copyrighted
works. Teleprompter has not contended in this Court that, if it did
"perform" the material, its performance was not "in public" within
the meaning of § 1(c) of the Act (nondramatic literary works) or
"publicly" under § 1(d) (dramatic works).
Cf. Fortnightly Corp.
v. United Artists Television, 392 U.
S. 390,
392 U. S. 395
n. 13.
[
Footnote 3]
The plaintiffs' amended complaints also contained allegations of
additional copyright infringements on various dates in 1969 and
1971.
[
Footnote 4]
The Court of Appeals in this case described the difference,
between point-to-point microwave transmission and broadcasting in
the following terms:
"A microwave link involves the transmission of signals through
the air. However, microwave transmission, in itself, is not
broadcasting. A broadcast signal, according to 47 U.S.C. §
153(
o), is transmitted by a broadcaster for '[reception]
by the public.' In the case of microwave, the signal is focused and
transmitted in a narrow beam aimed with precision at the receiving
points. Thus, microwave transmission is point-to-point
communication. The receiving antenna must be in the path of the
signal beam. If the transmission must cover a considerable
distance, the microwave signal is transmitted to the first
receiving point from which it is retransmitted to another receiving
point, and this process is repeated until the signal reaches the
point from which it is distributed by cable to subscribers."
476 F.2d 338, 343 n. 6. The plaintiffs argued in the District
Court and in the Court of Appeals that "the use of microwave, in
and of itself, is sufficient to make a CATV system functionally
equivalent to a broadcaster and thus subject to copyright
liability. . . . "
Id. at 348-349. This contention was
rejected by the Court of Appeals on the ground that microwave
transmission "is merely an alternative, more economical in some
circumstances, to cable in transmitting a broadcast signal from one
point in a CATV system to another,"
id. at 349, and the
argument has not been renewed in this Court.
[
Footnote 5]
For general descriptions of CATV systems and their operation,
see United States v. Southwestern Cable Co., 392 U.
S. 157; M. Seiden, An Economic Analysis of Community
Antenna Television Systems and the Television Broadcasting Industry
(1965); Note, Regulation of Community Antenna Television, 70
Col.L.Rev. 837 (1970); Note, The Wire Mire: The FCC and CATV, 79
Harv.L.Rev. 366 (1965).
[
Footnote 6]
In two of the cities involved in this suit, signals not normally
receivable by household sets because of distance or terrain could
be received by rooftop antennae because of the use by the
broadcasting stations of "translators," under license from the
Federal Communications Commission, which rebroadcast a specific
station's signals.
See 476 F.2d at 344 and n. 7.
[
Footnote 7]
The Court of Appeals acknowledged that a determination of what
is a "distant" signal was "difficult," and "that a precise judicial
definition of a distant signal is not possible." 476 F.2d at 350.
FCC regulations at one time provided that for regulatory purposes a
distant signal was one "which is extended or received beyond the
Grade B contour of that station." 47 CFR § 74.1101(i) (1971)
(removed in 37 Fed.Reg. 3278 (1972)). A Grade B contour was defined
as a line along which good reception may be expected 90% of the
time at 50% of the locations.
United States v. Southwestern
Cable Co., supra, at 163 n. 16. The Court of Appeals
recognized that
"this definition [is] unsuitable for copyright purposes, because
. . . any definition phrased in terms of what can be received in
area homes using rooftop antennas would fly in the face of the
mandate of
Fortnightly."
476 F.2d at 350. The court found instead that
"it is easier to state what is not a distant signal than to
state what is a distant signal. Accordingly, we have concluded that
any signal capable of projecting, without relay or retransmittal,
an acceptable image that a CATV system receives off-the-air during
a substantial portion of the time by means of an antenna erected in
or adjacent to the CATV community is not a distant signal."
Id. at 351 (footnote omitted).
[
Footnote 8]
Program origination initially consisted of simple arrangements
on spare channels using automated cameras providing time, weather,
news ticker, or stock ticker information, and aural systems with
music or news announcements. The function has been expanded to
include coverage of sports and other live events, news services,
moving picture films, and specially created dramatic and
nondramatic programs.
See CATV-First Report and Order, 20
F.C.C.2d 201;
United States v. Midwest Video Corp.,
406 U. S. 649.
[
Footnote 9]
The Court of Appeals limited its discussion of interconnection
among CATV systems to two instances of live coverage of
championship heavyweight boxing contests. While the respondents
contend that additional examples of interconnection were presented
in the trial testimony, they do not suggest that material
copyrighted by anyone other than the CATV operators was carried by
a such interconnection, and thus the exact number of such instances
is of no significance.
[
Footnote 10]
While the technology apparently exists whereby a CATV system
could retransmit to its subscribers broadcast programs taken off
the air but substitute its own commercials for those appearing in
the broadcast, none of the instances of claimed infringement
involved such a process.
[
Footnote 11]
The FCC has consistently contended that it is without power to
alter rights emanating from other sources, including the Copyright
Act. In 1966, it indicated that its proposed rules regulating CATV
operations would not "affect in any way the pending copyright
suits, involving as they do matters entirely beyond [the FCC's]
jurisdiction." Second Report and Order, Community Antenna
Television Systems, 2 F.C.C.2d 725, 768. This position is
consistent with the terms of the Communications Act of 1934, the
source of the Commission's regulatory power, which provides, in
part:
"Nothing in this chapter contained shall in any way abridge or
alter the remedies now existing at common law or by statute, but
the provisions of this chapter are in addition to such
remedies."
47 U.S.C. § 414. Thus, it is highly unlikely that the "distant"
signal definition adopted by the Commission or a differentiation of
function based on such a definition was intended to or could have
copyright significance. Indeed, as noted, the Court of Appeals in
the present case found that the Commission's definition of a
"distant" signal was unsatisfactory for determining if a
"performance" under the Copyright Act had occurred.
See
n 7,
supra.
[
Footnote 12]
For example, it was represented in a brief before this Court
that the Farmington, New Mexico, CATV system imported signals from
a Los Angeles station even though 113 other stations were closer or
equidistant, including a number which, unlike the Los Angeles
station, were in the same time zone as the Farmington
community.
[
Footnote 13]
Some commentators have suggested that, if CATV systems must pay
license fees for the privilege of retransmitting copyrighted
broadcast programs, the CATV subscribers will, in effect, be paying
twice for the privilege of seeing such programs: first through
increased prices for the goods and services of the advertisers who
pay for the television broadcasts and a second time in the
increased cost of the CATV service. Note, CATV and Copyright
Liability: On a Clear Day You Can See Forever, 52 Va.L.Rev. 1505,
1515 (1966); Note, CATV and Copyright Liability 80 Harv.L.Rev.
1514, 1522-1523 (1967).
See n 15,
infra.
[
Footnote 14]
Testimony and exhibits introduced in the District Court indicate
that the major rating services cover in their compilations
statistics concerning the entire number of viewers of a particular
program, including those who receive the broadcast via "distant"
transmission over CATV systems. The weight given such statistics by
advertisers who bid for broadcast time and pay the fees which
support the broadcasting industry was not, however, established.
See n 15,
infra.
[
Footnote 15]
It is contended that copyright holders will necessarily suffer a
net loss from the dissemination of their copyrighted material if
license-free use of "distant" signal importation is permitted. It
is said that importation of copyrighted material into a secondary
market will result in a loss in the secondary market without
increasing revenues from the extended primary market on a scale
sufficient to compensate for that loss. The assumption is that
local advertisers supporting "first run" programs will be unlikely
to pay significantly higher fees on the basis of additional viewers
in a "distant" market because such viewers will typically have no
commercial interest in the goods and services sold by purely local
advertisers. For discussion of the possible impact of CATV
"distant" signal importation on advertiser markets for broadcast
television,
see 52 Va.L.Rev. at 1513-1516; 80 Harv.L.Rev.
at 1522-1525. The Court of Appeals noted that
"[n]o evidence was presented in the court below to show that
regional or local advertisers would be willing to pay greater fees
because the sponsored program will be exhibited in some distant
market, or that national advertisers would pay more for the
relatively minor increase in audience size that CATV carriage would
yield for a network program,"
and concluded that, "[i]ndeed, economics and common sense would
impel one to an opposite conclusion." 476 F.2d at 342 n. 2. Thus,
no specific findings of fact were made concerning the precise
impact of "distant" signal retransmission on the value of program
copyrights. But such a showing would be of very little relevance to
the copyright question we decide here. At issue in this case is the
limited question of whether CATV transmission of "distant" signals
constitutes a "performance" under the Copyright Act. While securing
compensation to the holders of copyrights was an essential purpose
of that Act, freezing existing economic arrangements for doing so
was not. It has been suggested that the best theoretical approach
to the problem might be
"[a] rule which called for compensation to copyright holders
only for the actual advertising time 'wasted' on local advertisers
unwilling to pay for the increase in audience size brought about by
the cable transmission,"
Note 87 Harv.L.Rev. 665, 675 n. 32 (1974). But such a rule would
entail extended factfinding and a legislative, rather than a
judicial, judgment. In any event, a determination of the best
alternative structure for providing compensation to copyright
holders, or a prediction of the possible evolution in the
relationship between advertising markets and the television medium,
is beyond the competence of this Court.
[
Footnote 16]
The pre-
Fortnightly history of efforts to update the
Copyright Act to deal with technological developments such as CATV
was reviewed in the
Fortnightly opinion, 392 U.S. at
392 U. S. 396
n. 17. At that time, legislative action to revise the copyright
laws so as to resolve copyright problems posed by CATV was of such
apparent imminence that the Solicitor General initially suggested
to this Court that it defer judicial resolution of the
Fortnightly case in order to allow a speedy completion of
pending legislative proceedings. Those legislative activities,
however, did not bear fruit, apparently because of the diversity
and delicacy of the interests affected by the CATV problem.
See 117 Cong.Rec. 2001 (1971) (remarks of Sen. McClellan).
Further attempts at revision in the 91st Congress, S. 542, and the
92d Congress, S. 644, met with a similar lack of success. At
present, Senate hearings in the Subcommittee on Patents, Trademarks
and Copyrights have been held on a bill that would amend the
Copyright Act, S. 1361, but the bill has not yet been reported out
of that subcommittee. A companion bill has been introduced in the
House of Representatives, H.R. 8186, and referred to Judiciary
Committee No. 3, but no hearings have yet been scheduled.
MR. JUSTICE BLACKMUN, dissenting in part.
I was not on the Court when
Fortnightly Corp. v. United
Artists Television, 392 U. S. 390
(1968), was decided. Were that case presented for the first time
today, I would be in full agreement with what Mr. Justice Fortas
said in dissent. I would join his unanswered -- and, for me,
unanswerable -- reliance on Mr. Justice Brandeis' unanimous opinion
in
Buck v. Jewell-LaSalle Realty Co., 283 U.
S. 191 (1931). But
Fortnightly has been
decided, and today the Court adheres to the principles it
enunciated and to the simplistic basis* on which it rests.
With
Fortnightly on the books, I, like MR. JUSTICE
DOUGLAS, would confine it "to its precise facts and leave any
extension or modification to the Congress."
Post at
415 U. S. 422.
The United States Court of Appeals for the Second Circuit decided
this litigation as best it could with the difficulties inherent in,
and flowing from,
Fortnightly and the Copyright Act, and
within such elbowroom as was left for it to consider the expanding
technology
Page 415 U. S. 416
of modern-day CATV. Judge Lumbard's opinion, 476 F.2d 338,
presents an imaginative and well reasoned solution without
transgressing upon the restrictive parameters of
Fortnightly. I am in agreement with that opinion, and
would therefore affirm the judgment.
* "Broadcasters perform. Viewers do not perform." 392 U.S. at
392 U. S. 398
(footnotes omitted).
MR. JUSTICE DOUGLAS, with whom THE CHIEF JUSTICE concurs,
dissenting.
The Court today makes an extraordinary excursion into the
legislative field. In
Fortnightly Corp. v. United Artists
Television, 392 U. S. 390, the
lower courts had found infringement of the copyright, but this
Court reversed, holding that the CATV systems in
Fortnightly were merely a "reception service," and were
"on the viewer's side of the line,"
id. at
392 U. S. 399,
and therefore did not infringe the Copyright Act. They functioned
by cable, reaching into towns which could not receive a TV signal
due, say, to surrounding mountains, and expanded the reach of the
TV signal beyond the confines of the area which a broadcaster's
telecast reached.
Whatever one thinks of
Fortnightly, we should not take
the next step necessary to give immunity to the present CATV
organizations. Unlike those involved in
Fortnightly, the
present CATV's are functionally equivalent to a regular
broadcaster. TV waves travel in straight lines, thus reaching a
limited area on the earth's curved surface. This scientific fact
has created, for regulatory purposes, separate television markets.
[
Footnote 2/1] Those whose
telecast
Page 415 U. S. 417
covers one market or geographic area are, under
Fortnightly, estopped from saying that one who through
CATV reaches by cable remote hidden valleys in that area, infringes
the broadcaster's copyright. But the CATV's in the present cases go
hundreds of miles, erect receiving stations or towers that pick up
the programs of distant broadcasters, and carry them by cable into
a wholly different area.
In any realistic practical sense, the importation of these
remote programs into the new and different market is performing a
broadcast function by the cable device. Respondents in No. 72-1628
exercised their copyright privileges and licensed performance of
their works to particular broadcasters for telecast in the distant
market. Petitioners in that case (hereafter petitioners) were not
among those licensees. Yet they are granted use of the copyrighted
material without payment of any fees.
The Copyright Act, 17 U.S.C. §§ 1(C) and (d), gives the owner of
a copyright "the exclusive right" to present the creation "in
public for profit" and to control the manner or method by which it
is "reproduced." A CATV that builds an antenna to pick up telecasts
in Area B and then transmits it by cable to Area A is
reproducing the copyrighted work not pursuant to a license
from the owner of the copyright, but by theft. That is not
"
"encouragement to the production of literary [or artistic]
works of lasting benefit to the world"'" that we extolled in
Mazer v. Stein, 347 U. S. 201,
347 U. S. 219.
Today's decision is at war with what Mr. Chief Justice Hughes,
speaking for the Court in Fox Film Corp. v. Doyal,
286 U. S. 123,
286 U. S. 130,
described as the aim of Congress:
"Copyright is a right exercised by the owner during the term at
his pleasure and exclusively for his
Page 415 U. S. 418
own profit, and forms the basis for extensive and profitable
business enterprises. The advantage to the public is gained merely
from the carrying out of the general policy in making such grants,
and not from any direct interest which the Government has in the
use of the property which is the subject of the grants."
The CATV system involved in the present cases performs somewhat
like a network-affiliated broadcast station which imports network
programs originated in distant telecast centers by microwave,
off-the-air cable, precisely as petitioners do here. [
Footnote 2/2] Petitioners, in picking up
these distant signals, are not managing a simple antenna reception
service. They go hundreds of miles from the community they desire
to serve, erect a receiving station, and then select the programs
from TV and radio stations in that distant area which they desire
to distribute in their own distant market. If "function" is the key
test, as
Fortnightly says, then, functionally speaking,
petitioners are broadcasters, and their acts of piracy are flagrant
violations of the Copyright Act. The original broadcaster is the
licensor of his copyright, and it is by virtue of that license
that, say, a Los Angeles station is enabled lawfully to make its
broadcasts. Petitioners receive today a license-free importation of
programs from the Los Angeles market into Farmington, New Mexico, a
distant second market. Petitioners not only rebroadcast the pirated
copyrighted programs, they themselves -- unlike those in
Fortnightly -- originate programs and finance their
original programs [
Footnote 2/3]
and their pirated programs by
Page 415 U. S. 419
sales of time to advertisers. That is the way the owner of these
copyrighted programs receives value for his copyrights. CATV does
the same thing, but it makes its fortune through advertising rates
based in part upon pirated copyrighted programs. The Court says
this is "a fact of no direct concern under the Copyright Act"; but
the statement is itself the refutation of its truth. Rechanneling
by CATV of the pirated programs robs the copyright owner of his
chance for monetary rewards through advertising rates [
Footnote 2/4] on rebroadcasts in the
distant area and gives those monetary rewards to the group that has
pirated the program.
We are advised by an
amicus brief of the Motion Picture
Association that films from TV telecasts are being imported by CATV
into their own markets in competition with the same pictures
licensed to TV stations in the area into which the CATV -- a
nonpaying pirate of the films -- imports them. It would be
difficult to imagine a more flagrant violation of the Copyright
Act. Since the Copyright Act is our only guide to law and justice
in this case, it is difficult to see why CATV systems are free of
copyright license fees when they import programs from distant
stations and transmit them to their paying customers in a distant
market. That result reads the Copyright Act out of existence for
CATV. That may or may not be desirable public policy. But it is a
legislative decision that not even a rampant judicial activism
should entertain.
There is nothing in the Communications Act that qualifies,
limits, modifies, or makes exception to the Copyright
Page 415 U. S. 420
Act.
"Nothing in this chapter contained shall in any way abridge or
alter the remedies now existing at common law or by statute, but
provisions of this chapter are in addition to such remedies."
4 U.S.C. § 414. Moreover, the Federal Communications Commission
has realized that it can "neither resolve, nor avoid" the problem
under the Copyright Act, when it comes to CATV. [
Footnote 2/5]
On January 14, 1974, the Cabinet Committee on Cable
Communications, headed by Clay T. Whitehead, made its Report to the
President. That Report emphasizes the need for the free flow of
information in a society that honors "freedom of expression," and
it emphasizes that CATV is a means to that end, and that CATV is so
closely
"linked to . . . electronic data processing, telephone,
television and radio broadcasting, the motion picture and music
industries, and communications satellites,"
id. at 14, as to require "a consistent and coherent
national policy."
Ibid. The Report rejects the regulatory
framework of the Federal Communications Commission because it
creates "the constant danger of unwarranted governmental influence
or control over what people see and hear on television broadcast
programming,"
id. at 20. The Report opts for a limitation
of
"the number of channels over which the cable operator has
control of
Page 415 U. S. 421
program content and to require that the bulk of channels be
leased to others."
Ibid.
The Report recognizes that "copyright liability" is an important
phase of the new regulatory program the Committee envisages,
id. at 39. The pirating of programs sanctioned by today's
decision is anathema to the philosophy of this Report:
"Both equity and the incentives necessary for the free and
competitive supply of programs require a system in which program
retailers using cable channels negotiate and pay for the right to
use programs and other copyrighted information. Individual or
industry-wide negotiations for a license, or right, to use
copyrighted material are the rule in all the other media, and
should be the rule in the cable industry."
"As a matter of communications policy, rather than copyright
policy, the program retailer who distributes television broadcast
signals in addition to those provided by the cable operator should
be subject to full copyright liability for such retransmissions.
However, given the reasonable expectations created by current
regulatory policy, the cable operator should be entitled to a
non-negotiated, blanket license, conferred by statute, to cover his
own retransmission of broadcast signals."
Ibid.
The Whitehead Commission Report has, of course, no technical,
legal bearing on the issue before us. But it strongly indicates how
important to legislation is the sanctity of the copyright and how
opposed to ethical business systems is the pirating of copyrighted
materials. The Court can reach the result it achieves today only by
"legislating" important features of the Copyright Act out of
existence. As stated by THE CHIEF JUSTICE in
United States v.
Midwest Video Corp., 406 U. S. 649,
406 U. S.
676,
Page 415 U. S. 422
"[t]he almost explosive development of CATV suggests the need of
a comprehensive reexamination of the statutory scheme as it relates
to this new development, so that the basic policies are considered
by Congress, and not left entirely to the Commission and the
courts."
That counsel means that, if we do not override
Fortnightly, we should limit it to its precise facts and
leave any extension or modification to the Congress.
[
Footnote 2/1]
The Communications Act of 1934 empowered the FCC to "assign
frequencies for each individual station," "determine the power
which each station shall use," "[d]etermine the location of . . .
individual stations," and "[h]ave authority to establish areas or
zones to be served by any station." 47 U.S.C. §§ 303(c), (d), and
(h). Pursuant to these powers and others granted it by the
Communications Act, the FCC has supervised the establishment and
maintenance of a nationwide system of local radio and television
broadcasting stations, each with primary responsibility to a
particular community.
[
Footnote 2/2]
Farmington, New Mexico, into which petitioners pipe programs
stolen from Los Angeles, is 600 miles away, and petitioners
developed an intricate hookup "via twenty-three steps over a
roundabout, 1300-mile route to [establish the link]."
See 355 F.
Supp. 618, 622.
[
Footnote 2/3]
476 F.2d 338, 346-347;
CATV -- First Report and Order,
20 F.C.C.2d 201;
United States v. Midwest Video Corp.,
406 U. S. 649.
See also Cable Television Report and Order, 36 F.C.C.2d
143, 148, 290;
Rules re Microwave Served CATV, 38 F.C.C.
683;
Radio Signals, Importation by Cable Television, 36
F.C.C.2d 630.
[
Footnote 2/4]
We sustained the Commission's authority to require CATV to
originate programs in a 5-4 decision in 1972.
United States .
Midwest Video Corp., supra.
[
Footnote 2/5]
The Solicitor General, in his memorandum in the
Fortnightly case, urged that the cable transmission of
other stations' programs into distant markets be subject to
copyright protection:
"[M]uch of the advertising which accompanies the performance of
copyrighted works, such as motion pictures, is directed solely at
potential viewers who are within the station's normal service area
-- 'local' advertising and 'national spot' advertising both fall
within that category. Such advertisers do not necessarily derive
any significant commercial benefit from CATV carriage of the
sponsored programs outside of the market ordinarily served by the
particular station, and accordingly may be unwilling to pay
additional amounts for such expanded coverage."
Memorandum for the United States as
amicus curiae in
No. 618, O.T. 1967, p. 10.