Page 60 - A Study on the Role of UGC Platforms in Copyright Law：An Intermediary-oriented Approach

A Study on the Role of UGC Platforms in Copyright Law: Chapter 2 Copyright in the Pre-Internet Age: An Intermediary-oriented Approach
An Intermediary-oriented Approach

199
for performing its motion pictures without permission. After failing in both the district and
appellate courts, Fortnightly Co. received support from the Supreme Court which found that
cable companies did nothing more than ‘enhance viewers’ ability to receive broadcasters’
200
signals’. The Court held that cable companies were not in the same position as the
broadcasters and public performers of the films, and should be regarded as viewers and
receivers of the performance. However, as the dissenting opinion explained, the majority
201
decision protected the new distribution technology at the cost of reversing a precedent that
the Supreme Court itself had delivered 40 years earlier: that a hotel distributing radio signals
202
by wire to various rooms constituted a kind of public performance.
The need to encourage the development of the new technologies, protect copyright
owners’ public performance rights, and respect precedents were once again coordinated
through a statutory licencing mechanism. The 1976 Act granted cable systems a compulsory
licence to carry television signals currently authorised for retransmission by the Federal
Communications Commission (FCC) upon payment of a specified percentage of the
revenues. 203
3) The rise of video cassette recording and home copying: The Sony case
After cable transmission, the invention of videocassette recorders (VCRs) in the late
204
1970s brought another new revenue stream. VCRs allow consumers to record movies by
themselves, thereby depriving film companies of control over movie distribution. Due to the
difficulty of enforcing copyright by suing every individual end user, film companies lobbied
Congress. They demanded that distributors, namely, the VCR equipment manufacturers, pay
a royalty for sales of the equipment and blank tapes.
205
During the long wait for legislative reform, two film companies, Universal City Studios
and Walt Disney Productions, launched copyright infringement lawsuits against the biggest
206
VCR equipment maker, the Sony Corporation. The film companies alleged that even
though Sony did not physically copy the movies, it sold its Betamax VCR to meet the
207
consumer demand for home copying, which constituted contributory infringement. The

199 Ibid.
200 Ibid. 399.
201 Ibid. 399-401.
202 Ibid. 405. E.g., Buck v. Jewell-La Salle Realty Corp., 283 U.S. 191, 51 S.Ct. 410, 75 L.Ed. 971 (1931); Society of European
Stage Authors and Composers v. New York Hotel Statler Co., D.C., 19 F.Supp. 1 (1937).
203 17 U.S. Code § 111 (c)(1).
204 Richard S. Rosenbloom and Michael A. Cusumano, ‘Technological Pioneering and Competitive Advantage: The Birth of the
VCR Industry’ (1987) 29 California Management Review 51, 51.
205 This indirect solution is not new. Justice Holmes innovated this approach in the Ben-Hur case, finding that the producer of a
copyright-infringing motion picture could be held liable even though the movie was shown by the theatre owner. Goldstein (n
36) 65.
206 Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417, 423 (1984).
207 Ibid 420.

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