The Betamax Case

In the 1970s, Sony Corporation of America manufactured and sold a VCR and TV system called the Betamax. Compared to earlier home video tape recorders, the Betamax was more reliable and more affordable. With VCRs, consumers could watch programs on their own schedules, and they could fast forward through commercials. Two major film industry members who were wary of this development were Universal Studios and the Walt Disney company. These studios argued that VCR users paid nothing for their products, since they could both copy television programs and zip through the commercials.

Universal Studios sued Sony for copyright infringement in 1976. They alleged that Sony was responsible for developing a technology that some consumers might use for copyright infringement purposes. The District Court ruled that the non-commercial practice of home recording was fair use of copyrighted works, and it did not constitute copyright infringement. Further, the court deduced that Sony couldn’t be held liable for contributory infringement, even if the home use of VCRs was considered copyright infringement. Sony won the lawsuit, and it seemed like the practice of home recording would persist. However, in 1981, the US Court of Appeals for the Ninth Circuit reversed the decision and held Sony liable for contributory infringement.

In 1983, the Betamax case, formally called Sony Corporation of America v. Universal City Studios, Inc., was brought to the Supreme Court. In a 5-4 decision, the court ruled in favor of Sony. This meant that the sale of Betamax video tape recorders to the public did not violate the Copyright Act and did not constitute contributory infringement. Justice John Paul Stevens wrote that, "[t]he sale of copying equipment...does not constitute contributory infringement if the product is widely used for legitimate, unobjectionable purposes, or, indeed, is merely capable of substantial noninfringing uses." In the dissenting minority opinion, Justice Blackmun expressed that taping copyrighted work was infringement, and recorder manufacturers were guilty of inducing the infringement. 

Although Betamax ultimately lost the videotape format war to VHS recorders, the case legitimized noncommercial home recording and revolutionized the way that films were consumed. Studios ended up benefiting from the ruling because their films started being watched so much more. Without the Betamax ruling, even the digital video recorder (DVR) systems that many use today would have been illegal to produce. 

https://www.oyez.org/cases/1982/81-1687

https://www.latimes.com/opinion/editorials/la-xpm-2014-jan-17-la-ed-betamax-ruling-anniversary-20140117-story.html

https://slate.com/technology/2014/01/betamax-supreme-court-opinion-anniversary-the-decision-has-had-long-reaching-consequences.html

http://www.umich.edu/~evideo/beta2.html