448 480 FEDERAL SUPPLEMENT conferring the monopoly," this Court has said, “lie in the general benefits derived by the public from the labors of authors." Fix Film Corp. v. Doyal, 286 U.S. 123, 127. 52 S.CL. 546, 547, 76 L.Ed. 1010. (citations and footnotes omitted). Other courts, too, have noted the compet ing goals of the copyright laws. See, e. g., Williams & Wilkins v. United States, 487 F.2d 1345, 1352, 203 Ct.Cl. 74 (1973), aff'd per curiam by an equally divided court, 420 1.S. 376. 95 S.Ct. 1344, 43 L.Ed.2d 264 (1975): the development of 'fair use' has been influenced by some tension between the direct aim of the copyright privilege to grant the owner a right from which he can reap financial benefit and the more fundamental purpose of the protec tion To Promote the Progress of Science and the useful Arts." (citation omitted). One commentator has suggested that the question of fair use arises where the expec tations of the author and the public meet. [T]he author expects that the copyright scheme itself will sometimes require use of his work necessary in the public interest for which he will not be paid, and society expects that the copyright scheme will either allow such use without reducing the author's incentive or impose no excessive burdens on the public when use is controlled. Put another way, in entrusting their respective interests to the Copyright scheme, author and society each takes a risk that the costs to each would not be unacceptable. L. Seitzer, Exemptions and Fair Use in Toyright, at 30 (1978). [5] The fair use doctrine, as articulated in judicial opinions, is not so concise. The courts have identified four factors for de termining fair use. In Williams & Wilkins, supra, at 1252, these were identified as "(a) the purpose and character of the use, (b) the nature of the copyrighted work, (c) the amount and substantiality of the material used in relation to the copyrighted work as a whole, and (d) the effect of the use on a copyright owner's potential market for and value of his work." These same four factors were codified almost verbatim in 107 of the New Act. $107. Limitations on exclusive rights: Fair use Notwithstanding the provisions of section 106 (17 U.S.C. § 1061, the fair use of 3 copyrighted work, including such use by reproduction in copies or phonorecords or by any other means specified by that section, for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright. In determining whether the use made of a work ia any particular case is a fair use the factors to be considered shall include (1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes: (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use upon the potential market for or value of the copyrighted work. This section's language shows that the factors listed are neither exclusive nor required. The factors are illustrative, not definitive. As has been noted, the statute gives no guidance as to the relative weight of the factors and only generally defines the scope of each. 3 Nimmer on Cɔpyright § 13.05[A]. Thus, courts are left with great discretion to consider new factors and interpret those ccdified in new ways. As Congress 30knowledged in the House and Senate Reports on the New Act quoted supra, such flexibility is necessary in an era of great technological development. UNIVERSAL CITY STUDIOS v. SONY CORP. OF AMER The parties' oriefing has focused on three cases which illustrate the treatment of fair use in a noncommercial contex!. Neither these cases nor any others within this court's knowledge, however, discuss copying within a private home using signais beamed over public airwaves. The three cases addressing fair use in the noncommercial context are Wihtol v. Crow, 309 F.2d 777 (8th Cir. 1963); Williams & Wilkins v. United States, supra; and Encyclopaedia Britannica Educational Corp. v. Crooks. 447 F.Supp. 243 (W.D.N.Y.1978). Their facts must be reviewed. In Wihtol, a church choir director incorporated the entire copyrighted hymn "My God and I" into a new arrangement which was publicly performed by both a high school and a church choir. The Eighth Circuit found the choir director directly liaule for infringement and the employer church liable under the doctrine of respondeat superior. In Encyclopaedia Britannica, the district court granted a preliminary injunction to plaintiffs, producers of educational audiovisual works, against defendants, local government officials who would tape plaintiffs' works off-the-air, make copies of them and distribute them to the schools. In granting this preliminary relief, the court held that the fair use defense did not overcome piaintiffs' showing of a prima facie case. The court first carefully distin guished Williams & Wilkins, discussed infra, and then heid: The scope of BOCES' activities is difficult to reconcile with its claim of fair use. This case does not involve an isolated instance of a teacher copying copyrighted material for classroom use but concerns a highly organized and systematic program for reproducing videotapes on a massive scale. BOCES has acquired videotape equipment worth one-half million dollars, uses five to eight full-time personnel to carry out its program, and makes as many as ten thousand tapes per year. For the last twelve years, these tapes have been distributed throughout Erie County to over one hundred separate schools. 449 Considering all of these factors, I find that the plaintiffs nave established a pr ma facie case entitling them to pretiminary relief. As BOCES points out, the applicability of the defense of fair use raises numerous questions of fact which cannot be resolved without a full trial en the merits. At this stage in the proceedings. I find that the substantiality of the copying and the possible impact on the market for education films tip the balance in favor of the plaintiffs, outweighing BOCES noncommercial, educational purpose in copying the films. 447 F.Supp. at 252. In Williams & Wilkins, the Court of Claims found that copying by the National Institute of Health ("NIH") and the National Library of Medicine ("NLM") of entire articles published in plaintiff's journals was fair use under the Old Act. The court relied on many factors "and not upon any one, or any combination less than ail." 487 F.2d 1345 at 1362. While these factors included elements of the traditional four, the court exercised its discretion to consider other factors it deemed relevant to the issue of fair use in the particular factual context. The court listed eight factors. First, the court noted that NIH and NLM are nonprofit institutions and that with both the libraries and the requesters, "scientific progress, untainted by any commercial gain from the reproduction, is the hallmark of the whole enterprise of duplication." 487 F.2d at 1354. Second, the court relied on the two-part factor of "a system of imita tions" imposed and enforced by the institu tions and the "effectiveness of that system to confine the duplication for the personal use of scientific personnel who need the material for their work .." 437 F.2d at 1355. This factor, in the court's view, reduced the significance of the absolute number of copies of an article which must be made. Third, the court found it significant that photocopying had been going on ever since the Copyright Act was adopted with "apparent general acceptance" and asked "whether this marked in 450 480 FEDERAL SUPPLEMENT crease in volume (through improved technology] changes a use which was generally accepted as 'fair' into one which has now become unfair." 487 F.2d at 1356. Fourth. the court was convinced that "medical sci mination on infringement, the case nonetheless would be more dissimilar to the situation here than similar. The most impor tant difference is that it nid not involve home-use off-the-air recording out rather gram for reproducing videotapes on a massive scale." 447 F.Supp. at 252. A comparison of the factual settings in the decided cases with that of the present case reveals two distinguishing factors: (1) Home-use recording is done by individuals or families in the privacy of their own home for use in their home. ence would be seriously hurt if such library" highly organized and systematic prophotocopying were stopped." Id. Fifth. the court held that the "record simply does not show a serious adverse impact, either on plaintiff or on medical publishers generally, from the photocopying practices of the type of NIH and NLM." 487 F.2d at 1359. Sixth, the court was reluctant to find infringement because of the "grave uncertainty of the coverage of 'copy' in Section 1 of the 1909 Act Id. The court noted that "this is now preeminently a problem for Congress ." 487 F.2d at 1360. Seventh, the court reviewed legislative reports for revision of the 1909 Act and found it showed that photocopying can be "fair use" in proper circumstances. 487 F.2d at 1361. Finally, the eighth factor which the court found relevant to fair use was that foreign countries have statutes which allow such photocopying. Id. The Williams & Wilkins case, affirmed by an evenly divided Supreme Court, has little precedential value. Its holding is specifieat ly limited to its unique factual situation. Furthermore, it has been strongly criticized, with the harshest criticism leveled at the Court's treatment of the harm issue discussed infra). The value of the case lies in its demonstration of the relevance of the fair use doctrine when copyright protection is tested by new technology and noncommercial 11°e. Whtol and Encyclopaedia Britannica are also of little precedential value. Wihtol involved public performance of the copyrighted material. Encyclopaedia Britannica is limited because it was an opinion granting only preliminary relief. The court was not conclusively finding infringement but rather only a prima facie case thereof. Even if that court had made a final deter 2. See, eg, 3 Nimmer on Copyright 13.05(E). (2) The material copied has been voluntarily soid by the authors for broadcast over the public airwaves to private homes free of charge. These distinctions narrow the issue before this court. They shape the four factors of the traditional fair use analysis and guide the court in defining appropriate expecta tions of the copyright holder and the public. [6] As discussed above, the traditional four factors in determining fair use are listed in § 107 without reference to weight or priority. Several commentators, however, have suggested that fair use cases show that the fourth factor of harm to the copyrighted work is or should be considered first when determining fair use, and the issue of harm has received the most emphais in this lawsuit. For these reasons, it is discussed first in this analysis of fair use. 1. Harm The Court of Claims in Williams & WilKins found that library photocopying was fair use because ". plaintiff has failed to prove its assumption of economic detriment, in the past or potentially for the future. This record simply does not show a serious adverse impact, either on plaintiff or on the owner's potential market for the work. 487 F.2d at 1359. This approach by the Court of Claims has been supra. at 36: Fred. Fair use and the New Act. UNIVERSAL CITY STUDIOS v. SONY CORP. OF AMER widely criticized as inappropriate for deter- [7-9] As in Williams & Wilkins, supra, the issue of harm is important in this lawsuit for three determinations: (1) whether the use is fair use, (2) whether an injunction is appropriate, and, (3) assuming infringement, what the damages are. Actual harm may not be essential to any of these three determinations. Without it however, the determinations are much more difficult. It has been suggested that for purposes of fair use, the question should not be what are the past effects but rather what are the proba ble effects. Freid, Fair Use and the New Act, supra, at 505 n. 39. As to the injunetion issue, the question is whether any irreparable harm will occur if an injunction is not issued. As will be discussed, this prognostication of irreparable injury is past. larly difficuit for a court to make when ne harm has occurred to date and predictions of future harm are based un personal catro and speculation. The only issue where actual harm is neither necessary nor particu larly helpful is the issue of damages. Under both the Old and the New Acts, once infringement is found, statutory damages can be awarded when no actual damages Jave been proven. Plaintiffs have admitted that no actuai harm to their copyrights has occurred to date. Plaintiffs' experts also admitted that they knew neither the year in which the predicted harm would occur nor the number of Betamax purchases which would cause 451 the harm. Yet they rigorously maintained throughout "rial that harm to their convrights would not only be a probable effect of Betamax usage, but an imminen: effect. The bases for this contention are dis cussed extensively below in the context of the injunction issue and will not be repeated here. It should we noted, however, that plaintiffs' argument is more complicated and speculative than was the plaintiff's in Williams & Wilkins. In Williams & Wilkins, the plaintiff asked the court to predict that if many readers obtained a journal article free of charge from the library, the readers would not subscribe to the journal and the plaint:ff would be injured. Here, plainuffs ask the court to find harm basedi on many more assumptions. Plaintiffs first assume that a large proportion of the 75 miilion television househoids in this country will in the near future own the Betamax machine which today costs approximately $875; then they assume that a significantly large number of these Betamax owners will have both the financial ability and the desire to buy many Betamax tapes (toriay costing approximately $20 each) to record movies and episodes from TV series, and that they will keep these tapes for repeat viewing over many years. They further assume that a viewer will watch these Betamax playbacks at a time when he would otherwise be watching live television. Plaintiffs also assume that even if the tapes were not kept over a long period of time, Betamax owners will stil! injure the value of their copyrights by deleting commerciais from movies and television series. Further. more, plaintiffs assume that because the Betamax allows more persons to view the original telecast, fewer persons will be in the rerin audience. As is discussed more fully in Part IV inira, some of these assumptions are based on neither fact nor experience, and plaintiffs admit that they are to some extent inconsistent and logcal. They surface from a system i mar keting which developed because producers and broadcasters could control the time at which the public views materials beamed to them over public airwaves. The Betamax reduces that control, and plaintiffs predict that harm will result. 452 480 FEDERAL SUPPLEMENT Because this prediction of harm is based on so many assumptions and on a system of marketing which is rapidly changing this court is hesitant to identify 'nrobable ef of home-use copving. Yet even if This Tactor of the fair use analysis were determined in plaintiffs' favor, it would not render the use unfair. The other three factors, and other considerations which the court finds relevant, must be balanced with the harm. [10] Before proceeding to a discussion of these factors, the court notes that the extent of the harm which plaintiffs ask the court to assume is probable is unclear. Harm which “imperils the existence of a publication is more destructive of a fair use defense than is harm which would limit profits." See Freid, Fair Use and the New Act, supra, at 509 n. 53. Plaintiffs' experts have testified that if Betamax is not enjoined, their profits will decrease, and that for some programs, they may not recoup their production costs. If this happens, plaintiffs warn, they will have to reduce the quality, or at least the production costs, of their audiovisual works. Plaintiffs have not said that they will no longer be able to produce this material. Indeed it would be difficult for these plaintiffs to so contend. Their profits have increased gearly, including the years in which VTR technology was introduced and growing. They exploit their material in many ways other than free television. Networks pay them substantial sums of money for their product before it even reaches the television viewer who copies it. Of course, plaintiffs claim that this copying indirectly reduces the revenue by affecting ratings and advertising: If this is true, plaintiffs have marketing alternatives at hand to recoup some of that predicted loss. They stand ready to make their product available in cassettes and compete with the VTR industry. They have proven resilient to change in market practices arising from other technological inventions, e. g., cable television, pay television. It is true, however, that copyright holders in the television industry have come to ex pect substantial financial reward. They are entitled to reap the highest profit they can within the industry. The Betamax and other technological advances will undoubtedly change the industry and introduce new considerations into plaintiffs' marketing considerations. [11, 12] Copyright law, however, does not protect authors from change or new considerations in the marketing of their products. As the Supreme Court stated in Teleprompter Corp. v. Columbia Broadcasting System, Inc.: "While securing compensation to the holders of copyright was an essential purpose of that Act, freezing existing economic arrangements for doing so was not." 415 U.S. 394, 414 n. 15, 94 3.CL 1129, 1140. 39 L.Ed.2d 415 (1974). In any event, any harm which might be possible must be weighed with other fair use fac tors. 2 Nature of the Material This factor has not been discussed extensively in fair use cases. In Rosemont Enterprises, Inc., supra, at 307, the court asked whether the nature was such that “distribution would serve the public interest in the free dissemination of information." In Williams & Wilkins. supra, at 1356, the court found that the materials were necessary to the development of medical science. The Senate Report accompanying the New Act, S. Rep.No.473, supra, suggests that the use of a news article would be judged differently from the use of a musical composition and that reproduction of material which is usually unavailable would be more justifiable than reproduction of readily available material. The material at the heart of this lawsuit cannot be categorized as "scientific” or “educational." This court cannot, nor would it desire to pronounce the "New Mickey Mouse Club" episode which the court viewed at trial to be "mere entertainment." or "educational," or "informational," or "beneficial." As the Supreme Court wrote in Stanley v. Georgia. 394 U.S. 557, 566, 89 S.Ct. 1243, 1248. 22 L.Ed.2d 542 (1969), “The line between the transmission of ideas and |