Sony Corporation of America v. Universal City Studios, Inc.

464 U.S. 417 (1984)

A Betamax Player.

This is one of the most well known Supreme Court decisions in the last part of the 20th Century. Most commonly referred to as "the Betamax case," this opinion protected home recording of television broadcasts as fair use. The case split the court 5-4, but not along usual lines. Justices Stevens, Burger, Brennan, O'Connor, and White for the majority with Justices Marshall, Powell, Rehnquist, and Blackmun dissenting.

The court reached its opinion by noting that a video cassette recorder (VCR) has substantial non-infringing uses. Proponents of peer-to-peer file sharing services have argued that these programs should be allowed for the same reasons. In the case of Grokster, however, the courts were unconvinced and ordered the service shut down.

The holding of this case has been somewhat altered by the passage of the Digital Millennium Copyright Act. Previously, it was considered fair use to make a single copy of a legitimately-owned VCR tape for back-up purposes. However, the movie industry developed a technology to defeat copying known as Macrovision. It works by manipulating a VCR's automatic gain control, which tries to remove visual distortions from the tape. Many older VCR models do not have such a gain control, rendering the copy-protection system ineffective. However, after the DCMA's passage, it is illegal to import and sell these "immune" devices.

You may be wondering exactly what a Betamax is. In the early days of VCR's there were two competing standards, Betamax (developed by Sony) and the once ubiquitous VHS (developed by JVC). There are several reasons why the VHS standard won, but the biggest was probably that Sony would not allow other manufacturers to produce Betamax players. In contrast, JVC licensed VHS technology to all comers, and overwhelmed the market. Today, "to Betamax" is a term used to describe companies that lose market share by refusing to license its technology. However, failure to license cannot be the only reason, as the world's most valuable company also does not license its hardware. Surprisingly, Sony did not discontinue Betamax production until 2002, citing market pressure from DVD's.