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Here Comes the Judge (part 3):
“Banzai! Sony wins round one”
The sun was just starting to rise in “the land of the rising sun” on the morning of Saturday, November 13, 1976. Sony President Akio Morita was preparing for his customary 8:00 a.m. tee-off time at his exclusive country club just outside Tokyo, when the phone rang.
It was early Friday evening back in New York, and on the line was Harvey Schein, President of Sony Corporation of America, with the news that the day before (see Part 2), Universal City Studios and Disney Productions, on behalf of Hollywood Studios, had filed suit in a Los Angeles Court. They alleged that Betamax, through its ability to copy programming off-air, was an infringement of copyright laws. The suit sought to halt the sale of the beleaguered new home VCR Betamax in the US, or perform some other form of accommodation, such as a royalty on the VCR or blank tapes (oh no!).
On hearing this news, the normally reserved Morita, golf clubs in hand, screamed as if he’d triple-bogied a par 3 on the 18th hole!
Morita should not have been so surprised. After all, Sidney Sheinberg of Universal Studios and Lew Wasserman of MCA (see Part 2) had warned Morita earlier about possible litigation, and Sony’s lawyers had been warning about the legality of consumer home recording since 1965, when Sony introduced the 1/2” reel-to-reel black and white CV-2000 recorder. Sony’s lawyers were worried to the extent that in small print deep inside the Betamax LV-1901’s instruction manual, they cautioned consumers: “television programs, films and videotapes may be copyrighted and recording of such materials may be illegal.”
Thus it was “sayonara” for Morita's golf game that day, and “konnichi wa” to a legal battle that would last over seven years, cost tens of millions of dollars, and eventually be argued in and settled by the US Supreme Court. It was a legal battle whose outcome would shape not only the home entertainment industry, but ultimately touch on every aspect, from copiers to computers, of our daily lives, to this very day.
The legal name for the case was “Universal City Studios v. Sony Corporation of America,” but it was often simply referred to as “the Betamax case.” Trial began on January 30, 1979, in the United States District Court for the Central District of California, more than two years after Universal filed suit alleging copyright infringement. Ironically, it was a Japanese company—Sony—that argued that a consumer had a First Amendment right to record programs for private home use. Sony's lawyers argued that audiocassette and 8-track recorders (introduced in the 1960s), and Xerox copiers could potentially duplicate copyrighted material as well. Although the practice of copying had not been argued in a court of law, Sony believed that a precedent had been established. Universal argued that Betamax’s ability to copy television programs off-air (there was no cable TV at the time in most major cities) was an infringement of their copyright, and sought to halt the sale of the home VCR. Universal's mission was to protect film and television producers from the economic consequences of unauthorized mass duplication and distribution of their television programs.
Handing down its decision in October 1979, the U.S. District Court ruled in favor of Sony, stating that recording off-air programs for personal use or time-shifting for purposes of convenience constituted a “fair use,” and that Universal had not proved that any of the above practices constituted economic harm to the motion picture industry.
But Morita's cheers of “banzai,” meaning “hooray” or “long life,” were “short-lived.” In typical Hollywood tradition, Universal was not about to fade into the sunset and surrender to the "Betamax Pirates" from the “Land of the Rising Sun.” Universal appealed the decision of the District Court to the Ninth Circuit Court of Appeals, and the next stage of the legal battle would have a far different outcome.
The sun was just starting to rise in “the land of the rising sun” on the morning of Saturday, November 13, 1976. Sony President Akio Morita was preparing for his customary 8:00 a.m. tee-off time at his exclusive country club just outside Tokyo, when the phone rang.
It was early Friday evening back in New York, and on the line was Harvey Schein, President of Sony Corporation of America, with the news that the day before (see Part 2), Universal City Studios and Disney Productions, on behalf of Hollywood Studios, had filed suit in a Los Angeles Court. They alleged that Betamax, through its ability to copy programming off-air, was an infringement of copyright laws. The suit sought to halt the sale of the beleaguered new home VCR Betamax in the US, or perform some other form of accommodation, such as a royalty on the VCR or blank tapes (oh no!).
On hearing this news, the normally reserved Morita, golf clubs in hand, screamed as if he’d triple-bogied a par 3 on the 18th hole!
Morita should not have been so surprised. After all, Sidney Sheinberg of Universal Studios and Lew Wasserman of MCA (see Part 2) had warned Morita earlier about possible litigation, and Sony’s lawyers had been warning about the legality of consumer home recording since 1965, when Sony introduced the 1/2” reel-to-reel black and white CV-2000 recorder. Sony’s lawyers were worried to the extent that in small print deep inside the Betamax LV-1901’s instruction manual, they cautioned consumers: “television programs, films and videotapes may be copyrighted and recording of such materials may be illegal.”
Thus it was “sayonara” for Morita's golf game that day, and “konnichi wa” to a legal battle that would last over seven years, cost tens of millions of dollars, and eventually be argued in and settled by the US Supreme Court. It was a legal battle whose outcome would shape not only the home entertainment industry, but ultimately touch on every aspect, from copiers to computers, of our daily lives, to this very day.
The legal name for the case was “Universal City Studios v. Sony Corporation of America,” but it was often simply referred to as “the Betamax case.” Trial began on January 30, 1979, in the United States District Court for the Central District of California, more than two years after Universal filed suit alleging copyright infringement. Ironically, it was a Japanese company—Sony—that argued that a consumer had a First Amendment right to record programs for private home use. Sony's lawyers argued that audiocassette and 8-track recorders (introduced in the 1960s), and Xerox copiers could potentially duplicate copyrighted material as well. Although the practice of copying had not been argued in a court of law, Sony believed that a precedent had been established. Universal argued that Betamax’s ability to copy television programs off-air (there was no cable TV at the time in most major cities) was an infringement of their copyright, and sought to halt the sale of the home VCR. Universal's mission was to protect film and television producers from the economic consequences of unauthorized mass duplication and distribution of their television programs.
Handing down its decision in October 1979, the U.S. District Court ruled in favor of Sony, stating that recording off-air programs for personal use or time-shifting for purposes of convenience constituted a “fair use,” and that Universal had not proved that any of the above practices constituted economic harm to the motion picture industry.
But Morita's cheers of “banzai,” meaning “hooray” or “long life,” were “short-lived.” In typical Hollywood tradition, Universal was not about to fade into the sunset and surrender to the "Betamax Pirates" from the “Land of the Rising Sun.” Universal appealed the decision of the District Court to the Ninth Circuit Court of Appeals, and the next stage of the legal battle would have a far different outcome.
