exclusive rights

In 1976, Universal City Studios, Inc., and Walt Disney Productions, owners of copyrights in motion pictures and other audiovisual works, commenced a copyright infringement action in the United States District Court for the Central District of California against Sony Corporation of America and related entities that manufacture and sell Betamax video tape recorders. The Betamax consists of a tuner that receives signals from the public airwaves, a recorder that places those signals on magnetic tape, and an adapter that converts the signals for playback on a television set. It includes a timer for unattended recording, a pause button to omit commercials, and a fast-forward control. Surveys of several hundred Betamax owners conducted by both parties in 1978 showed that the primary use for most owners was time-shifting, recording a program for single later viewing and then erasing it. Sony's survey indicated that over 80 percent of interviewees watched at least as much regular television as before owning a Betamax. Seven point three percent of use was to record sports events whose professional leagues had no objection to home recording, and representatives of religious and educational broadcasters also testified they had no objection. After a lengthy trial, the District Court in 1979 denied all relief to the respondents, finding that time-shifting was fair use, that Sony had no direct involvement with any infringing activity, and that the Betamax was a staple article of commerce capable of substantial noninfringing uses. The court noted Sony's instruction booklet warned that unauthorized recording of copyrighted material may violate copyright laws. The Ninth Circuit in 1981 reversed the District Court's judgment on the copyright claim, holding petitioners liable for contributory infringement without setting aside any findings of fact, and remanded for consideration of damages or a continuing royalty. The Supreme Court granted certiorari in 1982, ordered reargument in 1983, and issued its decision in January 1984.

In February 1977, shortly after leaving the White House, former President Gerald R. Ford contracted with Harper & Row Publishers, Inc., and Reader's Digest Association, Inc., to publish his memoirs. The agreement provided Harper & Row and Reader's Digest the exclusive right to license prepublication excerpts known as first serial rights. Harper & Row paid Ford $25,000 upon signing and another $25,000 upon delivery of the manuscript, while the Government supplied $25,000 for researchers plus staff and access to White House files and tapes. The completed 460-page manuscript included roughly 200 pages on Ford's decision to pardon Richard Nixon. In late 1978, Victor Navasky, editor of The Nation, learned from an undisclosed source that the manuscript was in California. The source, described as a former Ford aide, supplied a copy to The Nation for $5,000. Navasky prepared a 2,250-word article titled "The Ford Memoirs — Behind the Nixon Pardon" that appeared in the April 3, 1979, issue. The article contained approximately 300 words of verbatim quotations from the manuscript, focused on the Nixon pardon chapters, and was published on the eve of the scheduled Time magazine serialization. Harper & Row had separately licensed first serial rights to Time magazine for $25,000, with $12,500 paid in advance and the balance due upon publication of a 7,500-word excerpt timed for one week before the hardcover book release. Time retained the right to renegotiate the second payment if any material appeared earlier. After The Nation article ran, Time canceled the remaining payment and the serialization. Harper & Row and Reader's Digest then sued Nation Enterprises in the United States District Court for the Southern District of New York, alleging copyright infringement among other claims. Following a six-day bench trial, the district court found that the Ford manuscript was protected by copyright at the time of The Nation's publication and that the use of the material was not fair use. The court awarded Harper & Row $12,500 in actual damages. A divided panel of the Court of Appeals for the Second Circuit reversed, holding that The Nation's use qualified as fair use. The Supreme Court granted certiorari.

Stiffel Company secured design and mechanical patents on a pole lamp. The lamp was a vertical tube having lamp fixtures along the outside and constructed to stand upright between floor and ceiling. Pole lamps achieved commercial success after Stiffel brought them to market. Sears, Roebuck & Company subsequently placed on the market a substantially identical lamp that it sold at a lower price. Its retail price matched Stiffel's wholesale price. Stiffel brought an action against Sears in the United States District Court for the Northern District of Illinois. Its first count claimed that Sears had infringed the patents by copying the design. The second count alleged that Sears had engaged in unfair competition under Illinois law by causing confusion in the trade as to the source of the lamps. Evidence introduced included the absence of identifying tags on Sears lamps, although labels appeared on the cartons delivered to customers. Additional evidence showed customer inquiries to Stiffel about differences from Sears lamps and complaints from two customers who had purchased Stiffel lamps upon learning of the cheaper Sears versions. After determining that the patents were invalid for want of invention, the District Court found as a fact that Sears' lamp was a substantially exact copy of Stiffel's. The lamps were so alike in appearance and functional details that confusion between them was likely and had already occurred in some cases. The court then entered judgment against Sears on the unfair competition claim. It enjoined Sears from selling or attempting to sell pole lamps identical to or confusingly similar to Stiffel's lamp. The court also ordered an accounting to determine profits and damages. The Court of Appeals affirmed the District Court's judgment. The Supreme Court granted certiorari to consider the question presented by the case.

In January 1882, Napoleon Sarony, a photographer operating in New York City, entered into an agreement with Oscar Wilde and created a photograph titled "Oscar Wilde No. 18." Sarony posed Wilde in front of the camera, selected and arranged the costume, draperies, and accessories, arranged the subject for graceful outlines, disposed the light and shade, and suggested the desired expression, producing the image entirely from his own original mental conception. Subsequently, the Burrow-Giles Lithographic Company, a lithographer also based in New York, produced and sold approximately 85,000 copies of the photograph without authorization. Sarony had complied with all statutory requirements for copyright, including affixing the notice "Copyright, 1882, by N. Sarony" to each copy. Sarony then commenced an action at law against the lithographic company in the Circuit Court for the Southern District of New York, alleging violation of his copyright. With a jury waived, the court made findings of fact and entered judgment in Sarony's favor for $600 in penalties for the plates and copies sold, plus $10 for copies in possession, under section 4965 of the Revised Statutes. The lithographic company brought a writ of error to the Supreme Court of the United States, challenging the constitutionality of copyright protection for photographs and the sufficiency of the copyright notice.