Opposition Brief — Teleprompter Corp. v. Columbia Broadcasting System, Inc.

INDEX

Page

RestaTeuent or Question PresentTep ..... and 2

SPaTeMENT ......... dane e §

A. Scope of the Conditional Cross-Petition ........ 2

B. The Facts Pertinent to Holdings Challenged

the Conditional Cross-Petition ...... — d a

% ↄ q ʃͤ 0 ln

22 on nonbroadeast .

(3) Sale of commercials on nonbroadcast chan- 2

C . ²˙

(4) So-called interconnection .............. 9

GO BA oo oosccssnavcctdibccaustt le 10

JF ·˙Ü 10] ͤ ²ͤͤ ˙ ee 11

I. The Courts Below Correctly Held That the Re-

spondents’ CATVs Broadcast-Reception-Func-

tions Were Separable From Their

Origination Functions, and i That

Such CATV igination Activities Did Not Con-

vert the Reception and Distribution of Broad-

cast Signals on Separate Channels Into a Per-

— . . as 11

II. The Courts Below Both Correctly Held That

Petitioners’ ‘‘Sale-of-Commercials’’ and Inter-

connection’? Contentions Added Nothing to Peti-

tioners’ Basic Originations Argument 17

III. Petitioners’ Contention That CATV Origination

Converts the tion and Distribution of

Broadcast Signals Into a Performance Is in

Direct Conflict With the F.C.C.’s Regulatory

Plan for CATV

6 m ²ĩ ce

ii : Index Continued

TABLE OF AUTHORITIES

Caszrs :

9 8 N 1959) oe 21

ores UR 00 o 15, 19, 22

United Artists ision, Inc. v. Fortuig orp.,

255 F. Supp. 177 (S. DN. T. 1966) ..............

United States v. Midwest Video Corp., 406 U.S. 649

ccc 6, 20, 21

Srarures anp Rurns

Copyright Act: .

URE fii eee TC 2

, ̃ .. 2

Code of Federal Regulations:

,,,, ..... 5

ts, cee cdekhalce avenues 20

r c. 20

C ĩ˙%ĩ˙ĩ¼%P½ö̃ 20

Sprout Reports anp Oxpers or rue F. C. C.:

First Report and Order on Community Antenna Tele-

vision Systems, 20 F. C. C. 2d 201 (1969) 5, 8, 9, 20

Cable Television Report and Order, 36 F. C. C. 2d 141

JJ%%S%%%%%%%%%SSSSVSSVTVVVVVcTTCc Gn KRL wis 6, 20

MIscELLANEOUS :

Brief for Broadcast M Ine. as Amicus Curiae

in Fortnightly Corp. v. Seen Artists Television,

Inc., Supreme Court, No. 618 (1967 Term) ...... 12

a ERE NSO

IN THE *

Supreme Court of the United States

Octroser Term, 1972

No. 72-1633

CotumB1a Broapcastine System, Inc., Catvapa Pro-

DUCTIONS, a joint venture, Jack CHERTOK TELEVISION,

INC., and Dena Piorunrs [ncorporaten, Petitioners,

V.

TELEPROMPTER CORPORATION AND CoNLEY ELECTRONICS

CORPORATION, Respondents.

RESTATEMENT OF QUESTION PRESENTED

Respondents submit that the question posed by Con-

ditional Cross-Petitioners (hereinafter “‘petitioners”’,

or CBS and the other plaintiffs’’) should more prop-

erly be phrased as follows:

Whether the reception by respondents’ CATV sys-

tems of television signals (broadcast by the station

with the copyright owner’s authorization for public

reception) and the distribution of those broadcast

signals to subscribers should be converted into a per-

formance” of the program in public“ within the

meaning of §§1(c) and 1(d) of the Copyright Act,

because

(i) on separate channels not used for broad-

east reception the CATV makes available to sub-

seribers programs it has originated (which in one

situation included commercial announcements), or

(ii) in two instances two or more of respond-

ents’ CATV systems simultaneously distributed

a sports program to their subscribers on such

other separate ‘“‘nonbroadcast’’ channel,

where program origination by the CATV was in com-

pliance with regulations for CATV issued by the Fed-

eral Communications Commission, and such an exten-

sion of the Copyright Act would be in conflict with one

of the key elements of the F.C.C.’s regulatory scheme

for CATV?

STATEMENT

A. SCOPE OF THE CONDITIONAL CROSS-PETITION

Respondents to this Conditional Cross-Petition ' have

filed a Petition for a Writ of Certiorari No. 72-1628,

which challenges the holding of the Court of Appeals

in this case, reversing the District Court, that the

operation of Teleprompter’s community antenna tele-

vision (CATV) systems in receiving and distributing

broadcast signals to subscribers constituted a per-

formance”’ of the broadcast program in public’’, and

therefore an infringement under the Copyright Act, to

1 Hereinafter cited as Pet. The Joint Appendix in the court

below is cited as JA“ and the Joint Exhibit volume as JE“.

3

the extent that the signals received were so-called dis-

tant signals. Respondents’ Petition in No. 72-1628

sets out in the Statement, pp. 5-19, a description of the

background of the case and facts in this case pertinent

to the distant signals issue posed by that Petition.

Respondents will not discuss issues pertinent to the

distant signals question in this Brief in Opposition

except to the extent petitioners’ arguments in this

Conditional Cross-Petition have melded these issues.

The Conditional Cross-Petition by CBS and the

other plaintiffs challenges the following holdings by

both courts below:

(1) [Wie hold that the fact that certain of the

CATV systems involved here originated program-

ming and [sic] nonbroadeast channels did not

make them ‘performers,’ for copyright purposes,

of broadcast programming distributed to sub-

seribers.“ (Pet. App. A, 14a-15a; see also Pet.

App. B, 23b-24b).

(2) With regard to the sale of commercial time

on nonbroadcast programming, although this is

another step bringing cable origination program-

ming in competition to some extent with broadcast

programming, again, we do not agree with appel-

lants’ position that there is some sort of ‘spillover’

effect by which the system becomes a ‘performer’

with regard to its reception service.“ (Pet. App.

A, 15a; see also Pet. App. B, 17b).

(3) „There was no interconnection here relating

to the reception of any telecast of appellants’ copy-

righted programs, or indeed of any broadcast pro-

gramming, received by the system and distributed

to subscribers. * * * In light of the minimal inter-

4

connection we have before us, we must agree with

the district court that ‘[w]hatever this brief inter-

connection may portend for the future, it [did] not

transform [Teleprompter’s] present CATV sys-

tem into a broadcasting network as [appellants]

suggest. (Pet. App. A, 15a-16a; App. B, 16b).

B. THE FACTS PERTINENT TO HOLDINGS CHALLENGED

BY THE CONDITIONAL CROSS- PETITION

(1) General

Most of the facts pertinent to the questions posed by

the Conditional Cross-Petition were stipulated. Peti-

tioners own copyrights in television programs, which

were broadcast by television stations pursuant to

authorization of CBS and the other plaintiffs. Re-

spondents’ CAT'V systems in five communities—Farm-

ington, N.M.; Elmira, N.Y.; Rawlins, Wyo.; Great

Falls, Mont.; and New York City, N.Y.—are specifi-

cally named in the complaint and two supplemental

complaints. They received the signals broadcast by the

television stations at the pertinent times“ off-the-air

on antennas and distributed all signals received from

? Petitioners assert that it was agreed that the five named

CATV systems ‘‘were to be used as ‘illustrative’ examples’’ (Pet.

p. 6n.**). Respondents at no point agreed to this argument by

CBS and the other plaintiffs. The proof adduced at trial was lim-

ited to the five CATV systems named in the complaints.

»The complaints allege infringement of programs broadcast

and received by the CATVs in November, 1964 (Farmington and

Elmira CATVs), in June 1969 (Farmington, Rawlins, Great Falls

and New York City CATVs) and in March 1971 (Farmington and

New York City CATVs). Whether the specified CATVs “ per-

formed’’ the copyrighted programs named in the complaint must

of necessity depend on the facts as to the activities of the par-

ticular CATV at the pertinent date, see infra, pp. 13, 17-19.

5

these stations unedited (including station identifica-

tions and all broadcast commercials), by cable, and in

some cases by microwave and cable, to subscribers’

homes for their viewing on their own television sets. In

addition to receiving and distributing to subscribers

signals broadcast by television stations, respondents’

CATVs involved in this case engaged in operations

on other channels (so-called ‘‘nonbroadeast channels’’)

not involving any of petitioners’ copyrighted pro-

grams, which are the subject of the Conditional Cross-

Petition, and which petitioners assert converted the

reception service into a performance“ of the broad-

east programs, and therefore an infringement.

(2) Program Origination on Nonbroadcast Channels

A coaxial cable, such as that used in respondents’

CATV systems, may be used for transmitting signals

of many different frequencies simultaneously.“ It is

this great potential of cable technology” of making

many channels available which the F. C. C. recognized

in its regulatory scheme for CATV when in 1969 it

issued a rule requiring that CATV systems with more

than 3,500 subscribers originate their own program-

ming on at least one channel.’ At each of the pertinent

*CATV amplifying equipment has and does technologically

limit the number of channels which can be distributed to sub-

seribers. At times pertinent to the alleged infringements, re-

spondents’ amplifying equipment could distribute five channels

(Farmington, 1964), and in the other situations or later with

respect to Farmington, twelve channels, to subscribers. Although

none was installed at any time pertinent to the alleged infringe-

ments, modern CATV amplifying equipment is capable of distrib-

uting 20 or more channels.

5 First Report and Order on Community Antenna Television

Systems, 20 F. C. C. 2d 201, 202 (1969), hereinafter cited as Firat

Report and Order. This rule—47 C. F. R. 974.1111 was originally

times, respondents’ CATVs involved in this case had

greater channel capacity than the number of television

stations being received and carried on the system. It

is on these channels not being used for broadcast re-

ception that the CATV originations challenged by peti-

tioners here were distributed to subscribers,

In some situations local origination’’ by the CATV

consisted only of an automatic time and weather serv-

ice, with or without background music (e.g., Elmira in

November, 1964,“ and Rawlins in June, 1969"); ta

provide this service the CATV had a small untended

television camera which automatically scanned a board

with time, temperature and other weather dials. The

other three CATV systems involved in the case, in

addition to automatic origination services, originated

so-called ‘‘entertainment’”’ programs of various types

motion pictures, and/or short films (see JA 197n.) ;

live interviews with local personages, public-interest

matters, and local sports ‘—on a nonbroadeast channel,

scheduled to be effective January 1, 1971, but this effective date

was extended until April 1, 1971, and then suspended pending re-

view proceedings which culminated in this Court’s decision up-

holding the F.C.C.’s regulations. United States v. Midwest Video

Corp., 406 U.S. 649 (1972). The F.C.C. has not yet acted to make

its CATV-originations rule effective, although its recent Cable

Television Report and Order, 36 F. C. C. 2d 141 (1972) has reaf-

firmed the importance of CATV origination in its regulatory scheme

for CATV.

JA 214. The Elmira CATV also distributed to subscribers on

this same nonbroadcast channel signals embodying educational

Se eee ee JA

TIA 241, 546-48.

This programming and the equipment used by the CATV in

this local origination is described in detail in the stipulations.

JA 193-202, 229-33, 254-57, 271-75, 281-90.

7

for a few hours a day in the case of two systems,’ and

about 40 hours a week in 1969 and 70 hours a week

in 1971 in the case of the New York City CATV.

None of petitioners’ programs were involved in the

CATV originations. The signals embodying these

CATV-originated programs were distributed by the

CATV to its subscribers through the cable system, al-

though always on separate channels not used to receive

broadcasts. It was stipulated that respondents secured

appropriate permissions and copyright licenses when

necessary for their CATV-originated programs. JA

164.

Respondents started CATV origination in Farming-

ton in 1964 as a promotional device to attract subscrib-

ers to the CATV’s reception service. Through such

origination the CATV could offer a different variety of

programs on a channel not used for broadcast recep-

tion. JA 523-24, 560-66.

No separate or per-program charge was made by the

respondents’ CATV systems for these local origina-

tions. The CATVs charged a flat monthly fee, and in

some cases an installation charge, for connection to

the system, and did not change their charges to sub-

seribers when they commenced or expanded such

originations. CATV origination made up only a very

small proportion of the total of broadcast signals and

* Farmington: 1964, for 4% hours, a day seven days a week (JA

193) ; 1969, for 3 hours a day, five days a week (Ibid.) ; 1971, for

4 hours a day, five days a week (JA 271). Great Falls: 1969, 2

hours a day, five days a week (JA 229).

10 JA 254, 281.

local origination available to the CATV’s subscribers.

The origination equipment was not used in the recep-

tion service, and the origination, which was always on

separate channels not then being used for broadcast

reception, in no way interfered with or interrupted the

reception and distribution of broadcast signals.

(3) Sale of Commercials on Nonbroadcast Channels

The only evidence of a sale of advertising by re-

spondent in this case consists of a contract entered into

by the New York City CATV for commercials in con?

nection with sports events at Madison Square Garden

which were distributed in 1971 by that CATV on a

nonbroadeast channel, JA 284-87; JE 179-81, 235-41.

The contract provided for two 60 second beer com-

mercials per event for each of approximately 60 1971

events. Importantly, as the District Court and the

Court of Appeals both noted (Pet. App. A, 10a, 15a;

App. B, 17b), these commercials were sold and carried

on nonbroadcast channels as part of CATV originated

programming and had nothing to do with commercials

on broadcast programs which were received and made

available to subscribers.

Petitioners fail to mention that the F.C.C. specifi-

cally authorized CATV systems to sell commercials

on nonbroadeast channels when it (in 1969) adopted

its rule requiring local origination by CATV systems

with more than 3,500 subscribers.” Since the Com-

mission recognized that the required program origina-

tion would be an expensive burden on CATV opera-

11 The income from these commercials was much less than the

amount paid by the New York City CATV for the right to dis-

tribute the events to subscribers. See JA 285-286.

12 First Report and Order, supra, n. 5, f 38, at 218.

tors, advertising was allowed because “‘it would permit

CATV to derive additional revenue to help defray the

costs of origination.’’ *

\

(4) So-Called “Interconnection”

The only evidence in the record of instances of in-

terconnectionꝰ between respondents’ CATV systems

involved in this case relates to the two heavyweight

championship fights, in February, 1964 and May,

1965. Respondents purchased the closed-circuit rights

to make these events available to subscribers. Through

telephone-company circuits the fights were carried to

the CATVs where they were distributed by cable on

a nonbroadeast channel to subseribers who chose to

view them on their own sets (J A 258-59).

Respondents paid for the right to distribute these

programs, but no separate charge was made to sub-

secribers for this service. The record shows that re-

spondents used these events as a promotional device

to solicit subscribers (J A 259, 526, 567; JE 230-31).

There was also evidence in the record that, pursuant

to the requirements of its New York City CATV fran-

chise (JE 402; JA 280-81), that CATV system had

the standby capability to connect with two other

CATV systems (not owned by respondents) in New

York City, and this capability had been used on ocea-

sion (JA 280-81). But this standby ‘‘interconnec-

tion“ capability had nothing to do with reception of

broadcasts of petitioners’ programs.

18 Ibid.

4 Petitioners refer to respondents’ plans for the future in

connection with possible use of an earth satellite to make pro-

grams available to CATVs for distribution on nonbroadeast chan-

C. OPINIONS BELOW

Both the District Court and the Court of Appeals

rejected petitioners’ contentions that the CATV’s

origination activities on nonbroadeast channels in

some manner tainted' the CATV’s reception service,

and converted the CATV’s reception and distribution

of broadcast signals into a performance of the

broadcast programs.

The precise holdings of the Court of Appeals on

these contentions are quoted supra, pp. 3-4. It rea-

soned that ‘‘[e]ven though the origination service and

the reception service are sold as a package to the sub-

seribers, they remain separate and different opera-

tions. (Pet. App. A, 13a), commenting that peti-

tioners' approach would be unnecessarily wooden

and mechanical in its application of copyright law to

CATV” (Id. 15a) .“ The Court of Appeals similarly

rejected petitioners’ contention for some sort of

‘spillover’ effect (Ibid.) by reason of the sale of com-

mercials to be carried with the CATV-originated pro-

grams.

nels (Pet. p. 15 n.**, at 16). Any such plan requires F.C.C. ap-

proval, and such possible future activity (when and if allowed)

provides no factual support for an argument that the activities of

respondents’ CATVs were a performance of petitioners’ pro-

grams in 1964, 1969 or 1971.

10 The District Court concluded that:

But the nature of and function of a CATV with respect to

received shows is not changed by the presence of original

material on other channels or at other times. What Tele-

prompter is doing to plaintiffs’ copyrighted material, and

other over-the-air broadcasts, is the same whether the CATV’s

originate programs or not. The ‘function’ of the reception

service is not changed by simultaneous sale of original shows,

just as it would not be changed by Teleprompter’s simultane-

ous delivery of free ice cream or candy to every subscriber.’’

Pet. App. B, 24b.

11

With respect to so-called . inter connection“, the

Court of Appeals noted that the only interconnection

on the facts in the case involved nonbroadcast channels

and that [there was no interconnection here relat-

ing to the reception of any telecast of appellants’ copy-

righted programs, or indeed of any broadcast pro-

gramming, received by the system and distributed to

subscribers.’’ (Pet. App. A, 15a).

ARGUMENT

L. THE COURTS BELOW CORRECTLY HELD THAT THE RE-

FUNCTIONS, AND ACCORDINGLY THAT SUCH CATV ORIGI-

NATION ACTIVITIES DID NOT CONVERT THE RECEPTION

AND DISTRIBUTION OF BROADCAST SIGNALS ON SEPA-

RATE CHANNELS INTO A

This Court’s decision in Fortnightly Corp. v. United

Artists Television, Inc., 392 US. 390 (1968), estab-

lishes the rule that reception and distribution of broad-

east signals to subscribers for viewing on their own

sets does not constitute a performance“ of the broad-

cast programs within the meaning of sections 1(c) and

(d) of the Copyright Act. The Court’s analysis was

based on its determination of the function that

CATY plays in the total process of television broad-

casting and reception“ (392 U.S. at 397), in which

“broadcasters perform“ and ‘‘viewers do not per-

form.“ Id. at 398. The Court concluded that CATV fell

„on the viewer’s side of the line“. Id. at 399. The

CATV system provided a well- located antenna with an

efficient connection to the viewer’s television set“

(Ibid.), the basic function the equipment serves is

little different from that served by the equipment gen-

erally furnished by a television viewer” (Ibid.), and

„the function of CATV has little in common wits the

function of broadcasters.’ (Id. at 400).

12

In two footnotes (392 U.S. 392 n. 6, 399 n. 25) the

Court made it clear that it was deciding the case be-

fore it on the basis of the facts with respect to the two

Fortnightly CATVs involved.“ This normal reser-

vation by the Court became necessary because of the

extensive references and arguments by the respondent

copyright owner and its amici supporters in their

briefs as to what the Fortnightly CATVs were capable [

of doing,” or what other CATVs were allegedly doing |

or might allegedly be capable of doing in the future."

But the underlying principle of the Court’s Fort.

nightly holding—that ‘“‘CATV operators, like viewers

and unlike broadcasters, do not perform the [broad-

cast] programs that they receive and carry’’ (392 U.S.

at 400-01)—necessarily serves as the basis for analysis

of whether respondents’ CATV systems involved in

this case performed“ petitioners’ broadcast pro-

grams when they received the broadcast signals and

carried them to subscribers. *

Petitioners’ argument for ‘‘tainting”’ respondents’

CATV’s reception and distribution of broadcast sig-

nals with the CATV program-origination activities on

1 Petitioners quote from Fortnightly counsel’s statement in its

brief urging that the particular facts govern. (Pet. p. 11).

*The District Court in Fortnightly had found that the Fort-

nightly systems had the capability of program origination, and on

one occasion had originated a slide message when there was an

interruption in service. United Artists Television, Inc. v. Fort- *

nightly Corp., 255 F. Supp. 177, 197 (S. D. N. v. 1966).

E.., Brief for Broadeast Music, Inc. as Amicus Curiae, Fort-

nightly Corp. v. United Artists Television, Inc., Supreme Court,

No. 618 (1967 Term), which was submitted by the same counsel as |

have represented petitioner CBS throughout this case: Program

origination by many CATV systems, accompanied in some cases

by advertising (pp. 15-16); interconnection through possible

future use of space satellites by CATV (p. 19).

13

separate channels, and thereby converting the unre-

lated reception and distribution of broadcast signals

into a performance“, is based on the alleged ‘‘fune-

tional equivalence“ of the CATV system, viewed as a

totality, to a broadcaster (Pet. pp. 14-15). The Dis-

trict Court and the Court of Appeals found no

in function by the CATV on the ground of totality“.

Moreover, in making this contention, petitioners con-

fusingly paint with a broad brush and attempt to gloss

over differences between the facts applicable to each of

the five different CATV systems involved in this case,

arguing, contrary to the record, that there is “*totality”’

with respect to the facts applicable to all of these five

systems (Pet. pp. 15-16). The facts as stipulated,

however, show that each of the five CATV systems had

differences from the others in its activities and services

provided to subscribers at the various times pertinent

to the alleged infringements. There was only one

single common denominator in these systems; each

* E.g., (1) the New York City CATV received and carried only

New York City television stations, pursuant to the requirements

of its franchise (JE 390, 404), and therefore never chose to im-

port [programs] from hundreds of miles away (Pet. p. 15). (2)

The ‘‘multipoint microwave system referred to (Pet. p. 15) was

used in system operation only by the New York City CATV, and

there not to ‘‘reach every home in any area within a radius of

some twenty miles (Ibid.), but instead only to serve in lieu of a

cable connection between that CATV’s principal antenna site and

two subsidiary sites. JA 252-53, 280-81. (3) There was no evi-

dence in the record (see supra, p. 8) that any of the five CATV

systems other than that in New York City sold advertising time

to sponsors (Pet. p..15). (4) At times pertinent to the alleged

infringements, the only programming originated by the Rawlins

and Elmira CATVs was the automatic time and weather service

provided on the separate channel not used for broadcast reception.

JA 214-15, 241, 527, 546-48.

There are a number of other such deficiencies in petitioners’

totality' picture. ‘

14

performed a reception-service function for its sub-

scribers ; broadcast signals were received off-the-air on

receiving antennas and carried by cable, or microwave

and cable (depending on the particular CATV system

and/or the particular signal in question), to sub-

seribers for viewing on the subscribers’ sets. This

reception-service function was in all cases the over-

and primary operation and business of the

respondents’ CATV systems.” The CATVs’ auto-

matic and program origination services provided an

ancillary and promotional service to attract subserib-

ers to the reception service." But more importantly,

and as the courts below both recognized, program-

origination activities by respondents’ CATVs were

always on separate channels, and constituted a separ-

ate and independent function of the CATV. Petition-

ers seek to make much of the fact that subscribers

paid for all services as a package. Respondents’

income flowed from monthly subscription fees paid by

members of the public for connection to the CATV .

system. Reference to a package merely means that

there was never any separate charge for origination

or other services. The courts below found that this

did not change the CATV’s reception function on

broadcast channels in any way.

Petitioners’ argument (Pet. pp. 13, 15) based on

selection“ and procurement“ of programs by

* Petitioners footnote suggestion to the contrary (Pet. p. 6

n. %, eonspicuously without record citations, is unsupported in

the record, or the opinions below. The reception of broadcast sig-

nals by any standard—hours available, subscriber interest, source

of income—greatly outweighed in importance and volume the

origination service. See note 21, infra.

n JA 523-24, 533, 542-43, 549, 550, 560-62, 566, 574-78.

15

broadcasters adds little to logical analysis. Of course,

respondents’ CATVs “‘selected’’ and ‘‘procured’’ those

programs the CATVs originated and distributed on

nonbroadeast channels. With respect to broadcasts

received, respondents had no control over programs

and did not select or procure programs any more than

the Fortnightly CATVs did.“ In any case the issue on

this Petition is whether CATV origination changed

the CATV reception service.

This Court’s reasoning in Fortnightly does not sug-

gest any basis for a conclusion that CATV program-

origination services on separate channels change the

CATV’s reception-service function. The service pro-

vided by a CATV to a subscriber is clearly discrete as

to each separate channel of broadcast reception, or

CATV origination on nonbroadeast channels, and the

broadeast- reception function is equally discrete and

separable from the origination function. To carry out

the function of receiving broadcast signals for its sub-

seribers, the CATV provides a well-located antenna

with an efficient connection to the viewer’s television

set“ (392 U.S. at 399) to receive a station’s broad-

cast signals for the subscribers viewing. Origination

by the CATV of its own programs and their distribu-

tion to subscribers in no way interferes with the broad-

cast reception. The CATV is eoneededly a performer of

* When petitioners argue that the CATVs selected and pro-

cured’’ programs, like a broadcaster, by reason of the CATV mak-

ing a decision to receive and carry a particular station (Pet. p. 15),

they are attempting to resurrect an argument put to rest by Fort.

nightly. The fortnightly CATVs had made similar decisions as to

which stations they would receive and carry among those available

for reception, as the District Court in Fortnightly found (255 F.

Supp. at 188), but this Court plainly concluded that such a deci-

sion as to the particular station to be received did not constitute

selection and procuring programs like a broadcaster. ¢ °

. See eee eR IR ES

programs it originates, but that is not petitioners’

argument here.“

Both courts below rejected the “‘totality”’ argument

and found that the CATV’s reception function was

separable from the origination function, and that pro-

grams and automatic origination services provided by

the CATV on separate origination channels were irrele-

vant to the CATV’s activities in receiving and distri-

buting broadcast signals. Aside from the formless ‘‘to-

tality“ theory, petitioners have never suggested any ex-

planation as to why the same reception-service function

provided by the Fortnightly CATVs should be con-

verted into a “‘performance’’ because of CATV origin-

ation on separate channels.“ Would the CATV recep-

tion service continue to be changed into a “perform-

ance during times when there was no origination

(non. automatie origination was either only a few hours

a day or several hours a day)? And the opinion tes-

timony of the alleged numerous witnesses”’ offered

None of the programs of CBS and the other plaintiffs were

involved in any of respondents’ CATV origination, and it was

stipulated that respondents secured the necessary authorizations or

copyright licenses for such CATV originations. JA 164.

audience and thus further reducing the income of copyright own-

ers. Pet. p. 12. Of course, this overlooks the benefit provided to

17

by petitioners at trial as to respondents’ CATVs being

“‘functionally equivalent to broadeasters“ (Pet. p. 17) *

is nothing more than a conclusory assertion echoing

petitioners’ unsupported legal argument of ‘‘totality”’.

H. THE COURTS BELOW BOTH CORRECTLY HELD THAT PE-

TITIONERS’ “SALE-OF-COMMERCIALS” AND “INTERCON-

NECTION” CONTENTIONS ADDED NOTHING TO PETITION-

ERS’ BASIC ORIGINATIONS ARGUMENT.

The courts below both concluded that the sale of

commercials by the New York City CATV in connec-

tion with its originations on nonbroadeast channels did

not convert the CATV’s reception and distribution

of broadeast signals into a performance“ of the

broadcast programs for essentially the same reasons

that the program origination itself on nonbroadeast

channels did not effect such a conversion. (Pet. App.

A, 13a-15a; App. B, 17b.) And the courts below reached

the same conclusion for the same reasons with

to “interconnection” (Pet. App. A, 15a-16a; App. B.

16b), although comment was also made that there was

only minimal intereonnection”’ before them. (Ibid.)

Petitioners apparently recognize the paucity of the

evidence in the record™ as to respondents’ sale of com-

* Petitioners fail to mention that one of these witnesses (Gray),

on whose testimony they here rely, conceded on cross-examination

that the Rawlins CATV at the time of the alleged infringement

was about the same’’ as the CATV he had formerly owned in

Utica, N.Y. (JA 388)—both provided an automatic time and

weather service, and both used microwave to import so-called

distant signals—and that he didn't regard his Utiea CATV

as a broadcast station (JA 387). Petitioners also fail to men-

tion the concession by a CBS Vice President witness (Blank) on

cross-examination that it was debatable whether automatic origi-

nation services (such as time and weather) should be considered

program origination in this context (JA 459-60).

* See discussion in Statement on these points, supra, pp. 8-9.

mercials associated with CATV-originated program-

ming, and as to so-called ‘‘interconnection’’ by respond-

ents’ CATVs, but they attack the decisions of the courts

below on these points with misleading explanations,”

talk of future plans“, and the apparent argument

that the failure by the courts below to issue an ad-

visory opinion on such minimal evidence ‘‘merely in-

vites further litigation’’. Pet. pp. 8-9, 15 n., 16 n. *.

Apparently, petitioners contend that any sale of eom-

mercials to be carried with the CATV-originated pro-

grams, no matter how small in amount, is such a sig-

nificant fact that the totality of the New York City

CATV (and perhaps all of respondents’ other CATVs

as well) should thereby be deemed converted to the

„functional equivalent of a broadcaster.’’ Similarly,

petitioners’ contention as to interconnection would use

the ‘‘relatively few examples of interconnection in the

record’”’ (Pet. p. 16),“ together with Teleprompter's

capability and plans (Ibid.), as the basis for such a

conversion of respondents’ CATVs to the functional

equivalent of a broadcaster, whether or not they were

* For example, petitioners imply that respondents stopped the

sale of commercials by its CATVs during the pendency of the

ease’’ (Pet. p. 16). The record is clear that respondents had never

rere

the F. C. C. decision in 1969 authorizing this (see p. 8, supra), and

that after such decision, respondents’ management reconsidered

this matter, and authorized such commercials in connection with

originated on its CATVs in order to help pay for origi-

nation costs, JA 576-78, 605-08.

To be more precise, 8 heavyweight

championship fights in February 1964 and May 1965, distributed

by the Farmington, Elmira and Great Falls CATVs to subscribers

on their nonbroadcast channels, and the New York City CATV’s

required-capability to connect with other CATVs in the city. See

discussion in Statement, supra, p. 9.

19

involved in the ‘‘interconnection”’ and whether or not

the ‘‘interconnection”’ took place at (or even near) the

time of the alleged infringement.

Petitioners’ reference to respondents’ future capa-

bilities and plans as a crutch to replace the deficiencies

in evidence supporting its theories on sale of com-

mercials and ‘‘interconnection”’ is akin to arguments

made by the copyright owner and its amici supporters

in Fortnightly (see discussion, supra, p. 12), and

should receive the same treatment as in Fortnightly.

Any decision that respondents infringed petitioners’

copyrights on the specific dates in 1964, 1969 and 1971

must necessarily depend on the facts with respect to

the operations of respondents’ CATVs involved in this

case at times pertinent to the alleged infringement.

If these facts are such that petitioners’ issues are not

properly posed, the remedy is certainly not an ad-

visory opinion in order to settle possible future liti-

gation.

Ii. PETITIONERS’ CONTENTION THAT CATV ORIGINATIONS

CONVERTS THE RECEPTION AND DISTRIBUTION OF

Although the Petition is conspicuously silent with

respect to the communications-law aspect of CATV

origination, both courts below noted that the F.C. C. has

adopted rules which, although suspended pending ju-

dicial review and not yet made binding on CATV,

would require CATV systems with more than 3,500 sub-

seribers to have their own program origination on at

least one nonbroadcast channel. Pet. App. A, 15a,

n. 13; App. B, 23b. See discussion supra, p. 5.

This CATV-origination requirement was based upen

and recognized CATV’s “great potential . . . to fur-

ther the achievement of long-established regulatory

goals in the field of television broadcasting by increas-

ing the number of outlets for community self-expres-

sion and augmenting the public’s choice of programs

and types of services. First Report and Order,

supra, n. 5, 1 3, at 202.

The Commission has recently expanded its CATV

origination requirement to inelude not only the speci-

fie designation of at least one channel for non-auto-

matic origination cablecasting’’, but also a require-

ment to provide additional nonbroadcast channels for

public access, educational access and leased access.

Cable Television Report and Order, supra, II 121-25,

at 190-92; 47 O.F.R. 58 76.201, 251. The CATV

“‘nonbroadeast channel“ requirement was imposed

by the F.C.C. as a condition of the CATV’s right

to receive and carry broadcast signals in its interrelated

regulatory scheme. Ibid. The sale of commercials in

connection with ‘origination cablecasting”’ is speci-

fically permitted by the regulations, although signifi-

cantly restricted when compared to what commercials

a broadcaster can carry. See 47 C.F.R. § 76.217.

A large number of CATV systems throughout’ the

United States, including respondents’ (see JE 158-59,

161-62), moved forward voluntarily to comply with the

F.C.C.’s 1969 regulation requiring the provision of

nonbroadeast channels, even though the Commission

did say that it would permit waivers to systems havi

difficulty complying, and then subsequently suspended

the effective date pending judicial review.”

* See United States v. Midwest Video Corp., supra, n. 5, at 654

n. 7, for a history of the Commission’s rulings on the effective

—äĩ— ——— — — — — ———ä

2¹

Court has upheld the F. C. C. “s authority to issue this

cablecasting regulation, as well as the regulation itself

as plainly supported by substantial evidence that it

will promote the public interest. United States v.

Midwest Video Corp., supra, n. 5, at 673.

Now petitioners would have these CATV systems

penalized, by proposing a new copyright rule convert-

ing reception and distribution of broadcast signals in-

to a “‘performance”’ of broadcast programs and conse-

quent copyright infringement, because the CATV 8

were doing what the Commission wanted them to do

in the publie interest i. e., cable origination on non-

broadcast channels. The CATV “origination cable-

easting’’ in compliance with these F.C. C. regulations

would, according to petitioners’ contentions, so taint

the CATV as a “totality” that its entire operations

become ‘functionally equivalent to a broadcaster”’

(see Pet. pp. 14-17).% »

We submit that this proposed construction of the

statute conflicts with the principles which have been

approved by this Court (see Farmers Union v. DAF,

360 U.S. 525 (1959) ), and would lead to an unconscion-

able result. If upheld, petitioners contentions would

also frustrate a key part of the Commission’s regula-

tory scheme for CATV which the Commission has

found to be in the public interest. The courts below

%° Petitioners’ contentions must reach this ultimate position. In-

fringement is claimed with respect to the New York City CATV,

which received and carried only local—i.e., New York City—tele-

vision stations. See supra, n. 19. Thus, despite petitioners’ con-

g — " : “

correctly reached the proper resolution that the recep-

tion-service and program-origination operations of

respondents’ CATVs involved in this case were sepa-

rate functions, as recognized by the F. C. O. in its regu-

lations, and thus correctly avoided a direct conflict be-

tween the Copyright Act and the F. C. C. regulations

under the Communications Act.

CONCLUSION

For the reasons discussed above, the courts below

were clearly correct on the question posed by the

Conditional Cross-Petition. Petitioners’ contention

would deny television reception to a large segment

of the public relying on CATV, in view of the many

CATV systems throughout the country originating

their own programs on nonbroadcast channels in com-

pliance with the F.C.C. CATV regulations.

Respondents believe that consideration by the Court

of the important ‘‘distant signals’’ question posed by

their Petition No. 72-1628 does not require considera-

tion of the CATV-originations question posed by the

Conditional Cross-Petition. The ( distant signals“ is-

sue, as reflected by the differing decisions of the Court

of Appeals and District Court on this point, turns

on the facts with respect to reception and distribution

of broadcast signals by the CATV systems involved,

and, as respondents have pointed out in Petition No.

72-1628, raises a plain question of conflict with this

Court’s Fortnightly decision.

_ Since the courts below were correct in their holdings

on the CATV-originations issue and since this issue is

separable from the distant signals’’ issue raised by

Respondents’ Petition in No. 72-1628, respondents sub-

mit that the Conditional Cross-Petition should be de-

nied.

Respectfully submitted,

Rosert C. BARNARD A

R. MionARL Duncan

Davm Z. RosENSWEIG

Attorneys for Respondents

Teleprompter Corporation

and Conley Electronics

Corporation

Of Counsel:

CLEARY, Gorriies, STEEN & Hamiron

1250 Connecticut Avenue, N.W.

Washington, D.C. 20036

Katz, Leavy, Rosensweic & SinDLE

437 Madison Avenue

New York, New York 10022