Thailand Law Forum: Private Use on Musical Works, Rights of Public Performance, and Collecting Society Systems

Private Use on Musical Works, Rights of Public

Performance, and Collecting Society Systems.

By' Judge Visit Sripibool

2 the portions of value of works
3 the good faith of a defendant
4 substantially diminished value of the copyrighted work
5 the labour of the copyright owners
6 the meaning defined by Act
7 whether or not incidental, illustrative, and fragmentary use.
8 in musical works, merely imitated the chorus without musical accompaniment, or merely peculiar actions, gestures, and tones of the plaintiff are not infringed,(88) but if a defendant sings the entire copyrighted song with musical accompaniment, the defendant may not be excused.(89)
9 in musical work, if broadcasting of music or reprinted some parts of the chorus of the song without music, it would be fair use in the way of implied consent.(90)

Moreover, most of cases, the court usually focused on the circumstances of whether defendant's use will seriously interfere with plaintiff's exploitation of his work.(91) If there is no likelihood of competition between plaintiff and defendant, it would not be infringed. This idea has been taken before the notion of "fair use"

When talking about the fair use cases in the united states, it seems incomplete if the case of Sony Corporation v. Universal City Studios(92) has not been quoted to consider. In 1976, Universal City Studios and Walt Disney Productions, motion copyright owners. Sued Sony Corporation, manufacture of "Betamax" video tape recording machines, Sony Corporation of America, Sony's United States distributor, four retailers who sold Sony's machines, Sony's advertising agency, and William Griffiths, an individual machine user. For convenience, plaintiffs-copyright owners will be referred to as "the Studios" and the defendants will be referred to as "Sony."
The Studios' theory was that Sony's machine sales were contributory copyright infringement because purchasers used their machines primarily to make illegal tape copies of motion pictures that television stations broadcast over the public airwaves with the Studios' permission.

Sony's videotape recorders ("VTR") consisted of three components: (1) a tuner, which receives broadcast signals, (2) a recorder, which records the signals on tape, and (3) an adapter, which converts the signals into a composite signal. The tuner enables the VTR to record a broadcast off one station while the television set connected to the VTR is tuned to another channel or is not in use. The VTR has (1) a timer, which allows the user to activate and deactivate the recorder at predetermined times (for example, to record for later viewing a program broadcast at an inconvenient time) and (2) fast-forward controls, which enable the user to pass over taped portions, such as the commercial advertisements recorded along with a motion picture.

After a lengthy trial, the district court denied the Studios' copyright infringement charge. The district court said that "First, home VTR recording of copyrighted works broadcast free to the public at large did not constitute infringement. Second, Sony would not be liable as a contributory infringer even if hometaping were an infringement because it merely sold a machine that was capable of a variety of uses, some of them infringing. Finally, the Studios' prayer for injunctive relief either preventing sale of Betamax machines or requiring that they be rendered incapable of recording copyrighted works off the air would be inappropriate even if Sony were otherwise liable as a contributory infringer because the injunction would cause harm to Sony and the public that outweighed that to the Studios."

The Ninth Circuit reversed, holding that, as a matter of law, home VTR use was not fair use because it was not a "productive use" and that Sony's VTR sales were contributory infringement because the primary purpose of VTR's is to copy television programming virtually all of which is copyrighted. The court remanded for a determination of the appropriate relief, suggesting that a continuing royalty might be an acceptable remedy.

The Supreme Court reversed the Ninth Circuit by a 5 to 4 vote, finding no liability for copyright infringement. The Supreme Court resolved two major issues: (1) contributory infringement: under what circumstances would Sony, as a seller of a machine that is not covered by any copyright but that can be used to make unauthorized copyrighted works, be liable as a contributory infringer? and (2) fair use: did use of videotaping machines to make recordings of broadcasted copyrighted works constitute "fair use"?. The court concluded that Sony as maker and seller of a machine is a contributory infringer only if the machine is not capable of substantial noninfringing use, and the machines had at least two noninfringing uses: authorized time-shifting and unauthorized time-shifting, the latter being fair use. In (1) contributory infringement, nothing in the Copyright Act renders anyone liable for infringement committed by another, a contrast with the Patent Act, which has explicit provisions on inducement of infringement and contributory infringement by sale of nonstaple components. Copyright law has a body of cases on vicarious liability, but these cases do not support imposing liability on the seller of a machine that may be sued to commit copyright infringement. The vicarious liability doctrine is based on the defendant's continuing ability to control the behavior of performers who directly infringe. Sony, seller of such a machine, has no such control. Having reduce the question of Sony's contributory infringement liability to that of whether there are substantial or "commercially significant" noninfringing sues for the videotape recorders, the Court found one potential use satisfied this standard: "private, noncommercial time-shifting in the home."
The court discussed two types of time-shifting. As to authorized time-shifting, it relied on the district court's findings that many producers are willing to allow private time-shifting to continue because it may enlarge the total viewing audience. It stressed that "third party conduct would be wholly irrelevant in an action for direct infringement" but that in an action for contributory infringement "the copyright holder may not prevail unless the relief that he seeks affects only his programs, or holder may not prevail unless the relief that he seeks affects only his programs, or unless he speaks for virtually all copyright holders with an interest in the outcome."

(2) As Fair Use, unauthorized time-shifting, the Court's discussion of "unauthorized time-shifting" is of great interest, being its inaugural voyage into copyright law's stormy fair use seas. Nothing that Section 107 "identifies various factors that enable a court to apply an equitable rule of reason analysis to particular claims of infringement," the Court of necessity gave little attention to two Section 107 factors- the second ("nature of the copyrighted work") and the third ("the amount of…used"). These factors strongly pointed toward a finding of no fair use because the copyrighted works were dramatic works, motion pictures, normally given stronger protection than factual and functional works, and because the alleged copying was of the entire work.

The first factors is "the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes," Copying for a commercial or profit-making purpose is "presumptively" unfair, a "contrary presumption" applies to "noncommercial, nonprofit activity."

The Court linked the fourth factor-"the effect of the use upon the potential market for or value of the copyrighted work"- to the first one in the context of noncommercial uses. Because a use for a noncommercial purpose in presumptively fair (factor (1)), the burden is on the copyright owner to show that "some meaningful likelihood of future harm" to a potential market for the work will result from the use.(93)
The Studios failed to show "meaningful likelihood of future harm." The district court found unsupported the Studios' suggestions that time-shifting without librarying would (1) not be measured by rating services, which determine advertising revenue from an original telecast, (2) diminish the number of persons watching live telecast movies, (3) reduce demand for reruns, or (4) reduce theater of film rental exhibition of films.(94)

The above case can be concluded that in the concept of contributory infringement the court look into the nature of uses focused on the defendant's continuing ability to control the behavior of users or and focused on a substantial or commercially significant use. On fair use, the court focused on the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes. Copying for a commercial or profit-making purpose is "presumptively" unfair, so a contrary presumption applies to noncommercial, nonprofit activity is fair use.In the scope of exclusive rights, the critical issue is that whether the exclusive rights of the copyright owners will expand to be unlimited or not. If we view on the performing rights in recording in the United States Copyright Act of 1976 Section 114(a)(104) , we might see that the right to play ("perform") the record in public is expressly denied the owner of the copyright in the recording.(105)

On the musical copyrighted work, when the right-owners sell the copyrighted works into the market, is the exclusive right still complete? or, is the right exhausted in some aspects.? This question is very interesting.

In general concept, the exhaustion of rights mean that the rights of the owner will be exhausted by the first sale doctrine, or parallel imports.(106) The relation between exclusive rights and rights to use or to consume would be considered in the concept of exhaustion of rights in another meaning.

Compared with the first sale doctrine in the United States, the distribution right gives the copyright owner the right to control the first public distribution of the work. The distribution right involves the right to transfer physical copies or phonorecords of the work. The distribution right is frequently infringed simultaneously with the reproduction right, but can also be infringed alone. Infringement of the distribution right alone commonly occurs in the music industry when unlawfully made audio or video tapes are acquired by a retailer and sole to the public, Although the retail seller may not have copied the work in any way and may not have known that the works were made unlawfully, he nevertheless infringes the distribution right by their sale. The seller's innocent intent is not a valid defense to an action for copyright infringement, which allows the copyright owner to proceed against any member in the chain of distribution. Section 109(a)(107) of Copyright Act of the United States creates a basic exception to the distribution right known as the "first sale doctrine" which limits the copyright owner's control over copies of the work to their first sale or transfer. Under this provision, once the work is lawfully sole or even transferred gratuitously, the copyright owner's interest in the material object, the copy or phonorecord, is exhausted; the owner of that copy can then dispose of it as he sees fit. The first sale doctrine entitles the owner of a copy to dispose of it physically. Thus, one who buys a copy of a book or any other copyrighted works is entitled to resell it out, give it away, rebind it, or destroy it.(108) Like the Patent Law of the United States, the purchaser of a patented article has the rights

Thailand

In Thailand it seems the cases regarding fair use not very much. That is because the defendants had not raised this issue to make excuses. A few cases have been found. In criminal cases, Public Prosecutor v. Kanokchai Phetdawong,(95) briefly, Public Prosecutor sued that the defendant infringed the copyrighted works of injured persons, the three publishing companies, by means of copying in some parts of the injured persons's books by copying machine for students in a university. It was deemed to reproduce in essential part of the book without the consents of the injured persons.

Kanokchai pleaded not guilty. Kanokchai said his occupation was to be hired to copy any document and to make the book' cover as to orders in ordinary way. His premises was attached to the university. The said books in the complaint used in class for students. He made the copies of books as to the orders of the students for hires. The students had brought the books to be copied. He charged for hire 60 Stang for a paper A4 each, 1 Baht for a paper F14 each, a paper F14 can be separated into two pages, so, can be calculated to be 50 Stang each.

In a judgment, the court looked into the case occurred in the United States(96) and considered the rules of fair use of the United States,(97) finally, concentrated on Section 32 second paragraph (1)(98) which is in the meaning of the 'three step test' of the TRIPS. That is, the court said that "the excuse for an infringement of copyright the defendant must prove to be sufficient for the court in three conditions;

1 the acts of the defendant should not conflict with the normal exploitation of the work of the copyright owners and not affect to the rights of the copyright owners.
2 the acts of the defendant are in the purpose of a research or study, and
3 the acts of the defendant have not to make a profit."

In all issues specified by the court in the judgment the court said " the court thinks that the interests of the injured persons as the creators or the persons who have been granted from the creators the copyrighted works are the economic interests for exclusivity in their copyrighted works. In the system of free markets, the economic interests are the most important motivation for the creators to create any work. This motivation is for the superb purpose of a society. That is knowledge, arts, sciences, and being well- off for human beings as a whole. So the economic interests of the copyright owners have to be balanced by the society interests or public interests in the way of study for anyone in the societies, and the research for the purpose of creating new characteristics of knowledge without the purpose of making a profit. The ways of examination to be known whether such studies or researches conflict to the interests of the copyright owners or effect to the right owners inappropriately have to consider circumstances in case by case. That is, it has to look into the factors of quality and the factors of quantity. In the factors of quality, the facts in the case have shown that the defendant pleaded that the work reproduced are used in classes of the university which has around 16,000 students. The university's library has the said copyrighted works 20 copies. A student can borrow the copyrighted copy not over 7 days. The library approximately has 6 copying machines for services to the students…if any student reproduces some parts of the book of which a teacher specifies to study in class, it obviously seems to be fair and within the exception for an infringement of copyright. When focusing on an economic mechanism and work sharing, instead of each of student will reproduce one copy by himself or herself, they may ask or hire anyone to do so on behalf of them. Anyone who is asked or hired may service by mean of charges for his or her labors, for his or her machine and for papers. In such case, even a copying shop charges fees for the purpose of its business or for the profits, but such business and profits are a direct consequence from the uses of labors, machines, and materials, for the facts of the case is a man, a copying machine and the paper which altogether total 60 Stang of each paper. Such circumstances, the copying shop does not make a profit from infringing the copyright owners but it did in the way of hire contracts between the students and the copying shop. The act of copying shop is equal to an agent or an instrument of the students for copying. The exception for infringement of copyright can take effect to the copying shop also.

In the factors of quantity…all copyrighted works reproduced in the case, 20 copies reproduced from the "Organizational Behavior" 5 chapters calculated to 25% of the book, 19 copies reproduced from the "Environmental Science" 5 chapters calculated to 20.83% of the book…"the court, continually, said "…fixing to the students to copy only one chapter may cause misunderstand or not understand an idea or philosophy hided in the book clearly, if the students have to buy all books in classes or to be members all journals without the exception by law that would be an obstruction for an advance of education and sciences in the society…the injured persons have no clear evidences to show that how much the copyrighted works which sell to the students are cheaper than the copies to see to normal markets… and no evidence show that the copyright owners have their agents authorized to authorize or to bargain for anyone who wants to get a license. The copyright owner has to make a royalty system and gives the consumers any such convenience, if not, the copyrighted works reproduced by the defendant that is for the purpose of study of the students is not be deemed to conflict with the normal exploitation of the copyright owners or to effect the legitimate rights of the owners…the case dismissed."

The case directly appealed to the Supreme Court. In the judgment of the Supreme Court, the court(99) said that " the defendant reproduced the copyrighted works of the right owners many copies and kept them at his store which is near to the university where has classes using textbooks of the injured persons. These circumstances are likely to have chances to sell those copies to the students conveniently, and both in the process of arrest and in the process of interrogation that were make in a same day the defendant pleaded guilty that he reproduced the works of others for the purpose of sale, propose to sell, having for sale. Those evidences are consistent with the circumstances of the case and reasonable to believe that the defendant reproduced the copyrighted works for the purpose of sale, propose to sell, having for sale for his own business and for seeking benefits from selling such copies that he had produced, not copying for hires by the students for the purpose of studies or researches. The act of the defendant is not within the exemption by the Copyright Act…the act of the defendant violates the rights of the copyright owners. The judgment of the Central IP& IT Court overruled."

The said case can be concluded as follows;

1 the Central IP & IT Court looks advance in the concept of fair use without the defendant's evidences. The guilty pleaded in the process of the police may not be necessary for this concept. The court concerns the public interests in the most. It seems that the court tries to make a great rule on this issue. This is a new dimension for the court of justice in Thailand. The outstanding point in the judgment of the Central IP & IT Court is that the fee collecting system would be arranged by the right owner for convenience of the consumers before claims of copyright. On the other hand, it could be said that 'if nowhere is for buying, nowhere is for paying.'

2 Most respectfully, the Supreme Court does not take in the same way with the Central IP & IT Court. The Supreme Court looks into only in the facts of the case, in particular the defendant's guilty pleaded in the process of the police, and blames the defendant's evidences that is not reasonable.

For the concepts of fair use said above, those can be concluded that fair use or fair dealing the laws focus on uses without permission of the copyright owner within the conditions said by law, and the circumstances interpreted by the courts. However, where the users have their own legitimate copyrighted works the fair use or fair dealing accuse will not be required. The critical question is that if those uses are in the way of private uses by the owner of the legitimate copyrighted works, and some situations, it seems to be conflicted with some of interests of the copyright's owner, can the owner of the legitimate copyrighted works do that? However, again, before going to the solution, it would look at another one concept of the limitation of exclusive right of the copyright owner. That is the exhaustion of right.

Exhaustion of Rights

It seems that the concept of exhaustion of right cannot absolutely be concerned on the issues in this paper. Yes, it seems like that. But it would be better if we can scrutinize in some part of ideas in this matter.

Even though, in general, the principle of exhaustion of intellectual property rights is established to support the concept of the free movement of goods.(100) That talks about the first sale doctrine and parallel imports, or the exclusive right does not extend to the resale of products put on the market by its proprietor or with his consent. However, the common concept of exclusive rights of intellectual property is designed to grant the owners to exploit monopolies,(101) while the basic concept of exhaustion of right is a free movement of good between states(102) which is one of the imitations of the exclusive right of the copyright owners. The question would be raised to be considered is that whether the exclusive rights of the owners expand without limitation? Because the exhaustion doctrine is used to the copyright also.(103)

In the scope of exclusive rights, the critical issue is that whether the exclusive rights of the copyright owners will expand to be unlimited or not. If we view on the performing rights in recording in the United States Copyright Act of 1976 Section 114(a)(104) , we might see that the right to play ("perform") the record in public is expressly denied the owner of the copyright in the recording.(105)

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(88) See Patry, supra note 45, at 48.
(89) Id. at 49.
(90) See Patry, supra note 45, at 59.
(91) W.R. Cornish, Intellectual Property: Patents, Copyright, Trade Marks and Allied Rights, Fourth Edition, London Sweet & Maxwell 1999 at 352.
(92) Sony Corporation of America v. Universal City Studios, 480 F. Supp. 429 (C.D. Cal. 1979), reversed, 659 F.2d 963, 211 U.S.P.Q. 761 (9th Cir. 1981), reversed, 464 U.S. 417, 220 U.S.P.Q. 665 (1981).
(93) The Supreme Court said, in some parts, that " Although every commercial use of copyrighted material is presumptively an unfair exploitation of the monopoly privilege that belongs to the owner of the copyright, noncommercial uses are a different matter. A challenge to a noncommercial use of a copyrighted work requires proof either that the particular use is harmful, or that if it should become widespread, it would adversely affect the potential market for the copyrighted work. Actual present harm need not be shown; such a requirement would leave the copyright holder with no defense against predictable damage. Nor is it necessary to show with certainty that future harm will result. What is necessary is a showing by a preponderance of the evidence that some meaningful likelihood may be presumed. But if intended used is for commercial again, that likelihood may be presumed. But if it is for a noncommercial purpose, the likelihood must be demonstrated."
(94) See Chisum, Jacobs, supra note 10, at 4-177-183.
(95) Public Prosecutor v. Knokchai Phetdawong, Case No. Black 326/2542, Red 784/2542. Decided by The Central Intellectual Property & International Trade Court.
(96) Princeton University Press v. Michigan Document Services, 99 F. 3d. 1381 (6th Cir. 1996).
(97) See Id, supra note 44.
(98) See The Copyright Act of Thailand of B.E. 2537 (1994), supra note 62, Id.
(99) The Judgment No.5843/2543, The Supreme Court of Thailand.

(100) John N. Adams Editor, Intellectual Property Quarterly 2000 Volume 4, Case Note, Sweet & Maxwell, London 2000 at 357.
(101) Will Alexander, Exhaustion of Intellectual Property Rights: Worldwide or Community-(EEA-) wide?, Intellectual Property and Information Law Edited by Jan J. Kabel, Kluwer Academic Publishers, The Netherlands 1998 at 3-16.
(102) W.R. Cornish, Intellectual Property: Patents, Copyright, Trade Marks and Allied Rights, Fourth Edition, Sweet & Maxwell, 1981 at 245.
(103) Peter Groves, Tony Martino, Claire Miskin, John Richards, Intellectual Property and the Internal Market of the European Community, Graham & Trotman, 1993 at 10.

(104) Section 114(a): "The exclusive rights of the owner of copyright in a sound recording…do not include any right of performance…"
(105) Leon E. Seltzer, Exemptions and Fair Use in Copyright the Exclusive Rights Tensions in the 1976 Copyright Act, Harvard University Press, Cambridge, Massachusetts and London, England 1979 at 60.
(106) See Cornish, supra note 91, at 41, 735.
(107) Section 109(a) provides:
"Notwithstanding the provisions of section 106(3)[citation omitted], the owner of a particular copy or phonorecord lawfully made under this title[citation omitted], or any person authorized by such owner, is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord."
(108) Marshall A. Leaffer, Understanding Copyright Law, Second Edition, Matthew Bender 1995 at 237-238.

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