Sony Corp. v. Universal Studios, 464 U.S. 417 (1984)

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Sony Corporation created and manufactured the Betamax machine, an early version of the VCR which allowed people to videotape broadcasts and play them back at a later time.  This time-shifting was of great concern to companies who purchased advertising space from television networks, because it allowed viewers to fast forward through their advertisements, making the ads less valuable.  As a result, the advertisers wanted to pay the networks less for air time, and the networks, in turn, wanted to pay the studios lower licensing fees.  The studios brought suit against Sony, alleging that the company's time-shifting technology infringed their copyrights in the various movies and television shows they broadcast.  The studios demanded an injunction to keep Sony from selling Betamax machines.  The Supreme Court held that: (1) the manufacturer of a device that is capable of being used to violate copyright laws is liable for contributory infringement if and only if the device is not susceptible of any substantial non-infringing use;  and (2) time-shifting copyrighted programs is fair use, although librarying copies is illegal.  This case has important implications for copyright on the Internet, both because viewing Web pages involves temporarily downloading images for time-shifting purposes, and because the increasing use of advertisements on free websites -- as in television programming -- will undoubtedly serve as a catalyst in bringing Internet copyright issues to the fore.