National Broadcasting Co., Inc. v. Sonneborn

• Decision Date: 15 November 1985
• Docket Number: Civ. No. B-80-189.
• Citation: 630 F. Supp. 524
• Parties: NATIONAL BROADCASTING COMPANY, INC., Plaintiff, v. Jonathan SONNEBORN, Individually and doing business as Reel Images and doing business as Video Images; Cleo Sonneborn; and Reel Images, Incorporated, Defendants.
• Court: U.S. District Court — District of Connecticut

630 F. Supp. 524

NATIONAL BROADCASTING COMPANY, INC., Plaintiff, v. Jonathan SONNEBORN, Individually and doing business as Reel Images and doing business as Video Images; Cleo Sonneborn; and Reel Images, Incorporated, Defendants.

Civ. No. B-80-189.

United States District Court, D. Connecticut.

November 15, 1985.

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Morgan P. Ames, Mark E. Fuhrmann, Cummings & Lockwood, Stamford, Conn., David R. Hyde, Lisa Schilit Pearson, Frank T. Judge, III, Cahill Gordon & Reindel, New York City, for plaintiff.

William F. Dudine, Jr., Terry J. Ilardi, Darby & Darby, P.C., New York City, for defendants.

MEMORANDUM OF DECISION

MESKILL, Circuit Judge, Sitting by Designation.

Plaintiff National Broadcasting Company (NBC) brings claims of copyright infringement under 17 U.S.C. § 101 et seq. (1982) (Copyright Act of 1976), and for unfair competition under 15 U.S.C. § 1051 et seq. (1982) (Lanham Act) and state law. This Court has jurisdiction of the copyright and Lanham Act claims under 28 U.S.C. §§ 1331 and 1338 (1982). Jurisdiction of the state law claim for unfair competition is found under 28 U.S.C. § 1332 (1982) (NBC is a Delaware corporation with its principal place of business in New York, New York; Sonneborn is a Connecticut domiciliary; the corporate Defendant Reel Images, Inc. is a Connecticut corporation with its principal place of business in Sandy Hook, Connecticut; the amount in controversy exceeds $10,000). Jurisdiction of the state law claim is also predicated on 28 U.S.C. § 1338(b) (1982).

BACKGROUND

The events that form the subject matter of this case hearken back to the dawn of videotape technology, to an era before videotape players became a common household appliance. This case demonstrates how technology has made some traditional categories of copyright law anachronistic. It also demonstrates that occasionally it is still necessary to apply those categories to cases brought under the new copyright laws, laws that were designed to rehabilitate those time-worn categories.

The 1960 Broadcast of "Peter Pan"

On December 8, 1960, NBC broadcast a color videotape recording of "Peter Pan." The recording had been made at various locations in New York City during the autumn of 1960. Transcript of Preliminary Injunction Hearing at 69-70. At that time the words "television network" did not have the functional content that they do today; in "single-station markets" a local television station might be affiliated with several national networks. Tr. 2-12 to 2-13, 2-50. The networks would compete with each other for the opportunity to have their programs broadcast in these markets and would make their programs available to their affiliates for delayed broadcast where the affiliate had already scheduled a different program for the time slot chosen by the network. Id. Five NBC affiliates chose not to carry "Peter Pan" on December 8, when it was transmitted from NBC. Tr. 2-50. NBC created for each of them what in technical parlance is called a "kinescope" or "kini." Tr. 134. See Tr. 83-88, 2-60, Pl.Ex. 120.

A kinescope was a film recording of a kinescope tube, which could be made while the television broadcast was being aired. Tr. 126-27, Tr. 83-87. Kinescopes were used to make delayed broadcast possible until the mid-1960s; they were then replaced by videotapes. Tr. 126; 2-13, 2-60, 2-62. Most NBC affiliates did not have videotape equipment in 1960 however. Id. Kinescopes were generally in black and white rather than color format. Tr. 2-15. They could be created "off-the-air" but the quality of this type of kinescope was poor. Tr. 111-12, 2-14 to 2-15. Kinescopes were made as "off-air tests" by a few small companies without NBC's knowledge, Tr. 127, possibly for use by advertisers who wished to verify that their commercials were aired. Copying a kinescope was quite expensive at the time in question even though it was technologically possible to prepare a "dupe" (duplicate) of a kinescope by sending it out to a specialized film laboratory. Tr. 2-63 to 2-64. The graphic resolution of kinescopes was generally poor because first a negative of the transmission was made and then a positive print was made from the negative. Tr. 86-87, 111-12.

After the kinescopes were prepared they were delivered to the affiliates. Tr. 134. NBC included this language in the standard form of its affiliation agreement:

You the affiliate agree that you will not authorize, cause, permit or enable anything to be done without NBC's consent whereby any television program, motion picture film, recording or other material furnished to you hereunder may be recorded, duplicated, or otherwise used for any other purpose other than broadcasting by the Station as provided herein.

Pl.Ex. 125, ¶ 19. NBC is now unable to establish conclusively that all of the kinescopes were returned to it after the delayed broadcast, but it had a policy of requiring the affiliate to return the film. Tr. 129-31, 137. Pl.Ex. 125 ¶ 3. When affiliates did not return films NBC had a policy of contacting its regional representative to induce the tardy affiliates to return their prints and to "abide by the affiliation contract." Tr. 2-44. After it had kept the returned film for a period of time NBC would then destroy it, Tr. 137, or salvage it for reusable photographic compounds. Tr. 2-44.

NBC had previously made two television broadcasts of "Peter Pan." These occurred under a contract between Walt Disney Productions (not a party to this suit), the holder of the television broadcast rights during the time of the prior telecasts, and NBC. See Pl.Ex. 8. NBC broadcast in color performances of the Broadway musical "Peter Pan" on March 7, 1955 and January 9, 1956. Pl.Ex. 29 & 30. It later extended its license to televise "Peter Pan" by negotiating a contract with the Hospital for Sick Children which held the rights to Sir James Barrie's "Peter Pan." Pl.Ex. 12-28. Then it negotiated a series of contracts with various performers and artists connected with the original Broadway production. Pl.Ex. 33-78. Some of these contracts reserved ownership of resulting property to NBC, see, e.g., Pl.Ex. 67 ¶ 12, and some only granted NBC a license to broadcast the resulting performance a specified number of times. See, e.g., Pl.Ex. 49 ¶¶ 1, 12. Its contract with Mary Martin, "Peter Pan's" star, provided that if a kinescope were made of the program she would receive a copy "for her personal and private library purposes only." Pl.Ex. 65 ¶ 17.

International Broadcast Licensing and Domestic Donation of "Peter Pan"

Between 1963 and 1968 an NBC subsidiary, NBC International Ltd. (NBCI), granted licenses to broadcasters in five foreign countries to telecast the 1960 production of "Peter Pan." Pl.Ex. 92-112. The licenses granted the right to broadcast "Peter Pan" in specific locations for specific amounts of time. See, e.g., Pl.Ex. 103 (Sales Report). The photostatic copies of two of the licensing agreements included in the record are virtually illegible, but the third contains a provision prohibiting the licensee from copying or duplicating the film. Pl.Ex. 111 ¶ 13.

Some time in 1964 NBCI prepared several "audition" prints to use in connection with its efforts to promote licensing agreements in Europe. Tr. 71. The audition prints were identical to the 1960 telecast of "Peter Pan" except that they were kinescopes, were black and white and were not of broadcast quality. Tr. 72-74, 80. After an audition print was mailed to the potential licensee, an NBCI salesperson would visit the potential licensee to arrange the sale and return of the audition print. Tr. 71-72. The former head of NBCI answered "no" when asked "Has it ever come to your attention that any foreign broadcaster who is licensed to broadcast "Peter Pan," or who received a copy for audition purposes, used that copy or disposed of that copy in a manner which was inconsistent with its contractual obligations or with industry custom?" Tr. 55-56, 76.

Under a November 1976 agreement, NBC donated a print of "Peter Pan" to the Museum of Broadcasting (MOB). Pl.Ex. 124, items 25, 28. The donation agreement provides that MOB may make copies of the print "for any purpose specified" in the agreement. Pl.Ex. 123 ¶ 3. MOB received title to the physical print but not "any title to, or artistic or literary rights in" the film. Id. at ¶ 4. MOB may allow scholars and researchers to view the print. Id. at ¶ 5. It may put on public performances of the print provided that it not be put to commercial use, id. at ¶ 8, and subject to the approval of the parties who own rights in the underlying work. Id. at ¶ 5(b), (c).

In 1980 NBC licensed some of its programs to the RCA videodisc enterprise. Tr. 106-07. NBC screened "Peter Pan" for RCA representatives and prepared a cassette at the screening. Def. Ex. 501 (Oct. 23 & 29, 1979). "Peter Pan" could not be licensed to RCA because NBC's contractual right to license the show had expired. Tr. 107. Another reason for the failure was that NBC never had the contractual right to sell tangible copies of "Peter Pan." Tr. 117. NBC and the Hospital for Sick Children conducted preliminary negotiations on the subject but no licensing agreement was ever reached. Def. Ex. 501 (Mar. 24, 1980).

Sonneborn's Copying

Jonathan Sonneborn is the president of Defendant Reel Images.¹ Tr. 3-8 to 3-9. Reel Images sells reprints of audiovisual works that are in the public domain and that are under license to it. Tr. 3-11, 3-14 to 3-15. Reel Images promotes its product in catalogs and flyers. See, e.g., Pl. Ex. 88; Tr. 3-12 to 3-23. In late 1979 Sonneborn spoke to a person from the East Brunswick, New Jersey library; that person told him that the library had a kinescope of "Peter Pan." Tr. 3-41.

Sonneborn offered to repair the library's damaged copy of the "Peter Pan" kinescope in return for the right to duplicate and sell videotape cassettes of the kinescope. Tr. 3-44 to 3-45....