National Football League v. McBee & Bruno's, Inc.

• Citation: 792 F.2d 726
• Decision Date: 01 July 1986
• Docket Number: Nos. 84-2665,85-1199 and 85-2350,s. 84-2665
• Parties: , 230 U.S.P.Q. 30, 1986 Copr.L.Dec. P 25,941, 12 Media L. Rep. 2265 NATIONAL FOOTBALL LEAGUE and St. Louis Football Cardinals, Inc., Appellees, v. McBEE & BRUNO'S, INC.; Jerrald Guttmann; Michael Badalamenti; Frank & Frank, Inc.; and Talayna's of South St. Louis, Inc., Appellants.
• Court: United States Courts of Appeals. United States Court of Appeals (8th Circuit)

Page 726

792 F.2d 726

55 USLW 2022, 230 U.S.P.Q. 30, 1986

Copr.L.Dec. P 25,941,

12 Media L. Rep. 2265

NATIONAL FOOTBALL LEAGUE and St. Louis Football Cardinals Inc., Appellees, v. McBEE & BRUNO'S, INC.; Jerrald Guttmann; Michael Badalamenti; Frank & Frank, Inc.; and Talayna's of South St. Louis, Inc., Appellants.

Nos. 84-2665, 85-1199 and 85-2350.

United States Court of Appeals Eighth Circuit.

Submitted Jan. 16, 1986.

Decided June 4, 1986.

Rehearing Denied July 1, 1986.

John L. Sullivan, St. Louis, Mo., for appellants.

John Vanderstar, Washington, D.C. and Robert E. Wallace, St. Louis, Mo., Rebuttal by Barry Ginsburg, St. Louis, Mo., for appellees.

Before HEANEY, ARNOLD, and WOLLMAN, Circuit Judges.

ARNOLD, Circuit Judge.

This lawsuit, brought by the National Football League (NFL) and the St. Louis Football Cardinals (Cardinals), alleges that defendants, the owners of several St. Louis restaurants, violated federal copyright and communications law by showing Cardinals' home games which had been "blacked out" in the St. Louis area. According to plaintiffs, defendants picked up the signals for such games by means of satellite dish antennae. The District Court, ¹ which had already issued a temporary restraining order and a preliminary injunction, entered a permanent injunction against defendants after a trial on the merits. NFL v. McBee & Bruno's, 621 F.Supp. 880 (D.Mo.1985). The decision was based on the Copyright Act of 1976, 17 U.S.C. Sec. 101 et seq., and the Federal Communications Act, Sec. 705 (formerly Sec. 605). In the main, we affirm.

I.

The Cardinals, a professional football team, is one of 28 teams composing the NFL, an unincorporated non-profit association through which the member clubs schedule games and manage their affairs as a group, including contracts with the three major television networks. One provision of those television contracts is that games which are not sold out within 72 hours of game time are to be "blacked out," that is, not broadcast within a 75-mile radius of the home team's playing field. Officials of the league and club testified at trial that such a rule boosts team revenue directly by increasing ticket sales and indirectly because a full stadium contributes to a more exciting television program and therefore makes the right to broadcast games more valuable.

Witnesses also described the process by which a live football game is telecast by the networks, in this case CBS. As television cameras capture the visual portion of the game, announcers describe and discuss the action from a sound booth of some kind. Those simultaneous audio and video signals are combined at an earth station outside the stadium. This signal--called an uplink--is transmitted up to a satellite, which then sends the signal back--called a downlink--to a network control point on Long Island. Because that signal contains no images other than those from the stadium, this stage is referred to as a "clean feed." The signal is then sent by cable to CBS studios in New York; commercials and other interruptions, such as station breaks, are inserted, and it is now described as a "dirty feed." There is another uplink to the satellite, and then a downlink to local affiliates, who insert local material and finally put the live broadcast on the air. The process apparently takes far longer to describe than to occur; at argument, counsel for the NFL called the procedure "simultaneous, instantaneous," and said that the delay between the action on the field and the broadcast by local affiliates was considerably less than two seconds.

The defendants are owners, corporate or individual, of St. Louis bar-restaurants within 75 miles of Busch Stadium, the Cardinals' home field. All defendants have satellite dish antennae that enable them to receive transmissions in the so-called C-band frequency, approximately 3200-4200 megahertz, in which the satellite sends and receives transmissions. ² There is no question that prior to November 19, 1984, all defendants but two ³ picked up the clean feed (from the satellite to CBS) and thereby showed blacked-out home games of the Cardinals. On that date, plaintiffs requested and the District Court entered a temporary restraining order, preventing defendants from intercepting and showing the home game scheduled for the following Sunday; after a hearing, the Court issued a preliminary injunction in basically the same terms, dealing with the last home game of the season. Trial on the merits was held on May 7, 1985. The District Court found that the telecasts were copyrightable under Section 102 of the Copyright Act, that the plaintiffs were owners of those copyrights, and that display of the clean feed transmissions of those telecasts violated plaintiffs' exclusive right of display and performance under Section 106 of the Act, as well as Section 705 of the Communications Act. A permanent injunction issued on September 13, 1985, prohibiting the defendants from intercepting and showing plaintiffs' programming, whether in the form of the clean or dirty feed transmissions.

II.

The owners of the defendant restaurants challenge the District Court's Copyright Act decision on a variety of grounds: that the evidence presented by plaintiffs to show irreparable injury was too speculative to support the issuance of a permanent injunction; that defendants' display of blacked-out home games falls under statutory limitations on exclusive rights of a copyright owner, 17 U.S.C. Sec. 110(5); that defendants did not infringe on plaintiffs' copyright because they intercepted the clean feed rather than the dirty feed, which was the transmission actually "fixed" under the Copyright Act and registered with the Copyright Office; and that under 17 U.S.C. Sec. 411, no permanent injunction can issue concerning works which are not already in existence. Although some of these arguments have more substance than others, we consider all to be ultimately without merit. ⁴

A.

Defendants first allege that plaintiffs have not shown that either the League or the local team will suffer the sort of irreparable injury necessary to justify a permanent injunction. Instead, say the restaurant owners, the plaintiffs' evidence is mere "bluster," Appellants' Supplemental Brief at 5, insufficient to make out a claim of copyright infringement under Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417, 104 S.Ct. 774, 78, L.Ed.2d 514 (1984), which they say requires factual evidence of harm.

Defendants have read Sony too broadly. Copyright law has long held that irreparable injury is presumed when the exclusive rights of the holder are infringed. See, e.g., American Metropolitan Enter. of New York, Inc. v. Warner Bros. Records, 389 F.2d 903, 905 (2d Cir.1968). The only limitation Sony placed on that principle was to require that if the unauthorized use of copyright material "is for a noncommercial purpose, the likelihood [of future harm] must be demonstrated." 464 U.S. at 451, 104 S.Ct. at 793. However, "[i]f the intended use is for commercial gain, that likelihood may be presumed." Id. The record in this case clearly shows that defendants did far better business on those days when they exhibited the blacked-out Cardinals' games, Tr. 102, ⁵ and the District Court so found. 621 F.Supp. at 885. Any claim that Sony changes the standard of proof required under these circumstances is simply incorrect.

Although the District Court recognized this presumption of irreparable harm, id. at 888, it also stated "that more persons attend the games if a televised showing is not available than if it is," id.; noting that a full stadium translates into greater ticket sales and a more exciting--and therefore more marketable--television entertainment program. This finding is not clearly erroneous, nor is it contradicted by Malrite TV of New York v. Federal Communications Comm'n, 652 F.2d 1140 (2d Cir.1981), cert. denied, 454 U.S. 1143, 102 S.Ct. 1002, 71 L.Ed.2d 295 (1982), cited by defendants for the proposition that the NFL and its member clubs have never been able to support their claim that the black-out rule protects their interests. That decision upheld changes by the FCC in the rules governing transmission of cable television signals and is inapplicable here for a variety of reasons: the standard of review was that used for agency rulemaking; the continuation of the home black-out rule was explicitly assumed; and no question of copyright infringement, with its presumption of injury, was raised.

B.

Defendants' second and most considerable argument is that their display of plaintiffs' blacked-out games falls into the category of non-infringing acts under Section 110(5) of the Copyright Act. Under that provision, no copyright liability can be imposed for "communication of a transmission embodying a performance ... by the public reception of the transmission on a single receiving apparatus of a kind commonly used in private homes...." ⁶ The District Court rejected this argument, finding that satellite dish antennae, which in the United States are outnumbered by television sets by more than 100-to-one, were outside the statutory exemption. 621 F.Supp. at 887.

According to the defendants, this ruling ignores their theory that how "the signal was captured by the antenna outside the premises" is "irrelevant," Appellant's Supplemental Brief at 6. Instead, they argue, the key to Section 110(5) is whether an alleged infringer uses commercial equipment to enhance the sound or visual quality of the performance as it is perceived inside the premises. "All published cases on Section 110(5) take this approach," defendants say, id. at 7 (emphasis in original). This interpretation ignores both the plain language of the statute and its obvious intent.

The home-use exemption was included in the 1976 Copyright Act specifically in response to the Supreme Court's decision in Twentieth Century Music Corp. v. Aiken, 422 U.S. 151, 95 S.Ct. 2040,...