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15B cable and satellite television

Where to Look in the Law

1909 Act: Not discussed (not surprisingly)
1947 Act: Not discussed
1976 Act: §110, §111; as of 1989: also §119

CFR: § 201.9 Recordation of agreements between copyright owners and public broadcasting entities;
§ 201.17 Statements of Account covering compulsory licenses for secondary transmissions by cable systems.

What the Supreme Court Ruled

 

Fortnightly Corp. vs United Artists

392 U.S. 390 (6-17-1968)

Fortnightly Corp. operated community antenna television (CATV) systems in Clarksburg and Fairmont, West Virginia, where (a) there weren’t local television stations until 1957, (b) at the time of the trial there were just two stations, and (c) hilly terrain makes reception difficult.  (CATV is a forerunner of cable television.)  The CATV would receive, amplify, and modulate signals from five distant television stations (distances: 52 to 82 miles from the CATV cities), convert them to different frequencies, and transmit them to their subscribers’ television sets.  Fortnightly did not edit the programs or originate any programs of its own.  United Artists owned copyrights on several motion pictures and had licensed the five television stations to broadcast certain of these films.  The licenses did not authorize carriage of the broadcasts by CATV, and in some instances specifically prohibited such carriage.  The Supreme Court ruled in favor of the CATV system.

“Essentially, a CATV system no more than enhances the viewer’s capacity to receive the broadcaster’s signals; it provides a well-located antenna with an efficient connection to the viewer’s television set.  It is true that a CATV system plays an ‘active’ role in making reception possible in a given area, but so do ordinary television sets and antennas.  CATV equipment is powerful and sophisticated, but the basic function the equipment serves is little different from that served by the equipment generally furnished by a television viewer.  If an individual erected an antenna on a hill, strung a cable to his house, and installed the necessary amplifying equipment, he would not be ‘performing’ the programs he received on his television set.  The result would be no different if several people combined to erect a cooperative antenna for the same purpose.  The only difference in the case of CATV is that the antenna system is erected and owned not by its users but by an entrepreneur.

“The function of CATV systems has little in common with the function of broadcasters.  CATV systems do not in fact broadcast or rebroadcast.  Broadcasters select the programs to be viewed; CATV systems simply carry, without editing, whatever programs they receive.  Broadcasters procure programs and propagate them to the public; CATV systems receive programs that have been released to the public and carry them by private channels to additional viewers.  We hold that CATV operators, like viewers and unlike broadcasters, do not perform the programs that they receive and carry.”

(“Some CATV systems, about 10%, originate some of their own programs.  We do not deal with such systems in this opinion.”)


 

Teleprompter Corp. vs CBS

415 U.S. 394 (3-4-1974)

“Several creators and producers of copyrighted television programs brought” suit against retransmission of programming “through various community antenna television (CATV) systems to paying subscribers.”  (CATV is an early version of cable.)  The suit was stayed pending the outcome of Fortnightly Corp. v. United Artists.  The copyright owners accepted the verdict with regards to CATV offering television stations whose signals were available within the community, but challenged the offering of “distant” signals.  One company offered a station more than 450 miles away, others offered ones nearer, yet ones where “reception of the signals of those stations by means of an ordinary rooftop antenna, even an extremely high one, would have been impossible because of the curvature of the earth and other topographical factors.”  Sometimes CATV offered stations from “intermediate distances where the broadcast signals could have been received by the customers’ own television antennae only intermittently, imperfectly, and sporadically.”  The CATV operators originated some programming and sold advertising during it, making CATV a more effective competitor to traditional broadcasters; the copyright owners contended that this made the CATV operators “performers,” but the Supreme Court saw in that argument a “logical flaw.”  Even though CATV operators choose among various “distant” broadcasting stations, once “it chooses which broadcast signals to rechannel, its creative function is then extinguished and it thereafter ‘simply carr[ies], without editing, whatever programs [it] receive[s].’” The “signals it receives and rechannels [had] already been ‘released to the public’”.  The “CATV systems do not interfere in any traditional sense with the copyright holders’ means of extracting recompense for their creativity or labor from advertisers on the basis of all viewers who watch the particular program.”

(One justice’s dissent observed that the “CATV’s in the present cases go hundreds of miles, erect receiving stations or towers that pick up the programs of distant broadcasters, and carry them by cable into a wholly different area.[…]  A CATV that builds an antenna to pick up telecasts in Area B and then transmits it by cable to Area A is reproducing the copyrighted work, not pursuant to a license from the owner of the copyright, but by theft.[…]  We are advised by an amicus brief of the Motion Picture Association that films from TV telecasts are being imported by CATV into their own markets in competition with the same pictures licensed to TV stations in the area into which the CATV — a nonpaying pirate of the films — imports them.”)


 

American Broadcasting Cos., Inc., et al. vs Aereo, Inc., FKA Bamboom Labs, Inc.

573 U. S. [page not set] (6-25-2014)

“Respondent Aereo, Inc., sells a service that allows its subscribers to watch television programs over the Internet at about the same time as the programs are broadcast over the air. When a subscriber wants to watch a show that is currently airing, he selects the show from a menu on Aereo’s website. Aereo’s system, which consists of thousands of small antennas and other equipment housed in a centralized warehouse, responds roughly as follows: A server tunes an antenna, which is dedicated to the use of one subscriber alone, to the broadcast carrying the selected show. A transcoder translates the signals received by the antenna into data that can be transmitted over the Internet. A server saves the data in a subscriber-specific folder on Aereo’s hard drive and begins streaming the show to the subscriber’s screen once several seconds of programming have been saved. The streaming continues, a few seconds behind the over-the-air broadcast, until the subscriber has received the entire show.

“Petitioners, who are television producers, marketers, distributors, and broadcasters that own the copyrights in many of the programs that Aereo streams, sued Aereo for copyright infringement.”

The Supreme Court determined that what Aereo did was illegal. Once the 1976 Copyright Act had gone into effect, broadcasters and program owners had the right to receive payment from cable companies which retransmitted their signals and copyrighted programs. The Court recognized that the internet had not existed in 1976, but in looking at the wording of the clauses added to the 1976 Act, the Court determined that Aereo was in violation of those clauses.

“Held: Aereo performs petitioners’ works publicly within the meaning of the Transmit Clause. […] It does not merely supply equipment that allows others to do so.”

It had once been legal for cable companies to retransmit the signals of television stations without payment to the stations or program owners. Two Supreme Court decisions (1968 and 1974) affirmed this. “In 1976, Congress amended the Copyright Act in large part to reject the Fortnightly and Teleprompter holdings.” [See above for summaries of those two earlier decisions, but realize that the findings are no longer valid.]

The Transmit Clause added in 1976 (placed into section 101) says that to “‘transmit’ a performance” is “to communicate it by any device or process whereby images or sounds are received beyond the place from which they are sent”. As the Court saw it, “The Clause thus makes clear that an entity that acts like a CATV system itself performs, even if when doing so, it simply enhances viewers’ ability to receive broadcast television signals.”

The Court reasoned thus: “Because Aereo’s activities are substantially similar to those of the CATV companies that Congress amended the Act to reach, Aereo is not simply an equipment provider. Aereo sells a service that allows subscribers to watch television programs, many of which are copyrighted, virtually as they are being broadcast. Aereo uses its own equipment, housed in a centralized warehouse, outside of its users’ homes.” However, “Aereo neither owns the copyright in those works nor holds a license from the copyright owners to perform those works publicly.”

The Court rejected two arguments posited by Aereo to the effect that it was different from cable companies and therefore not subject to the laws under which they were charged. The Court decided these aspects were inconsequential: “This Court recognizes one particular difference between Aereo’s system and the cable systems at issue in Fortnightly and Teleprompter: The systems in those cases transmitted constantly, whereas Aereo’s system remains inert until a subscriber indicates that she wants to watch a program. In other cases involving different kinds of service or technology providers, a user’s involvement in the operation of the provider’s equipment and selection of the content transmitted may well bear on whether the provider performs within the meaning of the Act. But given Aereo’s overwhelming likeness to the cable companies targeted by the 1976 amendments, this sole technological difference between Aereo and traditional cable companies does not make a critical difference here.”

The second of the two Aereo arguments rejected by the Court: “Aereo claims that because it transmits from user-specific copies, using individually-assigned antennas, and because each transmission is available to only one subscriber, it does not transmit a performance ’to the public.’” The Court determined that “the subscribers to whom Aereo transmits constitute ‘the public’ under the Act. This is because Aereo communicates the same contemporaneously perceptible images and sounds to a large number of people who are unrelated and unknown to each other.”

Six justices joined for this decision, written by Justice Breyer. Justice Scalia in his dissent (joined by two other justices) wrote, “I share the Court’s evident feeling that what Aereo is doing (or enabling to be done) to the Networks’ copyrighted programming ought not to be allowed.” However, it was his opinion that “what we have before us must be considered a ‘loophole’ in the law. It is not the role of this Court to identify and plug loopholes. It is the role of good lawyers to identify and exploit them, and the role of Congress to eliminate them if it wishes.” He called the reaching of the decision that Aereo was wrong “Guilt By Resemblance,” writing that Aereo is like “a copy shop that provides its patrons with a library card.” It is the case that, “A copy shop is not directly liable whenever a patron uses the shop’s machines to ‘reproduce’ copyrighted materials found in that library.”


What the Lower Courts Ruled

 

Intermountain Broadcasting & Television Corp. vs Idaho Microwave, Inc., Cable Vision, Inc., and W.L. Reiher

D.Idaho (6-27-1961) ¤ 196 F. Supp. 315, 130 USPQ 127

In that community antenna television system (CATV) is a forerunner of cable television, one can read verdicts concerning CATV and understand them to apply to modern cable TV.

Three network-affiliated Salt Lake City television stations sued a cable company in Twin Falls, Idaho (200 miles away), to enjoin it from carrying through on its announcement to offer the stations.  KSL (CBS, ch. 5) and KUTV (ABC) sold to KLIX-TV in Twin Falls their transmissions at $3.85 each hour used.  KTVT (NBC) did so at $5 an hour.  (KLIX-TV had contracts with all three networks to carry their shows, but the transcontinental signals didn’t reach Twin Falls, so KLIX-TV also contracted for signals that did.)  The Twin Falls cable company offered KLIX-TV and two Boise stations.  KLIX protested the cable company’s announcement to the FCC.  The Court decided that “the consent and payment arrangement which these plaintiffs have with KLIX, Twin Falls, is not a solid base upon which to rest, in whole or in part, their claim of unfair competition.”

“[Broadcasters] and [CATV systems] are not engaged in the same kind of business.  They operate in different ways for different purposes.

“[Broadcasters] are in the business of selling their broadcasting time and facilities to the sponsors to whom they look for their profits.  They do not and cannot charge the public for their broadcasts which are beamed directly, indiscriminately and without charge through the air to any and all reception sets of the public as may be equipped to receive them.

“[CATV systems], on the other hand, have nothing to do with sponsors, program content or arrangement.  They sell community antenna service to a segment of the public for which [broadcasters’] programs were intended but which is not able, because of location or topographical condition, to receive them without rebroadcast or other relay service by community antennae… .”

(All but the first paragraph of the preceding excerpt was later quoted by the Supreme Court within its similar decision for Fortnightly Corp. v. United Artists, 392 U.S. 390 (6-17-1968).)


 

Hubbard Broadcasting, Inc. vs Southern Satellite Systems, Inc., Turner Broadcasting System, Inc.

USCA, 8th Cir. (11-13-1985) ¤ 777 F.2d 393, 228 USPQ 102 (certiorari denied 12-8-1986, 479 U.S. 1070, rehearing denied 1-27-1987, 488 U.S. 961, second petition for rehearing denied 11-14-1988)

A district court “action, brought against Southern Satellite Systems, Inc. and Turner Broadcasting System, involves the interpretation and application of various provisions of section 111 of the Copyright Act of 1976.  The district court, after examining the relevant provisions of section 111, concluded that neither Southern Satellite nor Turner was guilty of copyright infringement.”

Congress decided that from 1978 onward, cable systems were sometimes required to compensate the “creators of copyrighted programs” carried on television signals retransmitted from distant non-network sources.  (Turner’s “superstation” WTBS was one such source.)  In revising the law in 1976, “Congress ‘recognized that “it would be impractical and unduly burdensome to require every cable system to negotiate [appropriate royalty payments] with every copyright owner” in order to secure consent for such retransmissions… . Congress established a compulsory licensing program for qualifying cable systems.”  Congress sought to compensate for “damage to the copyright owner by distributing the program in an area beyond which it has been licensed.”  (WTBS, when it first became a “superstation” available nationwide, was offering syndicated programs for which it had licensed rights only for Atlanta.)

Section 111 protected “carriers (here Southern) that retransmit secondarily the ‘primary transmission of a licensed television broadcast station (here Turner or WTBS) to cable systems… . [C]arriers that are sufficiently passive with respect to the actual retransmission of television signals incur no copyright liability when acting as a communications conduit between the distant broadcast station and interested cable systems.”  In accordance, “Southern Satellite received the WTBS signal over the air by means of a UHF receiving antenna… and retransmitted [it] in its entirety and without modification”.  After receiving complaints about signal quality, Southern and Turner established in 1979 “a direct microwave connection” so that thereafter Turner “generate[d] two video signals: one signal that would be transmitted over the air to the Atlanta area and a second signal that would be transmitted directly to Southern Satellite by microwave connection.

Both of the WTBS signals would be generated simultaneously and would be identical with respect to all programming material… . However, rather than transmit local Atlanta area advertising on both signals, local advertising made available to the Atlanta audience on the UHF signal would be substituted with national advertising on the microwave signal.”  Advertisement prices were different.

Southern Satellite received both signals because it chose to continue to receive the UHF signal as backup.  At Southern, “both WTBS signals are sent through a deice known as a lenco video presence detector.  The presence detector is owned by Southern and is programmed to select automatically and without comparison one of the two incoming WTBS signals.  In this case, presence detector automatically and at all times selects the WTBS microwave signal unless that signal is interrupted or is substantially degraded in quality.  If this should occur, the presence detector, again automatically shifts to the UHF signal.  This shift assures that Southern’s retransmission of WTBS to subscribing cable systems will not be interrupted.  Regardless of which WTBS signal emerges from the presence detector, it is then retransmitted by Southern Satellite in its entirety and without editing or modification.”

Now the conflict: “Hubbard Broadcasting operates local television stations in three markets …[:] Minneapolis-St. Paul, Minnesota; Albuquerque, New Mexico; and St. Petersburg, Florida… . [O]n several occasions, programs shown by Hubbard also appeared on the WTBS signal available to cable subscribers in Hubbard’s markets.  It is this overlapping programming” which led Hubbard to sue.  (EDITOR’S NOTE: Hubbard’s real grievance should have been with the program suppliers who sold it exclusive rights for particular local markets without recourse when competition arose from a national source.)

Hubbard argued that Southern’s status as a secondary provider of the transmission (rather than a primary provider) should be revoked because it exerted control over the content.  The Court disagreed: “to the extent that commercial substitution does occur, Turner again is entirely responsible for deciding what will be substituted and for making the actual substitution.”  Likewise, the substitution of the use of a microwave signal in place of the UHF signal was not indicative of Southern being a primary provider, for “its desire [is] to provide its customer with a better quality, more reliable WTBS signal.  This legitimate business interest on the part of Southern is entirely consistent with the goal of the Copyright Act of making broadly available and allowing the public to benefit from the copyrighted works carried on television signals.”  The UHF signal was incontrovertibly a “primary transmission,” yet, despite the two signals being technologically different, “the WTBS microwave signal constitutes a ‘primary transmission.’”

And: “Given… the nature of the WTBS microwave signal, it is clear that Southern’s retransmission of the WTBS microwave signal constitutes the ‘secondary transmission of a primary transmission.’”  Further, the presence detector introduces “no impermissible selection… . The presence detector is self-regulating.”  The commercial substitutions that the dual-signal system introduced are “insufficient to disqualify Southern from the carrier exemption.”  It is true that Congress had declared that “cable system cannot directly do” the substitution of a program “‘or any commercial advertising’” (inner quote from section 111(c)(3)) yet Turner was “substituting commercials at the primary transmission stage”.  Cable systems were not to make the decisions of a broadcaster, for (unlike with a broadcaster) only a cable system’s substituting of advertising “‘harms the advertiser and, in turn, the copyright owner, whose compensation for the work is directly related to the size of the audience that the advertiser’s message is calculated to reach.’”  (Inner quote from H.R. Rep. No. 1476, 94th Cong., 2nd Sess. at 93-94.)

(Objections by Hubbard were also made as to whether the transmission was “limited,” which would have taken away Southern’s liability exclusion.  The Court recognized that a true situation outside the scope of the exclusion would have been closed-circuit television or a scrambled broadcast signal discernible only by payment of a subscription charge.  WTBS, however, was made available by Turner for free.)

“Finally, we conclude that Turner’s development of two separate WTBS signals has no adverse impact on the interest of the copyright holders.  These individuals or companies, when contracting with Turner, know that WTBS signals will be available nationwide as well as locally and are entirely free to take those steps necessary to assure that they are compensated accordingly.  [EDITOR’S NOTE: Besides which, they get compensation from the compulsory licensing provisions.]  At bottom, no copyright holder is deceived by the extent of Turner’s market or the commercial content of the signals; no advertiser reaches a smaller market than anticipated; and no local broadcaster is forced to compete with Turner on any greater level than would exist absent Turner’s transmission of two television signals.”

illustration: transmission towers behind a Turner Broadcasting System building, Atlanta, Georgia.  Photo shot by the website proprietor, August 2009.


 

National Football League and St. Louis Football Cardinals, Inc., vs McBee & Bruno’s [and four other restauranteurs]

USDC, E.D. Mo., E.D. (10-2-1985) ¤ 621 F.Supp. 880, 228 USPQ 11
affirmed in part and reversed in part: USCA 8th Cir. (6-4-1986) ¤ 792 F.2d 726, 230 USPQ 30; rehearing denied 7-1-1986

Five restaurants in St. Louis, Missouri, each with a bar, showed on their televisions some football games of the St. Louis Cardinals that the football league had arranged to not be shown on television in the St. Louis area, owing to stadium tickets remaining available.  “Each defendant restaurant and bar is equipped with a satellite dish antenna capable of receiving satellite transmissions.”  The NFL had contracted separately with ABC, CBS and NBC so that “each network obtained exclusive rights to televise certain NFL games, subject to contractual limitations, among them the requirement that unsold games are not to be broadcast live; that is, that they be blacked-out in the home club’s home territory which is the area within a 75-mile radius of the club’s home playing site.”  Obviously, because the restaurants are in St. Louis, “All of the defendants’ establishments are located within 75 miles of Busch Stadium which is… the home site of plaintiff St. Louis Football Cardinals.”

“On November 4, 1984,… the game was blacked out.   The satellite signal of that game was intercepted by all defendants, except Sandrinas, with the use of dish antennas and shown to their bar and restaurant customers and friends.  The signal intercepted was that of the [stadium-to-network] downlink and viewers did not see commercials or other material added at the network control point.  They did view the entire game and heard the simultaneous audio commentary of the sports commentators and announcers.

“Sandrinas’, with the use of a television antennae, was able to receive the full game and commercial insertions as broadcast by an affiliated CBS station on Channel 12, located in Cape Girardeau, Missouri, perhaps 100 or more miles away on a point to point measurement.”

“Guttmanns’… was not open for business on Sunday, November 4, 1984.  Guttmanns’… showed the game to four persons including the owner and three friends.

“All defendants, except Guttmanns’, derive income from increased business as a result of showing blacked out football games to their customers via the systems detailed… . At the same time, when a game is blacked out, it is not sold out and the Cardinals lose income if there are unsold tickets.  Broadcast of live professional football games to a home audience produce an extremely adverse [e]ffect on live attendance.”

“According to defendants, [satellite interception of signals intended only for the network use] is not a transgression of the rights of the copyright owners of those shows.

“This Court cannot accept this proposition nor does it appear Congress ever intended this result.

“The viewing and hearing public, primarily by means of television and radio, enjoy sports, music, theatre and other programming because of the interest in those fields and not because of a desire to watch and listen to commercials and other network insertions… .”

“As to irreparable harm, the Court finds that more persons attend the games if a televised showing is not available than if it is.  A large live audience not only insures gate revenue, but enhances the marketability of television broadcasts, as well.  While it is usually impossible to measure precise damages for copyright infringement, as is the case here, ‘a copyright holder in the ordinary case may be presumed to suffer irreparable harm when his right to the exclusive use of the copyrighted material is invaded.’  American Metropolitan Enterprises of New York, Inc. v. Warner Brothers Records, Inc., 389 F.2d 903, 905 (2nd Cir.1968) …

“As the [stadium-to-network] feed signal without advertising, which the defendants intercepted, was never intended by plaintiffs to be broadcast, it was not for the use of the general public.  The sole purpose for the clean feed broadcast was to transmit this signal from satellite so that the network control point could receive it and insert the economically vital commercials.  The methodology used by plaintiffs to transmit the clean feed signal to the network control point, which enabled those with dish antennae apparatus also to intercept the signal, does not alter plaintiffs’ intent.”

The Judge had some leniency on two of the defendants.  The first was the one who seemingly gave a “public performance” where just three friends were present:

“A ‘public performance’ is the performance or display of a work to a substantial number of persons outside a normal circle of family or friends.  While Guttmann’s, on the basis of the evidence now before the Court, has not violated plaintiff’s copyright privileges, it has the equipment to do so”.  (The Appeals Court would later decide that the possession of equipment was irrelevant to the charges and verdict.)

“Defendant Sandrina’s, although it too has the equipment, did not transgress plaintiff’s copyrights by intercepting a satellite signal.  It did receive and show to its customers a broadcast of a game signal from a Cape Girardeau, Missouri located channel.  Channel 12, KFVS T.V. is a CBS affiliate in a community a 100 or more miles away and that affiliate has the permission from the network and plaintiffs to broadcast the game.  Sandrina’s received that channel broadcast by means of a T.V. antennae.  Such an interception with T.V. antennae equipment commonly used by the public is not an infringement of plaintiff’s copyright authority.”  (Quotes are from the District Court decision.)

(EDITOR’S NOTE: For other forms of entertainment (particularly music), “public performance” can require a license and payment of a fee to a rights-holder representative, even if the performance is merely a radio broadcast for which the broadcaster is already paying copyright royalties.  In this case, the NFL and television networks were apparently satisfied that increased viewership would enrich them by means of higher advertising charges.  Such willingness on the part of these entities at this time to not charge for private performance should not be taken to mean that they haven’t or won’t demand performance-fees at other times.)

The three defendants remaining as infringers were Panama Reds, Mr. B’s, and Talaynas.

The Appeals Court determined that the “clean feed” was protected by copyright.  It affirmed the finding of infringement against the three restaurants, but it reversed the District Court on its injunctions upon Guttmann’s and Sandrina’s (aka Frank & Frank Inc.).  Guttmann and his three friends may have violated the Communications Act, the Appeals Court said, but it was inappropriate to decide that in this case.  Guttmann, as a business never open on Sunday (it lacked a Sunday liquor license), posed no relevant possibility of injury to NFL than had his satellite dish been at a private home; such was not the focus of that lawsuit.


Other Information

 

“The television broadcaster in one sense does less than the exhibitor of a motion picture or stage play; he supplies his audience not with visible images but only with electronic signals.  The viewer conversely does more than a member of a theater audience; he provides the equipment to convert electronic signals into audible sound and visible images.  Despite these deviations from the conventional situation contemplated by the framers of the Copyright Act, broadcasters have been judicially treated as exhibitors, and viewers as members of a theater audience.  Broadcasters perform.  Viewers do not perform.  Thus, while both broadcaster and viewer play crucial roles in the total television process, a line is drawn between them.  One is treated as active performer; the other, as passive beneficiary.”  (Fortnightly Corp. v. United Artists, 392 U.S., at 398-399 (6-17-1968))


After the court rulings that local televisions could be carried by cable companies in their localities without this constituting copyright infringement, the Copyright Act was amended to allow local broadcast stations to charge fees to cable companies for carrying the stations.  The fees collected by broadcast stations are known of by program suppliers, who thereafter charge higher prices for programming.  These fees are passed along by cable companies to their home subscribers in the form of higher subscription fees.  The programs and broadcast stations continue to also be financed by the advertisers who pay for insertion of their commercial messages, and cable subscribers are exposed to the same number of sponsor messages on these stations as are viewers using in-home antennas who are not paying a fee to the cable company or station.  A consequence of this dual-source method of financing television stations is that cable subscribers have occasionally suffered temporary losses of local network stations when a particular cable company and particular local broadcaster have failed to negotiate a new rate upon expiration of a previous multi-year contract.

Readers wanting to know more should study the evolution of §119, “Limitations on exclusive rights: Secondary transmissions of superstations and network stations for private home viewing,” which first went into effect in 1989.


 

 

 

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