CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT.
Stewart, J., delivered the opinion of the Court, in which Brennan, White, Marshall, Powell, and Rehnquist, JJ., joined. Blackmun, J., filed an opinion dissenting in part, post, p. 415. Douglas, J., filed a dissenting opinion, in which Burger, C. J., joined, post, p. 416.
MR. JUSTICE STEWART delivered the opinion of the Court.
The plaintiffs in this litigation, creators and producers of televised programs copyrighted under the provisions of the Copyright Act of 1909, as amended, 17 U. S. C. § 1 et seq., commenced suit in 1964 in the United States District Court for the Southern District of New York, claiming that the defendants had infringed their copyrights by intercepting broadcast transmissions of copyrighted
material and rechanneling these programs through various community antenna television (CATV) systems to paying subscribers.*fn1 The suit was initially
stayed by agreement of the parties, pending this Court's decision in Fortnightly Corp. v. United Artists Television, 392 U.S. 390. In that case, decided in 1968, we held that the reception and distribution of television broadcasts by the CATV systems there involved did not constitute a "performance" within the meaning of the Copyright Act, and thus did not amount to copyright infringement.*fn2 After that decision the plaintiffs in the present litigation filed supplemental pleadings in which they sought to distinguish the five CATV systems challenged here from those whose operations had been found not to constitute copyright infringement in Fortnightly.*fn3 The District Court subsequently dismissed the complaint on the ground that the plaintiffs' cause of action was barred by the Fortnightly decision. 355 F.Supp. 618. On appeal to the United States Court of Appeals for the
Second Circuit, the judgment was affirmed in part and reversed in part, and the case was remanded to the District Court for further proceedings. 476 F.2d 338. Both the plaintiffs and the defendants petitioned for certiorari, and, because of the seemingly important questions of federal law involved, we granted both petitions. 414 U.S. 817.
The complaint alleged that copyright infringements occurred on certain dates at each of five illustrative CATV systems located in Elmira, New York; Farmington, New Mexico; Rawlins, Wyoming; Great Falls, Montana; and New York City. The operations of these systems typically involved the reception of broadcast beams by means of special television antennae owned and operated by Teleprompter, transmission of these electronic signals by means of cable or a combination of cable and point-to-point microwave*fn4 to the homes of
subscribers, and the conversion of the electromagnetic signals into images and sounds by means of the subscribers' own television sets.*fn5 In some cases the distance between the point of original transmission and the ultimate viewer was relatively great -- in one instance more than 450 miles -- and 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. In others, the original broadcast was relatively close to the customers' receiving sets and could normally have been received by means of standard television equipment. Between these extremes were systems involving intermediate distances where the broadcast signals could have been received by the customers' own television antennae only intermittently, imperfectly, and sporadically.*fn6
Among the various actual and potential CATV operations described at trial the Court of Appeals discerned,
for copyright purposes, two distinct categories. One category included situations where the broadcast signal was already "in the community" served by a CATV system, and could be received there either by standard rooftop or other antennae belonging to the owners of television sets or by a community antenna erected in or adjacent to the community. Such CATV systems, the court found, performed essentially the same function as the CATV systems in Fortnightly in that they "no more than enhance the viewer's capacity to receive the broadcaster's signals," 392 U.S., at 399. The second category included situations where the CATV systems imported "distant" signals from broadcasters so far away from the CATV community that neither rooftop nor community antennae located in or near the locality could normally receive signals capable of providing acceptable images.
The Court of Appeals determined that "when a CATV system is performing this second function of distributing signals that are beyond the range of local antennas, . . . to this extent, it is functionally equivalent to a broadcaster and thus should be deemed to 'perform' the programming distributed to subscribers on these imported signals." 476 F.2d, at 349. The Court of Appeals found that in two of the operations challenged in the complaint -- those in Elmira and New York City -- the signals received and rechanneled by the CATV systems were not "distant" signals, and as to these claims the court affirmed the District Court's dismissal of the complaint. As to the three remaining systems, the case was remanded for further findings in order to apply the appellate court's test for determining whether or not the signals were "distant."*fn7 In No. 72-1633 the plaintiffs
ask this Court to reverse the determination of the Court of Appeals that CATV reception and retransmission of signals that are not "distant" do not constitute copyright infringement. In No. 72-1628, the defendants ask us to reverse the appellate court's determination that reception and retransmission of "distant" signals amount to a "performance," and thus constitute copyright infringement on the part of the CATV systems.
We turn first to the assertions of the petitioners in No. 72-1633 that irrespective of the distance from the broadcasting station, the reception and retransmission of its signal by a CATV system constitute a "performance" of a copyrighted work. These petitioners contend that a number of significant developments in the technology and actual operations of CATV systems mandate a reassessment of the conclusion reached in Fortnightly that CATV systems act only as an extension of a television
set's function of converting into images and sounds the signals made available by the broadcasters to the public. In Fortnightly this Court reviewed earlier cases in the federal courts and determined that while analogies to the functions of performer and viewer envisioned by the Congress in 1909 -- that of live or filmed performances watched by audiences -- were necessarily imperfect, a simple line could be drawn: "Broadcasters perform. Viewers do not perform." 392 U.S., at 398 (footnotes omitted). Analysis of the function played by CATV systems and comparison with those of broadcasters and viewers convinced the Court that CATV systems fall "on the viewer's side of the line." Id., at 399 (footnote omitted).
"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." Id., at 400-401 (footnotes omitted).
The petitioners claim that certain basic changes in the operation of CATV systems that have occurred since Fortnightly bring the systems in question here over to the broadcasters' "side of the line." In particular, they emphasize three developments that have taken place in the few years since the Fortnightly decision. First, they point out that many CATV systems, including some of
those challenged here, originate programs wholly independent of the programs that they receive off-the-air from broadcasters and rechannel to their subscribers.*fn8 It is undisputed that such CATV systems "perform" those programs which they produce and program on their own; but it is contended that, in addition, the engagement in such original programming converts the entire CATV operation into a "broadcast function," and thus a "performance" under the Copyright Act. Second, these petitioners assert that Teleprompter, unlike the CATV operators sued in Fortnightly, sells advertising time to commercial interests wishing to sell goods or services in the localities served by its CATV systems. The sale of such commercials, they point out, was considered in the Fortnightly opinion as a function characteristically performed by broadcasters. Id., at 400 n. 28, citing Intermountain Broadcasting & Television Corp. v. Idaho Microwave, Inc., 196 F.Supp. 315, 325. Finally, they contend that by engaging in interconnection with other CATV systems -- whereby one CATV system that originates ...