Justice Stevens, the man who saved Hollywood from itself

By Matthew Belloni

As President Obama zeroes in on a replacement for retiring Supreme Court Justice John Paul Stevens, Hollywood should be paying close attention. Stevens' record serves as a perfect example of how much influence a single vote can have on the entertainment industry.

Joe Mullin at Corporate Counsel has posted an interesting analysis of Stevens' impact on intellectual property law, and it includes a nice chunk devoted of the bowtied jurist's heavy footprint on the modern copyright industry.

Generally, Stevens saw both copyright and patent law as "balancing acts that need to be kept in check by the Supreme Court," dissenting, for example, to the decision that allowed Congress (at the studios' strong urging) to retroactively extend copyrights in 1998.

But his lasting legacy will be as the man who saved Hollywood from its own fears. Stevens wrote the majority opinion in 1984's Sony v. Universal City Studios, the so-called Sony/Betamax case, which legalized VCRs against Hollywood's hysterically short-sighted objections. The industry wanted VCRs killed because execs feared they would turn moviegoers into full-time copyright pirates. No stranger to hyperbole, MPAA head Jack Valenti famously compared the VCR to the Boston Strangler. (If only Jack had lived to see the iPad.)

But Stevens couldn't understand why the industry should be able to squelch a device with a "substantial non-infringing use." His opinion, the first to grapple with "fair use" issues in the technology age, paved the way for the widespread adoption of home video. That opened up a market that -- despite the industry's initial objection -- ended up driving Hollywood's exponential growth through the '80s and '90s. And it almost didn't happen.

Mullin notes:

• Justice Stevens's contribution to the ultimate decision in Betamax extended well beyond writing the opinion. It was actually his negotiating skill that pulled together the five-vote majority that allowed home video recorders to be sold and used without interference from entertainment industry copyright holders. When he wrote the first draft of his opinion, Stevens thought he was writing a dissent -- and possibly a lone dissent at that. Even more remarkably, the justices' initial debates in the case made it clear that Stevens was the only one of the nine who believed that the "fair use" doctrine gave consumers a right to make personal copies of copyrighted content for home use.

The result was a 5-4 decision that allowed a single copy for personal use. It also established the framework that guided the court in 2005's MGM Studios v. Grokster, which ushered copyright law into the digital age and held, unanimously, that website operators could be sued for enabling mass infringements by others.

It's hard to imagine how the past 25 years of IP law would have played out had the VCR been ruled illegal. Sure, Congress could have responded with a law to help the 3 million people who had already bought VCRs by 1982. Or maybe the development of modern copyright law would have been totally different.

Regardless, Justice Stevens made Hollywood studios a lot of money by ruling against them. When he retires, the moguls should send the 89-year-old jurist to Aruba. And when he gets there, make sure there's a new Blu-ray player in his room and plenty of movies -- for his own personal use, of course.