Full opinion text
Opinion HERLANDS, District Judge: This action for infringement of plaintiff’s copyrights in moving pictures by defendant’s community antenna television (CATV) systems in Clarksburg and Fairmont, West Virginia poses novel questions involving interpretation of Gertain provisions of the Copyright Act, 17 U.S.C. § 1 et seq. In a general sense, this litigation is a commentary on the current scientific and technological revolution whose manifestations in the field of electronics in-elude such forms of mass communication as television over the air — commonly known as TV — and wire television or cable-TV — one phase of which is CATV. In a legalistic sense, this case requires the application of traditional judicial techniques of statutory construction to give specific words in Section 1 of the Copyright Act a meaning that will accommodate the underlying legislative purpose and the realities of modern communications technology. For the reasons expounded in this opinion, the court decides that defendant is liable for infringing plaintiff’s ex-elusive performing rights in the copyrighted works that are the subject mater o is i iga ion. This opinion contains the findings of fact and conclusions of law required by Fed.R.Civ.P. 52(a). Two preliminary observations will place the issues and the record in sharper focus. The term “community antenna,” as used by defendant for self-description, is a misnomer and reflects a fundamental misconception. Defendant’s two systems are not “community” ventures. They are large-scale commercial enterprises, advertising and promoting television programs, and making profit out of the exploitation of television programs, including plaintiff’s copyrighted motion pictures. Nor are defendant’s operations simply that of passive “antennas” used only to receive telecasts. In j. , fact, defendants two systems, among , ’ , other processes, receive, electronically reproduce and amplify, relay, transmit and distribute television programs — operations requiring complex, extensive and expensive instrumentation. These systerns function as wire television systems, only one of whose structural components consists of antennas, Most of the evidentiary facts are not jn dispute. The parties disagree fundamentally, however, as to the characteriza^ion ^be evidence, the operative facts and ^be Jegal conclusions. To take the most salient example: the electronics experts for both sides agree on the relevan^ television technology; and the parties themselves do not controvert any of the other basic technological facts, such as the manner in which defendant’s electronic instrumentation functions. Plain-tiff and defendant, however, argue for diametrically opposed conclusions from those facts. Because eyidence is technical and this case presents important questions of first impression, the court will express its findings and conclusions in more than customary detail. I, The eomplaint . . , . . „ . „ The, amended complaint (hereinafter >• fJd Janua37 24’ 1964’ alleges defendants ownership and opera-J1011 °f tw° immunity television systefs’ , ,1°cated i? fnd about th* “ty Clarksburg West Virginia and the ^ and about the city of Fair™nt’ West Virginia. (Paragraph 4 ) T+he describes the physical structure, electronic instrumentation and 0perf.I0n °f the systef s‘ +In +tbl® de‘ friPÜ™’ tbe+ complaint states that defendant s systems receive and reproduce . , . . . , ,. „ * television signals emanating * * * frQm television broadcasting stations located in the cities of Pittsburgh, Pa., Steubenville, Ohio and Wheeling, West Virginia”; that the “television signals so received and reproduced * * * are then distributed by defendant by means of cables connected to the homes, residences and places of business of defendant’s subscribers in and about” Clarksburg and Fairmont, “against payment by said subscribers of an initial hook-up fee and a monthly service fee to defendant.” (Paragraph “5”). The complaint particularizes (paragraphs “6” — “15”) plaintiff’s exclusive rights as the copyright owner of a large number of copyrighted “motion picture photoplay films,” material details in connection therewith being set forth in voluminous exhibits attached to the complaint. Among plaintiff’s exclusive rights enumerated in the complaint (paragraph “15”) is “the exclusive right to license the exhibition and telecasting” of the listed moving pictures “to television stations,” “authorizing them to telecast such motion pictures in their coverage area.” It is alleged that the ■ amount of plaintiff’s compensation derived from such licensed television stations “depends to a large extent on the size of the television audience for said motion pictures in the local coverage area of the licensee, but not outside thereof.” The complaint (paragraphs “16”-“27”) sets forth, as follows, the names and channel numbers of five television stations with whom plaintiff entered into limited license agreements covering a specified number of telecasts of certain listed motion pictures and providing “for free home reception and for no other use or purpose”: KDKA Pittsburgh channel 2 WTAE Pittsburgh channel 4 WIIC Pittsburgh channel 11 WSTV Steubenville channel 9 WTRF Wheeling channel 7 The complaint then charges (paragraphs “28” — “31”) that, “by means of its television systems,” without license or authority, defendant “did receive, reproduce and distribute in such reproduced form to its subscribers, the television broadcasting signals emitted by” the five above-mentioned television stations, “carrying telecasts” of plaintiff’s copyrighted motion pictures, as listed in the complaint; that, by reason of such acts, “defendant did publicly exhibit, perform, represent, produce, reproduce, copy, publish and vend, by means of its television systems, said motion pictures to its subscribers, * * * all of which constituted an infringement” of plaintiff’s copyrights; and that defendant’s acts “pertaining to each telecast of plaintiff’s copyrighted motion picture photoplay films gives rise to a separate claim under the Copyright Act against the defendant with respect to each such telecast.” ' The exhibits attached to the complaint list the respective infringement dates. The complaint (paragraph “34”) also charges defendant with “unfair trade practices and unfair competition.” For relief, plaintiff seeks an injunction, damages, an accounting, costs and attorneys’ fees. The answer The answer, filed April 1, 1964, is divided into seven parts. The first part contains, inter alia, denials of most of the material facts upon which plaintiff predicates its infringement claims. Defendant refers to each of its systems as “a community antenna system” and a “community antenna system for television reception” (paragraph “4”), “the function of which is the wholly passive one of responding to the energy of broadcast waves which strike it.” (Paragraph “5”). Defendant denies engaging in “the performance, exhibition, production, reproduction, representation or publication of motion pictures or any program or advertising” (paragraph “5”) and denies the allegations of the complaint charging infringement, unfair trade practices and unfair competition (paragraphs “28”-“35”). The second part (paragraph “36”) alleges the defense that plaintiff “has failed to state a cause of action upon which relief may be granted.” The third part (paragraphs “37”-“38”), quoted at length below, alleges the separate defense that plaintiff seeks by this action “to impose an unlawful charge upon the reception by defendant’s subscribers of broadcasts by commercial television” in contravention of the Communications Act of 1934, as amended, 47 U.S.C. §§ 151-609 (1964), as implemented by regulations of the Federal Communications Commission. The fourth part (paragraph “39(a)”-“39(e)”) pleads five separate defenses: (a) that “all of the motion pictures referred to in the Amended Complaint are in the public domain and unprotected by copyright having been publicly performed and published with the authority of the copyright proprietor without notice of copyright having been affixed thereon in conformity with law”; (b) that there is a failure to state a cause of action for those infringements “for which no date of infringement is alleged”; (c) that plaintiff is guilty of laches; (d) that plaintiff’s claims are barred by waiver and estoppel; and (e) that, if plaintiff licensed the five above-named television stations to broadcast the said motion pictures, “then defendant’s subscribers are licensed to receive such broadcasts by means of defendant’s community antennas and defendant is licensed to furnish its community antennas to its subscribers for such reception.” The fifth part (paragraphs “40”-“45”) pleads separate defenses of misuse of copyright. The sixth part (paragraphs “46”-“47”) pleads the separate defense of the statute of limitations. The seventh part (paragraphs “48”-“50”) pleads a separate defense to plaintiff’s non-copyright claims. Pre-Trial Order Number One On June 29, 1965, in Pre-Trial Order Number One, this court ordered that the trial of the action proceed in four designated stages; that the basic issue of copyright infringement be tried first; and that all defenses other than the separate defense pleaded in paragraphs “37” and “38” of the answer be reserved and tried in subsequent stages. Other material parts of said order are not referred to at this time. Pre-Trial Order Number Two The issues to be tried at the first stage of the trial were formulated by the court in its Pre-Trial Order Number Two, dated February 7, 1966, as follows: “1. Whether there is an infringement of copyright by reason of reception of (or other, if any, activity of the defendant in relation to), a telecast by means of the community antenna television system owned by the defendant within the meaning of 17 U.S.C. § 1(a) (c) and (d), as indicated in paragraph £ of the Amended Complaint and the Answer thereto as formulated in Pre-Trial Order No. 1, paragraph II, (as amended by Pre-Trial Order No. 2, par. VII) together with defendant’s Third Separate Defense. “2. Third Separate Defense: Commercial television broadcasting, like that of the broadcasting stations referred to in the Complaint, is governed by the Communications Act of 1934, as amended, 47 U.S.C. § 1, et seq., as implemented by regulations promulgated by the Federal Communications Commission, and under the Act so implemented no person may lawfully impose charge upon the reception of commercial television broadcasts and every person is free to receive such broadcasts by the equipment of his choice. (Paragraph 37 of the Answer.) “Since the stations alleged to have broadcast the motion pictures listed in the Exhibits annexed to the Complaint did so, if at all, pursuant to license from the plaintiff and pursuant to license from the Federal Communications Commission, which latter license precludes a charge to the public for the reception of the broadcasts, the plaintiff seeks by this action to impose an unlawful charge upon the reception by defendant’s subscribers of broadcasts by commercial television, and may not recover. (Paragraph 38 of the Answer.)” Jurisdiction Pursuant to 28 U.S.C. § 1338(a), this court has jurisdiction of the subject matter of this action which arises under the Copyright Act, 17 U.S.C. § 1 et seq., as amended. This court has jurisdiction of the parties hereto. Parties’ assumptions as to plaintiffs copyrights, motion picture telecasts, and defendant’s reception of telecast signals For the purpose of the first stage of the trial of this action, the parties have formally assumed the following facts inter alia: that plaintiff is the owner of valid copyrights in certain motion pictures ; that some of said motion pictures are photoplays (classified as LP’s on the copyright certificates), and that others are not photoplays (classified as MP’s on the copyright certificates); that these motion pictures were telecast by the above-mentioned five television stations in Pittsburgh, Wheeling, and Steuben-ville, pursuant to license contracts between plaintiff or plaintiff’s predecessor in title and said television stations; that the signals of these television stations were received by and made available on defendant’s systems; that the five television stations in Pittsburgh, Wheeling and Steubenville did telecast the motion pictures licensed to those stations by plaintiff or plaintiff’s predecessor in title; that the AM carrier waves and FM carrier waves into which those motion pictures were transduced in order for them to be telecast were received by defendant’s systems; and that audio and video signals representing the intelligence contained in those carrier waves were then made available by defendant to its subscribers. For the purpose of the first stage of the trial, defendant concedes that it did not enter into any license agreement with plaintiff with respect to any of the motion pictures in suit which were telecast by the stations in Pittsburgh, Wheeling and Steubenville. Charge of infringement limited to defendant At the outset, it should be pointed out that plaintiff has stipulated (1) that it does not contend that the broadcasting stations are guilty of copyright infringement by reason of the telecasts, which were authorized by the respective license agreements; and (2) that it does not contend that any of the homeowners who received any of the telecast programs are guilty of copyright infringements. Plaintiff and the motion pictures in suit Plaintiff, United Artists Television, Inc. (formerly known as United Artists Associated, Inc.), a Delaware corporation, is a wholly owned subsidiary of the United Artists Corporation, also a Delaware corporation. Effective as of October 17, 1958, United Artists Television, Inc. (then known as United Artists Associated, Inc. and hereinafter sometimes referred to as UATV or plaintiff) acquired the assets of Associated Artists Productions Corp. (hereinafter AAP), which included certain rights in the motion pictures in suit. Among the assets of AAP acquired by plaintiff were license agreements with respect to the motion pictures in suit with television stations in Pittsburgh, Wheeling and Steubenville. Plaintiff is, and, since October 17, 1958, has been engaged in the business of distributing and licensing the motion pictures in suit, and other motion pictures to television stations. Plaintiff’s predecessor in title (AAP, or AAP Inc. as its distribution agent) and plaintiff entered into contracts with television stations in Pittsburgh, Wheeling and Steubenville, with reference to the telecasting of the motion pictures involved in this action. Such motion pictures as were telecast by such stations and as are claimed to have been infringed by defendant were listed in said contracts with the respective television stations. Provisions of plaintiff’s contracts with the Pittsburgh, Wheeling and Steubenville television stations In all of the contracts whereby plaintiff or its predecessor in title licensed the said television stations to exhibit the motion pictures in suit, it was provided, in substance, that the licensor granted a limited license under copyright to exhibit the pictures over the facilities of the television station and for no other use or purpose. In most of the contracts whereby plaintiff or its predecessor in title licensed the said television stations to exhibit the motion pictures in suit, it was expressly provided, in substance, that the license granted shall be limited to the exhibition of the pictures over the facilities of the station licensed, unless specific provision was made for the right of the station to exhibit the pictures over the facilities of additional stations or networks, by simultaneous transmission, relay broadcast or otherwise. In some of the contracts whereby plaintiff or its predecessor licensed the said television stations to exhibit the motion pictures in suit, it was specifically provided, inter alia, that none of the pictures was to be broadcast or exhibited over community antenna systems. The primary purpose of the clauses in the licensing agreements with the Pittsburgh, Wheeling and Steubenville television stations limiting telecasting by those stations only over the facilities of the particular stations was to make it clear that the licensed stations had no right to sublicense community antenna systems authorizing them to pick up the programs licensed. The licenses granted by plaintiff to the television broadcast stations authorizing the broadcast of plaintiff’s copyright material contained the following limitations, inter alia: to broadcast only by the use of the effective radiated power at the time of the granting of the license; that the station could not grant sublicenses and could use only its own facilities ; that telecasts would be solely with the station’s own facilities for gratuitous reception by the public. Defendant’s business background and general operations Defendant, Fortnightly Corporation (sometimes referred to hereinafter as Fortnightly or defendant), is a Delaware corporation. Effective September 30, 1960, its name was changed from the NWL Corporation to Fortnightly Corporation. Defendant is, and has been, engaged in other businesses, in addition to its operation of the two wire television systems involved herein. On March 13,1957, defendant acquired all of the stock of the Clarksburg Television Cable Corporation, a West Virginia corporation, at a contract price of $879,000. The sole business of the Clarksburg Television Cable Corporation was the operation and maintenance of a community antenna system in and around Clarksburg, West'Virginia. On May 14, 1957, the Clarksburg Television Cable Corporation was liquidated and its assets transferred to, and its liabilities assumed by, defendant. Thereafter, defendant owned and operated the community antenna system in and around Clarksburg as a division of defendant under the name of Clarksburg TV Cable Co. On January 31, 1958, defendant acquired all of the stock of the Consolidated Television Cable Corporation at a contract price of $313,457. This corporation owned, maintained and operated as its sole business a community antenna system in and around Fairmont, West Virginia and a second community antenna system in and around Bluefield, West Virginia. Prior to November 13, 1956, the community antenna television system in Bluefield, West Virginia, was owned by the Bluefield TV Cable Corporation. •On November 13, 1956, the Fairmont Television Cable Corporation was merged with and into the Bluefield TV Cable Corporation, and on December 1, 1956, the name of the Bluefield TV Cable Corporation was changed to Consolidated TV Cable Corporation, the same corporation acquired by defendant on January 31, 1958. On December 23, 1958, the Consolidated Television Cable Corporation sold all of the assets of the Bluefield community antenna system for a price of $32,-000. Thereafter, the Consolidated Television Cable Corporation, which owned, maintained and operated only the Fairmont community system, was liquidated as of July 31, 1959. Its assets were transferred to, and its liabilities assumed by, defendant, who thereafter owned, maintained and operated the community antenna system in and around Fairmont as a division of defendant under the name of Fairmont TV Cable Co. On December 31, 1963, defendant transferred all of the assets of the Fairmont TV Cable Co. division to its wholly-owned subsidiary, Fairmont TV Cable Co., Inc., a West Virginia corporation, which assumed the liabilities of defendant for performance under the contracts and agreements of the antenna system and trade accounts with respect to this antenna system. Thereafter, this wholly-owned subsidiary owned, maintained and operated the Fairmont community antenna system. Location of defendant’s systems The community antenna system in and around Clarksburg was built by, or caused to be built for, the Clarksburg Television Cable Corporation in 1953. The subscribers to the Clarksburg community antenna system are located in and around Clarksburg and the surrounding communities of Bridgeport, Nutter Fort, Stonewood, Anmoore and Edge-wood. The community antenna system in and about Fairmont was built by, or caused to be built for, the Fairmont Television Cable Corporation in 1953. The subscribers to the Fairmont antenna systems are located in and around Fairmont and the surrounding communities of Barracksville and Watson. Clarksburg is located approximately 82 miles from Pittsburgh; approximately 57 miles from Wheeling; and approximately 74 miles from Steubenville. Fairmont is located approximately 67 miles from Pittsburgh; approximately 52 miles from Wheeling; and approximately 65 miles from Steubenville. Clarksburg is located approximately 18 miles from Fairmont. The above distances are air distances, measured from the approximate center of each community. Clarksburg and Fairmont are beyond the radio horizon of all of the television stations in Pittsburgh, Wheeling and Steubenville. The roughness and the increase in elevation of the terrain beyond the two-to ten-mile zone from Pittsburgh, Wheeling and Steubenville to Clarksburg (which terrain is rougher than the average terrain of the United States) attenuates the intensity of the propagated carrier waves because mountains and hills create obstructions to television transmission, and rough terrain causes a scattering and absorption of the electromagnetic energy. These factors adversely affect the quality of television reception in Clarksburg. In both Clarksburg and Fairmont, there are sharp drops in elevation from defendant’s antenna sites to the more densely populated areas of both cities. In Clarksburg, the antenna site is 210 feet higher than the highest point within the city and at least 720 feet higher than the lowest elevation within the city. In Fairmont, the antenna site is 263 feet higher than the highest point in the city and at least 723 feet higher than the lowest elevation within the city. Most of the homes in Clarksburg and Fairmont are located in valleys. Fairmont itself is very hilly and is surrounded by higher ridges and hills. Commercial aspects of defendant’s business Defendant’s systems were and are operated as businesses for profit. Defendant’s obligation to its subscribers was to deliver, provide and make available television programs for which the subscribers paid a fee. Members of the public residing in and around Clarksburg and Fairmont became subscribers to the respective systems by entering into contracts with defendant on contract forms provided by it and by making payments to it as required by the contracts. The systems charged various rates for making available the television programs by processing and transmitting broadcast television signals. The contracts specifically provide that defendant would not be liable if a television station should fail to broadcast. An initial charge was made to connect a subscriber’s set to the system even in cases where the connection was already in place. A subscriber was not permitted to install additional outlets and was not .allowed to connect additional sets to the system, except on the payment of additional charges for such additional outlets and sets. Non-residential premises, having a potentially larger number of viewers, paid, at times, a higher initial charge and a greater monthly charge than did residential premises. Defendant operates its Clarksburg system in the city of Clarksburg and the towns of Bridgeport, Anmoore, Nutter Fort and Stonewood, pursuant to municipal franchises reciting that they were granting it rights of way for the purpose of erecting and operating a system of ■distributing and relaying television broadcasts. Defendant operates its Fairmont system pursuant to a municipal ordinance of the town of Fairmont reciting that it was granting it rights of way for the purpose of erecting and operating a television cable service. Defendant and its predecessors promoted, vended and distributed programs to their subscribers. By means of newspapers, radio and by direct mail, they advertised the variety of programs transmitted; that their subscribers had a choice of more than one station at a time; that the choice of all three networks' programs was available only to their subscribers; that only with the cable could clear, steady, vivid, snow-free pictures be obtained; and that certain programs transmitted from Pittsburgh, Wheeling and Steubenville could be seen only on the cable. Defendant advertised that, without subscribing to its system, homeowners in Clarksburg were “chained to one channel,” i. e., they could view only the programs of the one local channel then on the air. Defendant advertised that only as a subscriber to its Fairmont system could a variety of programming and a choice of shows be obtained in Fairmont. Defendant’s activities in promoting and advertising television programs on its cables were similar to the promotional and advertising activities of a television broadcasting station. Moreover, defendant competed with the local television station and vied with programming much in the same way that television broadcasting stations compete with one another by means of the programs they offer. The need for defendant’s wire television systems The “geographic-electronic problem” created by the mountains between Clarksburg and Fairmont and the television stations in Pittsburgh, Wheeling and Steubenville and the other physiographic conditions in that area materially block normal television reception in Clarksburg and Fairmont of broadcasts from those television stations. No credible competent evidence was adduced which demonstrated that the residents of Clarksburg or Fairmont, other than the subscribers to defendant’s systems, could receive a usable and reasonably satisfactory picture from any of the five television stations in Pittsburgh, Wheeling or Steubenville. Without subscribing to defendant’s systems, the residents of Clarksburg and Fairmont could receive through their home antennas a usable and reasonably satisfactory picture only from the local Clarksburg and Fairmont (Weston) television stations. The distances between the Clarksburg-Fairmont area and Pittsburgh, Steuben-ville, and Wheeling, and the roughness of the intervening terrain are such as to render reception of the signals from Stations KDKA, WIIC and WTAE in Pittsburgh, Station WSTV in Steuben-ville and Station WTRF in Wheeling unsatisfactory on ordinary home antennas in Clarksburg and Fairmont. The Fairmont system publicly demonstrated the superiority of the signals transmitted by its systems over signals obtained directly off the air by a homeowner by playing two television sets tuned to the same channel side by side in its showroom, one connected to a roof top antenna and one to the CATV system. As compared to the picture on the set connected to the CATV- system, the picture on the set connected to the rooftop antenna was of poor quality, and there was “snow” on that picture. Statistics concerning defendant’s subscribers In 1963, the Clarksburg system had more than 9,500 subscribers. In 1960, the Clarksburg system had almost 8,000 subscribers, consisting of approximately 72 per cent of all occupied housing units in the area in which defendant’s system operated. The United States Census of Housing, 1960, for West Virginia, shows that the total occupied housing units in Clarksburg, Bridgeport, Anmoore, Nutter Fort, and Stonewood was 11,442. In 1959, approximately 73 per cent of the residents of Clarksburg subscribed to defendant’s system. In 1963, the Fairmont system had more that 6,000 subscribers; in 1960, more than 5,000 subscribers; in 1959, almost 5,000 subscribers; in 1958, more than 4,600 subscribers. The United States Census of Housing, 1960, for West Virginia, shows that the total occupied housing units in Fairmont was 9,079. In Fairmont, there were approximately 6,500 homes in 1958 and 1959 according to the municipal assessor. The approximate number of the subscribers to defendant’s community antenna systems in Clarksburg and Fairmont, as of December 31 of the years designated, was as follows: Clarksburg Fairmont 1953 1779 1104 1954 4245 2003 1955 6098 3065 1956 7415 3857 1957 7776 4313 1958 7891 4621 1959 8280 4919 1960 7966 5092 1961 7829 5160 1962 9075 5651 1963 9571 6047 Of these total numbers of subscribers, approximately 40 in Clarksburg and between 35 to 40 in Fairmont were nonresidential subscribers (e. g., hotel, motel, bar, tavern or pool hall, some of which had more than one outlet) during the years 1957. through 1963. During this period, there were also approximately 20 stores or retail television dealers in Clarksburg which were subscribers, some of which had more than one outlet. These stores and dealers were charged the residential rate. Hotels and motels were considered as one even though there were many taps. One hotel had 175 such taps. The operation of defendant’s systems Each of the defendant’s wire television systems requires a permanent staff of highly qualified technicians; intricate and expensive test and maintenance equipment; special tools; continuous preventive maintenance; and an expensive inventory of cable, amplifiers and other spare parts. A system such as each of defendant’s systems would require approximately ten to fifteen people to run it. Each of the systems is designed to receive specific stations and to reject all other stations. The only programs that can be received through defendant’s systems are those that the systems are engineered to distribute. Each of the systems is designed and operated to offer the subscribers a variety of the best programming available, without duplication. At the time of their construction, and until 1958, the equipment utilized by the said systems was such that the programs of only three television stations were transmitted to subscribers. In the fall of 1958, both of defendant’s systems were expanded with the result that, as of November 1, 1958, the programs of five television stations were transmitted to subscribers of each system. The following table lists the television stations whose programs were transmitted by defendant on its two systems during the period from their construction through May 1, 1964: Defendant took the position that it was an illegal act for anyone to “steal” the signals it transmitted. Defendant initiated a criminal prosecution against a person accused of having “stolen” its signals; and defendant obtained a conviction. Defendant also took the position, expressed in writing, that it was improper for WBOY, the local Clarksburg television station, to engage in “rebroadcasting programs” supplied to it by defendant under a subscription contract. (Emphasis added.) Defendant’s position was that it was improper for anyone to utilize its system for additional television sets for which the subscriber had not obtained authorization. Defendant’s systems preselected the stations whose programs were provided to its subscribers; and supplied some of said subscribers with programs contrary to their expressed preference, and in some instances, even contrary to the expressed preference of most of the subscribers. Origination of television broadcasts Television programs originate from any one of the following three sources: (a) a live performance in a television studio or other place of origination; (b) a prior recording of a live performance in the form of magnetic video tape; and (c) a motion picture film. Where the television station serves an affiliated network station (as distinguished from an originating station), the telecasts of the network station are a rebroadcast of the video and audio signals usually delivered to it by the television stations by means of the cable services of the telephone company. An understanding of the basic technology of telecasting is prerequisite to the resolution of the critical issue of copyright infringement. What follows is a summary of facts found on the basis of the record evidence herein representing relevant telecasting technology. The sensing of the video or picture portion of a live performance is effected by a television camera. The scene (the visual program information) to be reproduced is focused optically (by means of a lens system) on a photosensitive surface composed of elements whose electrical properties vary in accordance with the intensity of the light that strikes them. By “scanning” a narrow beam of electrons over this surface, so as to strike each element in a regular sequence, a pattern of electrical current or voltage is formed which varies in proportion to the brightness of the portion of the picture being scanned. The voltage so obtained is at any instant of time a measure of the brightness of the small area of the picture being scanned at that instant. This voltage is known as the “video signal.” The foregoing process by which sight has been converted into its electronic counterpart or replica, the “video signal,” is called transduction. A video signal is a form of electrical energy. However, video signals have an oscillation (frequency) and wave length that do not permit them, by themselves, to be radiated from the television station’s transmitting antenna. For this reason and purpose, carrier waves are employed. Carrier waves have higher frequency and shorter wave length than the video signals. The carrier waves are produced by an oscillator. If broadcast, carrier waves that are not modulated would transmit no information other than the fact that a transmitter is on. Therefore, the carrier waves are subjected to a process of “modulation,” whereby video signals (and also audio signals, as will be shown later) are imposed on the carrier waves, which are then said to be modulated. The carrier waves are modulated by the video signals by feeding the video signals into an amplitude modulator. The output of the amplitude modulator is a reproduction of the video signal in the form of an amplitude modulated carrier (hence “AM carrier wave”), which is suitable for transmission through the air by radiation from the station’s antenna. The information or intelligence embodied in the video signal appears as variations in the amplitude of the carrier wave. In the course of the foregoing processes, the video signal, and the amplitude modulated radio frequency carrier reproduced therefrom, are “amplified” by making reproductions of them at higher intensities, so that at the final stage the amplitude modulated radio frequency carrier can be employed for transmission through the air in the form of an electromagnetic wave. The sensing of the audio or sound portion of a program is effected by a microphone. Sound manifests itself in rapid pressure variations in the air, which, when they impinge upon the sensitive element of the microphone, cause the sensitive element to vibrate and the microphone to produce a voltage varying in intensity in proportion to the intensity of the sound from instant to instant. This voltage is known as the “audio signal.” The foregoing process by which sound has been converted into its electronic counterpart or replica, the “audio signal,” is another illustration of transduction. An audio signal, like a video signal, is a form of electrical energy. Like video signals, audio signals have a frequency and wave length that do not permit them, by themselves, to be radiated from the television station’s transmitting antenna. For this reason and purpose, carrier waves are employed. The audio signals are amplified and used to modulate the frequency of carrier waves (hence “FM carrier waves”), which are suitable for transmission through the air by radiation in the form of electromagnetic waves. The electronic reproductions, i. e., the patterns of electromagnetic energy of the video and audio signals derived from the television camera and microphone, can be stored upon the surface of a magnetic tape. When the tape is run under the readout head of a tape playback unit in the television broadcast station, the unit acts in much the same way as the television camera and microphone in the case of a live performance; so that, by means of amplification and modulation, reproductions of such signals are obtained at higher intensities at radio frequency, which are thereafter transmitted from the station’s antenna in the form of electromagnetic waves. Motion picture film, constituting patterns of different intensities of black and white, or color, on the film are transduced into video signals by projecting their images on a small photosensitive surface within a camera tube, which is then scanned by an electronic beam in the same manner as does the television camera in conjunction with a live scene. Similarly, the variations in the film’s sound track are used to obtain an audio signal. Thereafter, the video and audio signals so derived are reproduced by amplification and modulation, so as to obtain modulated radio frequency carriers with sufficient intensity as to be suitable for transmission from the station’s antenna in the form of electromagnetic waves. Neither picture nor sound is made visible or audible in the studio as the picture is transduced into video and audio signals. The term “envelope” represents a concept. It is a mere graphic representation without physical reality. It is a descriptive term used to describe the form or pattern of the modulated video carrier wave if one imagined that over a period of time a line were drawn on a graph of the modulated carrier wave joining the peaks of the changing amplitude of the variations or oscillations of the carrier wave. The “envelope” of the modulated carrier wave is essentially the same in form as that of the video signal used to modulate the carrier wave. The modulated carrier waves (the video and audio carriers) are reproduced by amplification in the broadcast transmitter and transmitted through a transmission line to the broadcasting station’s broadcasting or transmitting antenna. Commonly, the modulated video and audio carriers are combined through a device called a diplexer so that both modulated carriers may be broadcast from the same antenna. If a diplexer is not used, a separate transmitting antenna is used for broadcasting the modulated sound carrier and for broadcasting the modulated video carrier. The broadcasting antenna radiates these modulated carrier waves in the form of electromagnetic energy toward the horizon. Defendant’s systems: their equipment, operation, function, purpose and over-all engineering design Television programs, in the form of electromagnetic waves, may be transmitted to home television sets by any one of the following means: ■ (a) in the case of an originating local station, by direct propagation through the air at radio frequency from the transmitting antenna of the originating television station. (b) in the case of a network broadcast, from the network’s originating studio ; first, by propagating the video and audio signals and/or corresponding modulated radio frequency carriers through a system of coaxial cables and microwave links to the network affiliate station; and then, by propagation through the air at radio frequency from the transmitting antenna of such affiliate station. (c) in the case of a satellite, translator or repeater station, from the originating television station or local station; first, by propagation through the air at radio frequency to the receiving antenna of a satellite, translator or repeater station (a procedure referred to as “off the air pickup”), and then, by propagation at radio frequency through the air from the transmitting antenna of the said satellite, translator or repeater station; and (d) in the case of a CATV system, by propagation at radio frequency through its coaxial cables of programs picked up off the air from any one of the different types of transmitters described in subdivisions (a), (b) and (c) above. Programs in the form of electromagnetic waves are received on defendant’s antennas. The antennas for the Clarksburg system are located on Huffman Hill, 1,620 feet above sea level, approximately two and one-half to three miles from the center of Clarksburg. The antennas for the Fairmont system are located on Tennant’s Knob, Barracksville, West Virginia, 1,480 feet above sea level, approximately two and one-half miles distant from the center of Fairmont. The five antenna arrays for the Clarksburg system, consisting of seven antennas, are each supported on a separate pole, 40-50 feet tall. The antennas for the Fairmont system are mounted on a steel catwalk approximately 25 feet in length, supported by two steel towers of triangular or parallel steel construction approximately 100 feet in height, placed in a concrete foundation. The two towers are guyed by either three or four steel strands which extend approximately 60-70 feet from the antenna, and require between 14-and % of an acre. In Fairmont, for each station received there were the following antennas: for Channels 7 (WTRF), 9 (WSTV) and 11 (WIIC) there were, for each channel, two 10 element yagi antennas; and for Channels 2 (KDKA) and 4 (WTAE) there was, for each channel, a single 10 element yagi antenna. In Clarksburg, there were five antenna arrays made up of seven antennas as follows: for Channel 4 (WTAE), there were two 5 element yagi antennas in a stack; for Channel 9 (WSTV) there were two 12 element yagi antennas in a stack; for Channel 11 (WIIC) there were four 4 element yagi antennas in two stacks; for Channel 2 (KDKA) and Channel 7 (WTRF) there were dipole antennas with corner reflectors. The cost of corner reflectors for Clarksburg was $2,000. Antennas of a type substantially similar to those referred to above have been in use since November, 1958; and, prior to that time, substantially similar antennas were used to receive the signals of the three stations which were made available at that time on defendant’s systems. Defendant’s systems utilize antennas specially designed and oriented for optimum reception of each of the five channels carried. The electromagnetic waves which have been received on the antennas travel through coaxial cables from the antennas to a building at the base of the antennas, where the electronic equipment referred to as the “head end equipment” is located. The basic head end equipment employed by defendant during the period in suit was and is as follows: (a) Prior to November 1957, each system had two “WCON” converters (a. trade name of Jerrold Electronics Corp.) for Channels 7 and 9 and an amplifier for Channel 2; (b) During the period November 1957 to November 1958, each system had a “Teletrol” unit (a trade name of the Jerrold Electronics Corp.), consisting of a demodulator and a modulator, for Channel 2; and two WCON convertors for Channels 7 and 9; (c) During the period November 1958 to April or May 1964, each system had for each of the five channels a preamplifier and a “Teletrol” unit; and (d) After April or May 1964, each system had a “Channel Commander” unit (a trade name of the Jerrold Electronics Corp.) for each of its five channels. The preamplifiers, the amplifiers, the “WCON” convertors, the “Teletrol” units, the “Channel Commander” units (the last three mentioned instruments being used at various times but not simultaneously), and the line and distributing amplifiers throughout defendant’s systems are an assemblage of devices which — by enabling the received signals (voltages) to control a local source of electrical power — produces an enlarged reproduction of the essential characteristics of the received signals (input signals). The operations of the foregoing system of instrumentation, among other effects, modulate, on new carrier waves derived from locally supplied electrical energy, the pattern of variations of the input signals. Thereby, there are created output signals which are replicas in electronic terms of the input signals. These output signals, while completely new, represent the same video and audio information and intelligence as did the input signals. The signals representing both the video and sound do not move as preserved electronic entities through the system, for at each stage of amplification or modulation a new duplicate of the input is made; the input signals are dissipated and lost and do not join or become part of the output signals. The net effect of defendant’s electronic processing is to transmit through defendant’s coaxial cables to its subscribers reproduced signals on new carrier waves. The vacuum tubes in each active or energized electronic unit in defendant’s systems produce in the flow of locally supplied electric current a reproduction or duplication of the voltages that were originally supplied to the grid of each vacuum tube as the input signals. The action of the vacuum tubes controls the flow of locally supplied electrical energy and thereby forms a reproduction of the input signals on new carrier waves. This control of the local electrical power is basically the same when a transistor is used in place of a vacuum tube. The intelligence of the performance of a telecast moving picture — consisting of sight and sound as transduced and embodied in the amplitude and frequency variations in the energy of the input signals — is reproduced and duplicated electronically by creating precisely corresponding variations in the new current flowing through the vacuum tubes. The conveyance of the intelligence is effected by reproducing the variations in electrical quantities in the form of output signals, while the input signals arriving at the tubes are dissipated in the form of heat. Reproduction, as herein used, covers the electronic process whereby the patterns, arrangements and configurations of variations and fluctuations of electrical energy which flow into instruments in defendant’s systems are used to form on newly supplied energy the same basic patterns, arrangements and configurations. The fact that defendant’s systems duplicate and reproduce on newly supplied energy the patterns, arrangements, configurations, variations and sequences of energy that originated from the broadcast antenna is the essential feature of defendant’s act of electronic reproduction. Each of the basic electronic units of defendant’s head end — whether a WCON convertor, a Teletrol demodulator or modulator, or a Channel Commander — creates at its output, by means of locally supplied electrical energy, an electronic reproduction or replica of the input signal in the same general manner as an amplifier. A new amplitude modulated picture carrier wave and a new frequency modulated sound carrier wave reproduced by the head end equipment — representing the sights and sounds of the programs received — are transmitted by defendant in the form of electromagnetic waves propagated within a coaxial cable, i. e., the transmission lines of defendant’s systems, to the homes of the subscribers. It is appropriate at this point to consider certain basic facts concerning the reception at the subscribers’ homes. In the home television receiving set, two modulated carrier waves are reproduced by amplification at the radio frequency, that is, at the frequency at which each modulated carrier wave was broadcast. Both carrier waves are then converted (by a convertor or mixer) to a lower frequency, called the intermediate frequency, by a reproductive process called heterodyning. After new carrier waves have been reproduced at the intermediate frequency, these new carrier waves pass to the input of the demodulator or detector. In the reverse process of demodulation, the entire audio and video signals are dissipated in the form of heat. There is no tearing off, stripping or taking off the intelligence in a physical sense. The reproduced video signal is utilized to activate the picture tube. The “sync” controls the scan by the electron beam in the picture tube. The inside of the face of the picture tube is covered with a photosensitive substance; and the scanning of the picture tube by the electron beam controlled by the video signal produces varying gradations of light on the coating of the picture tube. Thereby, the picture which is viewed on the home television receiver’s screen is created. The reproduced audio signal activates a loudspeaker which converts the electromagnetic energy into sound. Since an electronic reproduction or replica of the input signals takes place, the output signals received by the television set are similar, but not identical, to the original broadcast signals. Having set forth certain technological facts concerning the home receiving sets, the court now resumes its statement of facts describing defendant’s systems. To transmit, propagate and distribute the signals throughout the Fairmont and Clarksburg systems, defendant employs a network of coaxial cables, amplifiers, convertors and taps. In Fairmont, a trunkline cable 225,000 feet in length and, in Clarksburg, one 400,000 feet in length extend from the head end building and proceed along utility poles down from the mountain. Trunkline amplifiers and other devices are inserted at regular intervals along the trunkline to “amplify” the energy. Distribution or feeder cables, 436,000 feet in length in Fairmont and 550,000 feet in length in Clarksburg, also carried on utility poles, extend and branch off from the truckline. Distribution amplifiers and other electronic devices are also mounted on utility poles at necessary intervals in conjunction with the distribution cable. There are approximately 5,000 poles used in each system. Smaller dimensioned pieces of cable— referred to as “house drop” cable, aggregating 900,000 feet in length in Fairmont, and 1,000,000 feet in length in Clarksburg — extend from “tap-offs” on the distribution cable and terminate on the subscribers’ premises, where a connection is made to the subscribers’ television sets. There are approximately 5,000 to 6,000 tap-offs in the Fairmont system, and 8,000 to 9,000 tap-offs in the Clarksburg system. In most cases, at the end of the coaxial cable on the subscriber’s premises there is a piece of equipment called a “matching transformer,” whose function is to transform the energy to the proper impedence so that the home sets will operate properly. There is an aggregate of 665 miles of coaxial cable and 1,017 amplifiers in both systems. There are approximately 2,000 to 3,000 tubes in the distribution and trunkline amplifiers for both systems — 1,000 to 1,500 tubes for each system as compared to approximately 150 tubes in the transmitter of a 100 kilowatt broadcasting station and approximately the same number in the transmitter of a 316 kilowatt broadcasting station. In the five Teletrol units used in the head end of each system, there were approximately 130 tubes. In the Clarksburg and Fairmont systems, there are 601 and 416 trunk and distribution amplifiers respectively. The average cost of these amplifiers would be approximately $100 each. The cost for the 601 and 416 amplifiers in each system would be $60,000 for the Clarksburg system and $40,000 for the Fairmont system. There is an aggregate of 250 strand miles in the two systems. The cost for all of the equipment, cables, amplifiers and other line distribution equipment and the installation thereof is approximately $3,000 to $4,000 per strand mile. Based on these figures, the combined cost of these distribution systems, ex-eluding antennas and head end equipment, would be between $750,000 and $1,000,000. A coaxial cable is a transmission line or wave guide for the purpose of transmitting electromagnetic energy from one point to another. It consists of an outer metal conductor; an inner metal conductor; and, in between the two conductors, a non-conducting medium known as a dielectric. The electromagnetic waves reproduced by the electronic equipment at the head end of defendant’s systems are fed into the coaxial cable and propagate within and along the cable through the dielectric space between the two conductors at very high velocity. The purpose of the cable is to guide the propagation of the electromagnetic field along the cable and prevent its radiating or spreading out into space over the countryside. As the electromagnetic waves propagate through the coaxial cable, they lose intensity and, therefore, they must be amplified repeatedly to make sure that, at all points, the signal level is sufficiently high to be useable by the subscribers, Defendant’s systems convert the higher band channels (7-13) to the lower band channels (2-6) in the VHF range. The following chart reflects the channel number on which the signal of each station was received, converted, where applicable, and retransmitted in each of defendant’s systems. An electromagnetic field is real, physical and measurable. A reproduction of an electromagnetic wave is a physical reproduction of a physical reality. In physical science, mass and energy are equivalent in the sense that one can be converted into the other in accordance with the famous equation “E — Me2”, in which “E” is energy, “M” mass, and “c” the velocity of light. Similarly, it is possible to describe the sensations of sight and sound and electromagnetic signals into which such sight and sound have been transduced as different phases of the same reality. They differ only in that they are different forms of interconvertible energy. For the reason that the information or intelligence of the sight and sound is the same as that embodied in their respective AM and FM carrier waves, and for the further reason that such sight and sound and such AM and FM carrier waves are readily interconvertible in either direction of transformation, such AM and FM carrier waves are, in substantial and material factual respects, equivalents of the sight and sound. Defendant’s systems are not passive antennas. They consist of sophisticated, complex, extremely sensitive, highly expensive equipment, especially constructed and designed to reproduce the electromagnetic waves received from the originating television station and to propagate and transmit the new electromagnetic waves through an elaborate network of coaxial cables. The term “passive” signifies a device which does not add energy to any of the signals being handled by the system. In that sense, only the antenna and the cable are passive. All of the other equipment, such as the preamplifiers, “Teletrol” demodulators and modulators, WCON converters, “Channel Commanders” and line and distribution amplifiers, used by defendant's systems at various times, are active, not passive. The intensity of the electromagnetic waves as received at defendant’s antenna is insufficient to enable them to travel along the coaxial cable to the subscribers and to produce an acceptable or viewable picture without the reproduction of the signals received on new locally supplied energy at higher intensity by defendant’s elaborate electronic equipment. The Clarksburg and Fairmont systems could not be operated without amplifiers. If it were connected directly to defendant’s antennas, a home set located more than 1,500 feet from any of those antennas could not obtain satisfactory signals without such intervening transmission equipment, whether coaxial cable or twin lead is used. The intervening transmission equipment is essential, for without it defendant’s systems would not work. Nature, function, design and purpose of defendant’s CATV systems compared with other television program distribution systems Four typical distribution systems are used to extend television service: (1) Regularly licensed television broadcast stations receive the signals of other television stations by direct off-the-air reception or by a coaxial cable or microwave link system from a network originating source and then distribute the signals by rebroadcasting them; (2) UHF translators receive and rebroadcast signals from television stations ; (3) VHF repeater stations receive broadcast signals by a superior receiving installation, and amplify and retransmit them; (4) CATY systems receive, process and distribute signals by coaxial cable to their subscribers. The electronic processes and equipment employed by all of these distribution systems for the reception, reproduction and transmission of the electromagnetic waves representing television programs originated by other television stations or network studios are basically the same in purpose, function and design. Each of them employs substantially the same complex combinations of amplifiers, detectors or modulators, frequency convertors, and attendant devices designed to accomplish the purpose of receiving, reproducing and retransmitting the electromagnetic waves representing television programs originated by other stations or network studios. The basic purpose of defendant’s CATV systems, like the basic purpose of other distribution systems, is to process and retransmit signals of a television broadcast station to areas in which direct reception by ordinary home antennas of such television broadcast is unsatisfactory because of distance, intervening topographical conditions, or similar factors. Defendant’s systems, with respect to each channel received, perform a function substantially identical to that of a network affiliated station, UHF translator, or VHF repeater in that they all not only receive but also retransmit signals originated elsewhere. In preparing the received signals for retransmission, the head end equipment in defendant’s systems creates new modulated carrier waves. This was particularly apparent in those instances where Teletrol units were used to create new AM carrier waves. The process by which defendant’s systems create new modulated carrier waves from the received signals is electronically the same as the modulating process performed by a television station, a translator and a repeater station in order to transmit received signals. The head end equipment in each of defendant’s systems could operate as a low-power television transmitter in a television broadcasting station. The dominant, over-all function and design of defendant’s systems at all times— regardless of the individual instruments or specific equipment used from time to time — were and are aimed at the objective of propagating electromagnetic energy for the purpose of transmitting TV program material to a large number of subscribers, who are, in effect, their audience. In view of the foregoing characteristics, defendant’s systems are, in material respects, analogous to television stations, translator and repeater stations. Defendant’s systems are communication systems for the reasons that they were designed and engineered to, and do, convey information from one location to other locations. Transmitting signals through the air and transmitting signals through a coaxial cable are equivalent in electronic terms. The same kind of electromagnetic field is transmitted and both types of transmission are manifestations of the working of precisely the same set of physical laws (Maxwell’s equations). In the case of a transmission over the air, an electromagetic field is radiated from the transmitter antenna. In the case of a transmission by coaxial cable, an electromagnetic field is formed within the space in the cable between the metal conducting elements of the cable and is propagated along the cable in that interior space. Only the boundary conditions are different in the two cases. If the outer sheath of the cable were removed, the electromagnetic field would propagate in all directions through the air and there would be a low-power telecast. The ultimate output of defendant’s head end, like that of a television transmitter, consists of electromagnetic waves. Closed circuit television, like CATV, uses coaxial cables for