Arthur Goldberg

“ The district judge found that each copyrighted film block booked by appellants for television use 'was in itself a unique product'; that feature films 'varied in theme, in artistic performance, in stars, in audience appeal, etc.,' and were not fungible; and that since each defendant by reason of its copyright had a 'monopolistic' position as to each tying product, 'sufficient economic power' to impose an appreciable restraint on free competition in the tied product was present, as demanded by the Northern Pacific decision. ”

“ The principles underlying our Paramount Pictures decision have general application to tying arrangements involving copyrighted products, and govern here. Applicability of Paramount Pictures brings with it a meeting of the test of Northern Pacific, since Paramount Pictures is but a particularized application of the general doctrine as reaffirmed in Northern Pacific. Enforced block booking of films is a vice in both the motion picture and television industries, and that the sin is more serious (in dollar amount) in one than the other does not expiate the guilt for either. ”

“ The trial judge's ability to formulate a decree tailored to deal with the violations existent in each case is normally superior to that of any reviewing court, due to his familiarity with testimony and exhibits. Notwithstanding our belief that primary responsibility for the decree must rest with the trial judge if workable results are to obtain, it is our duty to examine the decree in light of the record to see that the relief it affords is adequate to prevent the recurrence of the illegality which brought on the given litigation. ”

“ The United States contends that the relief afforded by the final judgments [7] is inadequate and that to be adequate it must also: (1) require the defendants to price the films individually and offer them on a picture-by-picture basis; (2) prohibit noncost-justified differentials in price between a film when sold individually and when sold as part of a package; (3) proscribe 'temporary' refusals by a distributor to deal on less than a block basis while he is negotiating with a competing television station for a package sale. ”

“ Not challenging the District Court's finding that they did engage in block booking, they contend that the uniqueness attributable to a copyrighted feature film, though relevant in the movie-theater context, is lost when the film is being sold for television use. Feature films, they point out, constitute less than 8% of television programming, and they assert that films are 'reasonably interchangeable' with other types of programming material and with other feature films as well. ”

“ Appellants cannot escape the applicability of Paramount Pictures. A copyrighted feature film does not lose its legal or economic uniqueness because it is shown on a television rather than a movie screen. ”

“ The United States brought separate civil antitrust actions in the Southern District of New York in 1957 against six major distributors of pre-1948 copyrighted motion picture feature films for television exhibition, alleging that each defendant had engaged in block booking in violation of § 1 of the Sherman Act. The complaints asserted that the defendants had, in selling to television stations, conditioned the license or sale of one or more feature films upon the acceptance by the station of a package or block containing one or more unwanted or inferior films. ”

“ Some of the practices which the Government seeks to have enjoined with its requested modifications are acts which may be entirely proper when viewed alone. To ensure, however, that relief is effectual, otherwise permissible practices connected with the acts found to be illegal must sometimes be enjoined. ”

“ These anti-competitive consequences are an apt illustration of the reasons underlying out recognition that the mere presence of competing substitutes for the tying product, here taking the form of other programming material as well as other feature films, is insufficient to destroy the legal, and indeed the economic, distinctiveness of the copyrighted product. ”

“ We agree in the main, except that the modification proposed by the Government fails to give full recognition to that part of this Court's holding in Paramount Pictures which said,
'We do not suggest that films may not be sold in blocks or groups, when there is no requirement, express or implied, for the purchase of more than one film. All we hold to be illegal is a refusal to license one or more copyrights unless another copyright is accepted.' 334 U.S., at 159, 68 S.Ct., at 930. ”

“ The Government's third request is, like the first, designed to prevent distributors from subjecting prospective purchasers to a 'run-around' on the purchase of individual films. No doubt temporary refusal to sell in broken lots to one customer while negotiating to sell the entire block to another is a proper business practice, viewed in vacuo, but we think that if permitted here it may tend to force some stations into buying pre-set packages to forestall a competitor's getting the entire group. ”

“ It correctly found that the conditioning of the sale of one or more copyrighted feature films to television stations upon the purchase of one or more other films is illegal. The antitrust laws do not permit a compounding of the statutorily conferred monopoly. ”

“ Each stands not on its own footing but in whole or in part on the appeal which another film may have. As the District Court said, the result is to add to the monopoly of the copyright in violation of the principle of the patent cases involving tying clauses.' 334 U.S., at 158, 68 S.Ct., at 929.
Appellants attempt to distinguish the Paramount decision in its relation to the present facts: the block booked sale of copyrighted feature films to exhibitors in a new medium television. ”

“ Appellants urge that their overall sales policies were to allow selective purchasing of films, and that in light of this, the fact that a few contracts were found to be illegal does not justify the entering of injunctive relief. We disagree. Illegality having been properly found, appellants cannot now complain that its incidence was too scattered to warrant injunctive relief. ”

“ We would not so limit the relevant cost justifications. To prevent definitional arguments, and to ensure that all proper bases of quantity discount may be used, the modification should be worded in terms of allowing all legitimate cost justifications. ”