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Sony Corporation of America developed a video recording unit that made film industry members uncomfortable. Companies such as Universal Studios in the film industry decided to sue Sony and its distributors in the district court. These companies felt that Sony was contravening copyright laws. According to Universal Studios, Sony was devising a format that would allow copyright infringement. The film industry would revenue from sales, hence the suit in the district court to save the interests of the company.

The district court ruled in favor of Sony Corporation, suggesting that home-use recording is fair use. The court indicated that Sony was not in commercial practice to be seen as copyright. Instead, they were recording television movies to allow free access to public information. However, the Court of Appeal reversed this ruling against Sony, arguing that Betamax cannot be a tack article because its sole objective was copying.

This argument by the court of appeal of the United States held Sony responsible for contributing to copyright infringement. When the case was presented before the Supreme Court, the bench voted in favor of Sony. They argued that copying television movies for repeated home use does not infringe on copyright law. According to the case, the film industry was not against copying for home use, but they had sued the company that had manufactured the device, which was used to facilitate this technology. This factor turned in favor of Sony since it did not contribute to the infringement of copyright law. Universal failed to convince the court of the harm Betamax had caused because there should be a balance for all stakeholders to participate in entertainment without partiality.