20th Century Fox sued a young video company for appropriating old footage from a documentary THAT WAS IN THE PUBLIC DOMAIN. Amazingly, a lower court agreed and ordered the company to pay Fox $1.5. Now the case is before the Supreme Court:

Justices were urged to watch a seven-hour World War II documentary in settling the fight between 20th Century Fox, which let a copyright lapse, and a young video company that reused an old war documentary.

The court must decide if the video distributor has to turn over its profits, and pay damages, in a case that will determine when people can be punished for using noncopyright material without giving the creator credit.

The documentary, based on Dwight Eisenhower's memoirs, did not have copyright protection when Dastar Corp. used it to make its own video in 1995 — the 50th anniversary of the end of the war.

The original documentary was "Crusade in Europe." Dastar deleted one hour, added a half hour of new material, then sold tape sets for about $25 as "Campaigns in Europe."

....While some justices seemed bothered by the company's marketing strategy, there was no agreement that it was illegal.

Justice Sandra Day O'Connor told Cendali that her client let the copyright lapse for the documentary, in the 1970s, and now wants the court to expand copyright protection so it can recover damages from Dastar.

"It was in the public domain," O'Connor said. "Of course they had a right to copy it."

....Dastar lawyer David Gerber said that Dastar sold the video at one-fifth of the cost of Fox tapes. Their products are sold to mail-order companies and warehouse clubs such as Costco and Sam's Club. They sold more than 35,000 copies of "Campaigns in Europe," court records show.

"Can you put your own name on something that's in the public domain?" O'Connor asked.

"The short answer is, you can," Gerber said.

....In this case, Dastar has the backing of the Bush administration and other groups including the American Library Association.

Justice David Souter said that Dastar followed the law, by putting its name on the video.

He said people angry that they bought a rerun "can go to Dastar and raise the devil — they know exactly who to blame." [AP]

It seems pretty cut and dried to me: the company used material in the public domain and made something new out of it. That's what the public domain is FOR.