FEDERAL JUDGE BLEEPS DVD EDITING

BY DEBORAH NATHAN, ESQ. / July 13, 2006
Find Law: Legal News & Commentary

A federal judge has stopped the distribution of major motion picture DVDs that were edited by several companies to remove objectionable content, ruling that the sanitized versions infringe the copyrights held by several major movie studios and directors.

Judge Richard P. Matsch of the District of Colorado granted the motion for partial summary judgment made by such cinema luminaries as Steven Soderbergh, Robert Redford, Steven Spielberg, Martin Scorsese and Sydney Pollack.

The directors and several movie studios were defendants in a 2002 lawsuit filed by Clean Flicks of Colorado, Family Flix USA, CleanFilms and Play It Clean Video.

The movie studios included Metro-Goldwyn-Mayer Studios Inc., Time Warner Entertainment Co., Disney Enterprises Inc. and Dreamworks LLC.

The plaintiffs sought a declaratory judgment that they were not infringing any party's copyrights by making edited versions of motion pictures.

The defendants counterclaimed, alleging copyright infringement, and then moved for partial summary judgment.

In response to the counterclaims, the plaintiffs argued that their actions did not constitute copyright infringement because they were making fair use of the copyrighted works.

The fair-use doctrine is an affirmative defense to allegations of copyright infringement. The doctrine allows use of copyrighted works for criticism, comment, news reporting, teaching, scholarship and research.

Courts balance four factors to determine if a particular use is fair: the purpose and character of the use, including whether it is of a commercial nature or for nonprofit educational purposes; the nature of the copyrighted work; the amount and substantiality of the portion of the work used; and the effect of the use upon the potential market for the work.

As explained in Judge Matsch's opinion, Clean Flicks and Family Flix operated similarly by purchasing an original DVD of a movie. After downloading the DVD onto a computer, they edited the film by deleting sex, nudity, profanity and gory violence.

The companies either sold the edited movies directly or through distributors CleanFilms and Play It Clean.

Judge Matsch weighed the four factors and concluded that the scales tipped in favor of the directors and studios.

The plaintiffs conceded that they were using the DVDs for commercial gain. Second, Judge Matsch said the edits to the movies, although constituting a small percentage of the original films, did nothing to transform the creative expression of the movies.

He explained further that the non-transformative nature of the edited copies, coupled with the creative expressions of the movies, weigh heavily in favor of the studios and directors under the second factor, the nature of the copyrighted work.

The judge also rejected the plaintiffs' claim that their use of the movies had no adverse effect on the value of the copyrighted work to the studios, noting that the argument ignored the intrinsic value of the right to control the content of the copyrighted work.

The plaintiffs also raised a public policy argument, claiming they were criticizing the objectionable content in many movies and were providing more socially acceptable alternatives.

Judge Matsch said that argument was addressed to the wrong branch of government, because courts are not free to determine the social value of copyrighted works.

He observed that during the pendency of the case, Congress enacted the Family Movie Act of 2005, which allowed private households to edit movies if no fixed copy of the movie is created.

The judge said Congress had the opportunity to make the policy choice now urged by the plaintiffs and rejected it.

Agreeing that the plaintiffs were infringing the defendants' copyrights, Judge Matsch enjoined them from continuing to produce and distribute edited versions of the films.

The plaintiffs' attorney, David N. Schacter of Sherman & Howard in Denver, acknowledged that Judge Matsch's opinion was well-reasoned, but said, "I'm disappointed that the court took the decision-making role away from the jury."

COURT BLOCKS SALE OF SANITIZED DVDs

BY CYNTHIA LITTLETON / July 10, 2006
The Hollywood Reporter

A federal judge in Colorado has handed the industry a big win in its protracted legal battle against a handful of small companies in Utah, Arizona and Colorado that offer sanitized versions of theatrical releases on DVD.

The case encompasses two of Hollywood's biggest headaches these days: the culture wars and the disruptive influence of digital technologies.

Senior U.S. District Court Judge Richard Matsch came down squarely on the side of the DGA and the major studios in his ruling that the companies must immediately cease all production, sale and rentals of edited videos. The summary judgment issued Thursday requires the companies -- Utah-based CleanFlicks, CleanFilms and Play It Clean Video, Arizona-based Family Flix United States and the separate entity CleanFlicks of Colorado -- to turn over all existing copies of their edited movies to lawyers for the studios for destruction within five days of the ruling.

Utah-based CleanFlicks, which describes itself as the largest distributor of edited movies, through online sales and rentals and sales to video stores in Utah, Arizona and other states in the region, said it would continue its fight against the guild and the studios. CleanFlicks and the others make copies of official DVD releases and then edit them for sex, nudity, violence and profanity.

"We're disappointed," CleanFlicks chief executive Ray Lines told the The Associated Press. "This is a typical case of David vs. Goliath, but in this case, Hollywood rewrote the ending. We're going to continue to fight."

David Schachter, attorney for CleanFlicks of Colorado, said Sunday that it was unclear whether any of the video-editing companies would seek an emergency hearing this week to request a stay of the injunction pending an appeal. He said such a move was unlikely for CleanFlicks of Colorado, which operates a retail store in Colorado Springs, Colo. It was unclear Sunday whether the store was still open.

Representatives for Family Flix could not be reached for comment during the weekend. A posting on the Web site www.clean-edited-movies.com reported that the Family Flix had decided to shut its doors after five years as a result of the litigation, though the date of the posting was unclear. The site quoted Family Flix founders Richard and Sandra Teraci as making plans to establish their own production company.

CleanFlicks and the others maintained their edited DVDs were legal under fair use guidelines that allow for the use of copyrighted material in criticism, news reporting, parody and other circumstances. The slogan on the CleanFlicks Web site is "It's About Choice." An online listing for Family Flix's offerings on the Web site of the Mormon-based Meridian magazine noted that the content snipped out of its edited videos included all references to "homosexuality, perversion and co-habitation."

The mainstreaming of sophisticated digital editing technologies has fueled the cottage industry of movie sanitizers. CleanFlicks and others purchase an official DVD copy of a film on DVD for each edited version of the title they produce through the use of editing systems and software. The official release disc is included alongside the edited copy in every sale or rental transaction conducted. As such, the companies argued that they had the right on First Amendment and fair use grounds to offer consumers the alternative of an edited version for private viewing, so long as they maintained that "one-to-one" ratio to ensure that copyright holders got their due from the transactions. Matsch disagreed.

"Their business is illegitimate," the judge wrote in his 16-page ruling. "The right to control the content of the copyrighted work ... is the essence of the law of copyright."

The fight began in August 2002 with a pre-emptive legal filing by CleanFlicks against the DGA and 16 prominent directors after it got wind that the guild was preparing a legal case against the company. CleanFlicks sought a court ruling clarifying its right to market the videos on First Amendment grounds. The DGA and directors countersued the following month. After initially staying out of the fray, eight Hollywood studios joined with the directors and the guild in December 2002, filing claims of copyright infringement against CleanFlicks and other companies.

"Whether these films should be edited in a manner that would make them acceptable to more of the public playing on a DVD in a home environment is more than merely a matter of marketing; it is a question of what audience the copyright owner wants to reach," Matsch wrote. "This court is not free to determine the social value of copyrighted works. What is protected are the creator's rights to protect its creation in the form in which it was created."

The studios involved in the suit are MGM, Time Warner Inc., Sony Pictures Entertainment Inc., the The Walt Disney Company, DreamWorks Animation SKG Inc., Universal, Twentieth Century Fox Film Corporation and Paramount Pictures Corporation. The directors named in the initial August 2002 filing included Martin Scorsese, Steven Spielberg, Steven Soderbergh, Michael Mann, Robert Altman, Curtis Hanson, Betty Thomas and DGA president Michael Apted.

Apted called Matsch's ruling a vindication for the guild and its members, especially with its clear support for rights of the work's original creator to protect how their film is presented.

"No matter how many disclaimers are put on the film, it still carries the director's name," Apted said. "So we have great passion about protecting our work, which is our signature and brand identification, against unauthorized editing."

Early on the legal sparring involved Salt Lake City-based ClearPlay, which offers video filtering software that allows for home viewing of cleaned-up versions of Hollywood titles.

ClearPlay offers software programs developed for specific titles that users can run on their computer or ClearPlay's proprietary DVD player along with an official copy of the DVD. With this technology, a nude shot of an actor can be altered to show a silhouette, or profanity can be bleeped out. Because ClearPlay's technology does not involve making an altered DVD copy, it has been shielded from the copyright infringement claims. The debate over movie content filtering activities made its way into Congress, which passed the 2005 Family Movie Act that protects ClearPlay and other software-based filtering companies. Matsch noted that Congress at that time had the opportunity to also carve out legal protections for CleanFlicks and its ilk, but chose not to.

The DGA said in its statement on the ruling it "remains concerned about this exception to copyright protection."

Matsch's opinion could wind up eliminating most of ClearPlay's competition, but company Bill Aho still criticized Matsch's reasoning.

"While it may be good for ClearPlay Inc., it's bad for parents," Aho said. "Moms and dads need all the help they can get to protect their kids, and these companies were providing a valuable service."

THE FILTH STAYS IN THE PICTURE

July 10, 2006
The Guardian

Hollywood last week won a protracted legal battle against companies which produce sanitised versions of its films on DVD when a US judge ordered those firms to turn over all existing copies to studio lawyers for destruction within five days of his ruling.

Senior district court judge Richard Matsch of Colorado ruled that editing movies to delete objectionable language, sex and violence was an "illegitimate business" that hurt Hollywood studios and directors who owned the movie rights.

The order affects the likes of Utah-based CleanFlicks, CleanFilms and Play It Clean Video, Arizona-based Family Flix USA and another CleanFlicks, from Colorado, all of whom have been editing films for violence, sex and bad language, in the face of the studios' wrath. The fight started in August 2002 when CleanFlicks of Utah filed a suit against the Directors Guild of America and 16 leading directors, seeking a court ruling clarifying its right to market the videos on First Amendment grounds. The DGA and directors countersued the following month. By December 2002, the case had snowballed when eight major studios filed suit against CleanFlicks and its peers for copyright infringement.

Utah's CleanFlicks, which says it is the largest distributor of edited movies, declared it would continue to fight studios for the right to produce edited movies.

It claims it should have the legal right to do so because it purchases one copy of a DVD for every edited movie it produces, and includes the original version with the new version when mailing packages to customers. David Schachter, attorney for CleanFlicks of Colorado, said yesterday that his client was unlikely to seek a stay on the injunction, but that it did not preclude others from choosing to do so. A posting on Family Flix's website reported that the company had decided to close its doors after five years as a result of the ruling. The company would routinely edit content for homosexuality, "perversion" and cohabitation - its version of Brokeback Mountain must have been a sight to see.