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In a significant victory for movie studios, a federal judge has ruled that movie “trailers” are an art form unto themselves and protected by copyright law and therefore cannot be streamed on the Internet without permission. In his 24-page opinion in Video Pipeline v. Buena Vista Home Entertainment Inc., U.S. District Judge Jerome B. Simandle of the District of New Jersey also ruled that the “fair use” doctrine does not protect a company that created its own version of trailers for Disney and Miramax movies after the studios insisted that their trailers be taken off the Internet. “Trailers have become more than advertising material for other products; they have become valuable entertainment content in their own right,” Simandle wrote. The plaintiff in the suit, Video Pipeline of Haddonfield, N.J., was seeking a declaratory judgment that its use of existing trailers and creation of its own trailers did not violate copyright law. But Simandle found that trailers, although not separately registered, are nonetheless protected by the movie’s copyright, and that all of the defenses Video Pipeline asserted were invalid. Since 1985, Video Pipeline has been in the business of creating movie promotional materials. At first, the company’s main product was a continuous loop video for use in video rental stores that included trailers from several movies. Simandle found that the company has provided more than 1.1 million trailers on videotape to about 2,000 home video distributors and retailers. But in the late 1990s, when the market for Internet sales of home videos exploded, Video Pipeline began supplying online retailers like Amazon.com, Netflix and Yahoo!Shopping with a service that allowed its customers to watch the trailers online. Video Pipeline had agreements with 25 Internet retailers that allowed visitors to the retailers’ Web sites to click on a “preview” button that links them immediately to VideoPipeline.net, which then streams the video to the customer. To the Internet surfer, however, the technological process is invisible, with no indication that the source of the streaming is Video Pipeline’s site. Under the agreements, the Internet-based retailers pay Video Pipeline “per megabyte actually shown to consumers.”

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