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Two Disney units have sued a New Jersey distributor of movie trailers, accusing the company of infringing their copyrights on promotional material. Buena Vista Home Entertainment and Miramax are requesting $111 million in damages from Video Pipeline, saying that the company illegally distributed trailers for movies to retailers and video-rental stores. A 16-year-old company, Video Pipeline creates trailer packages that run on in-store monitors. Four years ago, the company began streaming some versions over the Web to these retailers, so the recipients could carry them on their Web sites. The Disney units argue that the licensing agreements with Video Pipeline only cover analog versions of their trailers. The entertainment giant says digitizing and streaming them violates those contracts. Disney’s corporate office issued a statement saying the suit is “about Video Pipeline’s blatant infringement of our contract and intellectual property rights by creating unauthorized, bootleg trailers and distributing them for a profit under our registered trademarks.” Video Pipeline executives could not be reached to comment, but the company has stated in court documents that its use of Disney trailers falls under free-speech laws, which permit a limited amount of copying. U.S. District Judge Jerome B. Simandle, in Camden, N.J., will hear Disney’s request for a preliminary injunction against Video Pipeline on Wednesday. The shadow of Napster still looms large in the imagination of entertainment-industry executives who fear that they will lose control over their content on the Internet. Disney is expected to begin storing its promotional material on in-house servers, rather than distributing clips to third-party promotional and retail sites. Under this scenario, third-party sites would license a link to the Disney servers. Industry sources say installing such a system could cost about $5 million, with further costs of millions of dollars each year to send video streams to various sites. One issue Disney has with Video Pipeline is that the latter company was profiting from streaming the trailers by charging retail sites a per-stream fee. Entertainment industry executives may recall another company that rose to fame and fortune by repackaging promotional material: MTV. No other studio has sued Video Pipeline, but the Motion Picture Association of America weighed in on Disney’s side earlier this week, promising to file a friend-of-the-court brief on the studio’s behalf. Pam Horovitz, president of the National Association of Recording Merchandisers, which filed a friend-of-the-court brief on behalf of Video Pipeline, says a number of entertainment companies are trying to get control over promotional content online. She says music retailers have been asked to sign licensing agreements for the rights to stream 30-second teaser clips. Studios and labels, she says, “want to control everything. And it’s an outrage.” Related Articles from The Industry Standard: My Way’s the I-Way Study: Online Music Should Go Hollywood Freeserve May Leave UK Copyright � 2001 The Industry Standard

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