In a significant victory for movie studios, a federal judge in New Jersey has ruled that movie "trailers" are an art form protected by copyright law and therefore cannot be streamed on the Internet without permission. The judge also ruled that the "fair use" doctrine does not protect a company that created its own version of such trailers after the studios requested that theirs be taken off the Internet.
By Shannon P. Duffy|August 13, 2003 at 12:00 AM
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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. The ruling is a victory for attorneys Gary A. Rosen, a sole practitioner, and Patrick M. Madamba Jr. of the Philadelphia office of Akin Gump Strauss Hauer & Feld. 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 mega byte actually shown to consumers.” But in September 2000, Buena Vista, a subsidiary of Disney, told Video Pipeline that it did not have permission to use the studio-supplied trailers on the Internet, and that they were not cleared for online use. When Video Pipeline responded by filing suit in U.S. District Court, Buena Vista terminated its license agreement and demanded the return of the 80 previews it covered. Video Pipeline removed the studio-produced previews from the Internet but began to make its own “clip previews” from copies of videos owned by its retailer clients. Each clip preview created by Video Pipeline is about two minutes long and consists of an opening display of the Disney or Miramax trademark, the title of the motion picture being distributed by Buena Vista, and then two or more scenes from the motion picture, followed by another display of the title. Unlike the studios’ trailers, the clip previews have no voice over, no editing, no use of additional music and no use of narration. Ultimately, Video Pipeline created 62 clip previews for movies, such as “Fantasia,” “Beauty and the Beast” and “Pretty Woman.” In April 2002, Judge Simandle enjoined Video Pipeline from continuing to provide online “streaming” of movie previews it produced itself after Disney and Miramax said it was not allowed to stream the studios’ own trailers. Video Pipeline appealed the injunction, but the 3rd U.S. Circuit Court of Appeals has not yet issued a ruling. Now Simandle has rejected Video Pipeline’s motion for summary judgment and instead ruled that Buena Vista is entitled to summary judgment on all of its counterclaims — copyright infringement; unfair competition; conversion; and breach of contract. Video Pipeline’s lawyers, Gary D. Fry, Paul R. Fitzmaurice and Lisa A. Sabatino of Pelino & Lentz, argued that the company’s use of the Disney trailers and its own clip previews on the Internet constituted fair use because it “complements or promotes the copyrighted work.” Simandle found that courts weighing a fair use defense must consider four factors:
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