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Columbia Pictures Indus., Inc. v. Redd Horne, Inc.

United States Court of Appeals, Third Circuit
749 F.2d 154 (1984)
ELI5:

Rule of Law:

The exhibition of copyrighted motion pictures in private viewing booths within a commercial establishment open to the public constitutes a public performance under the Copyright Act. The first sale doctrine does not protect this activity, as it only limits the copyright holder's distribution right, not the exclusive right of public performance.


Facts:

  • Maxwell’s Video Showcase, Ltd. operated two stores that, in addition to selling and renting video cassettes, offered a 'showcasing' service.
  • The stores contained 85 small, private booths, each equipped with a television and seating for two to four people.
  • Any member of the public could select a film from a catalogue and pay a fee to watch the video cassette in one of the private booths.
  • An employee of Maxwell's would take the selected cassette, place it into a VCR at a central counter, and transmit the performance to the television in the customer's assigned private booth.
  • Maxwell's legally purchased the video cassette copies of the films from the plaintiffs or their authorized distributors.
  • Maxwell's advertised its 'showcasing' service on radio and in local newspapers, featuring specific motion pictures.

Procedural Posture:

  • Plaintiffs, various motion picture studios, sued defendants Redd Horne, Inc., Maxwell's Video Showcase, Ltd., and others in the United States District Court for the Western District of Pennsylvania for copyright infringement.
  • The defendants filed antitrust counterclaims against the plaintiffs.
  • The District Court granted the plaintiffs' motion for summary judgment on the copyright claim, enjoining the defendants' activities and awarding damages.
  • The District Court also dismissed the defendants' antitrust counterclaims.
  • The defendants, as appellants, appealed the District Court's judgment to the United States Court of Appeals for the Third Circuit.

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Issue:

Does a video store's practice of allowing paying customers to watch copyrighted films in small, private viewing rooms on its premises constitute a public performance that infringes upon the copyright holders' exclusive rights under the Copyright Act?


Opinions:

Majority - Chief Judge Re

Yes, the defendants' activities constitute an unauthorized public performance and are an infringement of the plaintiffs' copyrights. Under Section 101 of the Copyright Act, to perform a work 'publicly' means to perform it at a 'place open to the public.' The relevant 'place' in this case is not the individual viewing booth but each of Maxwell’s two stores, which are unquestionably open to the public. The fact that patrons view the films in private booths does not change the public nature of the overall establishment. Furthermore, the Act defines a public performance to include transmitting a performance to members of the public who receive it in separate places and at different times, which directly describes the defendants' operation. The 'first sale doctrine' under Section 109(a) is inapplicable because it only exhausts the copyright owner's right to control the distribution of a particular copy, not the separate and exclusive right to publicly perform the work. Maxwell's did not sell or otherwise dispose of the video cassettes; it retained possession and control while performing them for paying customers, an act indistinguishable from charging an admission fee at a public theater.



Analysis:

This decision clarifies that the definition of 'public performance' under the Copyright Act is broad enough to cover new business models enabled by technology like the VCR. The court's focus on the nature of the overall premises ('a place open to the public') rather than the individual viewing experience prevents businesses from creating 'mini-theaters' to circumvent public performance licensing requirements. This ruling reinforces the strength of a copyright holder's performance right, making it clear that this right is distinct from the distribution right exhausted by the first sale doctrine. It set a significant precedent for future cases involving the transmission of copyrighted content in commercial settings, such as hotels and online streaming services.

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