On Command Video Corp. v. Columbia Pictures Industries
777 F. Supp. 787, 92 Daily Journal DAR 1633, 21 U.S.P.Q. 2d (BNA) 1545 (1991)
Rule of Law:
A video-on-demand system that transmits copyrighted movies to individual hotel guest rooms upon request constitutes a 'public performance' under the 'transmit clause' of the 1976 Copyright Act, 17 U.S.C. § 101, thereby infringing the copyright owners' exclusive right, because hotel guests are considered 'the public' in this commercial context.
Facts:
- On Command developed an electronic system for delivering movie video tapes to hotel guest rooms.
- The On Command system consists of a computer program, an electronic switch, and a bank of video cassette players (VCPs), all centrally located in a hotel equipment room.
- These VCPs are connected to hotel guest rooms via wiring.
- A hotel guest operates the system from their room using a remote control, selecting a movie from a menu displayed on the television.
- Once a movie is selected, the computer program dedicates a specific VCP containing that movie to the guest's room and begins playing it.
- The selected video is seen only in the room where it was selected and cannot be viewed in any other guest room or public area of the hotel.
- Viewers cannot pause, rewind, or fast-forward the video.
- Hotel clerks can activate or deactivate movie transmission to specific rooms and block adult movies at a guest's request.
Procedural Posture:
- On Command (plaintiff) sought a declaratory judgment in federal district court, asserting that its hotel video-movie viewing system did not infringe the defendants’ copyrights.
- Seven major United States movie companies (defendants), excluding Embassy Pictures, counterclaimed for damages, alleging copyright infringement by On Command’s system.
- On Command and the defendants filed cross-motions for summary judgment on the issue of liability.
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Issue:
Does a hotel's video-on-demand system, which transmits copyrighted movies to individual guest rooms upon request, constitute a 'public performance' under the 'transmit clause' of the 1976 Copyright Act, 17 U.S.C. § 101, thereby infringing the copyright owners' exclusive right?
Opinions:
Majority - Weigel, District Judge
Yes, On Command’s hotel video-movie viewing system constitutes a public performance under the transmit clause of the Copyright Act. The court first addressed the 'public place' clause, affirming that hotel guest rooms are not considered 'public places' for copyright purposes, and thus no public performance occurs under that clause. However, the court found that On Command's system does result in a public performance under the 'transmit clause.' To 'transmit' a performance means to communicate it by any device or process where images or sounds are received beyond the place from which they are sent, which accurately describes On Command’s system. The court rejected On Command's argument that its system involves 'electronic rentals' rather than 'transmissions,' stating that communicating images and sounds from a central console to guest rooms via a network is a direct transmission. Furthermore, the court held that these transmissions are 'to the public' because hotel guests are considered 'members of the public' due to their commercial relationship with On Command, regardless of the private setting of the individual guest room. Citing legislative history and precedents like Redd Horne, the court emphasized that the transmit clause covers performances received in separate places and at different times, specifically mentioning hotel rooms and systems where content is performed at the initiative of individual members of the public. Therefore, whether one or one hundred guests view a transmission, simultaneously or sequentially, it remains a public performance because it goes to members of the public.
Analysis:
This case significantly clarifies the application of copyright law, particularly the 'public performance' right, to emerging technologies like video-on-demand systems. It establishes that the commercial nature of the relationship between the service provider and the audience is key to determining whether a transmission is 'to the public,' even if the viewing occurs in private spaces. The decision reinforces the broad scope of the Copyright Act's transmit clause, demonstrating that it covers decentralized, on-demand content delivery, thereby extending copyright protections to new digital distribution models. This ruling has implications for any service offering copyrighted material to an individualized, but commercially defined, audience.
