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Columbia Pictures Industries Inc. v. Aveco Inc.

argued: June 6, 1986.

COLUMBIA PICTURES INDUSTRIES, INC., EMBASSY PICTURES, MGM/UA ENTERTAINMENT CO., UNITED ARTISTS CORPORATION, PARAMOUNT PICTURES CORPORATION, TWENTIETH CENTURY FOX FILM CORPORATION, UNIVERSAL CITY STUDIOS, INC., WALT DISNEY PRODUCTIONS, INC., BUENA VISTA DISTRIBUTION CO., INC. AND WARNER BROS., INC.
v.
AVECO, INC., INDIVIDUALLY AND TRADING AND DOING BUSINESS AS NICKELODEON VIDEO SHOWCASE AND AS AMERICAN VIDEO EXCHANGE, AND LEONARDOS, JOHN P., INDIVIDUALLY AND TRADING AND DOING BUSINESS AS NICKELODEON VIDEO SHOWCASE AND AS AMERICAN VIDEO EXCHANGE; AVECO, INC., INDIVIDUALLY AND TRADING AND DOING BUSINESS AS NICKELODEON VIDEO SHOWCASE AND AS AMERICAN VIDEO EXCHANGE, AND JOHN P. LEONARDOS, ALSO KNOWN AS JOHN P. LEONARD, INDIVIDUALLY AND TRADING AND DOING BUSINESS AS NICKELODEON VIDEO SHOWCASE AND AS AMERICAN VIDEO EXCHANGE, APPELLANTS



On Appeal from the United States District Court For the Middle District of Pennsylvania - Scranton, Civil Action No. 84-0774.

Author: Stapleton

BEFORE: GIBBONS, BECKER, and STAPLETON, Circuit Judges.

STAPLETON, Circuit Judge.

Plaintiffs, appellees in this action, are producers of motion pictures ("Producers") and bring this copyright infringement action against the defendant, Aveco, Inc. Producers claim that Aveco's business, which includes renting video cassettes of motion pictures in conjunction with rooms in which they may be viewed, violates their exclusive rights under the Copyright Act of 1976, 17 U.S.C. § 101 et seq. The district court agreed and we affirm. Jurisdiction below was predicated on 28 U.S.C. §§ 1331 and 1338(a).

After discovery, the parties filed cross motions for summary judgment. The district court found that Aveco had infringed on Producers' exclusive rights to publicly perform and authorize public performances of their copyrighted works and so granted their motion for partial summary judgment. Columbia Pictures Industries, Inc. v. Aveco, Inc., 612 F. Supp. 315 (M.D. Pa. 1985). As a result, the court entered a permanent injunction order against Aveco.*fn1 The parties agree that this court must exercise plenary review, as there are no disputes of material fact and the question presented is one of interpreting the relevant law. Chrysler Credit Corp. v. First National Bank and Trust Co. of Washington, 746 F.2d 200, 202 (3d Cir. 1984).

I

Among their other operations, Producers distribute video cassette copies of motion pictures in which they own registered copyrights. They do so knowing that many retail purchasers of these video cassettes, including Aveco, rent them to others for profit. Aveco also makes available private rooms of various sizes in which its customers may view the video cassettes that they have chosen from Aveco's offerings. For example, at one location, Lock Haven, Aveco has thirty viewing rooms, each containing seating, a video cassette player, and television monitor. Aveco charges a rental fee for the viewing room that is separate from the charge for the video cassette rental.

Customers of Aveco may (1) rent a room and also rent a video cassette for viewing in that room, (2) rent a room and bring a video cassette obtained elsewhere to play in the room, or (3) rent a video cassette for out of store viewing.

Aveco has placed its video cassette players inside the individual viewing rooms and, subject to a time limitation, allows the customer complete control over the playing of the video cassettes. Customers operate the video cassette players in each viewing room and Aveco's employees assist only upon request. Each video cassette may be viewed only from inside the viewing room, and is not transmitted beyond the particular room in which it is being played. Aveco asserts that it rents its viewing rooms to individual customers who may be joined in the room only by members of their families and social acquaintances. Furthermore, Aveco's stated practice is not to permit unrelated groups of customers to share a viewing room while a video cassette is being played. For purposes of this appeal we assume the veracity of these assertions.

II

As the owners of copyrights in motion pictures, Producers possess statutory rights under the Copyright Act of 1976, 17 U.S.C. §§ 101-810. Among these are the exclusive rights set out in section 106 and reproduced in the margin.*fn2 Producers do not, in the present litigation, allege infringement of their exclusive rights "to do and to authorize [the distribution of] copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending." Thus, Aveco's rental of video cassettes for at-home viewing is not challenged.

17 U.S.C. § 106.

Producers' claim in this litigation is based on the alleged infringement of their "exclusive right . . . to perform the copyrighted work publicly" and to "authorize" such performances. Producers assert that Aveco, by renting its viewing rooms to the public for the purpose of watching Producers' video cassettes, is authorizing the public performance of copyrighted motion pictures.

Our analysis begins with the language of the Act. We first observe that there is no question that "performances" of copyrighted materials take place at Aveco's stores. "To perform" a work is defined in the Act as, "in the case of a motion picture or other audiovisual work, to show its images in any sequence or to make the sounds accompanying it audible." Section 101. As the House Report notes, this definition means that an individual is performing a work whenever he does anything by which the work is transmitted, ...


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