Movie studio sues rental store over private rooms

Can a video store allow customers to rent private rooms to watch movies without permission?

No, not without permission from the copyright owner. This was the issue in Columbia Pictures v. Redd Horn [*1].

What happened in Columbia Pictures?

Redd Horne, a video rental store, allowed customers to rent a room to watch videotapes in small groups. Redd Horne did not get permission from the movie studios (who owned the copyrights to the movies).

What was Red Horne’s argument?

Red Horne argued that they bought the video tapes and can do with them what they want. [*2] According to Red Horne, after they buy the video tapes, the movie studios no longer have a say in how the video tapes are used.

What did the Court say?

Sorry, Red Horne. You are allowed to resell the video tapes but you are not allowed to show them in private rooms.

Renting private rooms to show movies is prohibited by copyright law. Copyright law prohibits unauthorized “public exhibition of motion pictures and other audio visual works.” [*3] This includes showing video tapes in private rooms. The display is “public” under the law because the video store is open to the public for anyone to rent a video (even though customers are viewing the videos privately in a rented room).

So what?

When you buy a video tape, you have the right to resell it. You do not have the right to show the copyrighted work “publically.” This case shows that the Court is willing to interpret the term “public” very broadly – so broadly that private showings in small groups available to the general public counts as “public” under the law.

[*1] Columbia Pictures Indus. V. Red Horne, Inc., 749 F.2d 154, 224 U.S.P.Q. 641 (3^rd. Cir. 1984)

[*2] First Sale Doctrine

[*3] 17 U.S.C. Section 106