Everybody Wants to Direct: The Editing of Motion Pictures in Clean Flicks v. Soderbergh

On July 6, 2006, in Clean Flicks of Colo., LLC v. Soderbergh, 433 F. Supp. 2d 1236 (D. Colo. 2006), the court granted summary judgment to several film studios, holding that the practice of making and distributing edited versions of the studios' motion pictures by the defendants, collectively known as the 'Clean Flicks defendants,' amounted to copyright infringement.

The Clean Flicks court relied heavily upon its conclusion that the defendants violated the plaintiffs' 'right to control the content of the copyrighted work,' which the court reasoned was 'the essence of the law of copyright.' 433 F. Supp. 2d at 1242. The court declined, however, to find that the edited movies were infringing derivative works. In analyzing the right of a copyright holder to prevent modifications to a work, the court presented two contrasting perspectives. While it concluded that there is a very narrow derivative work right, it asserted a broad right of a copyright holder to otherwise prevent modifications to a work.

Copying, Editing, and Distribution of Movies

Though their individual practices varied, the Clean Flicks defendants generally purchased DVD copies of major commercial films; copied those DVDs onto computer hard drives (after overcoming a content scrambling system); edited the films to remove, blur, or black out certain visual content they deemed 'objectionable,' such as nudity and graphic violence, as well as redacted or replaced with ambient noise audio content deemed objectionable; burned DVDs of the now-edited movies; and sold or rented those newly created DVDs to the public. The companies lawfully purchased multiple copies of the unedited films and maintained a one-to-one ratio of copies of edited movies to copies of unedited movies.

This practice of renting and selling edited movies attracted the attention of the motion picture industry, which was not pleased to have its films being re-cut by third parties. In 2002, the Clean Flicks defendants, likely fearing a lawsuit from the Directors Guild of America, brought a declaratory judgment action against several prominent directors. The directors filed counterclaims, and the studios, as the holders of the copyrights to the films, joined the action and asserted claims of copyright infringement.

Derivative Works and Transformative Works

One of the exclusive rights of a copyright holder is the right to create derivative works. The Copyright Act defines a derivative work, in part, as a work based upon a pre-existing work, including any form in which the work 'may be recast, transformed or adapted.' (emphasis added). 17 U.S.C. '101. The Copy-right Act requires only minimal originality for a work to qualify as a derivative work, stating the requirement that the modifications 'as a whole, represent an original work of authorship.' Id. As courts have stated, this threshold is quite low and requires only a 'distinguishable variation that is more than merely trivial.' Waldman Publ'g Corp. v. Landoll, Inc., 43 F.3d 775, 782 (2d Cir. 1994). By definition, derivative works include an 'abridgement' or a 'condensation.' 17 U.S.C. '101.

The studios contended that the edited films were derivative works and thus a violation of their exclusive rights. The defendants denied that the edited films were derivative works, but also contended that making the edited films was fair use, because they were 'transformative.'

Fair use, originally a judge-made doctrine, is codified in '107 of the Copyright Act. The statutory factors used to evaluate a claim of fair use are: 1) the purpose and character of the use, 2) the nature of the copyrighted work, 3) the amount of the work taken, and 4) the effect of the use on the market or value of the work. With regard to the first factor, courts often inquire whether the work is 'transformative.' As used in the context of fair use, the term 'transformative' is generally understood to mean changing the original work to give it a new or different character or purpose, or to alter its meaning or message. Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 579 (1994). Determining whether a work is transformative is at the heart of the fair use doctrine. Id.

With little analysis, the Clean Flicks court stated that the parties held internally inconsistent positions and concluded that 'because the infringing copies of these movies are not used in a transformative manner, they are not derivative works.' 433 F. Supp. 2d at 1242. The court appeared not to consider whether the edited films might nonetheless constitute an 'abridgment' or a 'condensation' under the statutory definition of a derivative work, nor did it appear to consider other decisions that had found the editing of audiovisual works to be infringing. See, e.g., Gilliam v. American Broad. Cos., 538 F.2d 14 (2d Cir. 1976); WGN Continental Broad. Co. v. United Video, 693 F.2d 622 (7th Cir. 1982).

More important, it appeared to assume that the judge-made concept of 'transformative' use of a work in fair-use analysis is in all respects the same concept as the statutory concept of a 'transformed' work that qualifies as a derivative work. By conflating these two inquiries, the Clean Flicks decision undermines the derivative work right: In order for a work to qualify as a derivative work, it would require that the work be sufficiently transformative to meet the first factor of fair use.

Moral Rights and Modifications

Though it concluded that there was no violation of the derivative work right, the Clean Flicks court did find violations of the Copyright Act, based upon violations of the right of reproduction and distribution. In its analysis, the court relied heavily upon a belief that the defendants violated 'the creator's rights to protect its creation in the form in which it was created,' 433 F. Supp. 2d at 1240, and its right 'to control the content' of the work. Id. at 1242. The Clean Flicks decision, though, is not clear as to what exactly it meant by these rights, and how these rights would be violated without finding a violation of the derivative work right.

Such a broad statement of control might also cover territory more specifically addressed by laws protecting artists' 'moral rights.' Such rights, long protected under European systems, were added to the Copyright Act by the Visual Artists Rights Act of 1990 ('VARA'), codified at 17 U.S.C. '106A. VARA specifically addresses an author's right to protect the 'integrity' of certain protected works. It gives the author (not necessarily the copyright holder) the right to prevent designated modifications ' essentially, the right to make sure the work is kept in the form in which it is created. VARA, however, neither protects all works nor prevents all modifications.

In Lee v. A.R.T. Co., 125 F.3d 580 (7th Cir. 1997), the Seventh Circuit rejected an infringement claim against a company that purchased notecards and mounted them on tiles for resale. The Lee court stated that the right of artists or authors to block modifications of their works that they disapprove of is a version of an author's 'moral rights,' properly addressed under VARA, and under VARA, mass-produced notecards would not be protected.

Though eventually finding that a derivative work was not created because no changes to the notecards were actually made, the Seventh Circuit reasoned, albeit in dicta, that it would not 'be sound to use [the derivative work right] to provide artists with exclusive rights deliberately omitted from [VARA].' Id. at 583. The Clean Flicks court, though through different reasoning, came to a similar conclusion on this point.

In 2003, while the Clean Flicks case was pending, the Supreme Court in Dastar Corp. v. Twentieth Century Fox Film Corp., 539 U.S. 23 (2003) used reasoning similar to the Lee decision, though it did so in the context of public-domain works. Dastar had purchased several copies of a television series, which was originally copyrighted by Fox, but had fallen into the public domain. It edited and re-titled the series, and packaged and sold copies of it as a Dastar product. The Supreme Court rejected Fox's claim under the Lanham Act that the re-edited series falsely identified the series' author or origin.

The Supreme Court reasoned that the Lanham Act should not be used to assert a claim regarding the authorship of communicative products (such as a television series or motion picture), because such a claim was for a 'moral right' that Congress had chosen to confer only to the limited extent addressed by VARA.

Similar to the notecards at issue in Lee, 'motion pictures' are excluded from the protections of VARA. 17 U.S.C. '101. But the broad statements in the Clean Flicks decision regarding 'the creator's rights to protect its creation in the form in which it was created,' 433 F. Supp. 2d at 1240, would seem to be the basis of a broad interpretation of the ability of the studios (the copyright holders) to prevent such modifications to the films ' at least under the statutory rights of reproduction and distribution, if, in light of the rest of the holding, not under the derivative work right.

It is interesting that the directors, arguably the 'authors' of motion pictures, would have no right to protect the integrity of their work under VARA, while the language of the Clean Flicks decision would seem to grant the studios this right in their capacity as copyright holders. Though the Clean Flicks court likely did not intend to weigh in on the difficult issue of the interplay between the derivative work right and the moral right to protect the integrity of a work, the reasoning of the decision is likely to be cited both by those seeking to broaden a copyright holder's right to prevent modifications of a work and those seeking to narrow that right.

Jason D. Sanders is an attorney at Cowan, Liebowitz & Latman, P.C., in New York and represents clients from startup companies to established organizations in protection of their intellectual property and other rights. He can be contacted at 212-790-9225 or by e-mail at: [email protected].

On July 6, 2006, in Clean Flicks of Colo., LLC v. Soderbergh , 433 F. Supp. 2d 1236 (D. Colo. 2006), the court granted summary judgment to several film studios, holding that the practice of making and distributing edited versions of the studios' motion pictures by the defendants, collectively known as the 'Clean Flicks defendants,' amounted to copyright infringement.

The Clean Flicks court relied heavily upon its conclusion that the defendants violated the plaintiffs' 'right to control the content of the copyrighted work,' which the court reasoned was 'the essence of the law of copyright.' 433 F. Supp. 2d at 1242. The court declined, however, to find that the edited movies were infringing derivative works. In analyzing the right of a copyright holder to prevent modifications to a work, the court presented two contrasting perspectives. While it concluded that there is a very narrow derivative work right, it asserted a broad right of a copyright holder to otherwise prevent modifications to a work.

Copying, Editing, and Distribution of Movies

Though their individual practices varied, the Clean Flicks defendants generally purchased DVD copies of major commercial films; copied those DVDs onto computer hard drives (after overcoming a content scrambling system); edited the films to remove, blur, or black out certain visual content they deemed 'objectionable,' such as nudity and graphic violence, as well as redacted or replaced with ambient noise audio content deemed objectionable; burned DVDs of the now-edited movies; and sold or rented those newly created DVDs to the public. The companies lawfully purchased multiple copies of the unedited films and maintained a one-to-one ratio of copies of edited movies to copies of unedited movies.

This practice of renting and selling edited movies attracted the attention of the motion picture industry, which was not pleased to have its films being re-cut by third parties. In 2002, the Clean Flicks defendants, likely fearing a lawsuit from the Directors Guild of America, brought a declaratory judgment action against several prominent directors. The directors filed counterclaims, and the studios, as the holders of the copyrights to the films, joined the action and asserted claims of copyright infringement.

Derivative Works and Transformative Works

One of the exclusive rights of a copyright holder is the right to create derivative works. The Copyright Act defines a derivative work, in part, as a work based upon a pre-existing work, including any form in which the work 'may be recast, transformed or adapted.' (emphasis added). 17 U.S.C. '101. The Copy-right Act requires only minimal originality for a work to qualify as a derivative work, stating the requirement that the modifications 'as a whole, represent an original work of authorship.' Id. As courts have stated, this threshold is quite low and requires only a 'distinguishable variation that is more than merely trivial.' Waldman Publ'g Corp. v. Landoll, Inc. , 43 F.3d 775, 782 (2d Cir. 1994). By definition, derivative works include an 'abridgement' or a 'condensation.' 17 U.S.C. '101.

The studios contended that the edited films were derivative works and thus a violation of their exclusive rights. The defendants denied that the edited films were derivative works, but also contended that making the edited films was fair use, because they were 'transformative.'

Fair use, originally a judge-made doctrine, is codified in '107 of the Copyright Act. The statutory factors used to evaluate a claim of fair use are: 1) the purpose and character of the use, 2) the nature of the copyrighted work, 3) the amount of the work taken, and 4) the effect of the use on the market or value of the work. With regard to the first factor, courts often inquire whether the work is 'transformative.' As used in the context of fair use, the term 'transformative' is generally understood to mean changing the original work to give it a new or different character or purpose, or to alter its meaning or message. Campbell v. Acuff-Rose Music, Inc ., 510 U.S. 569, 579 (1994). Determining whether a work is transformative is at the heart of the fair use doctrine. Id.

With little analysis, the Clean Flicks court stated that the parties held internally inconsistent positions and concluded that 'because the infringing copies of these movies are not used in a transformative manner, they are not derivative works.' 433 F. Supp. 2d at 1242. The court appeared not to consider whether the edited films might nonetheless constitute an 'abridgment' or a 'condensation' under the statutory definition of a derivative work, nor did it appear to consider other decisions that had found the editing of audiovisual works to be infringing. See, e.g., Gilliam v. American Broad. Cos. , 538 F.2d 14 (2d Cir. 1976); WGN Continental Broad. Co. v. United Video , 693 F.2d 622 (7th Cir. 1982).

More important, it appeared to assume that the judge-made concept of 'transformative' use of a work in fair-use analysis is in all respects the same concept as the statutory concept of a 'transformed' work that qualifies as a derivative work. By conflating these two inquiries, the Clean Flicks decision undermines the derivative work right: In order for a work to qualify as a derivative work, it would require that the work be sufficiently transformative to meet the first factor of fair use.

Moral Rights and Modifications

Though it concluded that there was no violation of the derivative work right, the Clean Flicks court did find violations of the Copyright Act, based upon violations of the right of reproduction and distribution. In its analysis, the court relied heavily upon a belief that the defendants violated 'the creator's rights to protect its creation in the form in which it was created,' 433 F. Supp. 2d at 1240, and its right 'to control the content' of the work. Id. at 1242. The Clean Flicks decision, though, is not clear as to what exactly it meant by these rights, and how these rights would be violated without finding a violation of the derivative work right.

Such a broad statement of control might also cover territory more specifically addressed by laws protecting artists' 'moral rights.' Such rights, long protected under European systems, were added to the Copyright Act by the Visual Artists Rights Act of 1990 ('VARA'), codified at 17 U.S.C. '106A. VARA specifically addresses an author's right to protect the 'integrity' of certain protected works. It gives the author (not necessarily the copyright holder) the right to prevent designated modifications ' essentially, the right to make sure the work is kept in the form in which it is created. VARA, however, neither protects all works nor prevents all modifications.

In Lee v. A.R.T. Co. , 125 F.3d 580 (7th Cir. 1997), the Seventh Circuit rejected an infringement claim against a company that purchased notecards and mounted them on tiles for resale. The Lee court stated that the right of artists or authors to block modifications of their works that they disapprove of is a version of an author's 'moral rights,' properly addressed under VARA, and under VARA, mass-produced notecards would not be protected.

Though eventually finding that a derivative work was not created because no changes to the notecards were actually made, the Seventh Circuit reasoned, albeit in dicta, that it would not 'be sound to use [the derivative work right] to provide artists with exclusive rights deliberately omitted from [VARA].' Id. at 583. The Clean Flicks court, though through different reasoning, came to a similar conclusion on this point.

In 2003, while the Clean Flicks case was pending, the Supreme Court in Dastar Corp. v. Twentieth Century Fox Film Corp. , 539 U.S. 23 (2003) used reasoning similar to the Lee decision, though it did so in the context of public-domain works. Dastar had purchased several copies of a television series, which was originally copyrighted by Fox, but had fallen into the public domain. It edited and re-titled the series, and packaged and sold copies of it as a Dastar product. The Supreme Court rejected Fox's claim under the Lanham Act that the re-edited series falsely identified the series' author or origin.

The Supreme Court reasoned that the Lanham Act should not be used to assert a claim regarding the authorship of communicative products (such as a television series or motion picture), because such a claim was for a 'moral right' that Congress had chosen to confer only to the limited extent addressed by VARA.

Similar to the notecards at issue in Lee, 'motion pictures' are excluded from the protections of VARA. 17 U.S.C. '101. But the broad statements in the Clean Flicks decision regarding 'the creator's rights to protect its creation in the form in which it was created,' 433 F. Supp. 2d at 1240, would seem to be the basis of a broad interpretation of the ability of the studios (the copyright holders) to prevent such modifications to the films ' at least under the statutory rights of reproduction and distribution, if, in light of the rest of the holding, not under the derivative work right.

It is interesting that the directors, arguably the 'authors' of motion pictures, would have no right to protect the integrity of their work under VARA, while the language of the Clean Flicks decision would seem to grant the studios this right in their capacity as copyright holders. Though the Clean Flicks court likely did not intend to weigh in on the difficult issue of the interplay between the derivative work right and the moral right to protect the integrity of a work, the reasoning of the decision is likely to be cited both by those seeking to broaden a copyright holder's right to prevent modifications of a work and those seeking to narrow that right.

Jason D. Sanders is an attorney at Cowan, Liebowitz & Latman, P.C., in New York and represents clients from startup companies to established organizations in protection of their intellectual property and other rights. He can be contacted at 212-790-9225 or by e-mail at: [email protected].