Backgrounder on the Family Movie Act

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Overview of the Bill
The Family Movie Act of 2004 (H.R. 4586)
To clarify the freedom all families to purchase and use in the privacy of their homes technology that allows them to skip or mute over objectionable content in legally purchased or rented DVD movies.

Background
ClearPlay Inc. and other companies have developed technologies that can be incorporated into DVD players that allows parents to choose to skip or mute content such as graphic violence, sex, nudity and profanity during the DVD playback. ClearPlay and other companies that comprise this nascent industry were sued in September 2002 by eight Hollywood movie studios, 16 prominent directors and the Directors Guild of America over copyright and trademark infringement issues. This litigation has been very damaging to ClearPlay, and has resulted in substantial lost business and crippling legal expenses. Were the lawsuit to continue into the trial phase, it could prove devastating to ClearPlay and the industry, even if ClearPlay and others were to prevail.

Legality of Movie Filtering
The Copyright Office testified at a recent subcommittee hearing that in its opinion ClearPlay does not violate U.S. copyright laws. ClearPlay’s legal position is supported by the following facts:

ClearPlay allows a consumer to modify his or her experience, like a fast forward or mute button.
ClearPlay never alters, changes or even touches the actual DVD. The ClearPlay software does not create a fixed version of the alternate experience.
Consumers always have the choice to watch the movie with or without ClearPlay.
ClearPlay works with legally and lawfully obtained DVD’s. There is no monetary damage to the copyright holders. In fact, it is to their benefit.

Purpose of the Bill
This bill will amend the Copyright and Lanham Acts to clarify the legality of movie filtering in the privacy of homes and as a parental control option in DVD players.

Is a Settlement Possible?
ClearPlay remains hopeful. ClearPlay has proactively scheduled and conducted over 30 meetings with the representatives of the studios and the DGA, all held in Los Angeles, in the hopes of arriving at an amicable settlement. ClearPlay has offered multiple written proposals. However, the movie industry has insisted on controlling which movies they would allow to be filtered, and what content could be filtered. While the company has made meaningful concessions, it cannot accept a proposition that would be unacceptable to its customers. Even now, some studios have not made anyone available to continue settlement discussions with ClearPlay.

Wait for the Courts?
ClearPlay has filed a motion for summary judgment on all claims with the U.S. District Court for the District of Colorado. The motion was fully briefed in December 2003 and we all await the court’s reply. However, not even an outright summary judgment victory on both the Lanham Act and Copyright claims would give the company protection from endless litigation and variations on the theme, because Hollywood could drag out new plaintiffs to press the same claim in different courts in the hope of finding one court that will go its way. Hollywood has the financial means to work the courts indefinitely.

What do Americans Want?
In a poll conducted by ZDNet, of 17,018 respondents, 82% felt they should have the right to skip over scenes in movies they own or rent on DVD. There is a wealth of data that suggests that most people feel like there is too much violence in movies (62%--Princeton Survey Research Associates), or would like to watch filtered movies (58%--Wirthlin Worldwide Research).

What’s right for Families?
The evidence is overwhelming that content in entertainment—particularly violence—can have a damaging impact on children. It is easy enough for the studios to suggest kids not see any of these movies. Unfortunately, two thirds of MPAA fare is rated R. Most of the rest is PG-13, where the standards have slipped over time, and where studios routinely spend $30 million or more on marketing that is often aimed at children. ClearPlay is simply a tool that parents can use to help reduce content they might find objectionable. Finally, ClearPlay is an ideal solution that is used by families in the home, and doesn’t require limits on content the studios develop.

Status of the Bill
HR 4586 passed the House subcommittee by a vote of 11 to 5. It now moves to a full House Judiciary Committee vote, followed by debate and a vote on the House floor. If approved, it could be moved to the Senate as a standalone bill or as part of other legislation.

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