This document discusses potential legal issues facing a website called classic-tvseries.com that sells region-free TV show DVDs. It notes that US law requires regional encoding, and that while region-free content is allowed, it is uncommon. It then compares classic-tvseries.com to a similar website, finding classic-tvseries offers lower prices but region-free DVDs, while the other only offers region-1 DVDs. The document considers if classic-tvseries is violating copyright law and discusses defenses it could claim, like fair use, as well as damages media companies could seek if they sued.

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Business Challenges

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Discussion of Assignment
#1
 What are the differences between the
websites and products offered by both?
 Why do media companies have regional
encoding? Can we ignore or avoid it?
 US Law requires regional encoding for hardware;
region free DVD hardware illegal
 Region free content is okay, but uncommon
 Other countries have different laws in this regard
(e.g., New Zealand and Hong Kong)

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Classic-tvseries vs DVD Planet
 First, cost of TV series “Sabrina the Teenage
Witch” (Complete Series)
 $59.95 on “Classic-tvseries”
 $94.49 on DVD Planet.com
 Region Free for first, Region 1 only for second
 Differences
 Region encoding versus region free
 DVD versus DVDR (for all my favorite shows)
 Better appearance and searching on DVD Planet
 Easier to contact DVD Planet to find live person

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Is classic-tvseries.com selling illegal goods
in violation of copyright law?
 www.AllMyFavoriteShows.com in prior years
 Why is this web site still in business?
 Mice and Elephants
 Time required for litigation
 Defenses, not yet tested in court, so not proven
 Lack of deep pockets, or understanding of income
 Who is harmed or upset?
 Studios (economic harm likely to be modest)
 Directors (likely to be indifferent about sales)

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Rights violated and defenses?
 Copyright gives the studios the right to sue
 Must state a “cause of action”, or legal basis for
lawsuit that would give reason to win damages

Damages are the money you want to be awarded

Mostly based on some form of economic harm

May include lost future opportunities in harm claimed
 May also request “injunction” to stop harm
 Defenses are asserted by party being sued
 What defenses may be claimed in this situation?

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Balancing Test of Fair Use Defense
 Purpose and character of use, including
commercial nature
 Nature of copyrighted work
 Proportion that was “taken”
 Economic impact of “taking”
 Intent and motives of defendant
 First amendment interest (USA only)
 Balancing test of all above factors jointly

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Typically Competing Interests
 Policy issues often are in conflict in applying
fair use defenses, and there are seldom easy
and clear-cut cases that reach the courts
 Because of complicated and difficult policy
tradeoffs, fair use has been referred to as “the
most troublesome in the whole law of copyright”
 Dellar v. Samuel Goldwyn (1939)
 Sony case discussion of fair use rights
 Example of Parody and Fair Use

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Defenses ARE NOT RIGHTS
 Fair use is a DEFENSE, not a right
 You first admit that copyright was violated, but you
assert that you have a defense that eliminates any
liability that may be owed for the violation
 If you are not able to copy, then Fair Use or First
Sale can not be claimed as “rights”.
 Digital rights management systems (DRMS)
enable copyright owner to overcome fair use.
 Stops you from being ABLE to make a copy.

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classic-tvseries.com Gets Sued
 Region free means that studio’s efforts for
region encoding have failed or been
bypassed
 99% confidence that this is not authorized version
 Defenses asserted
 Sony Beta VCR case – time shifting of TV shows

Just providing a service that consumers would have
been able to do for themselves legally based on Sony
case

Fair Use – but, look at each of the six balancing tests

First sale – TV show aired free as a sale. Or, is it?

Invalid copyright – why might this be claimed?

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classic-tvseries.com Gets Sued
(continued)
 Claims of copyright violations
 Right of Reproduction
 Right of Derivative Work
 Right of Distribution
 Also assert all defenses claimed are invalid
 All fair use tests fail
 First sale is not a sale, but a license or lease
 Different from Sony – commercial profit intent
 Within copyright period

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Damages claimed in Litigation
 Economic harm of lost sales and profits
 Lost sales from infringement PLUS
 Defendant profits from Infringement

But, can not double count, so must eliminate overlap
 With Triple Damages for Willful Infringement
 Statutory Damages as an alternative
 $30k USD per infringement (huge pile of money)
 $150k USD per infringement if willful actions
 Potential personal liability of individuals