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Intellectual Property Newsletter

Independent Filmmakers and the MPAA Settle "Screeners" Dispute

“Screeners” are the videotapes and DVD copies of films that are sent to voters in competitions such as the Academy Awards and Golden Globes, so that voters can view the films at home rather than at studio screenings. On September 30, 2003, the Motion Picture Association of America (MPAA) imposed a ban against the pre-award distribution of “screeners” to critics and industry voters. The objective of the ban was to curb “piracy,” or the unlawful copying of the films to be sold on the U.S. black market, overseas, and on the Internet.

Partial Reversal of the Ban

However, in response to the ban, independent filmmakers and other organizations voiced their dissatisfaction, arguing that the screener copies are an essential aid for such filmmakers, providing significant coverage of their films to critics. In late October of 2003, in response to such complaints, the MPAA attempted to reach a compromise by partially reversing the ban. Under the reversal, only 5,600 copies would be sent to Academy Awards voters, but none would be sent to other awards events, including those preceding the Oscars. Smaller producers remained unsatisfied with the partial lift, arguing that competitions leading up to the Oscars were significant indicators to Oscar voters of winning films. However, the MPAA refused to lift the partial ban.

Lifting the Ban Against Pre-Award Release of “Screeners”

In November 2003, several independent film production companies took the dispute to federal court and sued the MPAA to end the ban, based on the claim that the ban violated the Sherman Antitrust Act. The Sherman Antitrust Act is a federal antitrust law that, among other things, prohibits businesses from monopolizing interstate commerce. The MPAA represents seven major movie studios, including Warner Brothers, Columbia Pictures, 20th Century Fox, Paramount, Universal Pictures, Walt Disney Studios and MGM.

The independent producers argued that the MPAA (by enforcing the ban) was conspiring with major movie studios to monopolize the film industry. They further argued that the ban was unnecessarily broad in that it treated all films the same, even though major films are at a substantially higher risk (than independent films) of being pirated. The independent producers sought $25 million in damages against the MPAA.

Temporary Restraining Order

On December 5, 2003, the court granted the independent filmmakers a temporary restraining order (TRO) to prevent the major movie studios from enforcing the MPAA ban against the advanced distribution of “screeners.” The TRO, in effect, prohibited the ban, (including the partial ban) from being effective, allowing independent producers to send out “screeners” to potential award voters. In addition, it served as an admonition to the MPAA that such a ban was a potential violation of antitrust laws.

Settlement

In March 2004, a coalition of independent filmmakers and the MPAA reached an out of court settlement. Although the ultimate terms of the agreement remain undisclosed, the independent filmmakers dismissed the lawsuit. Subsequently, the independent filmmakers’ coalition, in a joint statement by its leaders, stated that in light of their previous success in court regarding the TRO, “the Coalition enabled individual distributors to determine when and in what manner to distribute promotional screeners.” The statement also included an admonition to the MPAA to “engage in an ongoing process in which all constituencies of the industry are guaranteed a voice in the development of effective, fair, and legal anti-piracy policies.”

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