As you might have read, last week Judge Matsch of
the Colorado District Court issued a scathing, one-sided ruling against
companies that sell or rent edited DVD’s, including Clean Flicks and Clean
Films. The order was so onerous that it gave the companies only five days to
pack up all edited DVD’s and ship them to the Hollywood studios which opposed
the companies in the litigation.
You may remember that ClearPlay was originally
involved in this case when it began in 2002. In the early stages, ClearPlay
petitioned the court to draw a meaningful distinction between our technology and
the edited movie companies. As a result, ClearPlay spent three years fighting
Hollywood, while the edited movie side of the case was essentially put on
hold.
Our legal position was distinctly different than
Clean Flicks’. We argued that ClearPlay does not make a “derivative work;” that
our technology merely enables families in their homes to customize the playback
of movies. ClearPlay is not unlike a very intelligent remote control, skipping
and muting over unwanted segments. In contrast, Clean Flicks focused on their
“fair use” right to make copies of movies, even though they may be derivative
works.
Before the judge could rule on the ClearPlay side
of the case, Congress stepped in and passed The Family Movie Act of 2005, which
clarified the right of families to control the media in their homes. This was a
fundamental right and an important issue for many members of Congress. As a
result of that bill, Judge Matsch dismissed all Hollywood claims against
ClearPlay in August 2005, then turned his attention to the case against the
edited movie companies, culminating in last week’s ruling.
As of the writing of this newsletter, it’s not
clear whether Clean Flicks and Clean Films will appeal the ruling or not, or
whether the judge will grant them a stay of injunction even if they do. In any
event, we applaud their valiant efforts to sacrifice and fight for a product and
service that they believe in and that is good for families. We know how
difficult it is to wage these wars. The founders, employees, investors and
customers of these companies should be proud of what they have done.
If in fact the injunction holds, it would leave
ClearPlay as the only company offering this type of product to families. We have
paid a great price to be here, but work every day to bring you the best movie
experiences possible. We anticipate continued advances and improvements in our
products and technologies. To Clean Flicks and Clean Films customers who may
convert, we welcome you. To our current customers, thank you for your
participation. We look forward to a long relationship.
Sincerely,
Bill Aho
CEO, ClearPlay
Inc.
