How often have you seen the FBI warning screen preceding a movie and wondered, does this warning apply to me?  A common issue raised by common interest community associations is whether the association can show a motion picture or DVD at a common element location within the association, possibly the pool, clubhouse, or community room.  The Federal Copyright Act, Title 17, U.S.C. Section 101(1) and Section 106 make it unlawful to show a film in public without the explicit permission of the film’s copyright owner.  Renting or purchasing a cassette or DVD from the local video store or library gives the customer the right to view the film, but not to show it in public.  The Copyright Act defines “public” in this context as “any place where a substantial number of persons outside of a normal circle of a family and its social acquaintances is gathered.”  According to Senate Report # 94-473, Page 60; House Report number 94-1476, Page 64, public performances of movies are illegal unless they have been authorized by license.  Even “performances in ‘semi-public’ places such as clubs, lodges, factories, summer camps and schools are ‘public performances’ and subject to copyright control.”  Furthermore, both for-profit corporations and non-profit organizations must secure a license to show videos, regardless of whether an admission fee is charged.  
Non-compliance with the Copyright Act is considered infringement and can carry steep penalties. Unlicensed exhibitions are federal crimes and can subject the common interest community association to a penalty ranging from $750.00 to over $100,000.00 per exhibition for knowingly violating the Copyright Act.  Even inadvertent violators of the Copyright Act are subject to substantial civil penalties ranging from $750.00 to $30,000.00 for each illegal showing, plus other possible penalties under the Copyright Act.  
Therefore, if the association wishes to organize a weekly movie viewing, movie marathon, or some other event where a copyrighted motion picture will be shown on or within the common elements, the association should first obtain a license.  Fortunately, the obtaining of a license is a relatively simple procedure.  The association may contact the Motion Picture Licensing Corporation (“MPLC”) and request the purchase of an annual license.  The fee to obtain a license from the MPLC is based upon the type of organization, the number of units within the association, and the number of locations at which the film will be shown.  For example, for an association with 200 homes and one clubhouse, the number of units would be 200 and the location for exhibiting the movie would be 1.  The cost for an association to obtain a license varies according to the formula stated above, but appears to average $2.10 per unit, so that an association with 200 units would be charged an annual licensing fee of $420.00 and an association with 428 units, $899.00.
Securing a license from the MPLC would allow an association to exhibit movies an unlimited number of times.  Once a license has been obtained, the association could show any of the movies covered by the umbrella license granted by the MPLC.  The umbrella license covers the majority of the major motion picture producers and distributors including Walt Disney Pictures, Warner Bros., United Artist Pictures, Touchstone Pictures, Orion Pictures, Sony Pictures Classics, Fox 2000 Films, plus a large number of other corporations.  Furthermore, once a license has been obtained, the association and guests of its members would be allowed to use the association’s common elements and facilities and equipment to show movies.  While a license would not allow the association, or one of its committees or organizations, to charge an admission to view the movie, the association would be allowed to take volunteer donations to offset the cost of purchasing the license.  In addition, the association could charge to sell beverages or food at the time of the movie showing.  An additional benefit of the license granted by the MPLC is that if the association had previously infringed upon the Copyright Act or rights of any of the companies covered under the umbrella license, the MPLC agrees that upon obtaining a license, it will not seek legal recourse or assert any claim for any of the prior possible infringements. 
It is imperative that an association’s Board of Directors and legal counsel be aware of these issues so that inadvertent violations of the Copyright Act may be avoided.