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Photo Courtesy Randall Jeppesen, KSL Newsradio SALT LAKE CITY (AP) -- A video store that edits material from films it finds objectionable is closing because of pressure from movie studios over copyright laws.
"They said I could negotiate with each studio, shut down or continue to operate . . . and face a lawsuit," said Daniel Thompson, owner of Orem-based Flix Club. "I agreed (to) shut down by Dec. 31."
His Flix Club was one of several companies that sprang up after a federal court ruled that now-closed Clean Flicks, one of the earlier edited-film companies, was violating federal copyright laws.
A judge found that editing nudity and graphic violence out of videos that were being rented or sold did not constitute a fair use under the Copyright Act.
In April, Thompson, a former Clean Flicks franchisee, opened Flix Club because he believed it was allowed if edited videos were used for educational use. Copyright law waives penalties if the material in question is being used in schools.
In September, he received a letter from Loeb and Loeb, a New York law firm representing Walt Disney Co., DreamWorks and MGM. The law firm said he was violating copyright law.
Thompson responded in October, but said that he received a letter in November with an ultimatum.
"They said if I don't shut down, they would break me," Thompson said.
Loeb and Loeb chief marketing officer Jennifer Manton said she could not comment because of attorney-client privilege.
Thompson's business is not the only edited-video store closing. Kirt Merrill, owner of Cougar Video, said he's received letters, and he does not have the resources to fight a lawsuit against major film studios.
Merrill said the edited movies only represented a small portion of his store's stock, but brought in 85 percent of his customers. Without that, he doesn't know how the 16-year-old business could survive.
Edward L. Carter, a communications professor at Brigham Young University in Provo, isn't surprised that studios are cracking down.
"That (educational-use) argument was always a stretch to me," Carter said. "It was a matter of time before the studios responded."
Carter said the loophole clause was designed for teachers who wanted to use part of a copyright work in the classroom, such as handing out copies of an article or showing parts of movies. He said those are cases where there was pure academic interest in using the material and little economic damage to the copyright holder.
But Flix Club, Carter said, couldn't make that argument.
He said it would be hard to show the educational interest in offering edited movies to club members.
Information from: The Salt Lake Tribune
(Copyright 2007 by The Associated Press. All Rights Reserved.)