## Facts

- Major motion picture producers owning copyrights in various films sued Aveco, a video business operating “Nickelodeon Video Showcase” and related entities.
- Aveco rented videocassettes of copyrighted motion pictures and also rented on-premises viewing rooms equipped with couches, televisions, and videocassette players.
- The viewing rooms varied in size and could accommodate small groups (approximately 2 to 25 people).
- Customers could (1) rent a cassette and take it home, (2) bring an outside cassette and rent a room to watch it on-site, (3) rent both a cassette and a room to watch on-site, or (4) rent a room and watch a cassette they owned.
- Aveco did not have a public performance license comparable to those obtained by movie theaters.
- The producers challenged Aveco’s on-premises exhibition model as infringing the exclusive rights to publicly perform and to authorize public performances.

## Issues

1. Whether renting viewing rooms and equipment (and often supplying the cassette) for on-premises exhibition constitutes a “public performance” or an authorization of a public performance under 17 U.S.C. §§ 101 and 106(4).
2. Whether the first sale doctrine, 17 U.S.C. § 109, shields Aveco from liability when the videocassettes were lawfully acquired.

## Decision

- The Third Circuit affirmed partial summary judgment for the producers and upheld a permanent injunction.
- The court held that Aveco’s on-premises exhibition arrangement involved unauthorized public performances and authorizations of public performances.
- The court rejected Aveco’s first sale defense because § 109 limits distribution rights and does not immunize infringement of the public performance right under § 106(4).
- The injunction barred Aveco from performing or authorizing the performance of the producers’ copyrighted motion pictures at any place open to the public owned or operated by Aveco without permission.

## Legal Principles

- A performance is “public” when it occurs at a place open to the public, even if the work is viewed in separate rooms by discrete, private groups.
- An operator may infringe the public performance right by authorizing performances where it offers the premises and equipment for exhibition and structures the service to enable on-site showings, even if customers initiate playback.
- The first sale doctrine limits the copyright owner’s control over distribution of a particular copy, but it does not limit the separate exclusive right to perform a work publicly.
- Where material facts are undisputed, whether conduct constitutes a public performance or authorization under the Copyright Act is a question of law appropriate for summary judgment.

## Conclusion

The court treated commercial, on-premises viewing rooms offered to the public as a public-performance venue and held that Aveco’s room-rental model—often coupled with cassette rental—violated the producers’ exclusive public performance rights, unaffected by the first sale doctrine.


Columbia Pictures Indus., Inc. v. Aveco, Inc., 800 F.2d 59 (3d Cir. 1986)