Opening Remarks

Bill Aho, ClearPlay Inc.

House Judiciary Subcommittee on Courts, the Internet and Intellectual Property

May 20, 2004

ClearPlay is founded on the belief that families have the right to watch movies in the privacy of their homes any way they choose.  ClearPlay parental controls provide families the choice to filter movies of graphic violence, nudity, explicit sex and profanity.  This is a choice that many families desire.  Many see it as a useful parenting tool that will be beneficial to their children.   We believe that it is not in the best interest of society for the movie industry, in an effort to extend its artistic control over the experience of viewers, to take actions that would eliminate this choice for families.

ClearPlay parental controls are a feature available on DVD players, or on any consumer electronics device that plays movies.  They work with ClearPlay Movie Filters, which are uniquely created for each movie as it is released on DVD.  These filters identify, or tag, frames that have specific content, such as graphic violence, nudity or different kinds of profanity.  The customer chooses how to watch the movie—either with ClearPlay off or with ClearPlay on, using any combination of the 14 ClearPlay Filters, for over 16,000 different potential settings.   ClearPlay’s frame-accurate technology seamlessly skips and mutes over objectionable content.  It does not dub or add content.  ClearPlay parental control works with standard, studio-authorized DVD’s which are purchased or rented at normal retail outlets.

ClearPlay provides parental controls that American families want. Americans also overwhelmingly believe that they should have the right to use these parental controls within their own homes.  In a 2003 poll of 17,000 respondents conducted by MSN, 82% said that consumers should be able to use products like ClearPlay to skip over unwanted scenes or languages. .Further, ClearPlay’s research shows that a majority of U.S. households want the option to filter DVD movies of content they find offensive--especially families with children.

ClearPlay does not violate copyright or trademark laws. Indeed it doesn't copy or alter any of the works themselves, and it doesn't use anyone else's "trademarks" or distribute anyone else's products. ClearPlay merely automates certain skipping and muting functions of a DVD player, functions that could be performed less conveniently with a conventional remote control. Trademark and copyright laws were never intended to deprive families of choices in how they watch, in the privacy of their own homes, DVDs they have lawfully bought or rented.

In late 2002, the Directors Guild of America, 16 prominent movie directors and eight movie studios filed suit against ClearPlay, along with other companies that either sold edited VHS tapes or DVD’s or claimed technology that would add or dub new content onto DVD’s. 

The Directors rely on the Lanham Act to claim trademark infringement to vindicate “moral rights” that are not recognized in the United States or elsewhere.  It is a relatively weak case, which by the DGA’s own admission is not likely to prevail.  The studios’ case is more intricate, and is based on what we feel is a substantial extension of the copyright law that was never intended by Congress. 

These lawsuits have succeeded in delaying American consumers from having access to advanced parental controls for more than a year.  When the lawsuits were first filed, a major DVD manufacturer that had already completed integration of ClearPlay’s parental controls dropped the feature just weeks before production.  They told us that they chose to remove ClearPlay parental controls not because they feared the eventual outcome of the lawsuits, but rather because they did not want to be involved in litigation with the studios.

These lawsuits have also succeeded in putting an enormous financial burden on ClearPlay and making it extremely difficult for our company to generate investment.  No one likes to invest money to pay lawyers.   As a result, the management of the company has had to make substantial personal sacrifices to be able to realize our vision and bring this product to market.

Over the past eight months, we have made every effort to find an amicable solution with the DGA and the studios.  We have taken the initiative to schedule 25 meetings—all held at the studio offices in Los Angeles.  We have voluntarily explained our business, shared our research, given models of our product and put forth multiple proposals for settlement, all in an effort to find a solution where ClearPlay can maintain a viable business and satisfy its customers—the American families.

Despite these efforts, there remains a substantial gap between what we believe are the rights of consumers, and what the studios as copyright holders will allow.  I would like to outline these:

Issue #1: What content should families be allowed to filter?

We believe that consumers should have the right to filter any graphic violence, disturbing sexual content, or offensive language that they choose for their families in their homes.  The DGA has suggested that they would only allow ClearPlay parental controls to filter whatever content is altered in airline or TV versions.

There are several problems with this idea:

a. No written standards exist for airline or TV versions.

b. Airline and TV standards are a moving target, and become more lenient over time.

c. Based on our research, airline and TV standards are not consistent with either ClearPlay’s filter categories or the interests of many of our consumers.

We have suggested various compromises.  We could make an airline or TV equivalent the default, but allow consumers to override.  We could allow directors to review the filters and make suggestions.  Or we could come up with agreed-to definitions of ClearPlay categories, some of which might include content not removed from airline or TV versions. 

Issue #2: What movies should families be allowed to filter?

Again, we believe it is the right of families to watch any movie they choose with or without ClearPlay.  The DGA has said that they want ClearPlay parental controls to work only with movies that have airline or TV versions.  Further, the DGA has said that ClearPlay would have to get special permission from all “Final Cut” directors—prominent directors that negotiate personal services contracts that may supersede standard DGA contracts.  Again, there are significant problems with this:

a. The timing of TV versions really isn’t relevant to DVD consumers.  TV versions can often lag the release of the DVD by a year or more.

b. Airline versions are limited.  It is unclear exactly what movies have airline versions.  We know that there are numerous prominent films that don’t.  Many independent films do not.  And there are other reasons as well, for instance, if there are integral scenes featuring airplane crises.

c. Final Cut directors are often involved in prominent movies that are highly desired by the public and our customers.  Despite our requests, we have been unable to secure information from all the studios about what movies would or would not be available as a result of Final Cut contracts.

d. There appears to be no protection for a proliferation of new special agreement contracts specifically prohibiting ClearPlay parental controls.

We have shown a willingness to be flexible.  But we would hope that the industry could present a proposal that would guarantee consumers the right to filter most, if not all movies.

Issue #3: How long can ClearPlay provide filters to consumers?

We believe the rights should be interminable, and not subject to studio contracts or collective bargaining timetables.  The DGA has suggested that after December 2005, all rights would expire.  In effect, this would give Hollywood the opportunity to instigate a new round of litigation in 2006.  Naturally, this is unacceptable, and we believe at least a 10-year term is reasonable.  We have yet to hear a response from the industry on this issue.

Perhaps these issues can be resolved through more settlement discussions.  But if the committee agrees that families should have the right to filter movies within their own homes of unwanted violence or sex, then I think it would be useful at these hearings to explore these issues.  If it becomes apparent that the movie industry either can not, or is not willing to come to a settlement that is favorable to the American consumer, then I would respectfully request that we seek a legislative solution as expeditiously as possible.

Thank you.