Copyright question: what is "fair use" in showing movies at a for profit institution?

All disclaimers in place: I don’t hold anybody liable for any misinformation and realize that not all Dopers are copyright lawyers, etc… What I’m really hoping for is somebody who’s dealt with this before (such as a librarian, professor, or artist).
Here’s the situation:

I work at a for-profit school. The library has lots of movies, many of which are studio released films for which we do not have the performance rights. Since some professors seem to think that “fair use” means “if I need to show Cannonball Run 2 for a class, that seems fair”. (Not an actual example, but…)

We’ve been clamping down on this: no, you CAN’T show an entire movie that’s not in public domain, and classroom use exemptions are different for “for profit” institutions. Several professors (some of them lawyers, but not copyright lawyers) have asked the reasonable question “How much of a movie can I show without violating copyright?”

I’ve posed this to the school’s attorney, but he’s not a copyright lawyer and basically said “10 percent or 10 minutes, either one of those should be safe”. In one of those times I wished Dope Laws were national I tried to say “Cite?” but he didn’t. He then said, basically, “when in doubt, don’t show anything at all”, but while showing an entire film is verboten I’m pretty sure showing a 3 minute scene would be alright.

So I’m on an errand: I’m trying to find exactly what is permissible to show in a for-profit setting. I’ve been to the copyright office website, but like most legal and government websites you have to know jargon and exactly what terms you’re lookign for. I’ve found plenty of info on what a not-for-profit school can use, and I’ve found of course that we are forbidden to show the entire movie, but I can’t find how much can be shown without violating copyright (none? half? thirty seconds?).

In googling I’ve found the “10 percent or 10 minutes, whichever is less” rule several times, but never with a cite; while this may well be correct, I’d like to find out officially.

SO… has anyone ever dealt with this and if so do you know the answer? Again, I realize you can’t dispense legal advice, but I’m asking for pointers. (I’m not going to repeat any info professionally without verifying it first anyway.)

Are you charging to see “a specified period of time” of a given movie? And if not I believe you contact the studio for written approval. I got the Way of the Peaceful Warrior movie from the studio for a screening at a unitarian church where we were going to show it and charge a fee. But we were a nonprofit. I’m not sure in what context you are asking for. If for students at a school like University of Phoenix, or other online for-profit school, I don’t see why classroom exemption doesn’t work?

I have no facts but I am wondering why you have these movies if you do not have any license to actually show them. How did you acquire them, and what are you certain that you *are *allowed to do with them?

If we can understand that, then maybe some expert can determine whether showing the film is actually within that scope. I mean, it’s not like you downloaded them from BitTorrent–did you?

I’m sure they acquired them either by purchasing them from a retail outlet or through standard library acquisition procedures. Movies purchased through retail usually bear a notice saying that only private non-profit performances are permitted. I have no idea what happens with libraries.

CWG asks a valid question – how were the movies acquired and was there any contract language associated with such acquisition.

But here’s an issue – I have no reason to believe that “educational purpose” does not apply to a for-profit educational situation.

Here is a good guide:

The bad news is, you’re stuck with the mushy four-factor test. The only rules of thumb are invented.

But the statute talks about

"nonprofit educational institution"s

and “accredited nonprofit educational institution” *Id. *

and more generally,

“nonprofit educational purposes”

There isn’t a safe-harbor for for-profit educational use, which means you’re stuck with section 107’s four-part morass.

Most school districts have access to film libraries. Call around and they will might tell you how much they pay to show a film or rent it to a class.

We acquired them like the rest of our collection: mostly purchased from vendors and a few from donation. The only thing I am absolutely positive we can do is let students check them out for home use (same as Blockbuster, except we don’t charge).

Most of our academic videos and even some of our entertainment movies do include performance rights. They’re bloody expensive though. For example, a professor who lost our copy of The Crucible and offered to pay for it was stunned to learn that replacement cost is about $180. You can buy the DVD for $6.99 through Amazon, but the other 173.01 is “public performance rights”, meaning it can be played in its entirety without permission. (She found the copy she’d lost rather quickly.)

Since academic videos make almost all of their money through sales to schools and universities and almost always include performance rights, they’re extremely expensive. That’s why an academic documentary on, say, the Scopes Trial might be $150 and no better if as good as the History Channel documentary you can buy for $20. Suppose the academic documentary cost $50,000 to produce and is expected to sell 500 copies (almost all of them to libraries)- that means they only make a profit of $25,000. The History Channel may have paid $150,000 to produce their documentary, but they made their money back through advertising immediately when it first aired, and all video sales and reruns are gravy, and they’re a lot more likely to sell to private individuals, so if they sell 2000 copies at $20 they’ve made more profit than the $150 video. However, History Channel also has the right to sue us if we show that without their permission.

The students are not charged to watch the movie, but their tuition is paid to a for-profit company and is therefore more than the expenses of the education. In all likelihood if we showed Gone With the Wind for a class on American pop culture (not that we teach one) then MGM and the Mitchell Estate (or whoever owns the copyrights) probably aren’t going to batter down the doors and call for blood. Odds are 99.999% they’d never know about it and that if they did they’d just say “eh, not worth prosecuting”; they’re far more interested in people merchandising it illegally. HOWEVER, there is always the chance that at some point some somehow find out about it and that company will say “Damn it, we’re tired of this” and decide to make an example by suing us, and that’s what we’re on guard against.

But could you just replace the DVD cheaply on the theory that you didn’t lose the “public performance rights”, just the actual media?

That’s a good question that I remembered wondering at the time, and the answer is, “I don’t know”.

As a practical matter, studios (other than Disney) don’t really enforce performance rules all that rigorously. They will just pretend it isn’t happening unless you rub their noses in it (especially if you do something like charge admission). So the question isn’t really whether it’s fair use, but rather whether the copyright holder is forced to acknowledge it.