Eriq Gardner, THR, Esq, Studios Sue to Stop 'Family-Friendly' DVD Service - THR, Esq.: "A coalition of major studios including Paramount, Warner Bros., MGM, Disney, Universal and Fox has filed a lawsuit against a defendant who has taken movies such as Iron Man 2, The Hurt Locker, Prince of Persia and Date Night, altered them to be free of objectionable content, and is distributing them to consumers as "family-friendly." The lawsuit was filed on Thursday in Arizona District Court against Family Edited DVDS, Inc. and its leader, John Webster."
Paramount Pictures Corp. v. Family Edited DVDs (Complaint)
In 2006, Clean Flicks of Colorado v. Soderbergh ruled on a similar service, "Creating and distributing edited versions of films to 'sanitize' the films to make them more 'family-friendly' constitutes copyright infringement as a matter of law under the §106(1) right of reproduction and 106(3) right of distribution."
In response, Congress passed the Family Entertainment and Copyright Act of 2005, now 17 USC §110(11)
(11) the making imperceptible, by or at the direction of a member of a private household, of limited portions of audio or video content of a motion picture, during a performance in or transmitted to that household for private home viewing, from an authorized copy of the motion picture, or the creation or provision of a computer program or other technology that enables such making imperceptible and that is designed and marketed to be used, at the direction of a member of a private household, for such making imperceptible, if no fixed copy of the altered version of the motion picture is created by such computer program or other technology.
This allows manufacturers of DVD players that are designed to avoid possibly offensive content avoid liability from copyright owners whose works are played on those players. But it does not change the rights that Clean Filcks was found to be infringing.
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