Professional Real Estate Investors, Inc. v. Columbia Pictures Industries, Inc.

508 U.S. 49 (1993)

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Nature of the Case

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Facts

D operated a resort hotel in Palm Springs, California. D installed videodisc players in the resort's hotel rooms and assembled a library of more than 200 motion picture titles. D then rented videodiscs to guests for in-room viewing. P and seven other major motion picture studios held copyrights to the motion pictures recorded on the videodiscs that D purchased. P also licensed the transmission of copyrighted motion pictures to hotel rooms through a wired cable system called Spectradyne. D competed with P. P sued D for alleged copyright infringement through the rental of videodiscs for viewing in hotel rooms. D counterclaimed, charging D with violations of §§ 1 and 2 of the Sherman Act. D alleged that P's copyright action was a mere sham that cloaked underlying acts of monopolization and conspiracy to restrain trade. P did not dispute that D could freely sell or lease lawfully purchased videodiscs under the Copyright Act's 'first sale' doctrine. D conceded that the playing of videodiscs constituted 'performance' of motion pictures. Ruling that such rental did not constitute public performance, the District Court entered summary judgment for D. The Court of Appeals affirmed on the grounds that a hotel room was not a 'public place' and that D did not 'transmit or otherwise communicate' P's motion pictures. On remand, P sought summary judgment on D's antitrust claims, arguing that the original copyright infringement action was no sham and was therefore entitled to immunity under Noerr. The District Court granted the motion. The court found that there was probable cause for bringing the action, regardless of whether the issue was considered a question of fact or law. The Court of Appeals affirmed. The Court of Appeals rejected D's contention that 'subjective intent in bringing the suit was a question of fact precluding entry of summary judgment.' The court reasoned that the existence of probable cause 'precluded the application of the sham exception as a matter of law' because 'a suit brought with probable cause does not fall within the sham exception to the Noerr-Pennington doctrine.' The Supreme Court granted certiorari.