Incredible as it may be, but that seemingly innocent and fun activity with your neighbors can run afoul of copyright law, according to a recent blog post by attorneys Rebecca Drube and Bill Gourley of the Georgia-based law firm of Weissman Nowack Curry & Wilco.

Copyright Infringement?

That is because screening a copyrighted movie for members of an HOA or any other group in a public setting constitutes a public performance. Showcasing a work 'publicly' is defined by Title 17 under the U.S. Copyright Law as “to perform or display it at a place open to the public or at any place where a substantial number of persons outside of a normal circle of a family and its social acquaintances is gathered.” That not only applies to community associations but also to other public places like churches, bars, restaurants, libraries, clubs and summer camps.

“For example if you are a movie theater and you want to exhibit a movie to several hundred people in the theater, you need to get permission from the copyright owner,” said Ben Sheffner, vice president, legal affairs for the Motion Picture Association of America. It applies to essentially any place where members of the public are gathered and you exhibit a work to them. Or because I want to play songs to the public at a radio station, I need to get permission from the copyright owner. It applies to essentially any place where members of the public are gathered and you exhibit a work to them. ”

Copyright law still applies to a public performance of a copyrighted work even if you are not charging admission or if you are a for-profit or non-profit group. “There's an old Supreme Court case (Herbert v. Shanley) from the early 20th century about playing music at a restaurant,” said Sheffner. “The restaurant owner said, 'Hey we're just charging people for food, we're not charging for people to come in and listen to music.' The court explained, 'Look, music is an important part of the atmosphere, it's what makes the restaurant more desirable to its patrons. Therefore you should have to pay.'”

In addition, a rental or a purchase of a copy of a copyrighted movie does not mean that you have the right to publicly show the work. “If you go and buy a DVD or Blu-ray disc, you're buying that physical item,” Sheffner explains. “You own that piece of plastic, but that doesn't give you any copyright rights. So you can't go make additional copies, you can't publicly perform it unless you get permission. It's not like the movie studios don’t want anybody to watch movies...they just want to be fairly compensated for it.”

What About Netflix?

And what about publicly screening a film or TV show from streaming services like Netflix and Hulu? “When you subscribe to Netflix or a similar service, you're paying for the right to watch it,” said Sheffner. “But you don't get additional rights to show it to the public or make copies of it. You're paying for the right to watch it in your private residence. If you want to display it to the public, you need additional permission.”

Such violations of the Copyright Act could result in fines for the exhibitor of the work that could range from $750 to $30,000, which is certainly not worth the trouble for a HOA showing the latest rom-com or sci-fi flick.

Sheffner said that watching a movie is not a copyright violation and that the law makes it clear that you don't need a license if it's part of a purely private social gathering. “You can invite your friends to your living room and watch a movie or a TV show. When it's a more public environment, like a restaurant, a bar, or a condo or co-op common room or common area, you're going to need a license.”

There are several companies that specialize in granting licenses to groups and institutions for screening movies. In some cases, the fees for such licenses could be determined by such factors as the number of times the movie will be shown and how many people are expected to watch it. Among those firms include Swank Motion Pictures, Criterion Pictures U.S.A., and Motion Picture Licensing Corporation.

Ask Your Attorney

Sheffner acknowledges that copyright law can be a little complicated. “It's not something that movie studios just came up with last year,” he said. “It's been part of the law for a very long time—that a copyright owner has the exclusive right to publicly perform the work. I understand that people are not familiar with it. But it's an important part of the bundle of rights that copyright owners have, not just in the movie and TV industries, but for music and plays and varieties of other kinds of work.”

For added safe measure, it's always good for your co-op. condo or HOA to seek the guidance of an attorney for any legal concerns surrounding a movie night event. It's something to think about before you and your neighbors catch that next screening of Star Wars: The Force Awakens or Finding Dory in the rec room.

David Chiu is an associate editor at The Cooperator.