Family Movie Act
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The Family Movie Act of 2005 empowers parents, movie watchers, and movie remix artists to edit movies and eliminate profanity, obscenity or other objectionable or even boring passages.
The "U.S. copyright law makes it illegal to sell edited versions of Hollywood films. But the Family Movie Act says if you use software to 'mak[e] imperceptible changes to ... limited portions of audio or video content of a motion picture ... from an authorized copy of the motion picture,' you're OK. Just don't create a 'fixed copy of the altered version.' ... Annual DVD sales are around $16 billion. It's easy to envision a side business in DVD filters."[1]
Sources
Testimony of Marybeth Peters Register of Copyrights