Opinion ID: 404168
Heading Depth: 1
Heading Rank: 3

Heading: the validity of the competitive bidding guidelines

Text: 15 Competitive bidding for films is not mandatory in Ohio under the statute. It is a method of selling films to exhibitors which may be used by distributors in lieu of negotiations. The Ohio competitive bidding guidelines require disclosure of invitation to bid lists and the bids themselves after they are opened; and if all bids are rejected, the distributor must rebid the film rather than negotiate with exhibitors. 16 We see no federal constitutional or statutory infirmity in these guidelines. Competitive bidding, like trade screening, has been widely used in the film industry for many years. See United States v. Paramount Pictures, 334 U.S. 131, 161-66, 68 S.Ct. 915, 931-933, 92 L.Ed. 1260 (1948). If the distributor chooses to use this method of selling, the process should be fair, and that is what the guidelines are designed to insure. The disclosure provisions are not burdensome and are designed to counteract deception and unfair manipulation of the bidding process. The rebidding requirement has a similar purpose. It keeps producers from deceptively putting films out on competitive bid in order simply to test the market without any real intention of licensing the film to the best bidders. The rebid requirement is designed to prevent this misleading trade practice. 17 The District Court found that the incremental burdens that these provisions placed upon the licensing process are minimal-especially since little change from prevailing bidding practices is required and any delays because of possible rebidding, if they could not be avoided, would be rare. 496 F.Supp. at 438-440. As with the trade screening requirement, therefore, we find that no undue burdens are placed upon the rights of producers and distributors under either the first amendment or the commerce clause. The bidding procedures, like the trade screening requirement, do not interfere with any of the rights of the producer-distributors under the copyright statutes, and do not sanction any collusive behavior that is in violation of the antitrust laws. The open bidding requirements challenged by the producers require the disclosure of all bids after they have been considered. Each film is different, and the availability of information about prior bids does not stabilize prices. Even in subsequent rounds of bidding for the same film, if that should become necessary, the competition among the exhibitors makes price stabilization unlikely. Misuse of price information and collusion among exhibitors is not sanctioned by the Act, and as the District Court points out, such conduct would, of course, be subject to the strictures of the antitrust laws. 496 F.Supp. at 449-450. 18