Clean Flicks was one of several companies that would purchase a normal retail DVD, edit it to remove offensive material such as sex, profanity, and violence, then sell it to consumers who wanted family-safe entertainment. The Colorado District Court decided that such a product infringed upon the creator's original intent and vision for a given work and creating and unlicensed derivative work; further, it constituted illegal copying and distribution over which the copyright holder should have control. The court denied a fair use defense completely. In addition, DVD encryption must be cracked to produce these copies, and that itself is illegal. The Family Entertainment and Copyright Act of 2005 clarified that this kind of product was illegal, where programs that changed movies on the fly (creating no "fixed" clean version) were permissible.
Here the major modern precedent is set for the illegality of the sale and distribution (even if not infringing on the market for the originals) of derivative works that change the expression of the original authors without their consent. If films with swearing edited out do that, so surely do music videos where a 26-episode plotline is boiled down to a 3-minute montage, for example. But where Clean Flicks was found to be adding nothing creatively to the original works, AMVs add both a new soundtrack, wholly new editing, and a new or simply focused narrative (or at least a novel collection of moments). This is a strong precedent for the ability of anime copyright holders in America to take action against distributors of music videos containing copyrighted footage. As further sources demonstrate, however, legal action against fans (especially those ardent enough to create music videos) is exactly what anime distributors want to avoid doing no matter how flagrantly the law is being broken. Worse than the music video issue is that of fansubbing, which only transforms works to the extent that subtitles are added, and nothing more; these are distributed over the internet and (mostly in the past) through retail and continue to exist without real legal action against them.