WASHINGTON — A federal appeals court has upheld a lower court’s injunction against Video Pipeline, barring it from creating unauthorized previews of Disney movies and streaming them over the Internet.

Decision, handed down Tuesday by the U.S. Third Circuit Court of Appeals, comes less than a month after the district court in the case granted Disney’s motion for summary judgment on the underlying claims, making the appellate court’s ruling on the preliminary injunction potentially moot.

In a 20-page opinion, the appeals court affirmed the district court’s conclusion that Video Pipeline’s creation of the clip previews did not qualify as “fair use” of Disney’s copyrighted movies.

“We cannot conclude that Video Pipeline’s online display of its clip previews does anything but ‘infringe a work for personal profit,’ ” the court wrote.

The end in sight

Ruling could put an end to the 3-year-old case, which began in October 2000 over Pipeline’s use of Buena Vista-provided promotional trailers in a new online service. Service connected retailers’ Web sites to a network maintained by Video Pipeline that streamed the trailers to consumers who clicked on a “preview” button on the site.

After Buena Vista demanded the return of its trailers, Video Pipeline began creating its own “previews” of Disney and Miramax titles by copying clips of the movies from videocassettes owned by its retailer clients. When Disney objected, Video Pipeline sued, seeking a declaratory ruling that its actions did not violate the studio’s copyrights. Buena Vista countersued.

Video Pipeline could still seek review of the appellate panel’s ruling by the full Court of Appeals, or it could appeal the district court’s grant of summary judgment.

Mouse’s merits

In upholding the preliminary injunction, the appeals court said it was persuaded that Disney is likely to prevail on the merits of the case.

Video Pipeline officials were not immediately available for comment.

“The Court focused on the creation of the clips and not on the underlying issue of the need for retailers to be able to promote product they’ve bought,” VSDA president Bo Andersen said. “Retailers are still in need of clarification regarding what they’re able to do with approved promotional materials both online and in store. This decision doesn’t address that directly.”

In its ruling, the Court of Appeals said the previews created by Video Pipeline could displace the authorized trailers Disney runs on its own Web site and licenses to other online retailers, a factor it said weighed heavily against a finding of fair use.