Admittedly the Copyright Act does not use the word “exchange”. However, in interpreting statues one ought not to be swayed by use or non-use of words. It is the objective of the Act that is relevant and with that in background one must interpret the provisions. You must also bear in mind that the Copyright Act, like all other IPR related statutes is an Act creating “negative rights”. This means the IPR laws empower the IPR owner to restrain others from exploiting his work un-authorisedly. The entire purport of the Act is to empower the copyright owner to restrain unauthorised “publication” of his work and to secure his right to gain from his creations. Sec.3 of the Copyright Act also defines “publication” in very wide terms as the “communication” of the work to the public.
Now in respect of your specific query kindly peruse Sec.51(b)(ii) which reads as follows: “Copyright in a work shall be deemed to be infringed when any person distributes either for trade or to such an extent as to affect prejudicially the owner of the copyright any infringing copies of the work”. This section therefore stipulates that a copyright shall be deemed to be violated if
(i) any person distributes a work – mind you it does not require sale or hiring, mere distribution.
(ii) For trade OR TO SUCH AN EXTENT AS TO AFFECT PREJUDICIALLY THE OWNER OF THE COPYRIGHT
The section refers to the distribution of an “infringing copy”. Now in respect of a film an infringing copy is defined in Sec. 2(m) simply as a “copy of the film”.
Applying sec.52(b)(ii) to the activity of your forum:-
(i) DVD’s lawfully purchased by one person were being distributed to others thereby letting that other see the film
(ii) The size of your forum was probably large enough (in the estimation of the copyright owner) to prejudicially affect his right.
In my opinion the producer of the film does have a case to assert a copyright violation. I do not believe that the notice issued by the motion picture company to your forum is misconceived. On the other hand if your forum has not already stopped exchanging of DVD’s I suggest you must stop forthwith to avoid unnecessary complications.