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/* In this opinion, the court considers the possibility that a
litigant might bring baseless litigation to attempt to gain an
illegal anti-competitive advantage. */

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No. 91-1043
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PROFESSIONAL REAL ESTATE INVESTORS, INC., et al., PETITIONERS v.
COLUMBIA PICTURES INDUSTRIES, INC., et al.

on writ of certiorari to the united states court of appeals for
the ninth circuit
[May 3, 1993]


Justice Thomas delivered the opinion of the Court.

This case requires us to define the -sham- exception to the
doctrine of antitrust immunity first identified in Eastern R.
Presidents Conference v. Noerr Motor Freight, Inc., 365 U. S. 127
(1961), as that doctrine applies in the litigation context.
Under the sham exception, activity "ostensibly directed toward
influencing governmental action" does not qualify for Noerr
immunity if it "is a mere sham to cover . . . an attempt to
interfere directly with the business relationships of a
competitor." Id., at 144.  We hold that litigation cannot be
deprived of immunity as a sham unless the litigation is
objectively baseless.  The Court of Appeals for the Ninth Circuit
refused to characterize as sham a lawsuit that the antitrust
defendant admittedly had probable cause to institute.  We affirm.

I

Petitioners Professional Real Estate Investors, Inc., and Kenneth
F. Irwin (collectively, PRE) operated La Mancha Private Club and
Villas, a resort hotel in Palm Springs, California.  Having
installed videodisc players in the resort's hotel rooms and
assembled a library of more than 200 motion picture titles, PRE
rented videodiscs to guests for in-room viewing.  PRE also sought
to develop a market for the sale of videodisc players to other
hotels wishing to offer in-room viewing of prerecorded material.
Respondents, Columbia Pictures Industries, Inc., and seven other
major motion picture studios (collectively, Columbia), held
copyrights to the motion pictures recorded on the video-discs
that PRE purchased.  Columbia also licensed the transmission of
copyrighted motion pictures to hotel rooms through a wired cable
system called Spectradyne.  PRE therefore competed with Columbia
not only for the viewing market at La Mancha but also for the
broader market for in-room entertainment services in hotels.

In 1983, Columbia sued PRE for alleged copyright infringement
through the rental of videodiscs for viewing in hotel rooms.  PRE
counterclaimed, charging Columbia with violations of 1 and 2 of
the Sherman Act, 26 Stat.  209, as amended, 15 U. S. C. 1-2, and
various state-law infractions.  In particular, PRE alleged that

Columbia's copyright action was a mere sham that cloaked
underlying acts of monopolization and conspiracy to restrain
trade.

The parties filed cross-motions for summary judgment on
Columbia's copyright claim and postponed further discovery on
PRE's antitrust counterclaims.  Columbia did not dispute that PRE
could freely sell or lease lawfully purchased videodiscs under
the Copyright Act's "first sale" doctrine, see 17 U.S.C. 109(a),
and PRE conceded that the playing of videodiscs constituted
"performance" of motion pictures, see 17 U.S.C. 101 (1988 ed. and
Supp.  III).  As a result, summary judgment depended solely on
whether rental of videodiscs for in-room viewing infringed
Columbia's exclusive right to "perform the copyrighted work[s]
publicly." 106(4).  Ruling that such rental did not constitute
public performance, the District Court entered summary judgment
for PRE.  228 USPQ 743 (CD Cal. 1986).  The Court of Appeals
affirmed on the grounds that a hotel room was not a "public
place" and that PRE did not "transmit or otherwise communicate"
Columbia's motion pictures.  866 F. 2d 278 (CA9 1989).  See 17
U.S. C. 101 (1988 ed. and Supp. III).

/* Although the Court pays a great deal of lip service to the
"possible merit" of this suit, it is one that virutally all of
the copyright bar would find to be a very long shot. */

On remand, Columbia sought summary judgment on PRE's antitrust
claims, arguing that the original copyright infringement action
was no sham and was therefore entitled to immunity under Eastern
R. Presidents Conference v. Noerr Motor Freight, Inc., supra.
Reasoning that the infringement action "was clearly a legitimate
effort and therefore not a sham," 1990-1 Trade Cases -68,971, p.
63,243 (CD Cal. 1990), the District Court granted the motion:

      It was clear from the manner in which the case was
      presented that [Columbia was] seeking and expecting a
      favorable judgment.  Although I decided against
      [Columbia], the case was far from easy to resolve, and
      it was evident from the opinion affirming my order that
      the Court of Appeals had trouble with it as well.  I
      find that there was probable cause for bringing the
      action, regardless of whether the issue was considered
      a question of fact or of law. Ibid.

The court then denied PRE's request for further discovery on
Columbia's intent in bringing the copyright action and dismissed
PRE's state-law counterclaims without prejudice.

 The Court of Appeals affirmed.  944 F. 2d 1525 (CA9
1991).  After rejecting PRE's other allegations of
anticompetitive conduct, see id., at 1528-1529, the court focused
on PRE's contention that the copyright action was indeed sham and
that Columbia could not claim Noerr immunity.  The Court of
Appeals characterized sham litigation as one of two types of
abuse of . . . judicial processes: either
`misrepresentations  . . . in the adjudicatory process' or the
pursuit of `a pattern of baseless, repetitive claims' instituted
`without probable cause, and regardless of the merits.' Id., at
1529 (quoting California Motor Transport Co. v. Trucking
Unlimited, 404 U. S. 508, 513, 512 (1972)).  PRE neither
allege[d] that the [copyright] lawsuit involved
misrepresentations- nor challenge[d] the district court's finding
that the infringement action was brought with probable cause,
i.e., that the suit was not baseless.  944 F. 2d, at 1530.
Rather, PRE opposed summary judgment solely by arguing that "the
copyright infringement lawsuit [was] a sham because [Columbia]
did not honestly believe that the infringement claim was
meritorious." Ibid.

 The Court of Appeals rejected PRE's contention that
"subjective intent in bringing the suit was a question of fact
precluding entry of summary judgment." Ibid.  Instead, the court
reasoned that the existence of probable cause "preclude[d] the
application of the sham exception as a matter of law" because "a
suit brought with probable cause does not fall within the sham
exception to the Noerr-Pennington doctrine." Id., at 1531, 1532.
Finally, the court observed that PRE's failure to show that "the
copyright infringement action was baseless" rendered irrelevant
any "evidence of [Columbia's] subjective intent." Id., at 1533.
It accordingly rejected PRE's request for further discovery on
Columbia's intent.

 The courts of appeals have defined -sham- in inconsist-
ent and contradictory ways.  We once observed that -sham- might
become "no more than a label courts could apply to activity they
deem unworthy of antitrust immunity." Allied Tube & Conduit Corp.
v. Indian Head, Inc., 486 U. S. 492, 508, n. 10 (1988).  The
array of definitions adopted by lower courts demonstrates that
this observation was prescient.

II

PRE contends that "the Ninth Circuit erred in holding that an
antitrust plaintiff must, as a threshold prerequisite . . . ,
establish that a sham lawsuit is baseless as a matter of law."
Brief for Petitioners 14.  It invites us to adopt an approach
under which either "indifference to . . .  outcome," ibid., or
failure to prove that a petition for redress of grievances
"would . . . have been brought but for [a] predatory motive," Tr.
of Oral Arg. 10, would expose a defendant to antitrust liability
under the sham exception.  We decline PRE's invitation. Those who
petition government for redress are generally immune from
antitrust liability.  We first recognized in Eastern R.
Presidents Conference v. Noerr Motor Freight, Inc., 365 U. S. 127
(1961), that "the Sherman Act does not prohibit . . . persons
from associating together in an attempt to persuade the
legislature or the executive to take particular action with
respect to a law that would produce a restraint or a monopoly."
Id., at 136.  Accord, Mine Workers v. Pennington, 381 U. S. 657,
669 (1965).

In light of the government's -power to act in [its]
representative capacity- and -to take actions . . . that operate
to restrain trade,- we reasoned that the Sherman Act does not
punish -political activity- through which "the people . . .
freely inform the government of their wishes." Noerr, 365 U. S.,
at 137.  Nor did we "impute to Congress an intent to invade" the
First Amendment right to petition.  Id., at 138.

Noerr, however, withheld immunity from -sham- activities because
"application of the Sherman Act would be justified" when
petitioning activity, "ostensibly directed toward influencing
governmental action, is a mere sham to cover . . . an attempt to
interfere directly with the business relationships of a
competitor." Id., at 144.  In Noerr itself, we found that a
publicity campaign by railroads seeking legislation harmful to
truckers was no sham in that the "effort to influence
legislation- was -not only genuine but also highly successful."
Ibid. In California Motor Transport Co. v. Trucking Unlimited,
404 U. S. 508 (1972), we elaborated on Noerr in two relevant
respects.  First, we extended Noerr to "the approach of
citizens . . . to administrative agencies . . .  and to courts."
404 U. S., at 510.  Second, we held that the complaint showed a
sham not entitled to immunity when it contained allegations that
one group of highway carriers -sought to bar . . . competitors
from meaningful access to adjudicatory tribunals and so to usurp
that decisionmaking process- by -institut[ing] . . . proceedings
and actions . . . with or without probable cause, and regardless
of the merits of the cases.- Id., at 512 (internal quotation
marks omitted).  We left unresolved the question presented by
this case-whether litigation may be sham merely because a
subjective expectation of success does not motivate the litigant.
We now answer this question in the negative and hold that an
objectively reasonable effort to litigate cannot be sham
regardless of subjective intent.

 Our original formulation of antitrust petitioning
immunity required that unprotected activity lack objective
reasonableness.  Noerr rejected the contention that an attempt
"to influence the passage and enforcement of laws" might lose
immunity merely because the lobbyists' "sole purpose . . . was to
destroy [their] competitors." 365 U.S., at 138.  Nor were we
persuaded by a showing that a publicity campaign "was intended to
and did in fact injure [competitors] in their relationships with
the public and with their customers," since such -direct injury-
was merely "an incidental effect of the . . . campaign to
influence governmental action." Id., at 143.  We reasoned that
"[t]he right of the people to inform their representatives in
government of their desires with respect to the passage or
enforcement of laws cannot properly be made to depend upon their
intent in doing so." Id., at 139.  In short, "Noerr shields from
the Sherman Act a concerted effort to influence public officials
regardless of intent or purpose." Pennington, 381 U. S., at 670.
Nothing in California Motor Transport retreated from these
principles.  Indeed, we recognized that recourse to agencies and
courts should not be condemned as sham until a reviewing court
has -discern[ed] and draw[n]- the -difficult line- separating
objectively reasonable claims from "a pattern of baseless,
repetitive claims . . . which leads the factfinder to conclude
that the administrative and judicial processes have been abused."
404 U. S., at 513.  Our recognition of a sham in that case
signifies that the institution of legal proceedings -without
probable cause- will give rise to a sham if such activity
effectively "bar[s] . . . competitors from meaningful access to
adjudicatory tribunals and so . . . usurp[s] th[e] decisionmaking
process." Id., at 512.

 Since California Motor Transport, we have consistently
assumed that the sham exception contains an indispensable
objective component.  We have described a sham as "evidenced by
repetitive lawsuits carrying the hallmark of insubstantial
claims." Otter Tail Power Co. v. United States, 410 U. S. 366,
380 (1973) (emphasis added).  We regard as sham "private action
that is not genuinely aimed at procuring favorable government
action," as opposed to "a valid effort to influence government
action." Allied Tube & Conduit Corp. v. Indian Head, Inc., 486
U.S. 492, 500, n. 4 (1988).  And we have explicitly observed that
a successful "effort to influence governmental action . . .
certainly cannot be characterized as a sham." Id., at 502.  See
also Vendo Co. v. Lektro-Vend Corp., 433 U. S. 623, 645 (1977)
(Blackmun, J., concurring in result) (describing a successful
lawsuit as a -genuine attemp[t] to use the . . . adjudicative
process legitimately- rather than -`a pattern of baseless,
repetitive claims'-).  Whether applying Noerr as an antitrust
doctrine or invoking it in other contexts, we have repeatedly
reaffirmed that evidence of anticompetitive intent or purpose
alone cannot transform otherwise legitimate activity into a sham.
See, e.g., FTC v. Superior Court Trial Lawyers Assn., 493 U. S.
411, 424 (1990); NAACP v. Claiborne Hardware Co., 458 U. S. 886,
913-914 (1982).  Cf. Vendo, supra, at 635-636, n. 6, 639, n. 9
(plurality opinion of Rehnquist, J.); id., at 644, n., 645
(Blackmun, J., concurring in result).  Indeed, by analogy to
Noerr's sham exception, we held that even an -improperly
motivated- lawsuit may not be enjoined under the National Labor
Relations Act as an unfair labor practice unless such litigation
is -baseless.- Bill Johnson's Restaurants, Inc. v. NLRB, 461 U.
S. 731, 743-744 (1983).  Our decisions therefore establish that
the legality of objectively reasonable petitioning "directed
toward obtaining governmental action" is "not at all affected by
any anticompetitive purpose [the actor] may have had." Noerr, 365
U. S., at 140, quoted in Pennington, supra, at 669.

 Our most recent applications of Noerr immunity further
demonstrate that neither Noerr immunity nor its sham exception
turns on subjective intent alone.  In Allied Tube, 486 U. S., at
503, and FTC v. Trial Lawyers, supra, at 424, 427, and n. 11, we
refused to let antitrust defendants immunize otherwise unlawful
restraints of trade by pleading a subjective intent to seek
favorable legislation or to influence governmental action.  Cf.
National Collegiate Athletic Assn. v. Board of Regents of Univ.
of Okla., 468 U. S. 85, 101, n. 23 (1984) ("[G]ood motives will
not validate an otherwise anticompetitive practice").  In
Columbia v. Omni Outdoor Advertising, Inc., 499 U. S. ___ (1991),
we similarly held that challenges to allegedly sham petitioning
activity must be resolved according to objective criteria.  We
dispelled the notion that an antitrust plaintiff could prove a
sham merely by showing that its competitor's "purposes were to
delay [the plaintiff's] entry into the market and even to deny it
a meaningful access to the appropriate . . . administrative and
legislative fora." Id., at ___ (slip op., at 15) (internal
quotation marks omitted).  We reasoned that such inimical intent
"may render the manner of lobbying improper or even unlawful, but
does not necessarily render it a `sham.'" Ibid.  Accord, id., at
___ (Stevens, J., dissenting).

 In sum, fidelity to precedent compels us to reject a
purely subjective definition of -sham.- The sham exception so
construed would undermine, if not vitiate, Noerr.  And despite
whatever -superficial certainty- it might provide, a subjective
standard would utterly fail to supply -real `intelligible
guidance.'- Allied Tube, supra, at 508, n. 10.

III

 We now outline a two-part definition of -sham-
litigation.  First, the lawsuit must be objectively baseless in
the sense that no reasonable litigant could realistically expect
success on the merits.  If an objective litigant could conclude
that the suit is reasonably calculated to elicit a favorable
outcome, the suit is immunized under Noerr, and an antitrust
claim premised on the sham exception must fail.  Only if
challenged litigation is objectively meritless may a court
examine the litigant's subjective motivation.  Under this second
part of our definition of sham, the court should focus on whether
the baseless lawsuit conceals "an attempt to interfere directly
with the business relationships of a competitor," Noerr, supra,
at 144 (emphasis added), through the "use [of] the governmental
process" -as opposed to the outcome of that process "as an
anticompetitive weapon," Omni, 499 U. S., at ___ (slip op., at
14) (emphasis in original).  This two- tiered process requires
the plaintiff to disprove the challenged lawsuit's legal
viability before the court will entertain evidence of the suit's
economic viability.  Of course, even a plaintiff who defeats the
defendant's claim to Noerr immunity by demonstrating both the
objective and the subjective components of a sham must still
prove a substantive antitrust violation.  Proof of a sham merely
deprives the defendant of immunity; it does not relieve the
plaintiff of the obligation to establish all other elements of
his claim.

 Some of the apparent confusion over the meaning of -sham-
may stem from our use of the word -genuine- to denote the
opposite of -sham.- See Omni, supra, at ___; Allied Tube, supra,
at 500, n. 4; Noerr, supra, at 144; Vendo Co. v. Lektro-Vend
Corp., supra, at 645 (Blackmun, J., concurring in result).  The
word -genuine- has both objective and subjective connotations.
On one hand, -genuine- means -actually having the reputed or
apparent qualities or character.- Webster's Third New
International Dictionary 948 (1986).  -Genuine- in this sense
governs Federal Rule of Civil Procedure 56, under which a
-genuine issue- is one -that properly can be resolved only by a
finder of fact because [it] may reasonably be resolved in favor
of either party.- Anderson v. Liberty Lobby, Inc., 477 U. S. 242,
250 (1986) (emphasis added).  On the other hand, -genuine- also
means -sincerely and honestly felt or experienced.- Webster's
Dictionary, supra, at 948.  To be sham, therefore, litigation
must fail to be -genuine- in both senses of the word.

IV

 We conclude that the Court of Appeals properly affirmed
summary judgment for Columbia on PRE's antitrust counterclaim.
Under the objective prong of the sham exception, the Court of
Appeals correctly held that sham litigation must constitute the
pursuit of claims so baseless that no reasonable litigant could
realistically expect to secure favorable relief.  See 944 F. 2d,
at 1529.

 The existence of probable cause to institute legal
proceedings precludes a finding that an antitrust defendant has
engaged in sham litigation.  The notion of probable cause, as
understood and applied in the common-law tort of wrongful civil
proceedings, requires the plaintiff to prove that the defendant
lacked probable cause to institute an unsuccessful civil lawsuit
and that the defendant pressed the action for an improper,
malicious purpose.  Stewart v. Sonneborn, 98 U. S. 187, 194
(1879); Wyatt v. Cole, 504 U. S. ___, ___ (1992) (Rehnquist, C.
J., dissenting); T. Cooley, Law of Torts *181.  Cf. Wheeler v.
Nesbitt, 24 How. 544, 549-550 (1861) (related tort for malicious
prosecution of criminal charges).  Probable cause to institute
civil proceedings requires no more than a "reasonabl[e] belie[f]
that there is a chance that [a] claim may be held valid upon
adjudication" (internal quotation marks omitted).  Hubbard v.
Beatty & Hyde, Inc., 343 Mass. 258, 262, 178 N. E. 2d 485, 488
(1961); Restatement (Second) of Torts 675, Comment e, pp. 454-455
(1977).  Because the absence of probable cause is an essential
element of the tort, the existence of probable cause is an
absolute defense.  See Crescent City Live Stock Co. v. Butchers'
Union Slaughter-House Co., 120 U. S. 144, 149 (1887); Wheeler,
supra, at 551; Liberty Loan Corp. of Gadsden v. Mizell, 410 So.
2d 45, 48 (Ala. 1982).  Just as evidence of anticompetitive
intent cannot affect the objective prong of Noerr's sham
exception, a showing of malice alone will neither entitle the
wrongful civil proceedings plaintiff to prevail nor permit the
factfinder to infer the absence of probable cause.  Stewart,
supra, at 194; Wheeler, supra, at 551; 2 C. Addison, Law of Torts
1, -853, pp. 67-68 (1876); T. Cooley, supra, at *184.  When a
court has found that an antitrust defendant claiming Noerr
immunity had probable cause to sue, that finding compels the
conclusion that a reasonable litigant in the defendant's position
could realistically expect success on the merits of the
challenged lawsuit.  Under our decision today, therefore, a
proper probable cause determination irrefutably demonstrates that
an antitrust plaintiff has not proved the objective prong of the
sham exception and that the defendant is accordingly entitled to
Noerr immunity.

 The District Court and the Court of Appeals correctly
found that Columbia had probable cause to sue PRE for copyright
infringement.  Where, as here, there is no dispute over the
predicate facts of the underlying legal proceeding, a court may
decide probable cause as a matter of law.  Crescent, supra, at
149; Stewart, supra, at 194; Nelson v. Miller, 227 Kan. 271, 277,
607 P. 2d 438, 444 (1980); Stone v. Crocker, 41 Mass. 81, 84-85
(1831); J.  Bishop, Commentaries on Non-Contract Law 240, p. 96
(1889).  See also Director General v. Kastenbaum, 263
U.S. 25, 28 (1923) (-The question is not whether [the defendant]
thought the facts to constitute probable cause, but whether the
court thinks they did-).  Columbia enjoyed the -exclusive
righ[t] . . . to perform [its] copyrighted- motion pictures
-publicly.- 17 U. S. C. 106(4).  Regardless of whether it
intended any monopolistic or predatory use, Columbia acquired
this statutory right for motion pictures as -original-
audiovisual -works of authorship fixed- in a -tangible medium of
expression.- 102(a)(6).  Indeed, to condition a copyright upon a
demonstrated lack of anticompetitive intent would upset the
notion of copyright as a "limited grant" of "monopoly privileges"
intended simultaneously "to motivate the creative activity of
authors" and "to give the public appropriate access to their work
product." Sony Corp. of America v. Universal City Studios, Inc.,
464 U. S. 417, 429 (1984).

 When the District Court entered summary judgment for PRE
on Columbia's copyright claim in 1986, it was by no means clear
whether PRE's videodisc rental activities intruded on Columbia's
copyrights.  At that time, the Third Circuit and a District Court
within the Third Circuit had held that the rental of video
cassettes for viewing in on-site, private screening rooms
infringed on the copyright owner's right of public performance.
Columbia Pictures Industries, Inc. v. Redd Horne, Inc., 749 F. 2d
154 (1984); Columbia Pictures Industries, Inc. v. Aveco, Inc.,
612 F. Supp. 315 (MD Pa. 1985), aff'd, 800 F. 2d 59 (CA3 1986).
Although the District Court and the Ninth Circuit distinguished
these decisions by reasoning that hotel rooms offered a degree of
privacy more akin to the home than to a video rental store, see
228 USPQ, at 746; 866 F. 2d, at 280-281, copyright scholars
criticized both the reasoning and the outcome of the Ninth
Circuit's decision, see 1 P. Goldstein, Copyright: Principles,
Law and Practice 5.7.2.2, pp. 616-619 (1989); 2 M. Nimmer & D.
Nimmer, Nimmer on Copyright 8.14[C][3], pp.  8-168 to 8-173
(1992).  The Seventh Circuit expressly -decline[d] to follow- the
Ninth Circuit and adopted instead the Third Circuit's definition
of a -public place.- Video Views, Inc. v. Studio 21, Ltd., 925 F.
2d 1010, 1020, cert. denied, 502 U. S. ___ (1991).  In light of
the unsettled condition of the law, Columbia plainly had probable
cause to sue.

 Any reasonable copyright owner in Columbia's position
could have believed that it had some chance of winning an
infringement suit against PRE.  Even though it did not survive
PRE's motion for summary judgment, Columbia's copyright action
was arguably -warranted by existing law- or at the very least was
based on an objectively "good faith argument for the extension,
modification, or reversal of existing law." Fed. Rule Civ. Proc.
11.  By the time the Ninth Circuit had reviewed all claims in
this litigation, it became apparent that Columbia might have won
its copyright suit in either the Third or the Seventh Circuit.
Even in the absence of supporting authority, Columbia would have
been entitled to press a novel copyright claim as long as a
similarly situated reasonable litigant could have perceived some
likelihood of success.  A court could reasonably conclude that
Columbia's infringement action was an objectively plausible
effort to enforce rights.  Accordingly, we conclude that PRE
failed to establish the objective prong of Noerr's sham
exception.

/* Again, a close question. The Court goes through all of the
categories to find this case non-frivolous by stating that it at
least was an attempt to bring forth a novel interpretation of the
law. */

 Finally, the Court of Appeals properly refused PRE's
request for further discovery on the economic circumstances of
the underlying copyright litigation.  As we have held, PRE could
not pierce Columbia's Noerr immunity without proof that
Columbia's infringement action was objectively baseless or
frivolous.  Thus, the District Court had no occasion to inquire
whether Columbia was indifferent to the outcome on the merits of
the copyright suit, whether any damages for infringement would be
too low to justify Columbia's investment in the suit, or whether
Columbia had decided to sue primarily for the benefit of
collateral injuries inflicted through the use of legal process.
Contra, Grip-Pak, Inc. v. Illinois Tool Works, Inc., 694 F. 2d
466, 472 (CA7 1982), cert. denied, 461 U.S. 958 (1983).  Such
matters concern Columbia's economic motivations in bringing suit,
which were rendered irrelevant by the objective legal
reasonableness of the litigation.  The existence of probable
cause eliminated any "genuine issue as to any material fact,"
Fed. Rule Civ.  Proc. 56(c), and summary judgment properly
issued.

 We affirm the judgment of the Court of Appeals.

 So ordered.