"Without any authorization, permission, consent or license from the networks, Redlasso publicly performs, publicly displays and distributes its unauthorized copies of the networks' programming and content," NBC Universal, Fox News Network and Fox Television Stations allege in the lawsuit, filed this week in federal district court in New York.
The networks are seeking an injunction against Redlasso and monetary damages. Redlasso, a startup based in King of Prussia, Pa., declined to comment on the case.
The lawsuit comes two months after CBS, NBC and Fox sent Redlasso a letter demanding that it stop making clips of their shows available.
When the networks sent the cease-and-desist letter, Redlasso responded that it was providing a "valuable service" to bloggers and content owners. The company also said it was in talks with content owners.
In the lawsuit, Redlasso is likely to defend itself by saying that it doesn't violate copyright because it's only enabling the fair use of TV clips.
But that argument appears weak, according to Eric Goldman, director of the High Tech Law Institute at Santa Clara University. Although individual publishers who post short clips on their own sites as part of a commentary might have a fair use defense to copyright infringement claims, the companies that empower the embedding cannot typically claim fair use, according to Goldman.
"Redlasso can say it's enabling third-party users to engage in fair use, but the problem with that argument is that fair use doesn't transfer well," Goldman said. "Fair use doesn't provide coverage for the intermediary."
After Redlasso received the cease-and-desist letter, the company brought on CBS vet Michael Jordan to help forge deals with the TV networks. NBC and Fox jointly operate Web video site Hulu.com, which also allows the embedding of clips. Given their investment in Hulu.com, it's not clear whether they will want to reach an agreement with Redlasso.
CBS did not join in the lawsuit, and a company spokesperson declined to comment about whether CBS intended to either take further action against Redlasso or agree to a deal with the company.
So far, Redlasso has only announced one licensing agreement, which was with the Greater Media-owned radio station WMMR, based in Philadelphia.
Goldman said that in a somewhat similar situation, the company MP3.com was found liable for copyright infringement in 2000 for allowing users to stream their own CDs from any computer. MP3.com allowed users to upload CDs they had legally purchased to a central database; users could then stream those tracks from any computer. MP3.com argued that it was protected by the fair use doctrine, on the theory that purchasers of CDs are allowed to copy music they own for personal use. But a federal judge in New York ruled that MP3.com is not allowed to copy CDs it doesn't own, even if it's only doing this to facilitate consumers' fair use of the tracks. MP3.com ultimately paid record labels and publishers more than $150 million.