MPAA Sues Streaming 'Rental' Service


The Motion Picture Association of America has asked a court to shut down the new video site Zediva, which lets Web users stream new movies. In its lawsuit filed this week, the MPAA argues that Zediva infringes the studios' copyright by violating their exclusive right to perform the movies publicly.

Zediva, which launched out of beta three weeks ago, characterizes itself as a rental company and charges users $2 to stream a movie for up to two weeks. Unlike rental services Netflix and Redbox, which agreed last year that they wouldn't offer movies until 28 days after DVDs go on sale, Zediva has been streaming films as soon as they're available for purchase.

Zediva hasn't yet publicly addressed the lawsuit, but company executives have previously said they believe the business model is lawful.

Zediva says it buys the DVDs that it "rents," and that it limits the number of movies it streams at any one time to the number of physical DVDs that it owns. The company has said that, as a lawful purchaser, it's entitled to make use of the DVDs under the "first sale" concept. That doctrine enables companies that purchase CDs, books or movies to resell them without violating copyright law.



But the motion picture industry argues that Zediva isn't a rental company but a video-on-demand service that publicly performs movies. "Defendants' comparison of the Zediva service to a rental store is disingenuous, and defendants are attempting to rely on technical gimmicks in an effort to avoid complying with U.S. Copyright Law," the MPAA says in its complaint, filed in the U.S. District Court for the Central District of California. "Unlike Zediva, rental stores do not transmit performances of movies to the public 'over the Internet using streaming technologies.' "

Copyright expert James Grimmelmann, a professor at New York Law School, predicts Zediva will have a hard time persuading a court to accept the company's view of copyright law. "My best reading of the case law is that what they're doing is infringing," he says.

He adds that courts have previously ruled against brick-and-mortar stores that allowed consumers to rent videocassettes and watch them on the premises were infringing copyright by performing the movies publicly.


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