Starz Sues Disney Over Online Deals
Claims Copyright Infringement in Disney Deals with iTunes, Wal-Mart, Others
By Todd Spangler -- Multichannel News, 3/22/2007 7:47:00 PM
Starz Entertainment filed a federal lawsuit Thursday against Disney’s Buena Vista Television unit, alleging copyright infringement and breach of contract.
According to the suit -- under agreements the two companies signed in 1993 and 1999 and extended in 2005 -- Disney is prohibited from selling its films for transmission over the Internet outside of the window of Starz’s exclusive license period.
Starz claimed in the suit that Disney sold the same movies licensed to Starz via Apple’s iTunes, Wal-Mart Stores’ video-download site and other Internet services, constituting “a blatant breach” of those licensing agreements.
Starz said it has paid more than $1 billion for periods of exclusive rights to Buena Vista’s films. The suit seeks to bar Buena Vista “from continuing to infringe on Starz’s rights” and asks for all profits from its “infringing” activities.
In a statement, Buena Vista Television said: "We believe Starz misreads its agreement with Buena Vista Television and that its claim is without merit. BVT retained and has the right to sell its motion pictures in a wide range of mediums." BVT handles the TV-distribution agreements for all of Disney’s film titles and other programming.
In a prepared statement, Starz CEO Bob Clasen said: “Disney has been a great partner. We hope to continue our relationship. But our agreements clearly prohibit them from selling their movies by electronic download over the Internet while they are exclusive to Starz. If Disney is permitted to violate our contract in this manner, it will undermine the integrity of copyright in general, which is a cornerstone of our industry.”
Starz’s Vongo Internet service, priced at $9.99 per month, provides unlimited viewing of a library of movie rentals. The pay TV company is attempting to strike deals with cable operators to offer the Internet service to their own subscribers.
Disney movies scheduled to be available through Vongo in 2007 include Cars and Pirates of the Caribbean: Dead Man's Chest.
Starz said it filed the suit Thursday at approximately 1:35 p.m. (EST) in the U.S. District Court for the Central District of California.
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