Portable Planet

Starz Entertainment, LLC, today filed suit against Buena Vista Television (BVT), a subsidiary of The Walt Disney Co., for copyright infringement and breach of contract. Starz filed the suit in the US District Court for the Central District of California because Disney recently began to sell for transmission over the Internet the same movies that Disney licensed exclusively to Starz.

Under the terms of the 1993 and 1999 Starz-BVT agreements, extended by BVT in 2005, Disney is prohibited from selling its films for transmission over the Internet prior to Starz’s first exclusive license period and during all of Starz’s exclusive license periods.

Despite this prohibition, the suit notes that Disney has “begun to sell over the Internet via services like Apple Computer Corp.’s iTunes and (Wal- Mart Corp’s) Walmart.com the very same Disney films licensed to Starz.” Such conduct, the suit adds, constitutes “a blatant breach” of the licensing agreements between BVT and Starz. The suit notes that over the life of the contract Starz has paid “over one billion dollars” for periods of exclusive rights to the films.

Starz Entertainment Chief Executive Officer and Chairman Robert B. 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.”

Clasen added, “The film studios have been very aggressive, and quite rightly so, in protecting their copyrights, particularly with regard to the Internet. Starz must be equally aggressive in protecting the value of the deal it made. It is especially disappointing to see one of the largest studios ignore so blatantly its own contractual obligations to protect the copyrights it has licensed to Starz.”

Clasen pointed out that Starz has been a pioneer in Internet delivery of films, investing millions of dollars to develop, launch and market its Internet service last year. Starz delivers more than a thousand movies per month — including the Disney films — to subscribers via broadband Internet connections. “We want to encourage consumers to have every opportunity to access a wide array of films over the Internet,” Clasen said. “But we cannot allow Disney to sell those rights to us on an exclusive basis and then sell the same rights to other parties.”

The suit notes that the licensing agreements do allow Disney to distribute its films on a pay-per-view or on-demand basis defined as “the viewing of a motion picture by a consumer who is charged a fee to view the film over a limited period of time.” It also permits home video distribution where consumers may purchase or rent “a motion picture embodied in a video device which is a physical entity (including, without limitation, video cassette, laser video disc and DVD).”

But the suit points out that — other than these clearly defined exceptions — the agreements prohibit BVT from licensing its films “for exhibition in any form of television or electronic delivery.”

The suit seeks to prevent BVT “from continuing to infringe on Starz’s rights” and asks for all profits BVT has realized from its infringing activities.

Starz Entertainment is the exclusive subscription television and broadband provider of first-run films from leading Hollywood studios including Walt Disney Pictures, Sony Pictures Entertainment, Overture Films, Revolution Studios, Miramax Films, Touchstone Pictures, Hollywood Pictures, Pixar, TriStar, Screen Gems, Sony Classics and Warren Miller Films. Select first-run theatrical films from The Weinstein Company, IFC and Yari Film Group are also available for subscription television and broadband exclusively on Starz Entertainment services. A vast collection of classic and favorite titles are provided by a wide array of other Hollywood studios.

Source: Starz