Updated: Here’s a link to download the full lawsuit…PDF file.
This was bound to happen: Starz has been beating its chest for a couple of years about how it has long term contracts with the studios to supply movies to the cable TV service, and said that also gave it online right for the long term, and how other could not tread into this without violating the contracts. Well, now the Liberty-owned company is suing Buena Vista Television, a subsidiary of Disney, for “copyright infringement and breach of contract”. Starz runs the Vongo online movie service, which was announced at CES in 2006.
It 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,” the release says.
— 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, the company said.
— Despite this prohibition, the suit notes that Disney has begun to sell over the Internet via services like iTunes and 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.
Full details in the release.
Update 2: Dow Jones: The lawsuit was filed after months of talks failed to produce a solution, Starz said. Liberty Media CEO Greg Maffei spoke with Disney CEO Robert Iger within the past day to tell him that a lawsuit was being filed, the story says.
Meanwhile, Disney says “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.”
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