Blog Post

Viacom And Time Warner Take A Break From Legal Battle Over TV On iPads

iPads and other tablets that enable television watching are looking to be one of the legal flash points between content owners and distributors; that became clear when Viacom (NYSE: VIA) launched a lawsuit against Time Warner Cable (NYSE: TWC) in March, shortly after the cable company launched an app that allows TWC subscribers to watch TV on their iPads. It looks like the negotiations between the two companies are going well enough that they’re taking a break from their court battle, however.

In papers filed today, the New York federal judge overseeing the case approved a “standstill agreement,” which essentially means the litigation won’t move forward while the two sides are negotiating. That doesn’t mean the lawsuit has been put to rest, but it does suggest that talks are going well enough that the two sides would rather keep negotiating than pay their lawyers to fight. Either side can terminate the standstill agreement by providing five days’ notice. The LA Times, which first reported on the standstill, quotes a source close to the litigation explaining that “the filing was done so the two companies can negotiate without the pressure that can come from court-imposed deadlines for filings and hearings.”

Viacom originally sued Time Warner (NYSE: TWX) on April 7, just three weeks after the launch of the TWC iPad app. The lawsuit [PDF] claims that by launching the iPad app without authorization, TWC broke its contract and is also in violation of copyright law.

Two weeks ago, Time Warner filed its answer to the lawsuit. In that document, Time Warner reiterates its argument that the iPad is really just another screen in a customer’s home, and therefore already covered by its existing agreements with Viacom-owned channels. TWC’s answer also shows that:

»  500,000 people downloaded Time Warner’s iPad app between March 15 (when it was first made available) and June 5.

»  Time Warner already had a similar dispute once before with Viacom over its launch of “Broadband TV” in the San Diego market. That experiment lasted from 2005 to 2007, and was initially challenged by Viacom as well, although Viacom later relented and allowed the service to continue.

»  The legal sparring over this issue precedes the filing of the suit by several months. As early as Dec. 14, a representative of MTV Networks sent a letter to TWC stating that the broadcast of (Viacom-owned) MTV and BET programming to iPads was not authorized under existing agreements.