Judge Grants Preliminary Injunction Against Zediva

MPAA claims online VOD service was renting movies without paying per-performance license

By John Eggerton -- Broadcasting & Cable, 8/2/2011 9:34:27 AM

The Motion Picture Association of America late Monday was celebrating a court-ordered preliminary injunction against Zediva, the online video on demand service that it claimed was renting movies and did not have to pay a per-performance license.

The injunction is not a ruling on the merits, though the Judge appeared to find little merit in Zediva's arguments.

"Judge Walter's decision is a great victory for the more than two million American men and women whose livelihoods depend on a thriving film and television industry," said MPAA in a statement. "Judge Walter rejected Zediva's argument that it was ‘renting' movies to its users, and ruled, by contrast, that Zediva violated the studios' exclusive rights to publicly perform their movies, such as through authorized video-on-demand services."

The judge held that there was a likelihood that the studios would win their case--one of the tests for granting an injunction. "Plaintiff's argument that On Command's system involves not "transmissions" but "electronic rentals" similar to patrons' physical borrowing of videotapes is without merit," said Judge John F. Walter. He also agreed with the studios that the service constituted a public performance and that if those performances continued without payment, the studios would suffer irreparable injury.

That finding of injury is important because there is currently a circuit split over whether copyright infringement plaintiffs still have a presumption of irreparable harm and Walter agrees with the side that says it is not assumed.

Judge Walters said an injunction was in the public interest and ordered an order to be produced by Aug. 8.

MPAA filed suit in a California U.S. District Court back in April to block the service. Zediva advertises itself as providing "new movies before Netflix or Redbox," but arguing that what it is doing is providing "DVDs over the Internet."

The studios are seeking an injunction against the service and damages for violating their Copyright Act exclusive rights to "'publicly perform' their movies,"

MPAA says Zediva is not protected by the "first sale" doctrine, which it says applies to the sale of physical DVDs, not public performances. It also argues that Zediva is not protected by the Cablevision RS-DVR case, in which a video stream saved on a network server for later viewing was ruled a remote version of home copying rather than a public performance. The Supreme Court upheld that decision.

"The Cablevision case involved a different service and factual scenario, and does not apply to the facts of this case," said MPAA.