Judge orders shutdown of DVD-streaming service Zediva

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A federal judge has issued a preliminary injunction against video streaming service Zediva. The MPAA's Dan Robbins called the ruling "a great victory for the more than two million American men and women whose livelihoods depend on a thriving film and television industry."

Zediva argues that it is an ordinary DVD rental service that happens to allow customers to view their rented movies via the World Wide Web—imagine a tremendously long cord stretching from your home to the Zediva office. Like a video rental store, Zediva buys thousands of physical DVDs. Unlike a rental store, Zediva has also purchased numerous DVD players and hooked them up to the Internet. When the user wants to watch a movie, he "rents" a DVD player along with the DVD inside of it. The DVD player's output is streamed across the Internet to the user's browser.

Hollywood studios were not impressed with this perceived loophole in copyright law and sued in April, arguing that the service infringes their exclusive right to control the "public performance" of their movies. Legal experts agreed that the service was on shaky ground. "Zediva’s supposed 'loophole' in copyright law doesn’t exist,” Grimmelmann said in a March blog post.

On Monday, Judge John F. Walter reached the same conclusion. "Defendants are violating Plaintiffs’ exclusive right to publicly perform their Copyrighted Works," he wrote.

He cited a 1991 case in which courts ruled that a hotel's video-on-demand system infringed copyright. In that system, a hotel guest would choose the movie he wished to watch, then have it streamed from a bank of VCRs located in a hotel's equipment room. The courts ruled that it was irrelevant that the videos were streamed to one customer at a time in his private hotel room; the service still transmitted videos "to the public," as the statute defines that term, and thus violated copyright holders' exclusive public performance rights.

Judge Walter also seemed unimpressed by Zediva's argument against an injunction. "Defendants claim, without any evidence, that an injunction would significantly harm, if not destroy, their business," he wrote. He ruled that the harm to movie studios from lost revenues outweighed any hardship Zediva faced.

Zediva has vowed to appeal the ruling. "Today's ruling represents a setback for the hundreds of thousands of consumers looking for an alternative to Hollywood-controlled online movie services," the company wrote in a statement, pledging to stand up for "consumers' right to watch a DVD they've rented, whether that rental is at the corner store or by mail or over the Internet."

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