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Stanford Lawyer Joins Fight Over Online Movies

Here’s an interesting development in a copyright lawsuit filed this week by the Motion Picture Association of America against Zediva, a California-based start-up that streams movies for customers before Netflix or Redbox, has hired heavyweight Stanford University lawyer Mark Lemley and his San Francisco-based law firm Durie Tangri to fight the might of the movie studios.

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It’s an important lawsuit to watch for consumers, companies like Netflix and the movie industry. Here’s why: Zediva operates as an online DVD store and doesn’t pay licensing fees. If Zediva wins this case, it doesn’t only mean that you could theoretically watch videos before Netflix and Redbox on Zediva, it would likely lead to an influx of similar start-ups eager to take advantage of the apparent loophole in copyright law.

Lemley is a good catch for Zediva: he is William H. Neukom Professor of Law at Stanford Law School and teaches intellectual property, computer and Internet law, patent law, and antitrust. He is also the author of six books and more than 100 articles on these and related subjects. Lemley tells Pay Dirt he will represent Zediva, but declined to comment further.

Zediva has an unusual business model: it streams movies as soon as they’re out on DVD because, when you rent a movie on Zediva according to its website, you are renting both a DVD and DVD Player in its data center. According to Zediva’s website: “Using Zediva, you can rent and instantly watch new movies much earlier, often several weeks or months, than either Netflix or Redbox.”

Many online streaming companies that don’t pay licensing fees are registered overseas, making these kinds of lawsuits difficult, but Zediva is registered with and hosted at a data center in Santa Clara, California. A Zediva spokesman declined to comment on the lawsuit.

As Pay Dirt reported this week, the MPAA alleged in a copyright infringement lawsuit: “Zediva claims it is like a brick-and-mortar DVD rental store and therefore not obligated to pay licensing fees to copyright holders. But the DVD rental label is a sham. In reality, Zediva is a video-on-demand service that transmits movies over the Internet using streaming technologies in violation of the studios’ copyrights.”

Mike Robinson, executive vice-president and chief of operations for content protection at the MPAA, says companies that don’t pay licensing fees are hurting thousands of jobs in the movie industry.

What do you think of this novel online DVD service?


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    • Oh my goodness! an amazing article dude. Thanks Nevertheless I am experiencing issue with ur rss . Don’t know why Unable to subscribe to it. Is there anyone getting an identical rss downside? Anyone who is aware of kindly respond. Thnkx

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    • Thank you, Mr. Lemley, for lending your hand to help all of us. Whenever I see the exclusive rights of the copyright owner (which I totally support) stretched beyond reason, I look behind the curtain to see who’s doing the pulling…this time it’s the motion picture industry (or, more specifically, the powerful part of it.) I can’t see anything illegal here, as it is simply not a public performance, there’s no illegal copying, and the copyright owner gets its royalty from sale of the the DVD. If I buy a DVD, I can sell it or lend (rent) it to anyone I please. How is this different? Granted, the manner in which I get the work to the renter is different, but that’s just technology, with which the law has not caught up.

    • On the last statemennt,
      Mike Robinson, executive vice-president and chief of operations for content protection at the MPAA, says companies that don’t pay licensing fees are hurting thousands of jobs in the movie industry.

      Is the copyright law for the protection of jobs or “promoting the progress of science and useful art”, and does the latter do both?

    • The problem (well, one of many) with the MPAA (and Hollywood) is that they think they have the exclusive right to “stream” anything anywhere and that it’s part and parcel with copyright and public performance… but they’re wrong. Streaming is separate from both copyright and public performance. It’s just a delivery method. And in this case the delivery is from a single source to a single source–one at a time, so there is neither a copyright issue nor a public performance issue. Zediva is obeying the only license they need–the one on the DVD case for each DVD that they’re playing for a customer. Frankly, I think the MPAA has gone and shot itself in the foot with this one… and it couldn’t happen to a “nicer” bunch of guys.

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  • Pay Dirt examines the millions of consumer decisions Americans make every day: What to buy, how much to pay, whether to rave or complain. Lead written by Quentin Fottrell, the blog examines these interactions, providing readers with news, insight and tips on shopping, spending, customer service, and companies that do right – and wrong – by their customers. Send items, questions and comments to or tweet @SMPayDirt.