Starz Entertainment, LLC, today filed suit against Buena Vista Television (BVT), a subsidiary of The Walt Disney Co., for copyright infringement and breach of contract. Starz 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.
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.
Despite this prohibition, the suit notes that Disney has “begun to sell over the Internet via services like Apple Computer Corp.’s iTunes and (Wal- Mart Corp’s) 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.
Starz Entertainment Chief Executive Officer and Chairman Robert B. Clasen said, “Disney has been a great partner. We hope to continue our relationship. But our agreements clearly prohibit them from selling their movies by electronic download over the Internet while they are exclusive to Starz. If Disney is permitted to violate our contract in this manner, it will undermine the integrity of copyright in general which is a cornerstone of our industry.”