A California federal court is due to rule on the legality of Zediva, the movie rental company that serves streams of top titles from customer-controlled DVD players.
Studios filed a complaint against the company in April, alleging that Zediva’s novel business model amounts to unauthorized public performances of studio DVDs. Unauthorized public performances are unprotected by the first-sale provision of U.S. copyright law, which grants the purchaser of a DVD the right to rent, sell, or otherwise “dispose of” the disc itself.
Zediva asserts that it is not engaged in the public performance of DVDs, but rather, a series of private (and noninfringing) performances: each stream, it says, “is a transmission to the single person who has rented a particular copy of the movie being transmitted” (via GigaOm).
Prior case law favors the studios’ interpretation, according to James Grimmelmann, an associate professor at New York Law School, who analyzed Zediva’s business model in a blog post prior to the lawsuit (via Wired). In Grimmelmann’s opinion, Zediva is less like Blockbuster or Netflix, and more like a Pennsylvania business that offered private exhibitions of videocassettes in the early 1980s. Studios prevailed in a copyright infringement suit against that company.
Zediva says that a more recent case that upheld Cablevision’s cloud-based digital video recorder should apply; Jason Schultz, an associate professor at Berkeley Law School, told Wired in March that a court reviewing Zediva might agree.
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