Court Denies Disney’s Motion to Dismiss Starz Suit

A federal court this week tentatively denied a request by Disney’s Buena Vista Television unit to dismiss the lawsuit filed by Starz Entertainment alleging copyright infringement.

Starz filed the suit in March in the U.S. District Court for the Central District of California. According to the suit, Disney is contractually prohibited from providing its films for transmission over the Internet outside of the window of Starz’s exclusive license period.

Starz claimed that Disney made movies available to Internet distributors -- including Apple’s iTunes and Wal-Mart’s video-download online store -- which it had already exclusively licensed to Starz for a certain period of time.

In a decision entered July 10, U.S. District Judge Valerie Baker Fairbank ruled that Starz “has set forth allegations which, at this early stage in litigation, are sufficient to withstand [Buena Vista Television’s] motion to dismiss for lack of standing to bring a copyright cause of action.”

She added that the order did not preclude Buena Vista Television from challenging Starz’s standing to sue “at a time when more facts are before the court.”

Starz alleged that iTunes and Wal-Mart fall under the contractual definition of “television,” as included in 1993 and 1999 agreements between Starz and Buena Vista Television. In its motion to dismiss the suit, Buena Vista Television did not dispute this.

But Buena Vista Television -- which handles television-distribution agreements for Disney’s films -- argued that the contracts with Starz did not grant the pay TV provider exclusivity for all definitions of “television” distribution.

Fairbank, in her ruling, said Buena Vista Television had not shown that the language in the license agreements couldn’t be interpreted as giving Starz an exclusive license with respect to all television exhibition.

Starz CEO Bob Clasen said in an interview after the suit was filed that the Apple TV set-top -- which allows users to watch iTunes movies on their HDTV sets -- was a key reason why his company took legal action against Disney.