Starz Sues Disney Over Use of Content

Mar 22, 2007  •  Post A Comment

Starz Entertainment sued Walt Disney Co.’s Buena Vista Television unit, claiming the distributor sold movies online that were exclusively licensed to Starz.

The suit, filed in U.S. District Court in the Central District of California, claims Disney is prohibited from selling films over the Internet before and during Starz’s first exclusive license periods under terms of contracts signed in 1993 and 1995, and extended in 2005.

The dispute reflects how Internet distribution of content is creating new disputes over licensing rights.

Disney is selling the films licensed to Starz through iTunes, Walmart.com and other services in a “blatant breach” of the licensing agreement under which Starz pays Disney more than $1 billion for exclusive rights, Starz 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,” Starz Entertainment Chief Executive Officer and Chairman Robert B. Clasen said in a statement Thursday. “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.”

“We believe Starz misreads its agreement with Buena Vista Television and that its claim is without merit. BVT retained and has the right to sell its motion pictures in a wide range of mediums,” Disney said in a statement.

(Editor: Baumann)