In several earlier posts, I indicated that it was my view that the startup streaming company Zediva has very little chance of prevailing against the major Hollywood studios. Zediva has now filed its answer to the studios’ complaint, and seeks a ruling that its business method is perfectly legal. In legal parlance, Zediva is asking a court to award it a “declaratory judgment” that states that its services comply with copyright laws. In the May 16 filing Zediva argues:
This is no more a public performance than playing a DVD in one’s living room. It defies common sense to say, as the Studios do, that putting a longer cable between a DVD player and its single viewer transforms a private performance into a public performance.
I am skeptical that this argument will be persuasive with judges, given the case law on what constitutes a public performance. The Copyright Act says to “publicly perform” a copyrighted work is to perform it in a public place or:
to transmit or otherwise communicate a performance or display of the work…to the public, by means of any device or process, whether the members of the public capable of receiving the performance or display receive it in the same place or in separate places and at the same time or at different times.
Is Zediva transmitting a performance or display of the work? Clearly yes. Is it “by means of any device or process”? Clearly yes. Is it to multiple members of the public? Yes. Zediva does not limit who can become a customer of the site. And if you read the definition above, the performances are to many members of the public because they watch the same disc at different times. This is true for movie stores too, but they do not transmit the disc to the public. To be clear, I think there is a good argument for changing the language about “separate places” and “at different times,” but that is the way it is written.
Critically, customers never actually acquire physical control of either the videos or the DVD player. Zediva transmits movies from its own facility using technology that it has developed. While Zediva argues that the customer is able to direct the playing of the video on the DVD player, and has therefore “rented” a DVD player, it is ultimately Zediva that is transmitting the videos to customers.
This is exactly how the court in a prior case, with similar facts, viewed the situation. The case is On Command Video Corp. v. Columbia Pictures Industries, 777 F. Supp. 787 (N.D. Cal. 1991). The situation was analogous in that a hotel established a system by which its patrons were able to watch movies that were stored in the hotel’s equipment room. The hotel argued that its process was an electronic video rental, just as Zediva is doing. The Court disagreed, based on the definition I cited above:
Plaintiﬀ’s argument that On Command’s system involves not “transmissions” but “electronic rentals” similar to patrons’ physical borrowing of videotapes is without merit. On Command transmits movie performances directly under the language of the deﬁnition. The system“communicates” the motion picture “images and sounds”by a “device or process” — the equipment and wiring network — from a central console in a hotel to individualguest rooms, where the images and sounds are received “beyond the place from which they are sent.”
I expect a judge in this case to say something along the same lines.