How to Settle the iPad Lawsuits Now (Analysis)

Apple

Back in April, Viacom and Time Warner Cable sued each other; then last month Viacom sued Cablevision. Interestingly, that came just a day after Viacom and TWC filed a standstill agreement so that they could negotiate without the pressure of ongoing court deadlines.

In both sets of suits, the issue is the same: under license and distribution agreements, can  cable companies allow their customers to add another screen to their home viewing options: an iPad?

The iPad app, it should be emphasized, is usable only in the same home in which the customer already has cable service. It’s not usable on the go. For that reason, the cable companies argue that the iPad is simply another home screen – just like an additional television screen.

Viacom disagrees, arguing that such use exceeds the scope of the licensing language, and thus constitutes breach of contract and copyright infringement.

Viacom is also concerned that Nielsen doesn’t count iPad viewing (see Viacom complaint, para. 32) and claims it will be a long time before Nielsen is able to do so (although it doesn’t say why). That means ratings numbers could decline if a significant number of viewers switch from television sets to the wildly popular tablets. Channel providers’ concerns will only increase as the iPad continues to gain customers and if Android tablets become popular too.

Writing on this blog, Eriq Gardner predicted that the Viacom-TWC lawsuit will settle, possibly with TWC agreeing to paying a small mobile fee. I agree (and anticipate that the TWC-Cablevision suits will settle as well). Here’s a detailed look at why that’s likely to happen.