October 28, 2011 2:48pm PT by Eriq Gardner
Zediva Shut Down Permanently After Settlement With Hollywood Studios
The MPAA has reached a settlement agreement with Zediva that resolves a lawsuit and permanently enjoins the once burgeoning online company from operating any service like the one that made waves earlier this year.
Zediva touted itself as a DVD rental service with an interesting model intended to circumvent the red tape that stops other online streaming services like Netflix from renting users the latest releases. In Zediva's model, which it claimed to not need Hollywood approval, customers rent both DVDs and DVD players and remotely control each over the Internet.
Hollywood challenged Zediva's on-demand streaming service in a lawsuit filed in April, and argued that Zediva wasn't holding private exhibitions of its movies, but rather infringing its "exclusive rights to perform their works publicly."
In August, a California federal judge accepted this view, and the MPAA won a preliminary injunction against Zediva.
At the time, Zediva called the development a "setback for the hundreds of thousands of consumers looking for an alternative to Hollywood-controlled online movie services," and appealed the decision up to the Ninth Circuit.
Now, however, Zediva has backed down and has agreed to submit to a permanent injunction. The company is dropping its appeal, paying $1.8 million to resolve the claims, and the matter is now closed.
“We are pleased that this case ended with a court order permanently ending Zediva’s infringement,” says MPAA senior vice president and associate general counsel Dan Robbins. “This result sends a strong message to those who would exploit the studios’ works in violation of copyright law, on the Internet or elsewhere, and it is an important victory for the more than two million American men and women whose livelihoods depend on a thriving film and television industry.”