Can Ivi Beat the Big Broadcasters?

The major broadcasters usually can’t agree on much, but they’ve agreed to band together and file a lawsuit against Ivi, claiming that the online video startup is infringing copyrights. The suit, filed in the Southern District of New York yesterday, aims to shut down Ivi’s video service, which retransmits over-the-air broadcast signals online.

Ivi’s system works by relaying live TV feeds from more than 40 broadcasters — including ABC, (s DIS) CBS, (s CBS) Fox, (s NWS) NBC (s GE) and Telemundo — to online viewers. It claims to be operating under a legal loophole which says that cable and satellite companies can legally retransmit over-the-air broadcast content as long as they pay semi-annual fees to the U.S. Copyright Office. The startup says it has already applied to pay those fees, which are later distributed to rights holders.

It should come as little surprise that the broadcasters disagree with Ivi’s reading of the law, and have pressured it with cease and desist letters, calling for the startup to take down the online video service. That prompted Ivi to file a preemptive lawsuit against certain broadcasters last week.

The latest volley in the battle between Ivi and broadcasters came yesterday, as a group of TV programmers filed a lawsuit alleging copyright infringement for unauthorized retransmission of their live TV feeds. Plaintiffs in this latest suit, entitled WPIX Inc. v. Ivi Inc., include ABC, CBS, NBC, Fox, PBS, Major League Baseball and many more.

What Ivi’s doing is not a new idea, and its legal foundation is a little shaky. As one of our commenters noted a few weeks ago when Ivi launched, a startup called iCraveTV tried more than 10 years ago to exploit the same legal loophole before being “sued out of existence.”

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