iCraveTV Gets First-Round Setback

iCraveTV.com late Friday lost a major round in its fight with Hollywood and the major TV networks when as a Pittsburgh federal judge ordered the company to
at least temporarily pull its streaming broadcasts of several TV signals.

The temporary restraining order issued by Judge Donald Ziegler was an initial
victory for 10 U.S. motion picture studios, three broadcast television networks
and two of the country’s largest sports leagues in their attempts to stop
iCraveTV.com from rebroadcasting television content for which they hold
copyright. In addition, the judge ordered iCraveTV.com to turn over to the
studios by Feb. 2 “copies of all their (Web) server logs (plus) updates of
the logs on a daily basis thereafter.”

Listed as the plaintiffs in the Motion Picture Association Of America
backed lawsuit are: Twentieth Century Fox Film Corp., Disney
Enterprises Inc., Columbia TriStar Television Inc., Columbia Pictures
Television Inc., Columbia Pictures Industries Inc., Metro-Goldwyn-Mayer
Studios Inc., Orion Pictures Corp., Paramount Pictures Corp., Universal City
Studios Inc.; Time Warner Entertainment Co. L.P. (Warner Bros.), ABC Inc.,
CBS Broadcasting Inc. and Fox Broadcasting Co.

Launched late last year, iCraveTV has been streaming the programming of 17
Canadian and U.S. broadcast TV stations online, uncut and uninterrupted,
without permission, angering programmers on both sides of the border.
Further, the company was running its own banner advertising as a border
around its RealPlayer transmission screen.

“We’re pleased with the court’s decision,” said Brian McCarthy, a spokesman
for the National Football League, which succeeded in stopping the company
from broadcasting the Super Bowl championship game Sunday.

Jack Valenti, MPAA president and chief executive officer, was pleased with the ruling.

“Judge Ziegler’s ruling reaffirms
that this is a simple case of theft. This is a first-step victory for
creative artists, consumers and copyright owners everywhere,” he said in a statement.

William Craig, head of Radio Now Corp., the Canadian company which operates
iCraveTV.com, couldn’t disagree more. He has said his outfit is operating in
accordance with the rules set out by its country’s broadcasting regulator,
the Canadian Radio-television and Telecommunications Commission (CRTC). The
Canadian company argues that Canada’s laws give it the right to retransmit
broadcast television signals, in the same way that cable companies and
satellite companies do. As long as the company doesn’t cut or insert its own
commercials into the programming itself, and ultimately pays copyright
holders for their work, iCraveTV’s action is completely legal, Craig says.

This is because under recently liberalized Canadian laws, enacted to
encourage Internet creativity, he may be technically correct. His opponents,
however, claim he is infringing on more-strict U.S. laws because much of his
viewership comes from south of the border. ICraveTV alleges it prevents that
by insisting that users logging on must identify themselves with a Canadian
telephone area code, reminiscent of the “Joe sent me” passwords of speakeasy
days. But, in case a user doesn’t have a Joe handy, the site actually
provides an area code for U.S. users lacking a phone book.

Craig argues that under Canadian law iCraveTV.com is free to operate just
like any other cable television company, which can retransmit signals to it
customers without negotiating with programmers for rights. Instead, cable
companies in both Canada and the U.S. pay fees to communal royalty funds that
are then paid out to the production industry. Craig says iCraveTV.com could
make similar payments, but for the moment he is saying it from the safety of
a northern exposure, giving his statements from Toronto.

D

aniel A. Boehnan, a copyright law expert and partner at McDonnell Boehnan Hulbert and Bergoff in Chicago, said that the company needs to follow the same guidelines as cable companies.

“In order to be able to have the same kind of access and retransmission of the signal that a cable company does or a satellite company does, it seems to me they have to abide by all of the same obligations,” he said.

iCraveTV and Craig wound up being the media giants’ target
because the company is registered in Pittsburgh, on U.S. soil and probably,
as well, because Craig is in trouble on other fronts in that town, allegedly
owing $800,000 in a marital case and a bench warrant issued against him
carrying $1 million bond. Thus, he is testifying in absentia, a disadvantaged
exile prisoner of his own ancillary entanglements.

The plaintiffs feel they have a solid case, claiming the Internet video is a
degradation of their broadcasts and that the in-stream banner advertising
also amounts to an alteration of the original signals. They are seeking
damages of up to $150,000 for each of 36 NFL or NBA broadcasts they say have
been Webcast by the site by the date the complaint was filed. The U.S.
Copyright Act allows for damages of up to $150,000 per infringed work.

This copyright infringement battle, long-awaited by content producers and Net
players alike, has been joined by this killer group of media powerhouses in
hopes to demonstrate that piracy can be stopped and open the way for
increased and safer use of the medium by traditional broadcasters.

iCraveTV.com Webmasters, however, may be able to comply with the temporary
restraining order if they can improve their virtual US/Canada barrier, but
lawyers for the plaintiffs claim that the iCraveTV.com business model is
built on the potential for traffic from a large population south of the
border.

In addition, some Canadian motion picture and broadcast organizations have
said they are considering lawsuits against iCraveTV.com in their own country.

ICrave considers itself a pioneer in this space, and law expert Boehnan said that sometimes that’s not a good thing.

“ICrave wants to posture themselves as a pioneer, and it may be that they are a pioneer in this particular niche of the Internet and Web access,” he said. “. . .But pioneers often got shot by the Indians and laid dead by the roadside as others followed behind them.”

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