iCraveTV Settlement Leaves Legal Issues Open

Renegade Canadian Web site iCraveTV.com
has agreed to stop Webcasting off-the-air signals from US and
Canadian television stations in a bid to settle copyright-
infringement lawsuits in both countries.

While the out-of-court settlements reached late Thursday were
hailed as victories by motion-picture industry giants and
independent producers on both sides of the border, the end of
litigation against Toronto-based iCraveTV hasn't resolved all the
legal questions surrounding third-party retransmission of
television signals over the Internet - particularly in Canada,
where a unique twist in the country's broadcasting laws frees
Internet operations from regulatory red tape.

In a pair of US lawsuits, major studios and television networks -
quarterbacked by the Motion Picture Association of America (MPAA) -
and a teaming of the National Football League and the National
Basketball Association contended that iCraveTV's rebroadcasting of
programming that included US sports events and popular Hollywood
productions was a flagrant contravention of copyright laws.

A District Court in Pittsburgh has already dealt iCraveTV two blows
in deliberations over the US lawsuits, with Judge Donald Ziegler
ordering the Web site on Jan. 28 and again on Feb. 8 to halt its
broadcasts while the case continues. The Feb. 8 injunction was to
last for 90 days.

In Canada, where iCraveTV founder William Craig still contends his
company's activities were legal, a copyright-infringement lawsuit
had been filed by a coalition of broadcasters that included the
country's national public broadcaster, the Canadian Broadcasting
Corp., and companies owned by CTV Inc., WIC Western International
Communications Ltd., and Rogers Communications Inc. That lawsuit
was fronted by the Canadian Association of Broadcasters (CAB).

In a statement after the settlement, Craig said: "Given the
virtually infinite resources of those rights holders, a dot-com
start-up like iCraveTV was simply unable to continue with
protracted, multi-front litigation."

However, said Craig, "We continue to maintain, as we always have,
that our activities are perfectly legal under Canadian law."

But the settlement reached in the Canadian lawsuit suggests that it
won't be Craig or his partners who will lead the way in resolving
the question of whether the retransmissions were legal or not. The
pact signed by Craig for his TVRadio Now Corp., which operates the
iCraveTV.com Web site, forbids iCraveTV's executives from
continuing or initiating actions that might lead to a resolution of
such issues.

Specifically, the agreement prohibits the iCraveTV crew from
attempting - or helping anyone else attempt - to seek any sort of
ruling on the legality of that form of Web broadcasting in Canada.
The agreement also requires iCraveTV to rescind a request it made
to the country's Copyright Board in December, when it asked for an
opinion on what fees the Webcaster should be paying in order to
fulfill the same kind of obligations met by other rebroadcasters,
such as cable television companies.

Craig had argued all along that iCraveTV should be able to clear
copyright hurdles in Canada by contributing to the same communal
royalty fund used by cable broadcasters. He also argued that, like
those of the cable companies, iCraveTV's contributions should
represent a relatively thin slice of total revenues.

According to Canada's Copyright Act, outfits whose operations
are "comparable" to those of cable television broadcaster may
retransmit a live signal "in its entirety" if its operations are
"lawful under the Broadcasting Act."

Craig has pointed out that activities such as iCraveTV's became
lawful under the country's Broadcasting Act earlier in 1999 when
the Canadian Radio-television and Telecommunications Commission
(CRTC) specifically exempted Internet-based operations from the
regulations of the act - a move it said was designed to encourage
entrepreneurs to develop innovative approaches to online media.

But, in their lawsuit, the Canadian broadcasters said they
questioned whether iCraveTV could be considered comparable to a
cable television operator and have suggested that the company's
practice of surrounding the live video image with in-stream banner
advertising meant the signal was no longer unadulterated.

"iCraveTV had tried to position itself as a cable system," said
Elizabeth McDonald, president of the Canadian Film and Television
Production Association (CFTPA). "We believe the evidence before the
Court showed that, unlike cable systems, iCraveTV's operations were
destructive to the interests of broadcasters and producers by
adding its own advertising to the programs and by making the
broadcasts available outside Canada, neither of which Canadian
cable systems are allowed to do."

While the agreement ending the Canadian lawsuit means iCraveTV
won't be settling these legal issues, it leaves the door open for
Craig and his team to resume their former activities if some other
party paves the way, or if regulators make things clearer
independently. If that were to happen, the agreement allows the
iCraveTV executives to request the court to have the terms of the
settlement adjusted.

Meanwhile, iCraveTV said it will investigate its options as a
broadcaster of video content for which it can arrange more-
traditional licensing deals.

Jack Valenti, president and chief executive officer (CEO) of the
MPAA, said the settlement was a victory for intellectual property
protection on the Internet.

"The resolution of this matter will serve as a deterrent to anyone
who seeks to take that which they do not own. Legitimate consumers,
creative artists and copyright holders everywhere should join us in
celebrating today's settlement," Valenti said. "We remain committed
to using every resource at our disposal to defend our intellectual
property."

Valenti added, "Our members have endeavored to make full use of the
exciting opportunities offered by the Internet. We are anxious to
distribute our copyrighted programs online to consumers and look
forward to the development of legitimate and secure distribution
outlets on the Internet. The Internet - like print, radio and
television before it - will be a more satisfying medium for
consumers if the interests of content providers are properly
respected."

Michael McCabe, CAB president and CEO, said the agreements send a
signal to other Web sites that copyright infringement will be dealt
with "swiftly and soundly."

"Whether or not we're dealing with a $5 or a $5 billion operation
is irrelevant," he said. "We will move immediately to assert our
rights as copyright owners and creators."

The CFTPA's McDonald said the settlement was also a victory "for
all those who watch films and television programs in Canada."

"If iCraveTV had been allowed to continue, production of films and
television programs would have been seriously injured as their
advertising revenues and foreign export potential would have been
severely curtailed," she said. "But now these productions, and the
jobs they represent, can continue to flourish."

Launched at the end of November 1999, iCraveTV's programming had
been the broadcasts of 17 stations which were being captured off
the air in Toronto and piped onto the Internet in RealNetworks'
streaming media format. Those stations had included broadcasters in
cities on the US side of Lake Ontario.

Listed as the plaintiffs in the MPAA-backed lawsuit were: 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.

Reported by Newsbytes.com, http://www.newsbytes.com

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