USA Video Technology, based in Delaware, Conn., filed suit Thursday in the U.S. District Court for the District of Delaware against Movielink, a video-on-demand service that USA Video says violates its patent rights for an online movie delivery system.
USA Video, a unit of USA Video Interactive, was awarded the patent, called "Store and Forward Video System," in July 1992; it broadly covers a method for Internet users to request and receive "a digitized video program for storage and viewing," according to the complaint. Movielink, which sells digital copies of films for download from its five partners including Metro-Goldwyn-Mayer and Viacom's Paramount Pictures, violates this patent on the basis of its service, the complaint says.
USA Video does not operate a competing service to Movielink or others in the VOD industry, rather it develops and sells Net media delivery services and systems. But the plaintiff's attorney said that the patent rights could affect many other such VOD offerings. USA Video chose to file suit against Movielink because of the breadth of its content and service, said Erik B. Cherdak, plaintiff attorney at Steptoe & Johnson.
"This case is ripe now because the content is available and the legal landscape permits (an online movie rental service)," he said. "And the technology permits bandwidth that allows movies to be downloaded practically."
"The reality is this case has far-reaching affects on whether the corner video store will remain as a going concern in the future," he said, referring to greater movement toward delivering video programming over the Internet or IP (Internet protocol) networks.
Movielink said it does not comment on pending litigation.
Movielink and its partner studios have already been taken to court in another matter. Last September, rival video-on-demand service Intertainer filed suit against the studios and Movielink for alleged collusion to restrict contracts with competing services and buy time until the studio-backed site launched. With about 140,000 subscribers, Intertainer closed shortly after, citing pending litigation.
Movielink is a partnership of Metro-Goldwyn-Mayer, Viacom's Paramount Pictures, AOL Time Warner's Warner Brothers, Sony's Sony Pictures Entertainment and Vivendi Universal's Universal Pictures. Movielink launched last November.
USA Video is seeking permanent injunctive relief and compensatory and treble damages, as well as a jury trial on all appropriate issues.