LOS ANGELES (CBS) — Hollywood’s biggest studios fired the first shot in what will likely be a fierce legal battle against the movie-streaming service Zediva after filing a copyright infringement lawsuit in federal court, according to a complaint filed Monday.

The lawsuit alleges Zediva offers movies online without the required licenses to do so.

The complaint, filed in federal court in Los Angeles by the Motion Picture Association of America on behalf of its member studios, names WTV Systems, the parent company of Zediva, and Venkatesh Srinivasan, Zediva’s
founder and chief executive officer.

Santa Clara-based Zediva offers rentals of new releases for $2 per movie, or $1 each when ordering 10 films.

According to its website, registration for new members is temporarily closed.

Zediva claims it is like a brick-and-mortar DVD “rental” store and therefore not obligated to pay licensing fees to copyright holders, according to the MPAA.

In reality, Zediva is a video-on-demand service that transmits movies over the Internet using streaming technologies in violation of the studios’ copyrights, the MPAA alleges.

“Zediva’s mischaracterization of itself is a gimmick it hopes will enable it to evade the law and stream movies in violation of the studios’ exclusive rights,” said Dan Robbins, the MPAA’s senior vice president and associate general counsel.

“Courts have repeatedly seen through the facade of this type of copyright-avoidance scheme, and we are confident they will in this case too,” he said.

An email message requesting comment from Zediva was not immediately answered.

The studios are seeking an injunction and unspecified damages.

“When legitimate companies stream movies to their customers, they pay license fees to the copyright owners, enabling content providers to invest in new products and services that pay writers, set builders, wardrobe designers and countless others who contribute to a movie production,” Robbins said.

“Companies like Zediva profit off creators without paying them what is required by the law.”

(©2010 CBS Local Media, a division of CBS Radio Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. Wire services contributed to this report.)

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