Zediva, the newest kid on the block in online movie viewing, went live this week after a year in beta with their concept for letting the public watch new release DVDs online without the wait time imposed by movie distributors on competitors like Netflix and Amazon. Their concept is almost comically common-sense simple: buy DVDs on the day they become available at retail and use DVD players to play them, but send the picture and audio over the Internet to whomever rented the movie.

It seems the service works something like this:

  1. Go online and check to see if your favorite new release is available to rent. If so, order it.
  2. Somewhere in California, at Zediva’s data center, a copy of the DVD gets inserted into a DVD player and the movie is streamed to your computer or other device.
  3. You’ve got control of the DVD and DVD player for 4 hours, during which time no one else has access to that particular copy of the DVD.

In interviews, the CEO claims that what Zediva is doing is completely legal. Because the company is using physical DVDs that it bought and physical DVD players to play them, he argues, Zediva is protected by the “first sale doctrine” of copyright law.

As a copyright owner, you have the right to distribute copies of your work to the public, whether by sale, rental, gift or what have you. As written, a copyright owner has the right to control all distribution, so that every time I lend my beloved copy of The Shining to a friend, Stephen King could come after me for copyright infringement. (Yikes!) But the Copyright Act isn’t that harsh and makes exceptions, as under the first sale doctrine. (The first sale doctrine is codified in Section 109 of the Copyright Act, 17 U.S.C. § 109, for all you kids playing along at home). What the first sale doctrine says, essentially, is that, if you own a copy of a copyrighted work, the copyright owner can’t stop you from selling or otherwise transferring possession of that copy to someone else. (Whew!) So I can sell my The Last Unicorn DVD on eBay, and LionsGate can’t tell me not to. (Not that I would sell my The Last Unicorn DVD.)

So, Zediva is arguing that it is renting the physical copies of the DVD to its customers, just like customers rent from Redbox or Netflix or (still?) Blockbuster. In fact, the CEO has characterized its customers as renting both the DVD and the DVD player and that makes this alright.

My first thought is that if I’m on the beach in Florida, I definitely don’t have possession of a DVD in California, so that’s a problem right there. But here’s where I think Zediva’s going to run into trouble, and by trouble, I mean a massive copyright infringement lawsuit from those oh-so-lovable movie studios. The first sale doctrine implicitly applies to the distribution right, since it talks about a particular copy of a work and copies are defined as material objects in the Copyright Act. The first sale doctrine has a very limited bearing on the public performance or display right; and, those are the copyrights I expect the studios will say are infringed if they decide to sue.

As defined by the Copyright Act, public performance or display includes the transmission of the performance or display of the work to the public “by means of any device or process, whether the members of the public capable of receiving the performance or display receive it in the same place or in separate places and at the same time or at different times.” I think Zediva would have a hard time arguing that they are not transmitting the performance or display of the movie to the public.

But, we’ll see how this turns out. Zediva has been public knowledge for several months now and no one has sued them. And, with a savvy copyright lawyer, they could make some other arguments, I’m sure. Maybe they’ll have a happy ending and not just simply fade to black.