Internet cable company ivi TV suffers setback in court; can it survive?

Ivi TV, which describes itself as an online cable operator and has been streaming live video to the Internet from broadcasters in Seattle, New York, Los Angeles and Chicago since September, has lost its first major court battle against broadcasters seeking to shut it down.

A federal judge in Seattle late last week rejected a request from ivi TV for a declaratory ruling legitimizing its claims that it wasn't infringing on broadcasters' copyrights. District Court Judge James Robart wrote: "The totality of the circumstances here leads the court to conclude that ivi filed the action here because of imminent threat of suit by the Defendants, and to secure its own forum."  

A bevy of broadcasters have sued ivi in New York seeking to stop it from broadcasting their signals. The Seattle ruling means that case can now move forward.

When ivi filed the request in Seattle, CEO Todd Weaver called it "a preemptive move to discourage needless litigation from big media."

Ivi charges subscribers $4.99 for its service. Weaver has maintained that the company follows the same laws as cable companies, paying fees to the U.S. Copyright Office that will be distributed to content rights owners after they file a payment request.

Last year, FilmOn, which launched a similar service to ivi's, was forced off the air following a suit from broadcasters. A similar fate could await ivi TV, and it could happen within the week.

Sources close to ivi said the company launched with limited capital and, although there has been interest in the company from financing sources, none have come forward. Protracted legal wrangling could drain its remaining resources quickly.

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