The Motion Picture Association of America has filed a federal lawsuit against the makers and backers of Zediva, the streaming movie service that lets rent movies and stream them to Flash-capable devices.
In a statement, the MPAA claimed that Zediva has streamed movies without "obtaining required licences from the movie studios." Zediva, for its part, has described itself as a brick-and-mortar DVD rental store, which is therefore not obligated to pay licensing fees to copyright holders, a rationale that the MPAA calls a "sham."
The suit is not only asking the court to shut Zediva down, but is also demanding $150,000 for each unlicensed movie streamed over their network.
Zediva offers movies that are streamed over the Internet from a standard definition DVD player. For a fee, customers can rent a title for 14 days. Thanks to the fact that Zediva purchases the DVDs upon their release, the company is also able to edge out competitors like Netflix, who are increasingly bound by agreements with the movie studios not to make titles available for streaming directly after their DVD retail release.
The service is only available on the web and for Android users in its current form. The company says it's working on a version for iOS devices, but it's highly likely that this lawsuit may put a crimp in those plans.