RecordTV Deal to Halt Infringement

In the latest legal victory for entertainment companies seeking to control online use of their works, a Web site that allowed users to record television shows agreed to stop using movie studios’ copyrighted materials.

The Web site,, was sued by a dozen major entertainment companies last June in U.S. District Court in Los Angeles. The suit accused the Web site, a tiny operation run out of founder David Simon’s suburban home, of illegally using copyrighted television shows drawn from a Los Angeles-area cable signal.

Based on a settlement agreement, the court entered an injunction against Mr. Simon and RecordTV to enjoin him from streaming the entertainment firms’ works or using their trademarks. RecordTV also agreed to pay $50,000 to refund the studios’ legal fees. The studios’ suit had originally sought damages they estimated at more than $10 million.

“We basically ran out of resources” to continue the legal fight, Mr. Simon said. Amid the dot-com downturn, he wasn’t able to raise any capital to build a company, Mr. Simon said. He will now try to sell the site’s remaining assets, including its name and the programming he wrote to make it work, he said.

The Web site, which Mr. Simon had effectively shut down after the studios’ suit was filed, offered an online version of a videocassette recorder. Users could ask it to save shows, which they could then watch later. Mr. Simon had originally argued that this should be legal because it should share in the legal protection that shields consumer home use of VCRs.

The entertainment firms can claim the settlement as the latest win in their copyright fight over Internet services that offer songs, films and other materials to consumers without their owners’ permission. Most recently, a federal judge criticized song-swapping service Napster Inc. for inadequate efforts to block copyrighted works from its system and hinted that she may shut it down.

“It’s one more battle won in the struggle to make it clear that intellectual property is private property,” said Jack Valenti, president and chief executive officer of the Motion Picture Association of America. Among the plaintiffs were Disney Enterprises Inc., a unit of Walt Disney Co. (DIS), Viacom Inc.’s (VIAB) Paramount Pictures, AOL Time Warner Inc.’s (AOL) Warner Bros. and Metro-Goldwyn-Mayer Inc. (MGM).

Copyright (c) 2001 Dow Jones & Company, Inc.