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Hollywood Studios Score $50M Judgement Against Omniverse

Jeff Baumgartner
11/13/2019

The Omniverse One World Television saga appears to have reached its end.

Several major Hollywood studios, represented by The Alliance for Creativity and Entertainment (ACE), have obtained a stipulated consent judgment and permanent injunction against Omniverse that includes $50 million in damages.

The consent judgement dated Tuesday, November 13, by the federal district court for the Central District of California, arrives about nine months after ACE filed the a lawsuit against Omniverse and its CEO, Jason DeMeo, over allegations that Omniverse's OTT-delivered pay-TV service violated copyright law. When the suit was filed, Omniverse was delivering OTT-TV services in tandem with several third-party partners that white-labeled pay-TV offerings under their own brands, such as TikiLive, Clikia, SkyStream, Flixon and VivaLiveTV.

Omniverse had originally argued that its service was legal, citing a joint venture with HovSat, a private cable operator based in New Jersey that, Omniverse believed, possessed a 100-year contract with DirecTV affixed with "no limitations" with respect to US distribution and delivery method.

Later, as the lawsuit heated up and documentation supporting the basis of Omniverse's claims proved elusive, Omniverse began to pin the blame on HovSat and its owner, Shant Hovnanian, arguing that HovSat misled Omniverse to believe that it held valid licenses and contracts with DirecTV that allowed for the national distribution of OTT-TV services. At one point, Omniverse sought indemnification while accusing HovSat of breach of contract, negligent misrepresentation and a breach of "good faith and fair dealing."

In addition to the $50 million in damages, the operators of Omniverse also agreed to permanently cease all operations and to refrain from operating any similar service. Omniverse shut down its streaming service for residential subscribers on May 31, 2019. In August, it appeared that DeMeo was preparing to introduce another video streaming service, to be called OSTV Now, but it's clear that the OSTV Now project has since been abandoned.

Another win for ACE
This week's consent decree is another legal victory for ACE, a legal consortium that is backed by major studios, programmers, distributors and OTT video players. In the Omniverse case, ACE represented Paramount Pictures, Columbia Pictures, 20th Century Fox, Warner Bros. and Universal.

"This judgment and injunction are a major win for creators, audiences, and the legitimate streaming market, which has been undermined by Omniverse and its 'back office' piracy infrastructure for years," Karen Thorland, SVP and deputy general counsel at the Motion Picture Association, said in a statement. "It also builds on recent ACE legal victories over illicit piracy operations, strengthening the legitimate market for film, video, and live TV that gives audiences more choices than ever while supporting millions of American jobs."

ACE, which includes Comcast, Amazon, Viacom and Disney among its backers, has notched similar, favorable settlements in cases against TickBox, Dragon Box, SetTVNow and Vader Streams. Of recent note, ACE has initiated a new effort aimed at cracking down on password sharing and other methods used by consumers to access content without proper authorization.

Get up to speed on the Omniverse saga:

— Jeff Baumgartner, Senior Editor, Light Reading

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