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US Court of Appeals Allows Starz Lawsuit Against MGM to Proceed

Starz accuses MGM of violating an exclusivity agreement

Starz Entertainment’s breach of contract lawsuit against MGM will go forward, the U.S. 9th Circuit Court of Appeals ruled on Thursday.

In the suit, which was filed 2020, Starz accused MGM of breaching its exclusivity agreement when it allowed its library of film and TV shows to run on rival platforms. According to Starz, an employee noticed that “Bill & Ted’s Excellent Adventure,” a movie licensed by MGM to Starz, was also streaming on Amazon Prime despite being exclusive to Starz.

Starz asserts that MGM admitted to a breach that resulted in more than 200 films and TV shows running on other platforms. Some of those films were licensed on Epix, which is owned by MGM. According to the original lawsuit, Starz paid MGM about $70 million under two agreements in 2013 and 2015, which allowed the network to license 585 movies and 176 TV shows.

MGM had attempted to have the lawsuit dismissed on grounds that Starz filed the complaint too late, but a lower district court shut that down. The 9th Circuit Court of Appeals has now upheld that ruling.

“The district court correctly applied the discovery rule to conclude that Starz timely filed its claims of copyright infringement,” the court said in a filing which can be read here. “Taking all the facts in the complaint as true, there were no events that occurred that should have placed Starz on notice that MGM was violating its exclusive rights until Starz’s employee discovered the movie ‘Bill & Ted’s Excellent Adventure’ on Amazon Prime Video in August.”

“And as the district court aptly put it, ‘When Starz did detect smoke, in the form of ‘Bill & Ted’s Excellent Adventure,’ it quickly discovered the fire and promptly sued for all 340 infringements.’ Because Starz brought its claim within three years after its claim accrued, Starz is not barred from seeking damages for all acts of infringement,” the court said.

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