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Thursday, March 22, 2007, 11:20 am PT (02:20 pm ET)

Starz sues Disney over iTunes movie downloads

Liberty Media Holding Corp.'s Starz Entertainment cable network said Thursday it is suing a unit of Walt Disney Co. for allowing other movie download services to sell titles while they were exclusively licensed to Starz.

The lawsuit, filed in U.S. District Court in Los Angeles, was brought by Starz against Disney's Buena Vista Television, according to Reuters.

In recent months Disney has signed deals to sell movies on Apple Inc's iTunes online store and Wal-Mart Inc.'s new movie download site.

The lawsuit claims that Disney is barred under a 2005 licensing agreement with Starz from selling some of its films, such as the blockbuster "Pirates of the Caribbean: Dead Man's Chest," for transmission over the Internet before and during a period of exclusivity agreed upon for Starz.

Starz has paid over $1 billion for the exclusive rights to Disney films since 1993, according to the lawsuit. Retuers reports that Starz, under the terms of its deal, also has the right to offer the films on its subscription Internet download service, Vongo.

Last month Disney said it sold over 1.3 million movie downloads through iTunes in its first 3 months on the service, putting pressure on other Hollywood studios to join Apple’s digital download revolution.