Starz Entertainment has filed a lawsuit against Disney for copyright infringement and breach of contract. The lawsuit was filed because Disney began selling the same movies to Apple and Wal-Mart as it had previously offered exclusively to Starz.

"Disney has been a great partner," said Starz Entertainment chief executive Robert B. Clasen. "We hope to continue our relationship. But our agreements clearly prohibit them from selling their movies by electronic download over the internet while they are exclusive to Starz. If Disney is permitted to violate our contract in this manner, it will undermine the integrity of copyright in general which is a cornerstone of our industry."

Under the terms of the agreement between the two companies, Disney is prohibited from selling its films for transmission over the internet prior to Starz's first exclusive licence period and during all of Starz's exclusive licence periods.

"The film studios have been very aggressive, and quite rightly so, in protecting their copyrights, particularly with regard to the internet," said Clasen. "Starz must be equally aggressive in protecting the value of the deal it made. It is especially disappointing to see one of the largest studios ignore so blatantly its own contractual obligations to protect the copyrights it has licensed to Starz."

The agreement does allow Disney to distribute its movies on media like video cassette, laser video disc and DVD, but specifically prohibits it from licensing the films for "exhibition in any form of television or electronic delivery”.

The suit seeks to prevent BVT "from continuing to infringe on Starz's rights" and asks for all profits BVT has realized from its infringing activities.

Representatives from Disney were not immediately available to comment.