Under the flag of the MPAA, the studios labeled the new business as a “sham,” because it uses a clever way to bypass a licensing roadblock.

U..S. District Court Judge John Walter agrees with the MPAA’s assesment and has now ordered a preliminary injunction against Zediva, shutting down the entire operation.

The entire lawsuit centers around licencing fees which are the result of the MPAA’s attempt to maximise their control over video distribution.

Zediva allowed customers to rent and view physical DVDs remotely because this is the only ‘legitimate’ way to watch DVDs online immediately after they are released.

All other services have to abide by enforced long delays before streaming digital (vs. physical) copies, since the studios are afraid that giving people access to movies straight away will cannibalize their DVD sales.

Zediva thought they had cleverly bypassed this restriction by letting people rent a physical DVD that plays in a real DVD-player at their datacenter, but with a huge cable attached to it called the Internet.

Although it’s insane that they have to go to such an extreme to give consumers access to content in the first place, Zediva thought they had a solid plan.

The MPAA and Judge John Walter, however, disagreed and Zediva’s future is suddenly looking very grim.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.