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Seattle streaming video startup Ivi Inc. has been hit with another setback in its battle against some of the country’s biggest media companies.  The young upstart was shut down by a federal judge last year over its live, streaming TV service, one which allowed customers to gain access to TV programming at a low monthly cost of just $4.99.

Despite the injunction, Ivi has continued to fight the matter in the courts, claiming that its service should be designated as a cable TV operator.

In a ruling released today by the U.S Court of Appeals, Ivi lost an effort to have the federal court’s injunction overturned. That means the company will continue to be unable to offer its service.

“This is not the final chapter to this story,” said Ivi spokesman Hal Bringman, though he declined to elaborate on what’s next for the company.

The appeals court noted in its 32-page ruling that Ivi’s service could disrupt the television industry as we know it:

“Indeed, Ivi’s actions — streaming copyrighted works without permission — would drastically change the industry, to plaintiffs’ detriment. The strength of plaintiffs’ negotiating platform and business model would decline. The quantity and quality of efforts put into creating television programming, retransmission and advertising revenues, distribution models and schedules –- all would be adversely affected. These harms would extend to other copyright holders of television programming. Continued live retransmissions of copyrighted television programming over the Internet without consent would thus threaten to destabilize the entire industry.”

Plaintiffs in the case include American Broadcasting Companies, Disney Enterprises, CBS Broadcasting, NBC Universal, Telemundo Network, Major League Baseball, Cox Media and others.

Here’s a copy of the full opinion by the Appeals Court:

Ivi suit

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