VidAngel, the Provo company that lets customers stream filtered versions of Hollywood movies into their homes, has lost another copyright battle in court.
A federal judge in California granted summary judgment against VidAngel Inc., and in favor of four major movie studios. The ruling said the studios have proved that VidAngel violated the studios’ copyrights and the Digital Millennium Copyright Act, which includes protection for security software to keep the movies from being pirated.
In rulings issued Wednesday, U.S. District Court Judge André Birotte Jr. rejected VidAngel’s argument that its filtered streaming service is protected by the Family Movie Act, passed by Congress in 2005. Birotte also said VidAngel “has not raised a triable issue” in its claims that its violation of the DMCA is protected by the First Amendment.
Both arguments had been rejected by the Ninth Circuit Court of Appeals, Birotte said in the ruling, and “VidAngel cannot avoid the questions of law that this Court and the Ninth Circuit resolved against it.”
A trial is unnecessary, Birotte wrote, because “VidAngel has not pointed to any evidence that raises a triable issue of fact" about whether it infringed on the studios’ public performance rights, "and the Court finds that it did.”
The plaintiffs in the case are four of Hollywood’s heavyweights: Disney Enterprises Inc., LucasFilm Ltd. LLC, Twentieth Century Fox Film Corporation, and Warner Bros. Entertainment Inc.
In a statement, VidAngel CEO Neal Harmon said Birotte’s ruling "rendered the 2005 Family Movie Act meaningless, subverting the will of the people as expressed through their elected representatives in Congress.” Harmon is pushing for Congress to pass a bill to clarify the FMA, “to preserve the right they intended to afford families.”
Harmon also vowed to continue the legal fight against the movie studios “until the rights of families are secure for the 21st century.”
VidAngel was launched in 2014, offering its customers Hollywood movies in a way that could filter out nudity, violence and profanity.
It’s the way VidAngel did it that rankled the movie studios. VidAngel would buy a DVD, use software to decrypt the studios’ anti-piracy measures, and store the movie as files in a streaming format. The company would “sell” the DVD to a customer for $20, then buy it back after viewing for $19, with the physical disc almost never leaving VidAngel’s hands. The result was, in practice, a streaming service from VidAngel to a customer’s streaming device — such as Roku or Apple TV — for $1 per viewing.
The studios argued, successfully, that VidAngel violated their copyrights by making unauthorized copies of their films, and violated the DMCA by thwarting the studios’ anti-theft technology.
The four studios first sued VidAngel in June 2016, and the Provo company was forced by a preliminary injunction to stop streaming movies from DVDs that December. The case was delayed after VidAngel declared Chapter 11 bankruptcy in October 2017, but a stay was lifted last November to let the studios’ case proceed.
In June 2017, VidAngel started offering its filtering on streaming services, such as Netflix and Amazon. The legality of that filtering is still to be resolved. VidAngel asked to exempt that streaming from the injunction that stopped its DVD-based streaming, but Birotte on Wednesday denied that request.
VidAngel also streams its own content, family-friendly movies and comedy programs. Those are still available on VidAngel’s service, and are not covered by Birotte’s rulings.
The next step is to assess damages that VidAngel must pay to the studios. Birotte’s ruling found VidAngel bore liability for damages, rejecting a move to shift the blame to VidAngel’s customers. The judge also ordered Harmon to participate in a deposition next week, as the studios seek to assess the level of VidAngel’s liability.
VidAngel is just the latest company to try to show edited versions of movies and run afoul of Hollywood. The Varsity Theatre in Provo, owned by Brigham Young University, was not allowed to screen Steven Spielberg’s 1993 film “Schindler’s List” because Spielberg refused to let it be cut. Edited-video services proliferated in Utah in the late 1990s and early 2000s, led by a company called Cleanflix, which went out of business after courts ruled their editing violated studio copyrights.
