VidAngel violated copyright law when it allowed users to skip past offensive content in major studio releases, a federal judge ruled on Wednesday.
Disney, Lucasfilm, Warner Bros. and 20th Century Fox sued the service in 2016, alleging that it was streaming movies without the permission of copyright holders. On Wednesday, Judge Andre Birotte granted the studios’ motion for summary judgment, finding that VidAngel violated the studios’ copyrights.
Birotte held that the facts of the matter are not in dispute, and that a trial is not necessary.
“VidAngel has not pointed to any evidence that raises a triable issue of fact as to whether it infringes Plaintiffs’ public performance rights, and the Court finds that it did,” Birotte held.
VidAngel had argued that its service was permissible under the federal Family Movie Act, which allows users to skip offensive content on DVD’s. CEO Neal Harmon issued a statement on Wednesday renewing a call for an update to the law, which would protect content “filtering” on streaming services.
“Today’s rulings have rendered the 2005 Family Movie Act meaningless, subverting the will of the people as expressed through their elected representatives in Congress,” Harmon said. “We are renewing our call for leaders in Washington, DC to take decisive action to preserve the right they intended to afford families by passing the Family Movie Act Clarification bill, first introduced last year. And as we’ve promised, we intend to fight this battle until the rights of families are secure for the 21st century.”
VidAngel, based in Provo, Utah, launched in 2014. It offered the faith-and-family audience an opportunity to watch Hollywood blockbusters while filtering out nudity, violence, and offensive language.
VidAngel operated its service by buying up DVD copies of studio releases, using software to defeat the copy protections, and then tagging offensive content. The service would then “sell” copies to users for $20, who would stream the film at home, skipping objectionable content, and then “sell” it back to VidAngel for $19.
The studios argued that VidAngel was essentially offering a pirate streaming service, in which viewers could access films before they were available on Netflix or Amazon.
Birotte agreed, granting the studios’ request for an injunction in December 2016. VidAngel was forced to shut down while it appealed the decision to the 9th Circuit Court of Appeals, which upheld the injunction.
In June 2017, VidAngel launched a new version of its service, in which it filtered out content on streaming services like Netflix and Amazon. The legality of that service remains an unsettled question, though it continues to operate.
The company then filed for bankruptcy in an effort to pause the copyright suit long enough to gain traction on the new service. VidAngel then tried to get a Utah court to declare the filtered streaming service legal, though the court declined to rule on the matter. On Wednesday, Birotte also declined VidAngel’s request to explicitly exempt the new service from the injunction.
In November, a Utah bankruptcy judge granted the studios’ motion to lift the stay on the copyright suit. That allowed the studios’ motion for summary judgment to go forward.
The next step is a trial to determine how much VidAngel will have to pay in damages. The studios have said that damages could be between $950,000 and $152.5 million, according to the ruling lifting the bankruptcy stay. VidAngel argues that its infringements will be found to be “innocent,” and that damages will be far lower.
According to its most recent operating report in the bankruptcy case, VidAngel has $2.4 million in cash in the bank.
“It’s business as usual for our company,” Harmon said in an interview. “We got lots of good things going for our company, and we look forward to getting this behind us.”
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