Appeals Court Rejects VidAngel’s Bid to Overturn Injunction

[Len]

The VidAngel filtering service will remain shut down, following a ruling Thursday from a three-judge panel upholding an injunction against the service.

VidAngel was forced to shutter its service in December, after U.S. District Judge André Birotte Jr. ruled that several studios were likely to succeed in their lawsuit claiming that the service violated their copyrights. The family-friendly streaming service filters out offensive language, nudity, and other objectionable content from mainstream movies. It does so without a license, contending that its service is exempt from copyright claims under the federal Family Movie Act.

Birotte disagreed, and on Thursday a Ninth Circuit Court of Appeals panel upheld his injunction. The Family Movie Act requires that a filtering service use an “authorized” copy of the work in question. VidAngel argues that because it begins with lawfully purchased DVD copies — which it then decrypts and copies to a server — its service begins with “authorized” copies. Writing for the panel, Judge Andrew David Hurwitz made quick work of that argument.

“VidAngel’s interpretation would create a giant loophole in copyright law, sanctioning infringement so long as it filters some content and a copy of the work was lawfully purchased at some point,” Hurwitz wrote. “But, virtually all piracy of movies originates in some way from a legitimate copy. If the mere purchase of an authorized copy alone precluded infringement liability under the FMA, the statute would severely erode the commercial value of the public performance right in the digital context, permitting, for example, unlicensed streams which filter out only a movie’s credits.”

VidAngel also argued that its service is permitted under the “fair use” doctrine in copyright law, which requires some alteration in the copyrighted work that creates a new work. Hurwitz also rejected that argument.

“Although removing objectionable content may permit a viewer to enjoy a film, this does not necessarily ‘add something new’ or change the ‘expression, meaning, or message’ of the film,” he wrote. “‘Star Wars’ is still ‘Star Wars,’ even without Princess Leia’s bikini scene.”

In a statement, VidAngel attorney Peter Stris said the company was “disappointed” in the ruling. “We’re reviewing our strategy for moving forward,” he said.

The unanimous ruling was hardly a surprise. Shortly before oral argument in June, Judge Carlos Bea turned to Hurwitz and said the case would be “a lot easier” than the case they had just heard, which involved the constitutionality of a police search. Hurwitz agreed: “Me too,” he said.

The following week, VidAngel launched a new service that filters Amazon and Netflix. Courts have not yet ruled on the legality of that platform. Birotte declined VidAngel’s request to clarify that the new service is not covered by the existing injunction. To be careful, VidAngel has avoided filtering any content owned by the plaintiff studios — Disney, 20th Century Fox, Warner Bros., and LucasFilm.

VidAngel CEO Neal Harmon issued a statement stressing that the ruling has no bearing on the new service.

“We remain open for business,” Harmon said. “While all of the legal back-and-forth plays out, we know our customers are grateful to still have a way to protect their kids and filter harmful content. On the legal front, we are just getting started. We will fight for a family’s right to filter on modern technology all the way.”

While the studios contend that VidAngel is seeking to run an unlicensed streaming service, VidAngel argues that the studios are effectively shutting down filtering altogether, thereby gutting the 2005 Family Movie Act. Utah Sen. Orrin Hatch, who wrote the act, recently noted that technology has advanced since the act was codified, and urged studios to find a way to permit filtering on streaming services.