LOS ANGELES—Religiously inspired, Utah-based video streaming company VidAngel thought it had the perfect plan when it began operations back in 2013. Knowing that its devout constituency's minds were too fragile to be able to hear words like "goddamn," "shit," "pussy," "bastard," "fuck," "queer" and other common expletives and terms, and too fragile to see women's tits and asses or men's dicks, it hit upon what it thought would be the perfect solution: It used software to rip DVDs of 819 mainstream movies from Disney, Universal, Warner Bros. and dozens of other companies, went through them to censor the offending language and images, and uploaded the censored versions to its own streaming site, for which it charged access fees—all, of course, without any permission from the owners of those movies.
VidAngel's terms of service, according to an article on Law360.com, required users to buy a physical DVD of the movie in which they were interested in order to use the service, but U.S. District Judge Andre Birotte Jr. later found that the service still illegally bypassed locks on the disc in order to upload it and stream it to those users."
All of VidAngel's shenanigans were supposedly justified by the Family Home Movie Act of 2005 (17 U.S.C. 110(11)), signed into law as part of the Family Entertainment and Copyright Act by George W. Bush, which legalized software created by a company named Clearplay, which would allow a home consumer to screen out up to 14 different categories of objectionable content, such as drug use, sexual situations, or foul language, and censor them "on the fly" as that consumer played a DVD on his/her home system.
Counting on that legal "protection," VidAngel then sought investors, obtaining $5 million in investment just 28 hours after putting out the word, and four days after that, it had doubled that amount.
Shortly afterwards, in June of 2016, VidAngel and its founders, Neal and Jeffrey Harmon, were sued, and in December of 2016, they were ordered to shutter the website until trial.
The case languished for nearly three years until Judge Birotte, in March of 2019, ruled that the company had broken the law by ripping the DVDs and Blu-rays to put censored versions on its site. This led to a jury trial, which began on June 11, to determine what damages VidAngel owed to the Hollywood production studios, from whom it had stolen such iconic films as The Wizard of Oz, Casablanca and Lethal Weapon. According to an article on Law360.com, the trial "featured movie executives who testified that the studios make hundreds of millions of dollars in licensing deals with streaming services like Netflix and Hulu, and that VidAngel undermined those partnerships when it pirated films from DVDs to stream to its customers."
The jury's verdict? It only took three hours to decided that VidAngel owed $62.4 million in damages—and the studios sought a permanent injunction to prevent VidAngel from ripping (off) any further movies.
VidAngel called the request for injunction "a heavy-handed tactic intended more for intimidation than actually preventing further infringement," but in anticipation of the injunction being granted, the company changed its business model, now inking deals with Hulu and Netflix to provide censorship to movies that those services already offered on their streaming sites.
But the ploy didn't work, and Judge Birotte granted the permanent injunction against VidAngel censoring any movies to which it didn't own the rights, and from "circumventing" the encryption the Hollywood studios were using to protect its products. An appeal by VidAngel to the Ninth Circuit was fruitless, and the injunction remains in effect.
VidAngel, of course, challenged the jury award, asked for a new trial (citing among its reasons that the judge gave faulty jury instructions), wrongly admitted evidence and that the damages were "excessive" and "against the clear weight of the evidence"—and in a possibly related move, filed for bankruptcy earlier this month. It seems pretty clear, though, that the internet has seen the last of Hollywood movies being streamed and censored without the permission of their creators.
UPDATE 8/4/20: Sure enough, VidAngel has filed an appeal from the jury's verdict that it had pirated and illegally reedited more than 800 movies it stole from Disney, Warner Bros., Twentieth Century Fox and other Hollywood studios, but that hasn't stopped the studios from trying to collect, not only on the $62.4 million jury verdict, but also on the attorneys' fees that Judge Birotte awarded to those plaintiffs, in the amount of $6.4 million.
"In a motion lodged on Friday, the studios slammed VidAngel's litigation tactics, saying the company violated a preliminary injunction and forced the studios to file a motion for contempt, which the court granted," reported Hailey Konnath of Law360.com. "VidAngel also filed numerous meritless motions, including one for which it was sanctioned, raised frivolous arguments and rehashed multiple rejected arguments in post-trial motions, they said."
And of course, the more motions VidAngel filed, the more the studios' attorneys had to work, with the studios arguing that the company "forced plaintiffs to proceed to the bitter end rather than settling."
"All told, VidAngel has forced plaintiffs to spend more than $8 million in attorneys' fees to protect their copyrights and stop VidAngel's willful infringement and violation of the DMCA," the studios' attorneys told the court, adding that the $6.4 million request doesn't cover all the fees incurred by the studios.
A hearing on the amount of the fees is scheduled for August 28, but VidAngel is attempting to push that hearing back, saying that it won't have had time by that date to go through all of the studios' billing—109 "small print" pages—to determine which (if any) charges are unreasonable.
AVN will continue to follow this contentious case.
