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VidAngel fighting to keep wings on its video filtering service

Provo company in complicated legal battle with Hollywood studios

PROVO — Kristi Merrill is a big fan of the Provo-based video filtering service VidAngel.

Or at least she was until she heard that the way the company was doing its filtering was under legal scrutiny.

"I just assumed that it was legal, and I was kind of upset that maybe … as a consumer that I was buying into that," Merrill said. "As a company that was making the movies family friendly, it was easy to think they were playing by the rules."

To be clear, the legal questions raised about VidAngel's filtering technique — brought by a group of four heavy-hitting Hollywood movie studio plaintiffs that include Disney, Lucasfilm (a subsidiary of Disney), 20th Century Fox and Warner Bros. — have yet to be resolved.

Last December, a federal court in California issued a preliminary injunction that halted VidAngel's filtering service, finding that the plaintiffs were likely to prevail on their claims and to halt the prospect that the studios were also suffering irreparable harm.

VidAngel sought to challenge and overturn that ruling and presented arguments on its position before a three-judge panel of the 9th Circuit Court of Appeals in early June. That hearing was notable both for the numerous challenges posed by Judge Andrew D. Hurwitz to VidAngel attorney Peter Stris during his oral argument, and for an exchange captured by a hot-mic on the judge's bench before the proceeding began.

Before the final hearing on their calendar that day, Judge Carlos T. Bea was heard whispering to Hurwitz, "I think this one's a lot easier," to which Hurwitz replies, "I do, too." The court has yet to submit a ruling on the matter.

Arguments being posed by both sides delve deep into the minutiae of the Copyright Act of 1976, the Digital Millennium Copyright Act, and a legislative carve-out sponsored by Sen. Orrin Hatch, R-Utah — the 2005 Family Entertainment and Copyright Act that specifically addressed video filtering services, and allowed for it, albeit in a very narrowly defined manner.

However, at the heart of the matter is the studios' contention that VidAngel is infringing on their copyrights by illegally accessing, editing and distributing their property and VidAngel's rebuttal that the company is functioning in accordance with the law.

The way VidAngel's service works is users are presented with a menu of content switches that allow for editing according to the viewer's discretion. The menu includes the ability to remove things like nudity, gore, violence and profanity. These switches correspond with tags, or digital markers, that indicate where this content resides in the movie, and removes it.

The plaintiffs maintain infringement by VidAngel is not the fact that they're filtering — and have even cited another Utah company, ClearPlay, as offering a service that is performing filtering in a legal and acceptable manner — but that VidAngel is in clear violation of copyright law on multiple fronts.

To further complicate the current legal matters, just days after the 9th Circuit proceeding, VidAngel completely revamped its business model. It switched from a disc-based streaming service that originated from its website to an "over the top" service" that it says uses a stream from a licensed streaming service — like Netflix or Amazon — and is re-beamed via a VidAngel computer server to the end-user in its edited version. They say the method behind the new technology renders the studios' current arguments moot and VidAngel will be arguing from that basis in a hearing to seek clarification on the original injunction on Aug. 4, back in federal court.

The studios maintain the new approach continues to infringe on their rights and is still, ultimately, an illegally obtained and distributed derivative of their protected material.

Legal copy or not?

As that fight marches forward, Salt Lake City-based ClearPlay continues to operate, with seeming tacit approval from the movie studios. Its filtering service allows for much the same as VidAngel in terms of content editing options, although with a different, time code-based editing process.

ClearPlay has also entered the fray of the VidAngel legal proceedings, filing a friend of the court brief on behalf of the movie studios. CEO Matt Jarman said ClearPlay is actually doing what others only claim to do, which is, essentially, functioning like an automated remote control.

"When ClearPlay is filtering, at no point is a fixed copy of the movie ever produced," Jarman said. "I've been monitoring what’s been happening in this case, and I think that one of the primary issues is that VidAngel is likely streaming from a copy."

VidAngel claims that the copy that it creates, from which their edited version is streamed, is allowable under current rules, but it's a point that hasn't been clarified in a manner that is acceptable to the plaintiffs.

An explanation offered on VidAngel's website outlines that, after a user has selected a title and keyed in his or her editing preferences, the movie is streamed to VidAngel from a streaming service, like Amazon or Netflix, and from there it sends "a filtered version of the title to the user on his or her device."

BYU law Professor Clark Asay, who specializes in copyright law, posited that he also cannot envision a pathway through VidAngel's new technology that does not, at some point, require that an out of compliance copy be made. A copy would require decryption of the source material, both actions of which he notes are in direct conflict with current statutes.

"I can’t fathom any way that they’re doing what they're doing without decrypting the stream, which gets them in DMCA trouble," Asay said, referring to the Digital Millennium Copyright Act. "They’re claiming not to do any encryption on them."

"They’re also claiming that this is an authorized copy, a term in the Family Movie Act. But again, even if you take that at face value, the copy that they eventually stream to the user is not that copy any more."

VidAngel's disagreement on these points is evident in its July 10 U.S. District Court filing to seek clarification on the preliminary injunction that was levied on them. The company also notes in the document that it had made a good-faith effort to address the plaintiffs' concerns about the new, streaming-based technology by offering up complete access to the "source code."

"One would think that because VidAngel has eliminated decryption, eliminated every alleged harm plaintiffs offered any evidence at all to support, and based its new system on the purchase of authorized streams from (licensed streaming services) as plaintiffs previously told both this court and the 9th Circuit it should, plaintiffs would now approve of VidAngel’s new technology," wrote VidAngel attorney David Quinto.

"Notwithstanding their pious statements concerning filtering, plaintiffs have now been thoroughly outed that they are trying to kill filtering."

In a joint statement to the Deseret News, the studio plaintiffs reassert that the core issues are not about filtering and the new technology remains outside of legal territory.

“VidAngel continues to wave the flag of ‘filtering’ to obscure the fact that it wants to build a business based on copying and streaming movies and TV shows without authorization from copyright owners," the statement reads. "This case has never been about filtering, and the district court correctly held that the Family Movie Act does not provide a defense to VidAngel’s conduct. Despite the repackaging of its streaming service, VidAngel is asking the court for the right to copy and stream our works without authorization, which is why we have asked the court to reject VidAngel’s request for ‘clarification.’”

New laws?

As the litigants continue on the path to resolution of their legal matters, Asay said the fight itself may reflect that it's time to update copyright legislation that's been unchanged for decades and is losing relevance.

"I think there’s been movement in that direction and people have been talking for a while about the next great copyright act revision," Asay said. "The last one was in 1976. I think we can see it’s cracking."

Hatch is also back in action on movie filtering issues, co-signing a June 21 letter to Motion Picture Academy of America Chairman/CEO Chris Dodd, along with the rest of Utah's congressional delegation. The letter recognizes the "many constituents that have used or expressed a desire to use filtering technology" but stays well away from weighing in on the legal fight.

"We understand that there are outstanding legal disputes over whether the business models such filtering services employ fall within the bounds of the FMA," the letter states. "We do not wish to wade into such disputes, but do wish to express to you our strong desire that consumers be able to have access to effective online filtering technology consistent with the FMA and other applicable laws."

And while movie lover Merrill said she would happily return to being a VidAngel customer after the legal wrangling is over, for now she said she will find other ways to find content that works for family movie nights.

"It was nice to see new movies with my family for an inexpensive price in the comfort of our own home," Merrill said. "For now, I'm just going to go without the filtering and buy movies that we're all comfortable watching."