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California court rules against VidAngel again, and opens door for damages

PROVO — In the latest update to a yearslong copyright dispute with a group of heavyweight Hollywood studios, video filtering service VidAngel is hanging its hopes on an act of Congress following a series of additional legal setbacks this week.

In the meantime, however, the company could be looking at potentially tens of millions in damages following this week's rulings.

The most damning action may be a summary judgement issued Wednesday by U.S. District Court Judge André Birotte Jr. in favor of the plaintiffs group that includes Disney, Lucasfilm (a subsidiary of Disney), 20th Century Fox and Warner Bros.

In his ruling, Birotte wrote that VidAngel is liable for copyright infringement, violated the plaintiffs' public performance rights, dismissed VidAngel's arguments that its filtering service was protected by the 2005 Family Movie Act, and found that the company failed to make a viable argument based on fair use law.

"Upon review of the record, the court finds that there are no triable issues of material fact because VidAngel either admitted all of the material facts, or its purported factual disputes are not genuine," Birotte wrote. "In addition, VidAngel cannot avoid the questions of law that this court and the 9th Circuit resolved against it. Thus, plaintiffs are entitled to summary adjudication that VidAngel is liable for copyright infringement and for violating the (Digital Millennium Copyright Act)."

In a statement, VidAngel CEO Neal Harmon said his company, which offers a service that filters out content of movies and television shows that may be objectionable to some viewers like nudity, profanity and violence, wasn't done contesting the legality of their business model, in spite of the court's findings.

“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, D.C., 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.”

Other actions taken by the court this week include dismissal of VidAngel's request to modify an injunction issued by the court the prohibits the company from filtering content created by the plaintiffs. While the current court case is focused on VidAngel's prior practice of de-encrypting DVDs as part of its filtering process, the company switched to a method in 2017 the performs the filtering tasks, as determined by customers, to content from licensed video streaming services like Amazon Prime and Netflix. VidAngel requested the court lift the injunction as it applies to filtering works from the plaintiff studios that are streamed by the licensed services, but the court rejected that request.

The argument over the legality of VidAngel's filtering service first surfaced in 2016 and has included multiple rulings by various courts, as well as a bankruptcy filing by the company in the midst of the legal wrangling.

• June 2016: Plaintiffs' group files complaint against VidAngel, claiming the service is unlawfully reproducing copyrighted works owned by the studios. Plaintiffs claim VidAngel's business model is "cutting out payments to copyright owners" and unlawfully releasing videos before they're available on licensed streaming services.

• December 2016: A California U.S. District Court judge issues an injunction barring VidAngel from unlicensed streaming of works created by the plaintiff studios.

• June 2017: The 9th Circuit Court of Appeals affirms the lower courts injunction, denying VidAngel's challenge.

• June 2017: VidAngel switches business models from ripping, then streaming, filtered DVDs to filtering movies from licensed streaming services.

• August 2017: VidAngel files lawsuit in Utah federal court, seeking potential declaratory relief.

• October 2017: VidAngel files for bankruptcy, seeking protection from creditors including, according to filings, its own customers.

• January 2019: VidAngel seeks a modification to original injunction, allowing the company to filter content from plaintiff studios via licensed streaming services.

The court has also ordered VidAngel to make Harmon available to the plaintiff's counsel for a deposition on March 11 and, according to a blog entry posted Friday afternoon by Harmon, a hearing is scheduled on June 11 to make a determination as to damages. Harmon listed the following potential recovery amounts, and noted that just one of the plaintiffs, Disney, says VidAngel illegally accessed some 800 titles.

• Innocent Infringement: Roughly $200 per title

• Ordinary Infringement: Between $750 and $30,000 per title

• Willful Infringement: Between $30,000 and $150,000 damages per title

Harmon also mentions VidAngel's unresolved Chapter 11 proceeding, and said he expects a weigh-in from the bankruptcy court following the final determination of damages.