PROVO — Following years of unsuccessful arguments that its video filtering service did not infringe on copyrights held by Disney and others, VidAngel could be looking at damages in the hundreds of millions at the end of a two-day trial that begins Tuesday.
While the maximum allowable penalties would exceed $200 million on over 800 titles the plaintiffs — which includes Disney, Lucasfilm (a subsidiary of Disney), 20th Century Fox and Warner Bros. — say they own the rights to, industry watchers expect the actual assessments to fall much lower. The court proceeding follows a summary judgement issued in March by U.S. District Court Judge André Birotte Jr. in favor of the major production companies.
VidAngel offers a service that filters out content of movies and television shows that may be objectionable to some viewers like nudity, profanity and violence.
In his ruling, Birotte wrote that VidAngel is liable for copyright infringement and violated the plaintiffs' public performance rights. The judge 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)."
Birotte will preside over a jury trial that begins in Los Angeles on Tuesday, at which a determination will be made as to the level of infringement perpetrated by VidAngel. Jurors will hear arguments and assess which of the three possible levels of infringement — innocent, ordinary or willful — that VidAngel committed. Each infringement designation comes with its own range of potential damages.
• Innocent infringement: Roughly $200 per title.
• Ordinary infringement: Between $750 and $30,000 per title.
• Willful infringement: Between $30,000 and $150,000 in damages per title.
Disney and fellow plaintiffs say they are entitled to double damage assessments since VidAngel was found to have infringed on copyright protections twice — first by "ripping" or bypassing security protections of commercially produced DVD/Blu-ray videos, and then again when it made copies for streaming the content to VidAngel customers.
While the maximum, double-assessment for willful infringement could push damages into the hundreds of millions, a recent story in the Hollywood Reporter noted that in past copyright cases, penalties for willful copyright infringement were more typically in the range of $10,000 to $50,000 per work. At that rate, the movie studios could be looking at recovering $16 million to $82 million in damages following this trial. At the other end of the spectrum, should the outcome determine the company only committed innocent infringement, that damages figure could drop into the tens of thousands.
VidAngel did not respond to Deseret News requests for comment ahead of the trial. Following the March court ruling, company CEO Neal Harmon said that he wasn't ready to concede defeat.
“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.”
VidAngel's battle with Disney and others goes back to 2016 and was precipitated in part by claims by the filmmakers that VidAngel was releasing movies to its customers even before the content was available on Netflix and other licensed streaming services.
Benchmarks in the legal squabble leading up to the district court ruling in March include the following:
• 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.
A representative of the the plaintiff's group did not immediately responded to a Deseret News request for comment Monday.