VidAngel Loses Half of its Business with Recent Ruling

January 18, 2017
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VidAngel, a popular website that allows people to buy censored movies, has lost a court case that will lead to the company coughing up half of its business.

Behind the scenes

In June of 2016, a number of large entertainment companies like Warner Brothers, Lucasfilm and Disney sued VidAngel for streaming their movies without a license after having copied them from purchased DVDs, according to the Los Angeles Times.

VidAngel allows its customers to purchase “clean” movies—films stripped of cursing and nudity—for $20 from their website, and sell them back to the website for $19 in credit if returned within a certain time frame, a $1 difference. This price increases to $2 per movie for high definition. This type of sales process is much more affordable than purchasing the actual DVD, or even renting them or buying them from Google Play, Amazon or the Apple Store.

The Utah-based firm has been able to eschew legal action related to piracy for some time because its lawyers have consistently clung to a law ratified in 2005 called the Family Movie Act, the LA Times reported. The ruling contends that consumers can alter movies they’ve purchased in any way they want. Furthermore, Deseret News reported that VidAngel lawyers pointed out that each movie streamed has a corresponding bar code that is scanned. Once a movie is purchased, no other user can watch the movie from that same DVD—an attempt to show there’s no piracy infringement.

There seems to be a disconnect as to what laws have been broken by VidAngel. While the defendant believes the entertainment studios are simply arguing against the sanitization of their films, the plaintiffs contend the company is using the Family Movie Act to skirt around copyright laws.

Piracy prevails

Ultimately, Los Angeles U.S. District Judge Andre Birotte Jr. ruled in favor of the entertainment industry, granting a preliminary injunction against VidAngel that asks the company to remove 53 percent of its films, according to Deseret News.

“This case was never about filtering,” a statement provided to the LA Times by Disney, Lucasfilm and other plaintiffs, read. “The court recognized that the Family Movie Act does not provide a defense to VidAngel’s infringing acts of ripping, copying and streaming copyrighted movies and TV shows. We look forward to defending the court’s decision against any appeal by VidAngel.”

VidAngel owners argued that they had a lack of time to comply with the preliminary injunction, which would cause the video streaming website to suspend services completely.

“VidAngel was trying to find ways to comply with the preliminary injunction without affecting the other 47 percent. When the judge denied our request for a stay, VidAngel immediately complied with the preliminary injunction,” VidAngel’s attorney David Quinto told Deseret News in a telephone interview. “As we know, full compliance meant VidAngel had to shut down its business entirely because we didn’t have the necessary time.”

Judge Birotte Jr. recently announced a decision to hold the defendants in contempt of court for not properly informing the court about the repercussions immediate compliance would have on the business. The company was also ordered to pay $10,200 for the plaintiffs attorney fees.

The ruling comes at an important juncture where streaming content is becoming more prevalent and frankly easier to acquire given the advancements of technology. Quinto, who has played the part of a high-powered attorney for the Academy of Motion Picture Arts and Sciences, took the job for that specific reason, telling Deseret News he believes strongly that people should have the right to watch movies how they want.

This will undoubtedly be the last heard from this case, as the company raised $10 million in public funding specifically for the legal battle, according to the LA Times, and its case could end up re-writing the script on copyright infringement.