'Family Friendly' Streaming Service Loses Battle With Hollywood

Tech company VidAngel, which operated a supposedly “family friendly” streaming video service, infringed movie studios' copyright, a federal judge ruled Thursday.

The decision marks another in a string of defeats for VidAngel, which briefly operated a $1 streaming video service that allowed users to censor nudity or violence from videos. VidAngel, which launched in 2015, purchased DVDs like "The Martian" and "Star Wars: The Force Awakens," and then streamed them from its own servers, without obtaining licenses from the studios. In some cases, those films weren't otherwise available for on-demand viewing.

Disney, Warner Bros and 20th Century Fox sued VidAngel in June of 2016, arguing that the startup was infringing copyright by streaming programs without a license.

VidAngel said its service was protected by the Family Movie Act, a 2005 law intended to enable parents to censor movies. The Family Movie Act appears to create an exemption to copyright infringement laws when people tinker with legally acquired DVDs in order to mute or hide "limited portions of audio or video content."

In late 2016, U.S. District Court Judge Andre Birotte Jr. in Los Angeles enjoined VidAngel from operating while the lawsuit was pending.

The company then unsuccessfully appealed to the 9th Circuit Court of Appeals, which upheld the injunction. The appellate judges rejected VidAngel's analysis of the Family Movie Act, ruling that the company's interpretation of the law “would severely erode” the rights of content creators.

The judges who issued and upheld the injunctions found that VidAngel was likely to lose its case, but didn't definitively rule that the company infringed copyright.

Last year, the studios asked Birotte to officially find that VidAngel infringed copyright.

VidAngel countered that it was entitled to a trial, where it could press its arguments about the Family Movie Act. The company argued that the 9th Circuit judges based their decision to uphold the injunction on an “undeveloped factual record.”

Birotte rejected that request on Wednesday, ruling that the company hadn't shown that anything had changed since the earlier decisions.

Birotte hasn't yet ruled on how much VidAngel owes the studios in damages. The company, which filed for bankruptcy in 2017, is now operating a different filtering service that allows people to screen out objectionable material from Amazon, Netflix and other streaming video providers. VidAngel stated Wednesday that Birotte's decision doesn't impact the current service.

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