'Family Friendly' Streaming Service VidAngel Appeals $62 Million Copyright Verdict

Tech company VidAngel, which formerly touted itself as a family-friendly streaming service -- is asking a federal appellate court to reverse a jury's decision requiring the company to pay four movie studios $62.4 million for piracy.

In papers filed this week with the 9th Circuit Court of Appeals, VidAngel says the damages award is so high it violates the company's right to due process of law.

The filing is the latest development in a battle dating to 2016, when Disney, Warner Bros and 20th Century Fox sued VidAngel for allegedly infringing copyright by streaming programs without a license.

VidAngel's $1-per-movie streaming service allowed users to censor nudity or violence from videos. The company 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.

The Provo, Utah-based tech company “sold” movie streams to consumers for $20, but allowed them to sell back the movies for $19 in credit.

VidAngel said it provided customers with a “filtering tool” that allowed users to edit out objectionable portions of movies.

The company argued that its service was protected by the Family Movie Act, a 2005 law intended to allow parents to censor movies by stripping them of inappropriate material.

The Family Movie Act provides that copyright infringement laws don't apply to technology that mutes or hides "limited portions of audio or video content" from an authorized copy of the movie.

U.S. District Court Judge Andre Birotte Jr. in Los Angeles initially rejected VidAngel's argument in 2017, when he enjoined the company from operating its streaming-and-filtering service.

VidAngel appealed that move to the 9th Circuit, which also ruled against the company. That court said VidAngel's interpretation of the Family Movie Act law "would create a giant loophole in copyright law."

In March of 2019, Birotte rejected VidAngel's other defenses -- including that its service was protected by fair use principles -- and awarded the studios summary judgment on their copyright claims.

Several months later, a jury awarded the studios $62.4 million in damages.

VidAngel now argues that figure should be vacated because it's more than 20 times the estimated $3 million revenue it received from filtering any of the studios' movies.

“The awards against VidAngel are completely out of kilter with the statute’s purposes, and the jury obviously did not consider them in any meaningful way,” the company writes in its appellate papers.

VidAngel also raises other arguments, including that Birotte should have allowed a jury to decide whether VidAngel's service was a fair use.

“VidAngel used plaintiffs’ works for a legitimate purpose: namely, to provide a technology authorized and encouraged by the [Family Movie Act,]” the company writes.

“A reasonable jury could have found VidAngel’s use was fair,” it adds.

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