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New York Court Issues a Setback to 'Clean' Movie Streaming Service

The Ninth Circuit Court has ruled that allowing Vidangel to run as usual would "create a giant loophole in copyright law."
Major studios argue that Vidangel, a movie-filtering service, has been streaming movies like Star Wars: The Force Awakens before those films were authorized to play on VOD.

Major studios argue that Vidangel, a movie-filtering service, has been streaming movies like Star Wars: The Force Awakens before those films were authorized to play on VOD.

On Thursday, New York's Ninth Circuit Court upheld an injunction to shut down a movie-filtering service that scrubs mainstream Hollywood movies of nudity, profanity, sexual content, and violence.

Vidangel (motto: "Watch Movies However the BLEEP You Want"), a subscription service that gives users the power to edit out Hollywood movies, has been locked in a legal battle with Disney, Lucasfilm, 20th Century Fox, and Warner Bros. since June of 2016. Last June, the four studios alleged that VidAngel was infringing on copyright by streaming entertainment without authorization. Doing so, the plaintiffs argued, allowed the company to stream movies to consumers for lower prices (Vidangel allowed consumers to buy movies for $20 and "sell" them back for $19 after they finished viewing) and before some movies—including Star Wars: The Force Awakens—make it to licensed streamers, like Netflix. The studios additionally argue that the Family Movie Act of 2005, which allows companies to edit "clean" versions of films in certain circumstances, does not protect Vidangel's edited movies because its edited versions were not authorized by the copyright holders—the studios themselves.

Last June, Vidangel fired back that it purchases thousands of DVDs and Blu-Rays for its services and had the "first-sale" doctrine right to sell those copies. The company also alleged that its editing is protected under the FMA—the lawsuit, it stated, amounted to a trust-like "conspiracy to restrain the market for online filtering services."

Last December, the studios won an injunction against Vidangel. Since then, though, the company has launched a new streaming service—which costs subscribers $7.99 per month and filters films available on subscribers' other streaming services—that it argued was protected under law.

In Thursday's decision, United States Circuit Judge Andrew D. Hurwitz affirmed the December decision to shut down Vidangel's initial service, writing that giving Vidangel the right to operate through the FMA "would create a giant loophole in copyright law, sanctioning infringement so long as it filters some content and a copy of the work was lawfully purchased at some point." The FMA protects editing services that use "authorized copies," Hurtwiz argued—not DVD-ripped copies, as VidAngel's core service used. The court also rejected VidAngel's claim that it was protected under copyright's fair use clause, instead affirming that it had violated the Digital Millennium Copyright Act when it ripped DVDs for its service.

On Thursday, Vidangel Chief Executive Officer Neal Harmon responded to the legal setback with a statement noting that the company's $7.99-per-month service is still operating. "Today's decision has absolutely no impact on VidAngel's current service, we remain open for business. While all of the legal back-and-forth plays out, we know our customers are grateful to still have a way to protect their kids and filter harmful content. On the legal front, we are just getting started. We will fight for a family's right to filter on modern technology all the way," he said.

The Vidangel decision is only the latest development in an ongoing battle between studios and video-streaming services. The filtering service Clearplay won a legal battle against the Directors' Guild of America and 13 individual directors in 2005; another shut down CleanFlicks the following year. Most recently, Sony Pictures created its own "Clean Version" Initiative to filter its own films, which drew criticism from creators who have previously worked with Sony.