A federal judge on Monday granted Disney’s request to halt VidAngel Inc.’s services while a lawsuit continues over whether the company’s business model is, as Disney alleges, an “end run” around copyright protections.
U.S. District Judge Andre Birotte Jr. in Los Angeles said in his order granting a preliminary injunction that Disney and two other movie studios have shown they’re likely to win on the merits of their claims and that they will be irreparably harmed if VidAngel is allowed to continue infringing their rights while the lawsuit is being decided.
“Hollywood studios have followed a repeated pattern in their decades-long campaign to put movie filtering services out of business by seeking a shut-down decision in trial court,” VidAngel Chief Executive Officer Neal Harmon said in an e-mailed statement. “We will aggressively pursue an appeal and take this case to a higher level where we have always believed we will ultimately prevail.”
Disney claims VidAngel operates as an unlicensed video-on-demand service. The company buys DVD and Blue-ray disc copies of newly released titles which it purports to sell to its customers, according to Disney. But instead of shipping the physical discs, VidAngel “rips” one disc to create a master-copy that can be filtered according to a customer’s preferences and streamed to their home, according to Disney. The customer can then “sell” the movie back after watching it.
This system allowed VidAngel to offer the latest Star Wars movie for $1 a day before it was available from licensed video-on-demand services, Disney said in its complaint filed June 9 along with Warner Bros Entertainment Inc. and Twentieth Century Fox Film Corp. VidAngel subscribers can watch movies with only minimal filtering if they choose to, the studios claim.
“VidAngel flaunts its interference with exclusive windows as a competitive advantage over authorized services by expressly promoting titles that are available on VidAngel but ‘NOT on Netflix,’" Disney said. "VidAngel’s unrestrained conduct thus threatens the legitimate online distribution market."
VidAngel contends its business model is legal under the Family Movie Act, a 2005 law that authorizes for-profit companies to stream lawfully obtained movies for home viewing with objectionable content filtered out. Disney and the other major studios opposed this law that was directly intended to prevent studios from using litigation to block parental filtering they disliked, according to VidAngel.
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