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VidAngel Countersues Hollywood Studios With Antitrust Lawsuit

VidAngel, an online video service that allows consumers to watch major home-video releases in standard definition for $1, has filed a counter complaint against Hollywood studios who are seeking to shut them down.

Customers of VidAngel buy a movie online for $20, then have the option of setting filters to screen out objectionable content and watch the movie. The customer then sells back the movie for as much as $19.

VidAngel, however, contends that studios have violated the Sherman Antitrust Act by pressuring Google to withhold its Chromecast support services from VidAngel, which depends on streaming services to get access to its customers. Its counterclaim was filed on Tuesday in U.S. District Court in Los Angeles.

VidAngel claims that the Walt Disney Co., 20th Century Fox, Warner Bros. and Lucasfilm “have interfered with VidAngel’s attempts to partner with streaming content providers to filter movies.” They also claim that the studios have sought to “expand their copyright monopoly” by depriving consumers of the right to buy and sell copyrighted works.

VidAngel contends that its service is legal under copyright law and that its filtering is allowed by the Family Movie Act of 2015.

“Once a VidAngel customer purchases a disc, that disc is no longer available for sale,” the company said in its counter complaint. “The purchasing customer may request that the physical disc be mailed to him or her or may allow VidAngel to maintain custody of it. The discs are maintained in a physical vault, which is kept locked and protected by round-the-clock electronic monitoring.”

The customer, after viewing the disc via streaming, also has the option to sell it back to VidAngel. VidAngel contends that studios cannot prevent this arrangement because they lose distribution control over DVDs and Blu Rays after the first sale — akin to the ability of a bookseller or record shop to sell used copyrighted works.

The company also said that it has “designed and engineered its service to promote compliance with copyright law. For example, just as a physical DVD could not be played simultaneously on multiple devices, VidAngel restricts a user’s playback to one device at a time. VidAngel also streams a work to just one of a user’s registered devices at a time.”

It defends its filtering technology as authorized by the 2005 Family Movie Act, which allows for the creation of technology to filter out objectionable content. VidAngel said that its making of a decrypted copies of titles for filtering is “fully consistent’ with the 2005 law and all copyright laws, as well as its remote streams to customers.

The company says that “in asking this Court to impose a consent requirement on VidAngel’s filtering service, Plaintiffs are effectively asking that the Court repeal a federal statute enacted to protect American families.”

The four studios claim that VidAngel is “no different than many other unlawful online services.” They contend that the service appears to circumvent technological protection measures on DVDs and Blu-ray discs to create unauthorized copies that are then streamed to customers.

In their suit, they contend that VidAngel has defended the legality of its service by pointing out that it is “selling,” not renting, the movies to its users, distinguishing it from the likes of Netflix and Hulu that forge pricey licensing agreements for studio movies.”It does not matter whether VidAngel sells or rents movies,” their lawsuit said. “In either case, VidAngel would need copyright owner consent to circumvent access controls on protected discs, make copies of that content, and stream performances of the content to the public.”

The studios contend that VidAngel is undercutting their deals with video-on-demand and streaming businesses.

Among other things, VidAngel is seeking declarations that their service is legal, as well as damages. They are represented by Baker Marquart.

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