U.S. District Judge Andre Birotte had ruled that VidAngel, which has streamed hundreds of Disney, Fox and Warner Bros. movies without permission, was illegal. Now a jury has ordered the company to pay $62.4 million to those injured studios, potentially forcing it to shutter its doors. The Utah-based VidAngel ripped movies from DVD copies and then created versions sanitized of violence, sex and other so-called objectionable material. Earlier, VidAngel stated that it was allowed to do this under the federal Family Movie Act.
Variety reports that Birotte rejected that argument and ordered VidAngel to shut down in December 2016. The company “later relaunched a filtering service for Netflix and Amazon, which continues to operate,” as the original case worked its way through the legal system. The studios had asked the jury to “impose the maximum penalty of $125 million for illegally streaming 819 movies, arguing that the company had willfully violated copyright law.”
VidAngel’s attorney Mark Eisenhut, however, asked them for the minimum levy of $600,000, saying that company chief executive Neal Harmon and his team “honestly believed that what they were doing was legal.”
When the jury split the difference between the two extremes, Harmon responded, “it just so happens that halfway in between is not a good situation for us.” He plans to appeal, noting that the trial didn’t determine if filtering was legal or not. The studios applauded the decision, saying that the award “sends a clear message to others who would attempt to profit from unlawful infringing conduct at the expense of the creative community.”
The plaintiffs’ lead attorney Kelly Klaus had told the jury in his opening statements that, “VidAngel customers could stream movies for as little as $1 — undercutting services like Amazon and iTunes that had paid for their content.”
VidAngel, which has about $2.2 million in the bank, is already in bankruptcy in Utah and the verdict could force the company into liquidation, but Harmon said, “in a matter of months we should have a better picture of what kind of guidance we can give customers going forward.”