Disney Enterprises, Inc. v. Vidangel, Inc.
869 F.3d 848
| 9th Cir. | 2017Background
- Studios (Disney, LucasFilm, Fox, Warner) sell movies via themed windows and protect discs with TPMs (CSS, AACS, BD+) that require licensed players to decrypt and prevent copying.
- VidAngel bought physical DVDs/Blu-rays, used third-party AnyDVD HD software to decrypt (rip) one disc per title, created a cloud "master file," tagged/segmented content for filters, and streamed filtered versions to customers.
- VidAngel sold customers a specific disc for $20, retained physical possession in its vault, and allowed customers to "sell back" titles (most sold back within hours); streams originated from VidAngel’s ripped master files, not the physical discs.
- Studios sued for copyright infringement (reproduction and public performance rights) and for DMCA anti‑circumvention violations (17 U.S.C. § 1201(a)(1)); VidAngel asserted fair use and the Family Movie Act (FMA) as defenses.
- The district court granted a preliminary injunction enjoining VidAngel from circumventing TPMs, copying, and streaming plaintiffs’ works; VidAngel appealed and the Ninth Circuit affirmed.
Issues
| Issue | Plaintiffs' Argument | VidAngel's Argument | Held |
|---|---|---|---|
| Whether FMA §110(11) immunizes VidAngel | FMA permits only filtered transmissions "from an authorized copy"; VidAngel streams from unauthorized master files created by ripping discs, so FMA does not apply | VidAngel: filtering starts with a lawfully purchased (authorized) copy, so the filtered stream is "from an authorized copy" and thus exempt | FMA does not apply—filtered transmission must itself come from an authorized copy; ripping and streaming a separate master file falls outside the FMA exemption |
| Whether VidAngel’s copying infringes §106 reproduction right | VidAngel reproduced plaintiffs’ works onto servers and streaming files, infringing the reproduction right | VidAngel: lawful purchase and resale of discs permits its activity (and alternatively relied on FMA/fair use) | Copying digital files from discs constitutes reproduction; VidAngel likely infringed §106(1) and its defenses were unlikely to succeed |
| Whether VidAngel’s circumvention violates DMCA §1201(a)(1) | TPMs control access; VidAngel decrypted TPMs without the copyright owners’ authorization, violating §1201(a)(1) | VidAngel: purchasers are authorized to decrypt to view; TPMs are use controls not access controls, so §1201(a) does not apply | VidAngel’s decryption was unlawful circumvention under §1201(a)(1); authorization to view via licensed players does not equal authorization to circumvent TPMs |
| Whether preliminary injunction factors supported relief (irreparable harm, equities, public interest) | Studios: VidAngel undermines windowing/licensing, harms negotiating leverage and goodwill; monetary damages inadequate (irreparable) | VidAngel: public interest in filtering, economic harm to its business, delay by Studios | District court did not err—studios showed likely irreparable harm, balance of equities favored studios, public interest favored protecting copyrights; injunction affirmed |
Key Cases Cited
- Garcia v. Google, Inc., 786 F.3d 733 (9th Cir.) (standard of review for preliminary injunctions)
- Pimentel v. Dreyfus, 670 F.3d 1096 (9th Cir.) (abuse-of-discretion review of injunction application)
- Perfect 10, Inc. v. Amazon.com, Inc., 508 F.3d 1146 (9th Cir.) (copyright infringement elements and burden-shifting re: defenses)
- MAI Sys. Corp. v. Peak Comput., Inc., 991 F.2d 511 (9th Cir.) (intermediate copying is a ‘‘reproduction’’ under §106)
- Sega Enters. Ltd. v. Accolade, Inc., 977 F.2d 1510 (9th Cir.) (intermediate copying and reverse engineering context)
- Campbell v. Acuff‑Rose Music, Inc., 510 U.S. 569 (U.S.) (fair use factors and transformative-use analysis)
- Lamie v. U.S. Tr., 540 U.S. 526 (U.S.) (textualist rules against reading words into statutes)
- Yates v. United States, 135 S. Ct. 1074 (U.S.) (using statutory context and modifiers to interpret text)
- MDY Indus., LLC v. Blizzard Entm’t, Inc., 629 F.3d 928 (9th Cir.) (DMCA authorization/authorization-to-circumvent analysis)
- Universal City Studios, Inc. v. Corley, 273 F.3d 429 (2d Cir.) (purchaser’s viewing authorization does not equal authorization to circumvent TPMs)
- WPIX, Inc. v. ivi, Inc., 691 F.3d 275 (2d Cir.) (streaming without permission harms licensing model; supports irreparable harm)
- Fox Television Stations, Inc. v. FilmOn X LLC, 966 F. Supp. 2d 30 (D.D.C.) (injunction and harms to licensing/negotiating leverage)