Case 2:16-cv-04109-AB-PLA Document 198 Filed 08/02/17 Page 1 of 6 Page ID #:6043

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES - GENERAL

Case No.: CV-16-04109-AB (PLAx) Date: August 2, 2017

Title: Disney Enterprises, Inc. et al v. VidAngel Inc.

Present: The Honorable ANDR BIROTTE JR., United States District Judge
Carla Badirian N/A
Deputy Clerk Court Reporter

Attorneys Present for Plaintiff: Attorneys Present for Defendant:

N/A N/A

Proceedings: Order Denying Defendants Motion to Clarify or Construct the

Courts December 12, 2016 Preliminary Injunction Order (Dkt.
No. 182)
Pending before the Court is Defendant VidAngels (VidAngel) Motion to Clarify
or Construct the Courts December 12, 2016 Preliminary Injunction Order. (Dkt. No.
182). VidAngel brings this motion on the grounds that the new version of their filtering
technology does not violate the terms of the preliminary injunction order. VidAngel thus
seeks an order: (1) clarifying or constructing the preliminary injunction order; and (2)
declaring that VidAngels proposed course of conduct will not violate the preliminary
injunction. Plaintiffs Disney Enterprises, Inc., Lucasfilm Ltd. LLC, Twentieth Century
Fox Film Corporation, and Warner Bros. Entertainment Inc. (Plaintiffs) filed an
opposition (Dkt. No. 188), and VidAngel filed a reply (Dkt. No 190). The Court finds the
motion appropriate for resolution without oral argument and VACATES the hearing set
for August 4, 2017. See Fed. R. Civ. Proc. 78(b), Local Rule 7-15. For the following
reasons, the Court DENIES VidAngels Motion to Clarify the Courts Order.

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I. BACKGROUND

a. Factual and Procedural Background

The Court will not recite the entire factual and procedural record from its December
12, 2016 Order, and instead incorporates the background section contained in that order as
if set forth fully herein and adds only those facts relevant to the instant Motion. (See Dkt.
No. 144). On, December 12, 2016, the Court granted Plaintiffs motion for a preliminary
injunction and enjoined VidAngel from:

(1) circumventing technological measures protecting Plaintiffs copyrighted

works on DVDs, Blu-ray discs, or any other medium;

(2) copying Plaintiffs copyrighted works, including but not limited to

copying the works onto computers or servers;

(3) streaming, transmitting or otherwise publicly performing or displaying

any of Plaintiffs copyrighted works over the Internet (through such websites
as VidAngel.com), via web applications (available through platforms such as
the Windows App Store, Apples App Store, the Amazon App Store,
Facebook or Google Play), via portable devices (such as through applications
on devices such as iPhones, iPads, Android devices, smart phones or tablets),
via media streaming devices (such as Roku, Chromecast or Apple TV), or by
means of any other device or process; or

(4) engaging in any other activity that violates, directly or indirectly,

Plaintiffs anti-circumvention right under 1201 of the Copyright Act, 17
U.S.C. 1201(a), or infringing by any means, directly or indirectly, Plaintiffs
exclusive rights under 106 of the Copyright Act, 17 U.S.C. 106.

(Dkt. No. 144 at 22). After the Courts order was issued, VidAngel developed a new
filtering technology which is currently in use for films that are not subject to the
preliminary injunction. (Mot. at 2). Whereas the previous version of VidAngels service
involved the decryption of a DVD or Blu-Ray disc, VidAngels current service involves
generating a framebuffer version of movie data from a digital transmission that VidAngel
purchases through a licensed streaming service. (Id. at 2, 4-5). VidAngel also requires
viewers to either purchase a specific movie title or have a valid subscription with a licensed
streaming service in order to watch a filtered version of any particular movie through
VidAngels website. (Id. at 6-7). VidAngel contends that their new service does not
violate the Courts preliminary injunction order, and now seeks a declaration from the
Court to that effect.

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II. LEGAL STANDARD

Federal Rule of Civil Procedure 65(d)(1)(C) requires that every order granting an
injunction must describe in reasonable detailand not by referring to the complaint or
other documentthe act or acts restrained or required. See Fed. R. Civ. P. 65(d)(1)(C).
A party subject to an injunction always has the right to ask the court that is administering
it whether it applies to conduct in which the person proposes to engage. Abelyan v.
OneWest Bank, No. CV 09-7163 CAS (AGRx), 2011 U.S. Dist. LEXIS 65299, at *4 (C.D.
Cal. June 13, 2011) (citing Hendrix v. Page (In re Hendrix), 986 F.2d 195, 200 (7th Cir.
1993). While such relief [is] in the sound discretion of the courts, a court should not
withhold a clarification in the light of a concrete situation that [leaves] parties. . . in the
dark as to their duty toward the court. Regal Knitwear Co. v. NLRB, 324 U.S. 9, 15, 65 S.
Ct. 478, 482 (1945).

III. DISCUSSION

a. Clarification or Construction of the Courts December 12, 2016

Order

VidAngel does not request clarification of the first element of the preliminary
injunction. VidAngel states that they interpret the second element of the preliminary
injunction as prohibiting unlawful copying of Plaintiffs copyrighted works. (Mot. at 20).
VidAngel contends that the copying involved with their new filtering service amounts to a
"fair use" of Plaintiffs copyrighted works as provided in 17 U.S.C. 107 of the Copyright
Act, and thus is not unlawful. VidAngel thus does not seek a clarification of the acts
restrained by the second provision, but rather a declaration that their service complies with
17 U.S.C. 107 of the Copyright Act. (Id. at 20-21). However, for the reasons discussed
below, the Court declines to reach the merits of VidAngels fair use argument in this order.

VidAngel contends that the third element of the preliminary injunction is vague with
regard to the prohibition of streaming, transmitting or otherwise publicly performing or
displaying any of Plaintiffs copyrighted works. (Id. at 21). VidAngel argues that if this
provision were interpreted broadly it would prohibit a VidAngel employee from
purchasing a video from a licensed streaming service and watching it via the internet on a
company laptop. (Id.) The Court does not agree that the language of the third provision
could reasonably support this interpretation. The provision specifically prohibits
streaming, transmitting, or otherwise publically performing or displaying Plaintiffs
copyrighted works. (Dkt. No. 144 at 22) (emphasis added). The second part of the
sentence clearly modifies the terms streaming and transmitting, prohibiting them only
insofar as they amount to a public performance or display of Plaintiffs copyrighted works.
VidAngel next asks the Court to clarify that their new service is in compliance with the

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third element of the preliminary injunction. This would necessarily involve a
determination that VidAngels streaming service does not violate Plaintiffs public
performance rights pursuant to 17 U.S.C. 106(4). Again, the Court will not address the
merits of this argument.

Finally, VidAngel argues that the fourth element of the preliminary injunction is
essentially a catch-all that orders VidAngel to obey the law. (Mot. at 22). The Court
disagrees. The fourth provision specifically prohibits VidAngel from engaging in any
activity that violates Plaintiffs anti-circumvention right under 17 U.S.C. 1201(a), or
infringing Plaintiffs exclusive rights under 17 U.S.C. 106. To the extent that VidAngel
seeks clarification of whether their new service violates the fourth provision, they
essentially seek a declaration of non-infringement. The Court declines to make such a
declaration in this order.

Based on the foregoing, the Court finds that the Preliminary Injunction Order
sufficiently describes the acts restrained in reasonable detail pursuant to Federal Rule of
Civil Procedure 65(d)(1)(C), and no further clarification is necessary based on the issues
that VidAngel identifies.

b. Declaration that VidAngels New Service Does not Violate Courts

Order.

VidAngels request for a declaration that their new service doesnt violate the
Courts order is essentially an action for a declaratory judgment and is not appropriate for
resolution in a motion to clarify. As briefly discussed above, the Court will necessarily
have to decide whether VidAngels service complies with several sections of the Copyright
Act in order to determine whether it also complies with the preliminary injunction. Thus
VidAngel basically seeks a declaration of non-infringement. Courts routinely deny
motions to clarify under similar circumstances. The Ninth Circuit in Velo-Bind, Inc. v.
3M Co., 647 F.2d 965, 974 (9th Cir. 1981) affirmed a district courts denial of a motion for
modification, holding that it was in essence a motion for a summary adjudication of an
infringement claim. Id. There the district court found that defendants binding machine
violated 3 patents owned by the plaintiff and subsequently issued a permanent injunction.
Id. at 967. The defendant subsequently filed a motion to modify the injunction, seeking a
declaration that defendants new binding machine did not constitute an infringement of the
patents at issue. Id. at 974. In denying the motion, the district court relied on Atiyeh v.
Filtex Corporation, 130 F. Supp. 196 (S.D. Cal. 1955). In Atiyeh, the defendant was
enjoined from manufacturing, using or selling an infringing device. Id. at 197. The
defendant later filed a motion to construe the preliminary injunction with regard to
defendants reconstructed devices. Id. The court held that the defendant should have
brought this request in an action for declaratory relief as opposed to a summary method
such as a motion to construe an injunction. Id. Among the reasons cited by the court for

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their disapproval of a summary adjudication of an infringement action was the fact that
such a method would [] seem to circumvent the patentees right to a trial of the fact issues
by a jury. Id. Likewise in Velo-Blind, the Ninth Circuit ruled that the district court's
refusal to grant 3M's request for relief amounting to the summary adjudication of a separate
and prospective act of infringement was not an abuse of its discretion. Velo-Bind, Inc.,
647 F.2d at 975. In Cornucopia Prod., LLC v. Dyson, Inc., the plaintiff filed a motion to
clarify a preliminary injunction that prohibited them from manufacturing an infringing
product. Cornucopia Prod., LLC v. Dyson, Inc., No. CV12-0234-PHX-NVW, 2013 U.S.
Dist. LEXIS 192792, 2013 WL 12098786, at *6 (D. Ariz. June 20, 2013). The plaintiffs
motion sought a declaration that a new product complied with the Courts preliminary
injunction. Id. The court held that this would require a careful evaluation of the
plaintiffs new product, which should not be performed under the guise of clarifying an
injunction that is already clear. Id. Similarly, in Pac. Bioscience Labs., Inc. v. Home
Skinovations, Inc., No. C15-0689JLR, 2017 U.S. Dist. LEXIS 48200, at *7 (W.D. Wash.
Mar. 30, 2017), the court held that defendants motion to clarify an injunction was actually
an action seeking a declaration that plaintiffs new product did not infringe the patent at
issue or violate the injunction. There the court stated that non-infringement motions are
dispositive motions that should be advanced based on a fully developed record and thus
the defendants motion for clarification of the permanent injunction is a maladroit vehicle
to drive the issue of non-infringement to resolution. Id. at 8.

VidAngel seeks to distinguish the aforementioned cases by pointing to the fact that
they involve patent infringement determinations which are uniquely discovery-, law-, and
fact-intensive. (Reply at 19). However, the Ninth Circuit has long held that there is a
strong connection between copyright and patent law. "Where precedent in copyright
cases is lacking, it is appropriate to look for guidance to patent law 'because of the historic
kinship between patent law and copyright law.' " Silvers v. Sony Pictures Entm't, Inc., 402
F.3d 881, 887 (9th Cir. 2005) (quoting Sony Corp. of Am. v. Universal City Studios, 464
U.S. 417, 439, 78 L. Ed. 2d 574, 104 S. Ct. 774 (1984)). Moreover, the determination of
whether VidAngels new service infringes upon Plaintiffs rights pursuant to the Copyright
Act will also be fact-intensive due to the highly technical nature of the service. In fact,
both parties have submitted almost 90 pages of pleadings and multiple declarations and
exhibits. Yet, despite all of the materials submitted, it still remains unclear how exactly
VidAngel produces copies of Plaintiffs works via the digital streams they purchase from
licensed streaming services. In their motion VidAngel simply refers to it as generating a
framebuffer version of the movie data. (Mot. at 182). In the opposition, Plaintiffs
contend that the movie streams employ several technological protection measures
(TPMs) and that it is unclear whether VidAngel is circumventing these measures in
violation of 17 U.S.C. 1201(a), and the Courts preliminary injunction order. (Oppo. at
12-13). Plaintiffs also assert that they require extensive discovery in order to determine
whether or not VidAngel is circumventing TPMs, however VidAngel has not provided said

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discovery. (Id.) VidAngel responds by stating that they offered to allow Plaintiffs to
review source code and third party tools for the new service, which would have enabled
Plaintiffs to fully investigate their alleged concerns about possible circumvention of
technological protection measures. (Oppo at 13). However, VidAngel does not provide
sufficient information for the Court to determine exactly how VidAngels new service
manages to copy movie streams without circumventing the TPMs that Plaintiffs allege are
a part of each movie stream. This is simply one issue among many that will be involved in
determining whether VidAngels new service complies with the Copyright Act and the
Courts preliminary injunction. Without further factual development on this issue, the
Court is not in the position to declare the rights of the parties with regard to this new
service. Therefore, the Court denies VidAngels request for a declaration that its new
service does not violate the preliminary injunction.

IV. CONCLUSION

For the foregoing reasons, the Court DENIES Defendants Motion for Clarification.
(Dkt. No. 182). This denial is without prejudice to renewal, should Defendant have
further need for clarification of any issue not addressed in this order.

IT IS SO ORDERED.

Dated: August 2, 2017 _______________________________________

HONORABLE ANDR BIROTTE JR.

UNITED STATES DISTRICT COURT JUDGE

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