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

Filing 20

Filed (ECF) Appellees Disney Enterprises, Inc., Lucasfilm Ltd. LLC, Twentieth Century Fox Film Corporation and Warner Brothers Entertainment, Inc. response opposing motion ([16] Motion (Seal) (ECF Filing)). Date of service: 01/02/2017. [10251409] [16-56843] (Klaus, Kelly) [Entered: 01/02/2017 09:40 PM]

Case No. 16-56843
IN THE UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

DISNEY ENTERPRISES, INC., ET AL.,
Plaintiffs-Appellees,
v.
VIDANGEL, INC.
Defendant-Appellant.

Appeal from he United States District Court
for the Central District of California
Case No. 16-cv-04109-AB (PLAx)
The Honorable André Birotte Jr., Presiding
APPELLEES’ SUPPLEMENTAL APPENDIX
VOLUME 4
(Pages S.A.750 - S.A.957)

MUNGER, TOLLES & OLSON LLP
Glenn D. Pomerantz
Kelly M. Klaus
Rose Leda Ehler
Allyson R. Bennett
355 South Grand Avenue
Thirty-Fifth Floor
Los Angeles, California 90071-1560
Telephone: [phone]
Facsimile: [phone]
Attorneys for Plaintiffs-Appellees

TABLE OF CONTENTS
Date

Description

Page

Volume 4 (Public and Redacted):
12/29/16

[ECF No. 168] [In Chambers] Order Setting Hearing on
Plaintiff’s Ex Parte Application Requesting an Order to
Show Cause Why Defendant Should Not Be Held
Contempt for Violating the Court’s Preliminary
Injunction Order ........................................................................ S.A.0750

12/23/16

[ECF No. 165] Declaration of Stephen H. Kay Filed in
Support of Plaintiffs’ Opposition to VidAngel’s Ex
Parte Application for a Stay.................................................... S.A.0751

12/23/16

[ECF No. 164-2] Declaration of David Quinto and
Exhibit A in Support VidAngel, Inc.’s Opposition to
Plaintiffs’ Ex Parte Application for an Order to Show
Cause ......................................................................................... S.A.0753

12/22/16

[ECF No. 161-1 to 161-3] Declaration of Kelly M.
Klaus and Exhibits A and B in Support of Ex Parte
Application for Order to Show Cause Why VidAngel
Should Not be Held in Contempt .............................................. S.A.0763

12/20/16

[ECF No. 156 to 156-2] Supplemental Declaration of
Kelly M. Klaus and Exhibits A and B Regarding
VidAngel’s Continuing Violation of Preliminary
Injunction, Filed in Further Support of Plaintiffs’
Opposition to VidAngel’s Ex Parte Application for a
Stay ............................................................................................ S.A.0772

12/15/16

[ECF No. 154] Plaintiffs’ Opposition to VidAngel’s Ex
Parte Application to Stay Preliminary Injunction
Pending Appeal or, Alternatively, Pending Decision by
the Ninth Circuit on Stay Appeal Pending .............................. S.A.0789

12/15/16

[ECF No. 154-1] Declaration of Rose Leda Ehler in
Support of Plaintiffs’ Opposition to VidAngel’s Ex
Parte Application to Stay Preliminary Injunction
Pending Appeal ......................................................................... S.A.0805

2

TABLE OF CONTENTS
Date

Description

Page

12/15/16

[ECF No. 154-8] Exhibit G to Declaration of Rose Leda
Ehler in Support of Plaintiffs’ Opposition to VidAngel’s
Ex Parte Application to Stay Preliminary Injunction
Pending Appeal ......................................................................... S.A.0809

12/15/16

[ECF No. 154-9] Exhibit H to Declaration of Rose Leda
Ehler in Support of Plaintiffs’ Opposition to VidAngel’s
Ex Parte Application to Stay Preliminary Injunction
Pending Appeal ......................................................................... S.A.0812

12/15/16

[ECF No. 154-11] Exhibit J to Declaration of Rose Leda
Ehler in Support of Plaintiffs’ Opposition to VidAngel’s
Ex Parte Application to Stay Preliminary Injunction
Pending Appeal ......................................................................... S.A.0814

10/3/16

[ECF No. 92] Redacted Version Sealed Supplemental
Declaration of Robert Schumann in Support of
Plaintiffs’ Motion for Preliminary Injunction........................... S.A.0817

10/3/16

[ECF No. 91] Redacted Version of Sealed Declaration
of Allyson Bennett in Support of Plaintiffs’ Motion for
Preliminary Injunction .............................................................. S.A.0830

10/3/16

[ECF No. 91-1] Exhibit A to Declaration of Allyson
Bennett in Support of Plaintiffs’ Motion for Preliminary
Injunction .................................................................................. S.A.0835

10/3/16

[ECF No. 91-2] Exhibit B to Declaration of Allyson
Bennett in Support of Plaintiffs’ Motion for Preliminary
Injunction .................................................................................. S.A.0842

10/3/16

[ECF No. 91-11] Exhibit K to Declaration of Allyson
Bennett in Support of Plaintiffs’ Motion for Preliminary
Injunction .................................................................................. S.A.0844

8/22/16

[ECF No. 30] Redacted Version of Sealed Declaration
of Rose Leda Ehler in Support of Plaintiffs’ Motion for
Preliminary Injunction .............................................................. S.A.0847
3

TABLE OF CONTENTS
Date

Description

Page

8/22/16

[ECF No. 30-1] Exhibit A to Declaration of Rose Leda
Ehler in Support of Plaintiffs’ Motion for Preliminary
Injunction .................................................................................. S.A.0855

8/22/16

[ECF No. 30-3] Exhibit C to Declaration of Rose Leda
Ehler in Support of Plaintiffs’ Motion for Preliminary
Injunction .................................................................................. S.A.0886

8/22/16

[ECF No. 30-7] Exhibit G to Declaration of Rose Leda
Ehler in Support of Plaintiffs’ Motion for Preliminary
Injunction .................................................................................. S.A.0888

8/22/16

[ECF No. 30-10] Exhibit J to Declaration of Rose Leda
Ehler in Support of Plaintiffs’ Motion for Preliminary
Injunction ........... ....................................................................... S.A.0915

8/22/16

[ECF No. 30-30] Redacted Version of Sealed Exhibit
DD to Declaration of Rose Leda Ehler in Support of
Plaintiffs’ Motion for Preliminary Injunction........................... S.A.0922

8/22/16

[ECF No. 30-31] Redacted Version of Sealed Exhibit
EE to Declaration of Rose Leda Ehler in Support of
Plaintiffs’ Motion for Preliminary Injunction........................... S.A.0923

8/22/16

[ECF No. 29] Redacted Version of Sealed Declaration
of Robert Schumann in Support of Plaintiffs’ Motion for
Preliminary Injunction .............................................................. S.A.0924

8/22/16

[ECF No. 28] Declaration of Tedd Cittadine in Support
of Plaintiffs’ Motion for Preliminary Injunction ...................... S.A.0939

7/22/16

[ECF No. 14] Stipulation Regarding Preliminary
Injunction Briefing and Hearing Schedule ............................... S.A.0953

Volume 5 (Filed Under Seal):
10/6/16

Supplemental Declaration of Robert Schumann in
Support of Plaintiffs’ Motion for Preliminary Injunction ........ S.A.0958

10/3/16

Declaration of Allyson Bennett in Support of Plaintiffs’
Motion for Preliminary Injunction .......................................... S.A.0971
4

TABLE OF CONTENTS
Date

Description

Page

8/22/16

Declaration of Robert Schumann in Support of
Plaintiffs’ Motion for Preliminary Injunction.......................... S.A.0976

8/22/16

Exhibit DD to Declaration of Rose Leda Ehler in
Support of Plaintiffs’ Motion for Preliminary Injunction ........ S.A.0991

8/22/16

Exhibit EE to Declaration of Rose Leda Ehler in
Support of Plaintiffs’ Motion for Preliminary Injunction ........ S.A.0995

5

Case 2:16-cv-04109-AB-PLA Document 168 Filed 12/29/16 Page 1 of 1 Page ID #:5303

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
CIVIL MINUTES - GENERAL

Case No.: CV 16-04109-AB (PLAx)
Title:

Date:

December 29, 2016

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

Present: The Honorable

ANDRÉ BIROTTE JR., United States District Judge

Carla Badirian
Deputy Clerk

N/A
Court Reporter

Attorneys Present for Plaintiffs:

Attorneys Present for Defendants:

None Appearing

None Appearing

Proceedings:

[In Chambers] Order Setting Hearing on Plaintiff’s Ex Parte
Application Requesting an Order to Show Cause Why
Defendant Should Not Be Held in Contempt for Violating the
Court’s Preliminary Injunction Order

The Court is in receipt of all papers filed in connection with Plaintiffs’ ex parte
application requesting an order to show cause why Defendant should not be held in
contempt of this Court’s December 12, 2016 Order Granting Plaintiffs’ Motion for
Preliminary Injunction. The Court hereby sets this matter for hearing on Friday,
January 6, 2017 at 10:00 AM. IT IS FURTHER ORDERED THAT that if the
Defendant wishes to present further briefing, their papers shall be filed by no later than
5:00 PM on Wednesday, January 4, 2017. Plaintiffs’ response, if any, shall be filed by
no later than 5:00 PM on Thursday, January 5, 2017.

IT IS SO ORDERED.

CV-90 (12/02)

S.A.0750

C IVIL MINUTES - GENERAL

1

Initials of Deputy Clerk CB

Case 2:16-cv-04109-AB-PLA Document 165 Filed 12/23/16 Page 1 of 2 Page ID #:5293

S.A.0751

Case 2:16-cv-04109-AB-PLA Document 165 Filed 12/23/16 Page 2 of 2 Page ID #:5294

S.A.0752

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#:5278

S.A.0753

Case 2:16-cv-04109-AB-PLA Document 164-2 Filed 12/23/16 Page 2 of 10 Page ID
#:5279

S.A.0754

Case 2:16-cv-04109-AB-PLA Document 164-2 Filed 12/23/16 Page 3 of 10 Page ID
#:5280

S.A.0755

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#:5281

S.A.0756

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#:5282

S.A.0757

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#:5283

S.A.0758

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#:5284

S.A.0759

Case 2:16-cv-04109-AB-PLA Document 164-2 Filed 12/23/16 Page 8 of 10 Page ID
#:5285

S.A.0760

Case 2:16-cv-04109-AB-PLA Document 164-2 Filed 12/23/16 Page 9 of 10 Page ID
#:5286

S.A.0761

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#:5287

S.A.0762

Case 2:16-cv-04109-AB-PLA Document 161-1 Filed 12/22/16 Page 1 of 3 Page ID #:5232

1 GLENN D. POMERANTZ (SBN 112503)
[e-mail]
2 KELLY M. KLAUS (SBN 161091)
[e-mail]
3 ROSE LEDA EHLER (SBN 296523)
[e-mail]
4 ALLYSON R. BENNETT (SBN 302090)
[e-mail]
5 MUNGER, TOLLES & OLSON LLP
355 South Grand Avenue, Thirty-Fifth Floor
6 Los Angeles, California 90071-1560
Telephone: [phone]
7 Facsimile: [phone]
8 Attorneys for Plaintiffs
9
10

UNITED STATES DISTRICT COURT

11

CENTRAL DISTRICT OF CALIFORNIA

12

WESTERN DIVISION

13
14 DISNEY ENTERPRISES, INC.;
LUCASFILM LTD. LLC;
15 TWENTIETH CENTURY FOX FILM
CORPORATION and WARNER
16 BROS. ENTERTAINMENT INC.,
Plaintiffs and CounterDefendants,

17
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20
21

Case No. 16-cv-04109-AB (PLAx)
DECLARATION OF KELLY M.
KLAUS IN SUPPORT OF EX
PARTE APPLICATION FOR
ORDER TO SHOW CAUSE WHY
VIDANGEL SHOULD NOT BE
HELD IN CONTEMPT
Judge: Hon. André Birotte Jr.

vs.
VIDANGEL, INC.,

Crtrm.: 7B

Defendant and CounterClaimant.

Trial Date:

None Set

22
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S.A.0763
KLAUS DECL. I/S/O EX PARTE APP. FOR ORDER TO SHOW CAUSE
16-CV-04109-AB (PLAX)

Case 2:16-cv-04109-AB-PLA Document 161-1 Filed 12/22/16 Page 2 of 3 Page ID #:5233

1 I, Kelly M. Klaus, hereby declare:
2

1.

I am admitted to practice before all of the courts of the State of

3 California and this Court. I am an attorney at the law firm of Munger, Tolles &
4 Olson LLP, counsel for Plaintiffs in the above-captioned matter.
5

2.

I submit this declaration in support of Plaintiffs’ Ex Parte Application

6 for Order to Show Cause Why VidAngel Should not Be Held in Contempt. I have
7 personal knowledge of the facts set forth in this declaration. If called as a witness, I
8 could and would testify competently to the matters set forth herein.
9

3.

On December 21, 2016, I contacted VidAngel’s counsel in this action

10 regarding Plaintiffs’ Ex Parte Application for Order to Show Cause Why VidAngel
11 Should not Be Held in Contempt. I informed counsel that Plaintiffs intended to file
12 this application and explained the basis for the application.
13

4.

I asked VidAngel’s counsel if VidAngel opposes the relief sought in

14 this application. VidAngel’s counsel, David Quinto, told me that VidAngel opposes
15 Plaintiffs’ application. Attached as Exhibit A is a true and correct copy of my
16 correspondence to and from VidAngel’s counsel.
17

5.

Attached as Exhibit B is a true and correct copy of Apple’s notice that

18 it will not accept app updates from December 23 to 27, available at
19 https://developer.apple.com/news/?id=11292016a (last visited Dec. 22, 2016).
20

6.

Attached as Exhibit C is a true and correct copy of VidAngel’s Blog

21 post “DECLARATION of Neal Harmon in Support of VidAngel, Inc.’s Ex Parte
22 Application to Stay Preliminary Injunction Pending Appeal,” available at
23 http://blog.vidangel.com/2016/12/21/declaration-of-neal-harmon-in-support-of24 vidangel-inc-s-ex-parte-application-to-stay-preliminary-injunction-pending-appeal/
25 (last visited Dec. 22, 2016).
26

I declare under penalty of perjury under the laws of the United States of

27 America that the foregoing is true and correct.
28
S.A.0764

-2KLAUS DECL. I/S/O EX PARTE APP. TO SHOW CAUSE
16-CV-04109-AB (PLAX)

Case 2:16-cv-04109-AB-PLA Document 161-1 Filed 12/22/16 Page 3 of 3 Page ID #:5234

1

Executed on December 22, 2016, at San Francisco, California.

2
3
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/s/ Kelly M. Klaus
Kelly M. Klaus

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S.A.0765

-3KLAUS DECL. I/S/O EX PARTE APP. TO SHOW CAUSE
16-CV-04109-AB (PLAX)

Case 2:16-cv-04109-AB-PLA Document 161-2 Filed 12/22/16 Page 1 of 4 Page ID #:5235

EXHIBIT A

S.A.0766

Case 2:16-cv-04109-AB-PLA Document 161-2 Filed 12/22/16 Page 2 of 4 Page ID #:5236

From:
To:

Cc:
Subject:
Date:

David Quinto
Klaus, Kelly; Jaime Marquart; Peter Stris; Brendan Maher; Victor O"Connell; Elizabeth Brannen;
[e-mail]; Scott Malzahn; Brian Grace; Maxwell M. Blecher; Donald R. Pepperman; Taylor
Wagniere
Pomerantz, Glenn; Ehler, Rose; Bennett, Allyson
RE: Notice of Ex Parte re OSC re Contempt
Wednesday, December 21, 2016 5:07:19 PM

Kelly:
This will confirm that VidAngel will oppose Disney’s needless application and shameful
attempt to use a preliminary determination to destroy VidAngel’s business without allowing it
even a merits determination much less an opportunity to seek appellate review.
Thanks much,
David Quinto
From: Klaus, Kelly [mailto:[e-mail]]
Sent: Wednesday, December 21, 2016 4:51 PM
To: Jaime Marquart <[e-mail]>; David Quinto <[e-mail]>;
Peter Stris <[e-mail]>; Brendan Maher <[e-mail]>;
Victor O'Connell <[e-mail]>; Elizabeth Brannen
<[e-mail]>; [e-mail]; Scott Malzahn
<[e-mail]>; Brian Grace <[e-mail]>
Cc: Pomerantz, Glenn <[e-mail]>; Ehler, Rose <[e-mail]>; Bennett,
Allyson <[e-mail]>
Subject: Notice of Ex Parte re OSC re Contempt
Subject line of my prior email had your subject line from your ex parte notice (used reply to all to get
all concerned on your line). Assume you know the subject is Plaintiffs’ Notice of Application for Ex
Parte re Contempt – but so there’s no confusion, here’s another email.

From: Klaus, Kelly
Sent: Wednesday, December 21, 2016 4:48 PM
To: 'Jaime Marquart'; David Quinto; Peter Stris; Brendan Maher; Victor O'Connell; Elizabeth Brannen;
[e-mail]; Scott Malzahn; Brian Grace
Cc: Pomerantz, Glenn; Ehler, Rose; Bennett, Allyson
Subject: RE: Application for Stay of Preliminary Injunction Pending Appeal
Importance: High

Dear Jaime, David et al.,
This is notice that Plaintiffs will be filing an ex parte application, requesting an
order to show cause why VidAngel should not be held in contempt for violating
S.A.0767

Case 2:16-cv-04109-AB-PLA Document 161-2 Filed 12/22/16 Page 3 of 4 Page ID #:5237

the preliminary injunction. We will ask the Court to hold VidAngel in contempt
based on its unilateral decision to absolve itself of the obligation to comply with
a lawful, valid, and effective preliminary injunction. We are not aware of any
legal authority that would allow a party in VidAngel’s position to exempt itself
from compliance with an injunction. If you are aware of any such authority,
give us the cites now so we can review the cases and address them in our
papers.
We also will ask the Court to strike all those portions of Mr. Harmon’s
declaration (Dkt. 158), purporting to set forth VidAngel’s claims of “hardship” in
having to comply with the preliminary injunction. Those excuses are baseless
for many reasons, including:
Mr. Harmon claims VidAngel is trapped in a “holiday window” for Apple
apps. VidAngel is in the claimed corner only because it has painted itself there,
having waited until now to think about how to comply with an injunction
VidAngel knew Plaintiffs were seeking since June.
Mr. Harmon claims to be concerned about “customer confusion” when
customers cannot find a title that VidAngel has no right to stream—and which
it has been ordered not to stream. VidAngel communicates with its user base
constantly; and its users know very well why Plaintiffs’ titles will not be
available through VidAngel; and Mr. Harmon already has a sworn declaration
on file saying that VidAngel tells users when titles are out of stock.
Moreover, if VidAngel believed it would be difficult to comply with a
preliminary injunction, VidAngel should have included those reasons in its
opposition to the motion, or in its request for a stay. The newest Harmon
declaration is a transparent, improper, and meritless attempt to backfill
VidAngel’s record.
Please let us know whether VidAngel intends to oppose Plaintiffs’ application.
Thanks,
Kelly

S.A.0768

Case 2:16-cv-04109-AB-PLA Document 161-2 Filed 12/22/16 Page 4 of 4 Page ID #:5238
Kelly M. Klaus | Munger, Tolles & Olson LLP
355 South Grand Avenue | Los Angeles, CA 90071
560 Mission Street| San Francisco, CA 94105
Tel: [phone] (LA) | 415-512-4017 (SF)
[e-mail] | www.mto.com

S.A.0769

Case 2:16-cv-04109-AB-PLA Document 161-3 Filed 12/22/16 Page 1 of 2 Page ID #:5239

EXHIBIT B

S.A.0770

12/22/2016
Case

Get Document 161-3 Filed 12/22/16 Page 2 of
2:16-cv-04109-AB-PLA Your Apps Ready for the Holidays - News and Updates - Apple Developer2 Page ID #:5240

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Account

Get Your Apps Ready for the Holidays
November 29, 2016

The busiest season on the App Store is almost here. Make sure your
apps are up-to-date and ready for the winter holidays. New apps and
app updates will not be accepted December 23 to 27 (Pacific Time),
so any releases should be submitted, approved, and scheduled in
advance. Other iTunes Connect and developer account features will
remain available.
Learn more about preparing apps for the App Store.
Back to News

S.A.0771
https://developer.apple.com/news/?id=11292016a

1/1

Case 2:16-cv-04109-AB-PLA Document 156 Filed 12/20/16 Page 1 of 3 Page ID #:5190

1 GLENN D. POMERANTZ (SBN 112503)
[e-mail]
2 KELLY M. KLAUS (SBN 161091)
[e-mail]
3 ROSE LEDA EHLER (SBN 296523)
[e-mail]
4 ALLYSON R. BENNETT (SBN 302090)
[e-mail]
5 MUNGER, TOLLES & OLSON LLP
355 South Grand Avenue, Thirty-Fifth Floor
6 Los Angeles, California 90071-1560
Telephone: [phone]
7 Facsimile: [phone]
8 Attorneys for Plaintiffs
9
10

UNITED STATES DISTRICT COURT

11

CENTRAL DISTRICT OF CALIFORNIA

12

WESTERN DIVISION

13
14 DISNEY ENTERPRISES, INC.;
LUCASFILM LTD. LLC;
15 TWENTIETH CENTURY FOX FILM
CORPORATION and WARNER
16 BROS. ENTERTAINMENT INC.,
Plaintiffs and CounterDefendants,

17
18
19
20
21
22

vs.
VIDANGEL, INC.,
Defendant and CounterClaimant.

Case No. 16-cv-04109-AB (PLAx)
SUPPLEMENTAL DECLARATION
OF KELLY M. KLAUS
REGARDING VIDANGEL’S
CONTINUING VIOLATION OF
PRELIMINARY INJUNCTION,
FILED IN FURTHER SUPPORT OF
PLAINTIFFS’ OPPOSITION TO
VIDANGEL’S EX PARTE
APPLICATION FOR A STAY
__________________
Judge: Hon. André Birotte Jr.
Trial Date:

None Set

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S.A.0772
SUPP. KLAUS DECL.
CASE NO. 16-CV-04109-AB (PLAX)

Case 2:16-cv-04109-AB-PLA Document 156 Filed 12/20/16 Page 2 of 3 Page ID #:5191

1 I, Kelly M. Klaus, hereby declare:
2

1.

I am an attorney with Munger, Tolles & Olson LLP, counsel for

3 Plaintiffs in this matter. I am a member of the California Bar and am admitted to
4 practice before this Court. Except as to matters stated on information and belief, I
5 have personal knowledge of the matters set forth in this supplemental declaration; as
6 to those matters stated on information and belief, I am reliably informed of their
7 contents and believe them to be true. If called as a witness, I could and would
8 testify competently to the facts stated herein.
9

2.

I submit this supplemental declaration to bring to this Court’s attention

10 additional facts relevant to VidAngel’s pending application to stay the Preliminary
11 Injunction: VidAngel not only has refused to remove Plaintiffs’ works from its
12 service, but VidAngel is also flouting the Preliminary Injunction by adding new
13 releases of Plaintiffs’ works as they become available on DVD and Blu-ray Disc.
14 For example, as discussed further below, VidAngel has added Warner Bros.’s Sully
15 and Storks and Fox’s Miss Peregrine’s Home for Peculiar Children to its service—
16 titles which were not released on DVD until after the Preliminary Injunction was
17 entered.
18

3.

VidAngel’s defiance of the Preliminary Injunction is flagrant. If

19 VidAngel will not comply with the Preliminary Injunction immediately, Plaintiffs
20 will have no option other than to move ex parte for an order to show cause why
21 VidAngel should not be held in contempt.
22

4.

VidAngel, like any other party, must comply with the Court’s

23 Preliminary Injunction “unless and until this or another court has relieved [it] of that
24 responsibility, through a stay, reversal or modification of the order,” regardless of
25 VidAngel’s objections to the Injunction. Armstrong v. Brown, 857 F. Supp. 2d 919,
26 948 (N.D. Cal.), order enforced (Aug. 28, 2012), order aff’d, appeal dismissed, 732
27 F.3d 955 (9th Cir. 2013). VidAngel’s filing of application to stay the Preliminary
28 Injunction does not itself stay the Preliminary Injunction. “[T]he party to whom the
-1S.A.0773
SUPP. KLAUS DECL.
CASE NO. 16-CV-04109-AB (PLAX)

Case 2:16-cv-04109-AB-PLA Document 156 Filed 12/20/16 Page 3 of 3 Page ID #:5192

1 injunction is directed acts (or fails to act) at its peril if it declines to comply while
2 waiting for decision on a stay application.” Tekkno Labs., Inc. v. Perales, 933 F.2d
3 1093, 1099 (2d Cir. 1991).
4

5.

Our review of VidAngel’s website makes it clear that, notwithstanding

5 the Preliminary Injunction, VidAngel is continuing to add more of Plaintiffs’ works
6 to its service as soon as those titles are released on DVD and Blu-ray Disc.
7

6.

Attached as Exhibit A is a true and correct copy of a screenshot of the

8 “New Releases” section of VidAngel’s website as of yesterday, December 19, 2016.
9 The movies were sorted by date, so the most recently added movies appeared first.
10

7.

Attached as Exhibit B is a true and correct copy of a screenshot of the

11 “New Releases” section of VidAngel’s website as of today, December 20, 2016.
12 Here, too, the movies were sorted by date, so the most recently added titles appear
13 first. Warner Bros.’s Sully and Storks. and Fox’s Miss Peregrine’s Home for
14 Peculiar Children appear in Exhibit B, but not in Exhibit A. In other words, those
15 titles made it to VidAngel’s “New Releases” today. I am informed and believe that
16 Sully and Storks were released on DVD and Blu-ray Disc today, December 20; and
17 that Miss Peregrine’s Home for Peculiar Children was released on DVD and Blu18 ray Disc one week ago, on December 13.
19

I declare under penalty of perjury under the laws of the United States that the

20 foregoing is true and correct.
21

Executed this 20th day of December, 2016 in San Francisco, California.

22
/s/ Kelly M. Klaus
Kelly M. Klaus

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S.A.0774

-2SUPP. KLAUS DECL.
CASE NO. 16-CV-04109-AB (PLAX)

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EXHIBIT A

S.A.0775

Case 2:16-cv-04109-AB-PLA Document 156-1 Filed 12/20/16 Page 2 of 6 Page ID #:5194

S.A.0776
https://www.vidangel.com/browse/new-releases

12/19/2016

Case 2:16-cv-04109-AB-PLA Document 156-1 Filed 12/20/16 Page 3 of 6 Page ID #:5195

S.A.0777
https://www.vidangel.com/browse/new-releases

12/19/2016

Case 2:16-cv-04109-AB-PLA Document 156-1 Filed 12/20/16 Page 4 of 6 Page ID #:5196

S.A.0778
https://www.vidangel.com/browse/new-releases

12/19/2016

Case 2:16-cv-04109-AB-PLA Document 156-1 Filed 12/20/16 Page 5 of 6 Page ID #:5197

S.A.0779
https://www.vidangel.com/browse/new-releases

12/19/2016

Case 2:16-cv-04109-AB-PLA Document 156-1 Filed 12/20/16 Page 6 of 6 Page ID #:5198

S.A.0780
https://www.vidangel.com/browse/new-releases

12/19/2016

Case 2:16-cv-04109-AB-PLA Document 156-2 Filed 12/20/16 Page 1 of 8 Page ID #:5199

EXHIBIT B

S.A.0781

Case 2:16-cv-04109-AB-PLA Document 156-2 Filed 12/20/16 Page 2 of 8 Page ID #:5200

S.A.0782
https://www.vidangel.com/browse/new-releases

12/20/2016

Case 2:16-cv-04109-AB-PLA Document 156-2 Filed 12/20/16 Page 3 of 8 Page ID #:5201

S.A.0783
https://www.vidangel.com/browse/new-releases

12/20/2016

Case 2:16-cv-04109-AB-PLA Document 156-2 Filed 12/20/16 Page 4 of 8 Page ID #:5202

S.A.0784
https://www.vidangel.com/browse/new-releases

12/20/2016

Case 2:16-cv-04109-AB-PLA Document 156-2 Filed 12/20/16 Page 5 of 8 Page ID #:5203

S.A.0785
https://www.vidangel.com/browse/new-releases

12/20/2016

Case 2:16-cv-04109-AB-PLA Document 156-2 Filed 12/20/16 Page 6 of 8 Page ID #:5204

S.A.0786
https://www.vidangel.com/browse/new-releases

12/20/2016

Case 2:16-cv-04109-AB-PLA Document 156-2 Filed 12/20/16 Page 7 of 8 Page ID #:5205

S.A.0787
https://www.vidangel.com/browse/new-releases

12/20/2016

Case 2:16-cv-04109-AB-PLA Document 156-2 Filed 12/20/16 Page 8 of 8 Page ID #:5206

S.A.0788
https://www.vidangel.com/browse/new-releases

12/20/2016

Case 2:16-cv-04109-AB-PLA Document 154 Filed 12/15/16 Page 1 of 16 Page ID #:5138

1 GLENN D. POMERANTZ (SBN 112503)
[e-mail]
2 KELLY M. KLAUS (SBN 161091)
[e-mail]
3 ROSE LEDA EHLER (SBN 296523)
[e-mail]
4 ALLYSON R. BENNETT (SBN 302090)
[e-mail]
5 MUNGER, TOLLES & OLSON LLP
355 South Grand Avenue, Thirty-Fifth Floor
6 Los Angeles, California 90071-1560
Telephone: [phone]
7 Facsimile: [phone]
8 Attorneys for Plaintiffs
9

UNITED STATES DISTRICT COURT

10

CENTRAL DISTRICT OF CALIFORNIA

11

WESTERN DIVISION

12
13

DISNEY ENTERPRISES, INC.;
14 LUCASFILM LTD. LLC;
TWENTIETH CENTURY FOX FILM
15 CORPORATION and WARNER
BROS. ENTERTAINMENT INC.,
16
Plaintiffs and CounterDefendants,
17
18

vs.

19 VIDANGEL, INC.,
20

Defendant and CounterClaimant.

Case No. 16-cv-04109-AB (PLAx)
PLAINTIFFS’ OPPOSITION TO
VIDANGEL’S EX PARTE
APPLICATION TO STAY
PRELIMINARY INJUNCTION
PENDING APPEAL OR,
ALTERNATIVELY, PENDING
DECISION BY THE NINTH
CIRCUIT ON STAY PENDING
APPEAL
Filed concurrently:
(1) Decl. of Rose Leda Ehler

21

Judge: Hon. André Birotte Jr.

22

Trial Date:

None Set

23
24
25
26
27
28
S.A.0789
PLAINTIFFS’ OPP. TO EX PARTE APP.TO STAY
16-CV-04109-AB (PLAX)

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TABLE OF CONTENTS

1

Page

2

3 INTRODUCTION .......................................................................................................1
4 ARGUMENT...............................................................................................................2
5 I.
6

II.

VIDANGEL CANNOT MEET THE DEMANDING STANDARDS
FOR A STAY ....................................................................................................2

7

PLAINTIFFS, NOT VIDANGEL, HAVE A “STRONG
LIKELIHOOD OF SUCCESS,” ORDER AT 8, 11 ......................................... 3

8

A.

VidAngel’s Family Movie Act (“FMA”) Defense Is Meritless ............. 3

9

B.

VidAngel’s Arguments Regarding MDY Industries Are Based
On Attorney Rhetoric, Not Evidence...................................................... 4

C.

VidAngel Failed Completely To Satisfy Its Burden Of Showing
Its Fair Use Defense Likely Would Succeed .......................................... 6

D.

VidAngel’s Efforts To Dismiss The Irreparable Harm To
Plaintiffs Ignore Controlling Ninth Circuit Authority ........................... 6

10
11
12
13

III.

VIDANGEL WILL NOT SUFFER IRREPARABLE HARM ABSENT
A STAY.............................................................................................................7

15 IV.
16

IF A STAY ISSUES, VIDANGEL WILL CONTINUE TO ADD
PLAINTIFFS’ COPYRIGHTED WORKS AND CAUSE
PLAINTIFFS IRREPARABLE HARM ........................................................... 8

17 V.

THE PUBLIC INTEREST FAVORS NOT GRANTING A STAY ..............10

14

18 CONCLUSION..........................................................................................................11
19
20
21
22
23
24
25
26
27
28
S.A.0790

-iPLAINTIFFS’ OPP. TO EX PARTE APP. TO STAY
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1
2

TABLE OF AUTHORITIES
Page

3 FEDERAL CASES
4 Apple Comput., Inc. v. Franklin Comput. Corp.,
714 F.2d 1240 (3d Cir. 1983) ........................................................................... 7, 10
5
6 Arc of Cal. v. Douglas,
757 F.3d 975 (9th Cir. 2014) .................................................................................. 6
7
8 Bailey v. Callaghan,
No. 12-11504, 2012 WL 3134338 (E.D. Mich. Aug. 1, 2012) .............................. 2
9
Concrete Mach. Co., Inc. v. Classic Lawn Ornaments, Inc.,
10
843 F.2d 600 (1st Cir.1988) ................................................................................... 7
11
CytoSport, Inc. v. Vital Pharms., Inc.,
12
617 F. Supp. 2d 1051 (E.D. Cal.), aff’d, 348 F. App’x 288 (9th Cir.
2009) ....................................................................................................................... 2
13
14 In re Flor,
79 F.3d 281 (2d. Cir 1996) ..................................................................................... 4
15
16 Fox Television Stations, Inc. v. BarryDriller Content Sys., PLC,
915 F. Supp. 2d 1138 (C.D. Cal. 2012).................................................................. 7
17
18 Fox Television Stations, Inc. v. FilmOn X, LLC,
968 F. Supp. 2d 134 (D.D.C. 2013) ................................................................... 7, 8
19
Gilder v. PGA Tour, Inc.,
20
936 F.2d 417 (9th Cir. 1991) .................................................................................. 3
21
Hilton v. Braunskill,
22
481 U.S. 770 (1987) ........................................................................................... 2, 3
23 Jones v. Loan Correspondents Inc.,
No. 14-00311-PHX-ROS, 2014 WL 12569385 (D. Ariz. Mar. 21,
24
2014) ....................................................................................................................... 5
25
26 Leadsinger, Inc. v. BMG Music Publ’g,
512 F.3d 522 (9th Cir. 2008) .................................................................................. 6
27
MDY Indus., LLC v. Blizzard Entm’t, Inc.,
28
629 F.3d 928 (9th Cir. 2010) .................................................................................. 4
S.A.0791
-iiPLAINTIFFS’ OPP. TO EX PARTE APP. TO STAY
16-CV-04109-AB (PLAX)

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1

TABLE OF AUTHORITIES
(continued)

2

Page

3 Miller v. Carlson,
768 F. Supp. 1341 (N.D. Cal. 1991)....................................................................... 2
4
5 Nken v. Holder,
556 U.S. 418 (2009) ........................................................................................... 2, 3
6
Novartis Consumer Health, Inc. v. Johnson & Johnson-Merck
7
Consumer Pharms. Co.,
8
No. 00-5361 (WGB), 2001 WL 493266 (D.N.J. Jan. 17, 2001) ............................ 2
9 Perfect 10, Inc. v. Amazon.com, Inc.,
508 F.3d 1146 (9th Cir. 2007) ................................................................................ 5
10
11 Salinger v. Colting,
607 F.3d 68 (2d Cir. 2010) ................................................................................... 10
12
13 Silvester v. Harris,
No. 1:11-CV-2137 AWI SAB, 2014 WL 661592, at *4 (E.D. CAl.
14
Nov. 20, 2014) ........................................................................................................ 3
15
Triad Sys. Corp. v. Southeastern Express Co.,
16
64 F.3d 1330 (9th Cir. 1995) .................................................................................. 7
17 Walczak v. EPL Prolong, Inc.,
198 F.3d 725 (9th Cir. 1999) .................................................................................. 3
18
19 WPIX, Inc. v. ivi, Inc., 765 F. Supp. 2d 594 (S.D.N.Y. 2011), aff’d, 691
F.3d 275 (2d Cir. 2012) .......................................................................................... 7
20
21 WPIX, Inc., v. ivi, Inc., No. 10-7415, 2011 WL 1533175, at *4
(S.D.N.Y. Apr. 19, 2011) ..................................................................................... 10
22
23 FEDERAL STATUTES
24 17 U.S.C. § 110(11)........................................................................................1, passim
25 17 U.S.C § 1201, et seq. ....................................................................................4, 5, 10
26 28 U.S.C. § 1292(b)..................................................................................................... 4
27
28
S.A.0792

-iiiPLAINTIFFS’ OPP. TO EX PARTE APP. TO STAY
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1

TABLE OF AUTHORITIES
(continued)

2

Page

3 LEGISLATIVE MATERIALS
4 151 Cong. Rec. S502 (daily ed. Jan 25, 2005) ............................................................ 4
5
TREATISES
6
16 Charles Alan Wright, Arthur R. Miller, & Edward H. Cooper,
7
Federal Practice and Procedure, § 3930 (3d ed. 2008)........................................... 4
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
S.A.0793

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1
2

INTRODUCTION
Rather than complying with this Court’s December 12 Preliminary Injunction

3 Order (Dkt. 144), VidAngel has continued to operate its illegal service causing
4 further harm to Plaintiffs and enriching VidAngel’s owners. The Court ordered
5 VidAngel to stop infringing Plaintiffs’ rights, but, continuing its pattern of acting
6 unilaterally to further its illegal business first and then seeking permission second,
7 VidAngel refuses to comply with that Order until the Court rules on its Application
8 for a stay. The Application is meritless and should be denied.
9

Contrary to VidAngel’s characterization of the Application, VidAngel is

10 asking the Court to reconsider issues that it has already carefully considered and
11 rejected. The issues presented were not close calls. Ripping is illegal and copying
12 and publicly performing without authorization is infringement. The Family Movie
13 Act (“FMA”) is clear and does not excuse VidAngel’s conduct. The FMA’s
14 language is unequivocally reinforced by the legislative history. VidAngel has the
15 right to argue these issues again to the Ninth Circuit, where it will have to establish
16 that this Court abused its discretion in granting the Preliminary Injunction. Nothing
17 in the Application justifies a stay.
18

In the meantime, VidAngel’s continuing illegal conduct is violating Plaintiffs’

19 rights and compounding the irreparable harm. VidAngel continues to populate its
20 site with Plaintiffs’ works. See Ehler Decl. ¶ 8, Ex. F (VidAngel’s offering, as of
21 today, of numerous of Plaintiffs’ titles, including categories comprised entirely of
22 Plaintiffs’ works, e.g., “Classic Disney,” “Harry Potter Marathon,” and “Star Wars
23 Marathon”). Unless and until this Court tells VidAngel (once again) that it must
24 stop, VidAngel will continue to violate Plaintiffs’ rights. See id. ¶ 6, Ex. D (listing
25 numerous of Plaintiffs’ works among “Movies Coming in December”). The Court
26
27
28
S.A.0794

-1PLAINTIFFS’ OPP. TO EX PARTE APP. TO STAY
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1 should deny the Application and order VidAngel to comply with the Preliminary
2 Injunction immediately. 1
3

ARGUMENT

4 I.
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20

VIDANGEL CANNOT MEET THE DEMANDING STANDARDS FOR
A STAY
To obtain a stay, VidAngel must show (1) that it is “likely to succeed on the

merits” before the Ninth Circuit; (2) that it “will be irreparably injured absent a
stay”; (3) that a stay will not “substantially injure” the Plaintiffs; and (4) that “the
public interest” favors a stay. Miller v. Carlson, 768 F. Supp. 1341, 1342-43 (N.D.
Cal. 1991) (citing Hilton v. Braunskill, 481 U.S. 770, 776 (1987). “It is not enough
that the chance of success on the merits be better than negligible. . . . [M]ore than a
mere possibility of relief is required. By the same token, simply showing some
possibility of irreparable injury fails to satisfy the second factor.” Nken v. Holder,
556 U.S. 418, 434-35 (2009) (internal citations and quotation marks omitted).
The Court already decided that all of these factors favor Plaintiffs. Order at
6-20. VidAngel’s Application reargues points the Court already resolved, which is
not a proper use of an ex parte Application and in any event without merit. See
CytoSport, Inc. v. Vital Pharms., Inc., 617 F. Supp. 2d 1051, 1084-85 (E.D. Cal.)
(rejecting movant’s “attempts to repackage [previously made] arguments” as “not
compelling”), aff’d, 348 F. App’x 288 (9th Cir. 2009).2

21
22
1

As directed by the Court, Plaintiffs have posted a bond with the Clerk. Notice of
Filing of Preliminary Injunction Bond (Dkt. 151); Notice of Manual Filing (Dkt.
24 152).
23

2

See also, e.g., Bailey v. Callaghan, No. 12-11504, 2012 WL 3134338, at *2 (E.D.
Mich. Aug. 1, 2012) (“Defendants’ rehashing of their previous arguments does not
26 establish more than a mere possibility of success on the merits. This factor does not
27 weigh in favor of granting a stay.”); Novartis Consumer Health, Inc. v. Johnson &
Johnson-Merck Consumer Pharms. Co., No. 00-5361 (WGB), 2001 WL 493266, at
28 *1 (D.N.J. Jan. 17, 2001) (defendant “offers no new circumstances to support its
-2S.A.0795
25

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1 II.
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16

VidAngel does not even attempt to make the required “strong showing that
[it] is likely to succeed on the merits.” Hilton, 481 U.S. at 776 (emphasis added).
VidAngel instead claims that it can show “serious legal questions,” which, as it
admits, requires that it also show the “balance of hardships tips sharply in its favor.”
App. at 5 (emphasis added). VidAngel cannot show either.3 “[S]erious questions
refers to questions which cannot be resolved one way or the other at the hearing on
the injunction and as to which the court perceives a need to preserve the status quo
lest one side prevent resolution of the questions or execution of any judgment by
altering the status quo.” See Gilder v. PGA Tour, Inc., 936 F.2d 417, 422 (9th Cir.
1991)).
To start, VidAngel cannot show that the Ninth Circuit is likely to reverse the
Preliminary Injunction, which the Circuit will review with substantial deference.
Walczak v. EPL Prolong, Inc., 198 F.3d 725, 730 (9th Cir. 1999) (preliminary
injunctions receive limited review under the abuse of discretion standard).
A.

17
18
19
20
21
22

PLAINTIFFS, NOT VIDANGEL, HAVE A “STRONG LIKELIHOOD
OF SUCCESS,” ORDER AT 8, 11

VidAngel’s Family Movie Act (“FMA”) Defense Is Meritless

Notwithstanding VidAngel’s continued protests, the FMA does not provide a
defense to VidAngel’s illegal activity. This is clear from the statute’s plain
language and its legislative history. As the Court found, “the FMA exempts only []
‘the making imperceptible’ of limited portions of a motion picture” and does not
excuse it from complying with other provisions of the Copyright Act. Order at 12.

23

application for a stay [of a preliminary injunction] pending appeal,” and granting the
24 motion would “effectively be a reconsideration and reversal” of the injunction).
3

The merits and irreparable harm factors are the two “most critical,” and a showing
on both is required. Nken, 556 U.S. at 434. For example, in Silvester v. Harris,
26 which VidAngel cites, the court denied a stay, notwithstanding a finding of “serious
27 legal questions,” because the applicant had not shown that the “balance of equities
tips sharply in her favor.” No. 1:11-CV-2137 AWI SAB, 2014 WL 6611592, at *4
28 (E.D. Cal. Nov. 20, 2014) (cited App. at 4).
-3S.A.0796
25

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16-CV-04109-AB (PLAX)

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1 Moreover, the FMA applies to immunize such “making imperceptible” in the course
2 of certain transmissions only when the transmissions are made “from an authorized
3 copy of the motion picture.” 17 U.S.C. § 110(11). It is indisputable VidAngel
4 streams from unauthorized copies. The text is clear that the FMA provides no
5 defense to VidAngel’s DMCA violation, and the only legislative history addressing
6 this issue (from the Senate sponsor, Senator Hatch) is clear that it is “not [] a
7 defense to a claim of violation of section 1201 that the circumvention is for the
8 purpose of engaging in the conduct covered [by the FMA].” 151 Cong. Rec. S502
9 (daily ed. Jan 25, 2005).
10

The Court relied on the FMA’s plain language and the legislative history in

11 rejecting VidAngel’s FMA defense. Order at 8, 12. The questions were not close
12 before this Court, and they will not be close before the Ninth Circuit. The fact that
13 no other litigant has made—and thus no other court has had the opportunity to
14 reject—VidAngel’s baseless arguments may make the questions ones of “first
15 impression,” App. at 5, but that does not make the questions “serious.” Cf. In re
16 Flor, 79 F.3d 281, 284 (2d. Cir 1996) (the “mere presence of a disputed issue that is
17 a question of first impression” does not mean that a legal question presents
18 “substantial ground for difference of opinion” for purposes of 28 U.S.C. § 1292(b));
19 see generally 16 Charles Alan Wright, Arthur R. Miller, & Edward H. Cooper,
20 Federal Practice and Procedure, § 3930 (3d ed. 2008) (“District [court] judges have
21 not been bashful about refusing to find substantial reason to question a ruling of law,
22 even in matters of first impression”).
23
24
25
26
27
28
S.A.0797

B.

VidAngel’s Arguments Regarding MDY Industries Are Based On
Attorney Rhetoric, Not Evidence

VidAngel likewise has not raised “serious” questions about the potential
application of MDY Indus., LLC v. Blizzard Entm’t, Inc., 629 F.3d 928, 951 (9th Cir.
2010). The Ninth Circuit expressly declined to decide whether the presence of
actual antitrust issues would alter the application of the DMCA. Moreover, the
-4PLAINTIFFS’ OPP. TO EX PARTE APP. TO STAY
16-CV-04109-AB (PLAX)

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1 court there was considering a § 1201(a)(2) claim for trafficking in circumvention
2 technologies, whereas VidAngel clearly violates the § 1201(a)(1) bar on the act of
3 circumvention. This Court considered and rejected VidAngel’s reliance on MDY
4 Industries for exactly these reasons. Order at 8. VidAngel’s “respectful”
5 disagreement with the Court’s conclusion does not make the question close. App. at
6 9.
Even if VidAngel’s reading of MDY Industries were correct (which it is not),

7

8 VidAngel still has the burden of showing that it is likely to succeed on its copyright
9 misuse affirmative defense (which presumably is the same as its antitrust
10 counterclaims). See Perfect 10, Inc. v. Amazon.com, Inc., 508 F.3d 1146, 1158 (9th
11 Cir. 2007) (“once the moving party has carried its burden of showing a likelihood of
12 success on the merits, the burden shifts to the non-moving party to show a
13 likelihood that its affirmative defense will succeed.”). VidAngel did not even brief
14 its misuse defense in opposing Plaintiffs’ preliminary injunction motion, let alone
15 present and argue from evidence supporting such a defense. VidAngel relies on
16 what is “alleged in VidAngel’s antitrust answer and counter-complaint.” App. 9.
17 But allegations are not evidence and cannot establish that VidAngel has any chance
18 of succeeding on this defense. See Jones v. Loan Correspondents Inc., No. 1419 00311-PHX-ROS, 2014 WL 12569385, at *2 (D. Ariz. Mar. 21, 2014) (“mere
20 allegations are insufficient” to justify a preliminary injunction).4
21
22
23
24
4

VidAngel claims that “Plaintiffs have taken away any legitimate alternatives to
VidAngel’s current model.” App. at 9. This attorney rhetoric is contradicted by the
26 Court’s finding that the ClearPlay model is an alternative. Order at 20. In contrast
27 to ClearPlay, VidAngel’s “current model” is to rip Plaintiffs’ works from discs (in
clear violation of the DMCA) and to claim that the FMA gives it full immunity from
28 any liability under the DMCA or Copyright Act.
-5S.A.0798
25

PLAINTIFFS’ OPP. TO EX PARTE APP. TO STAY
16-CV-04109-AB (PLAX)

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1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18

C.

VidAngel Failed Completely To Satisfy Its Burden Of Showing Its
Fair Use Defense Likely Would Succeed

VidAngel’s fair use defense does not raise “serious” questions. VidAngel
bore the burden of showing likely success on this defense, Order at 13, and
VidAngel failed to meet its burden as to even one of the fair use factors, let alone all
four, id. at 13-16.
VidAngel says it intends to challenge the Court’s holding as to two of these
factors (purpose and character of use and effect on the potential market for
Plaintiffs’ works). App. at 10. VidAngel (1) ignores the fact that its use is
commercial (which raises an unrebutted presumption of market harm), Leadsinger,
Inc. v. BMG Music Publ’g, 512 F.3d 522, 530 (9th Cir. 2008); (2) repeats its legally
unsupported argument that making small amounts of content imperceptible, without
adding new content or commentary, makes its near-verbatim use transformative; and
(3) ignores the evidence of market harm and two of the fair use factors in their
entirety (nature of the works and amount and substantiality of VidAngel’s use).
VidAngel’s fair use defense is not close.
D.

VidAngel’s Efforts To Dismiss The Irreparable Harm To Plaintiffs
Ignore Controlling Ninth Circuit Authority

Plaintiffs’ irreparable harm is clearly established and supported by evidence

19 in the record. E.g., Declaration of Tedd Cittadine (Dk.28). VidAngel cannot raise a
20 serious legal question as to this harm and, instead, simply reiterates its “delay”
21 argument. App. at 11-12 (repeating vertatim arguments from VidAngel’s opposition
22 brief at 23-24). VidAngel continues to ignore the controlling Ninth Circuit authority
23 (which this Court followed) that (1) “delay is but a single factor to consider in
24 evaluating irreparable injury” and “courts are ‘loath to withhold relief solely on that
25 ground,’” and (2) “tardiness is not particularly probative in the context of ongoing,
26 worsening injuries.” Arc of Cal. v. Douglas, 757 F.3d 975, 990 (9th Cir. 2014).
27 Further, this Court made a factual finding—on ample evidence that included Mr.
28 Harmon’s tesimonty—that Plaintiffs acted “reasonab[ly] under the circumstances.”
-6S.A.0799
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1 Order at 19. VidAngel has made no showing to that the Ninth Circuit is likely to
2 find this Court abused its discretion in finding irreparable harm.
3 III.
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
S.A.0800

VIDANGEL WILL NOT SUFFER IRREPARABLE HARM ABSENT A
STAY
In a single paragraph, VidAngel tells this Court that absent a stay, it will

suffer hardship due to loss of its “unique market position and its market value,”
“serious financial loss,” and harm to its good will because “the Court’s rationale on
likelihood of success impugns VidAngel’s entire business model.” App. at 12.
First, VidAngel “cannot complain of the harm that will befall it when
properly forced to desist from its infringing activities.” Triad Sys. Corp. v.
Southeastern Express Co., 64 F.3d 1330, 1338 (9th Cir. 1995); see also Fox
Television Stations, Inc. v. BarryDriller Content Sys., PLC, 915 F. Supp. 2d 1138,
1147 (C.D. Cal. 2012) (“Defendants have no equitable interest in continuing an
infringing activity.”); Concrete Mach. Co., Inc. v. Classic Lawn Ornaments, Inc.,
843 F.2d 600, 612 (1st Cir.1988) (“Where the only hardship that the defendant will
suffer is lost profits from an activity which has been shown likely to be infringing,
such an argument in defense ‘merits little equitable consideration’”); Apple
Comput., Inc. v. Franklin Comput. Corp., 714 F.2d 1240, 1255 (3d Cir. 1983) (in
motion for preliminary injunction, district court should not consider even the
“devastating effect” of the injunction on the infringer’s business).
Second, VidAngel’s argument that the injunction will harm its “market
position,” because Plaintiffs are “half of the major studios in this country,” App. at
12, admits that its success depends on its infringing use of Plaintiffs’ popular movies
and television shows. VidAngel apparently fears that users will switch to services
that operate lawfully. As another court held in rejecting a similar argument, this
merely “underscores the threat [the infringing service] poses to the plaintiffs.”
WPIX, Inc. v. ivi, Inc., 765 F. Supp. 2d 594, 621 (S.D.N.Y. 2011), aff’d, 691 F.3d
275 (2d Cir. 2012); see also Fox Television Stations, Inc. v. FilmOn X, LLC, 968 F.
-7PLAINTIFFS’ OPP. TO EX PARTE APP. TO STAY
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1 Supp. 2d 134, 139 (D.D.C. 2013) (denying application to stay preliminary injunction
2 and rejecting arguments, also made by VidAngel’s counsel, that infringing service
3 would lose market share to a competitor).
4

Third, VidAngel tells the Court that a stay threatens its existence, but

5 VidAngel is telling the public something else. According to its own press release,
6 “one day after [the Court’s] decision, VidAngel hosted a launch party in Provo,
7 Utah where CEO Neal Harmon outlined an exciting path forward for the company
8 in front of hundreds of fans, investors, employees, and the media.” Ehler Decl. ¶ 9,
9 Ex. G. Mr. Harmon announced “the launch of VidAngel Studios -- something we
10 have been working on for years. Beginning in 2017, we’ll offer original family11 friendly content, with technical innovations that will provide a unique experience.”
12 Id. In a video linked in the press release, “VidAngel’s Special Announcement”
13 (also posted on Facebook), Mr. Harmon explains that VidAngel will continue to
14 offer family-friendly content, has $10 million to fund this litigation, will start
15 producing original content in “early 2017,” and has already licensed three films that
16 it will stream in December. Id. ¶ 11, Ex. H (video available at
17 https://www.youtube.com/watch?v=9bFBchSChaY) (last visited Dec. 15, 2016).
18 See FilmOn X, LLC, 968 F. Supp. 2d at 138 (denying stay application and noting
19 that public still is able to “access material that is properly licensed from copyright
20 holders.”).
21 IV.
22

IF A STAY ISSUES, VIDANGEL WILL CONTINUE TO ADD
PLAINTIFFS’ COPYRIGHTED WORKS AND CAUSE PLAINTIFFS
IRREPARABLE HARM

23

On the other side of the balance, the harm to Plaintiffs from VidAngel’s

24 continuing illegal activity is substantial and irreparable. “VidAngel’s service
25 undermines Plaintiffs’ negotiating position with licensees and also damages
26 goodwill with licensees.” Order at 18. VidAngel continues to feed new works by
27 Plaintiffs into its infringing system, which means the harm to Plaintiffs “will likely
28 only increase absent an injunction.” Id. at 19. Granting a stay will not preserve the
-8S.A.0801
PLAINTIFFS’ OPP. TO EX PARTE APP. TO STAY
16-CV-04109-AB (PLAX)

Case 2:16-cv-04109-AB-PLA Document 154 Filed 12/15/16 Page 14 of 16 Page ID #:5151

1 status quo. It will instead magnify the irreparable harm to Plaintiffs. As VidAngel’s
2 infringement continues, its liability will also grow making it even less likely
3 VidAngel will be able to satisfy a large damages award.
4

VidAngel once again argues that the harms Plaintiffs face now are the same

5 as those in July 2015 and any further harm would be “marginal.” App. at 13; see
6 also Opp. (Dkt. 42) at 27. But VidAngel has aggressively pursued user growth and
7 investment from July 2015 forward, all the while knowing that a preliminary
8 injunction was possible, if not unavoidable. It is precisely the harm posed by
9 VidAngel’s rapid expansion—which threatens the businesses of Plaintiffs’
10 legitimate licensees and thereby Plaintiffs’ relationships with them—that the
11 Preliminary Injunction is designed to avoid. VidAngel has vowed in its public
12 securities filings that “its growth will continue at a high rate” and that it will add
13 new titles “at an increasing rate” “for the foreseeable future.” Pls.’ Supp. RJN, Ex.
14 A (Dkt. 117-2) at RJN-9.
15

Each month VidAngel posts to its blog a list of approximately 100 “new

16 releases” that it intends to add to its service. Ehler Decl. ¶ 6, Ex. D. VidAngel’s
17 “New releases coming in December, 2016” promises, among other titles, Warner
18 Bros.’s Suicide Squad (2016), Warner Bros.’s Storks (2016); Fox’s Miss Peregrine’s
19 Home for Peculiar Children (2016); and a number of Christmas movies including
20 Disney’s Mickey’s Christmas Carol (1983) and Mickey’s Once and Twice Upon a
21 Christmas (1991 and 2004). Id. at Ex. D. These are just the tip of the iceberg—
22 VidAngel promises that it will “add more than three times this many movies in
23 December, but these are the ones we are definitely adding!” Id. VidAngel also
24 continues to use Plaintiffs’ movies to market its service through Facebook
25 advertisements, including, Disney’s The BFG (2016) and Pete’s Dragon (2016). Id.
26 at ¶¶ 4-5, Exs. B, C. VidAngel is also aggressively pursuing more users. It is
27 currently offering a promotion for users to buy a $30 VidAngel gift card and receive
28 a free Roku. Id. ¶ 7, Ex. E. And, VidAngel sent an email asking its users to refer
-9S.A.0802
PLAINTIFFS’ OPP. TO EX PARTE APP. TO STAY
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Case 2:16-cv-04109-AB-PLA Document 154 Filed 12/15/16 Page 15 of 16 Page ID #:5152

1 new users in exchange for free credit the day after the Preliminary Injunction issued.
2 Id. at ¶ 11, Ex. I. The harm to Plaintiffs will only grow as VidAngel adds more of
3 Plaintiffs’ works and more customers.
4

VidAngel argues that Plaintiffs “hope [to] effectively preclude VidAngel

5 from pursuing its case at all, or to severely handicap what is already a battle of
6 David versus several Goliaths.” App. at 13. This is disingenuous. Plaintiffs want
7 VidAngel to stop violating their rights. And VidAngel is no David. It has raised
8 $10 million and claims that $5 million will be devoted to litigating this case. Ehler
9 Decl. at ¶ 12, Ex. J.
10

Finally, VidAngel argues that the harms it inflicts “are equally posed by the

11 ClearPlay streaming model.” App. at 13. VidAngel, however, ignores the fact there
12 is no evidence that ClearPlay rips DVDs containing Plaintiffs’ works (thereby
13 violating the DMCA), makes unauthorized copies of Plaintiffs’ works (which
14 VidAngel does), or streams from unauthorized copies. Rather, as even VidAngel
15 concedes, ClearPlay’s DVD filters are designed to work with authorized copies that
16 users have on DVDs; and ClearPlay’s streaming filters appear to work only on
17 authorized streams from Google Play.
18 V.

THE PUBLIC INTEREST FAVORS NOT GRANTING A STAY

19

The public interest favors upholding copyright protection. VidAngel “offer[s]

20 no reason why this Court, having found that [VidAngel violates] [P]laintiffs’
21 copyrights, should discount the object of copyright law to ‘promote the store of
22 knowledge available to the public’ by ‘providing individuals a financial incentive to
23 contribute to the store of knowledge.’” WPIX, Inc., v. ivi, Inc., No. 10-7415, 2011
24 WL 1533175, at *4 (S.D.N.Y. Apr. 19, 2011) (denying motion to stay injunction of
25 similar Internet infringing service) (quoting Salinger v. Colting, 607 F.3d 68, 82 (2d
26 Cir. 2010)); Apple Comput., Inc., v. Franklin Comput. Corp., 714 F.2d 1240, 1255
27 (3d Cir. 1983) (“[T]he public interest can only be served by upholding copyright
28
S.A.0803

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16-CV-04109-AB (PLAX)

Case 2:16-cv-04109-AB-PLA Document 154 Filed 12/15/16 Page 16 of 16 Page ID #:5153

1 protections and, correspondingly, preventing the misappropriation of skills, creative
2 energies, and resources which are invested in the protected work.”)
3

Instead, VidAngel argues that ClearPlay “does not provide a legal filtering

4 alternative” and is “technically inferior.” App. at 14. ClearPlay, however, has
5 undeniably existed since the passage of the FMA. VidAngel’s complaints that
6 ClearPlay is an inferior service is based on a marketing pitch by Mr. Harmon against
7 a competing service. In any event, VidAngel misses the significance of ClearPlay,
8 namely, that it provides a marketplace alternative for filtering that does not use
9 VidAngel’s illegal model.
10
11

CONCLUSION
Plaintiffs respectfully request that the Court deny VidAngel’s Application and

12 order it to comply immediately with the Preliminary Injunction.
13
14 DATED: December 15, 2016

MUNGER, TOLLES & OLSON LLP

15
16
17
18

By:

/s/ Kelly M. Klaus
KELLY M. KLAUS
Attorneys for Plaintiffs

19
20
21
22
23
24
25
26
27
28
S.A.0804

-11PLAINTIFFS’ OPP. TO EX PARTE APP. TO STAY
16-CV-04109-AB (PLAX)

Case 2:16-cv-04109-AB-PLA Document 154-1 Filed 12/15/16 Page 1 of 4 Page ID #:5154

1 GLENN D. POMERANTZ (SBN 112503)
[e-mail]
2 KELLY M. KLAUS (SBN 161091)
[e-mail]
3 ROSE LEDA EHLER (SBN 296523)
[e-mail]
4 ALLYSON R. BENNETT (SBN 302090)
[e-mail]
5 MUNGER, TOLLES & OLSON LLP
355 South Grand Avenue, Thirty-Fifth Floor
6 Los Angeles, California 90071-1560
Telephone: [phone]
7 Facsimile: [phone]
8 Attorneys for Plaintiffs
9
10

UNITED STATES DISTRICT COURT

11

CENTRAL DISTRICT OF CALIFORNIA

12

WESTERN DIVISION

13
14 DISNEY ENTERPRISES, INC.;
LUCASFILM LTD. LLC;
15 TWENTIETH CENTURY FOX FILM
CORPORATION and WARNER
16 BROS. ENTERTAINMENT INC.,
Plaintiffs and CounterDefendants,

17
18
19
20
21

vs.
VIDANGEL, INC.,
Defendant and CounterClaimant.

Case No. 16-cv-04109-AB (PLAx)
DECLARATION OF ROSE LEDA
EHLER IN SUPPORT OF
PLAINTIFFS’ OPPOSITION TO
VIDANGEL’S EX PARTE
APPLICATION TO STAY
PRELIMINARY INJUNCTION
PENDING APPEAL
__________________
Judge: Hon. André Birotte Jr.
Trial Date:

None Set

22
23
24
25
26
27
28
S.A.0805
EHLER DECL. I/S/O OPP. TO EX PARTE APP. TO STAY
CASE NO. 16-CV-04109-AB (PLAX)

Case 2:16-cv-04109-AB-PLA Document 154-1 Filed 12/15/16 Page 2 of 4 Page ID #:5155

1 I, Rose Leda Ehler, hereby declare:
2

1.

I am an attorney with Munger, Tolles & Olson LLP, counsel for

3 Plaintiffs in this matter. I am a member of the California Bar and am admitted to
4 practice before this Court. I have knowledge of the matters set forth below based on
5 my direct involvement in this matter. If called as a witness, I could and would
6 testify competently to the facts stated herein.
7

2.

On the evening of December 12, 2016, at or around 8:00 pm PST, I

8 visited the “blog” site that VidAngel maintains with public statements by VidAngel
9 regarding this lawsuit, http://blog.vidangel.com/category/legal/. While on that site, I
10 read a posting from that same evening by VidAngel’s CEO, Neal Harmon, regarding
11 an “update on preliminary injunction.” In that post, Mr. Harmon stated that this
12 Court had granted Plaintiffs’ motion for preliminary injunction, and that as a result
13 VidAngel would be removing from its site the content of Plaintiffs and what Mr.
14 Harmon described as “other studios” pending VidAngel’s appeal. Mr. Harmon also
15 stated that during the time this content was down, VidAngel would be working on a
16 redesigned service, and that VidAngel had secured a content license. When I
17 revisited the website on the morning of December 13, 2016, the post that I read on
18 the evening of December 12 had been deleted and replaced.
19

3.

The replacement post, which was still on VidAngel’s lawsuit “blog” as

20 of 11 a.m. today, is attached as Exhibit A. This is a true and correct copy of the
21 current post at http://blog.vidangel.com/category/legal/. The replacement post
22 states, among other things: “We are seeking a stay of this injunction, but if our
23 efforts fail, we will need to take down the movies of all major studios.” The
24 replacement post further states: “In the meantime, we will be finding and creating
25 family-friendly shows and movies so you can still watch quality content on
26 VidAngel. This will be a gradual process, so please be patient with us.”
27
28
S.A.0806

-1EHLER DECL. I/S/O OPP. TO EX PARTE APP. TO STAY
CASE NO. 16-CV-04109-AB (PLAX)

Case 2:16-cv-04109-AB-PLA Document 154-1 Filed 12/15/16 Page 3 of 4 Page ID #:5156

1

4.

Attached as Exhibit B is a true and correct copy of VidAngel’s

2 Facebook advertisement offering Pete’s Dragon, a movie released by Disney in
3 2016.
4

5.

Attached as Exhibit C is a true and correct copy of VidAngel’s

5 Facebook advertisement offering The BFG, a movie released by Disney in 2016.
6

6.

Attached as Exhibit D is a true and correct copy of VidAngel’s blog

7 post entitled “Movies Coming in December,” posted at
8 http://blog.vidangel.com/2016/11/18/movies-coming-in-december/ (last visited Dec.
9 15, 2016). This post shows thumbnail images of the movie posters and lists the
10 movies VidAngel intends to newly offer to users in December. The post also states:
11 “We’ll add more than three times this many movies in December, but these are the
12 ones we are definitely adding!”
13

7.

Attached as Exhibits E is a true and correct copy of VidAngel’s

14 Facebook promotion of its “VidAngel Gift Cards with FREE Rokus!” In this
15 promotion, VidAngel offers users who purchase a $30 VidAngel gift card a free
16 Roku device.
17

8.

Attached as Exhibit F is a true and correct copy of a printout of

18 VidAngel’s website www.vidangel.com/browse (last visited Dec. 15. 2016), which
19 displays titles (including movie posters) of movies and TV shows that VidAngel
20 offers to stream to its users. The “browse” page groups these titles into various
21 categories that appear on the face of Exhibit F.
22

9.

Attached as Exhibit G is a true and correct copy of VidAngel’s press

23 release dated December 14, 2016 at 8:07 ET posted on PR Newswire. The press
24 release states that “VidAngel will continue to be America’s home for family25 friendly content.” It also announces the “launch of VidAngel Studios – something
26 we have been working on for years. Beginning in 2017, we'll offer original family27 friendly content, with technical innovations that will provide a unique experience.”
28
S.A.0807

-2EHLER DECL. I/S/O OPP. TO EX PARTE APP. TO STAY
CASE NO. 16-CV-04109-AB (PLAX)

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S.A.0808

Case 2:16-cv-04109-AB-PLA Document 154-8 Filed 12/15/16 Page 1 of 3 Page ID #:5179

EXHIBIT G

S.A.0809

Case 2:16-cv-04109-AB-PLA Document 154-8 Filed 12/15/16 Page 2 of 3 Page ID #:5180

VidAngel Charts Path Forward, CEO
Announces Innovative VidAngel Studios
Filtering company to continue legal fight with Hollywood by appealing preliminary
injunction while rolling out its own original, family-friendly content for rabidly
supportive fan base

NEWS PROVIDED BY
VidAngel, Inc.
Dec 14, 2016, 08:07 ET

PROVO, Utah, Dec. 14, 2016 /PRNewswire/ -- VidAngel, the market-leading
entertainment platform empowering users to filter language, nudity, violence, and
other content from movies and TV shows, is engaged in a high-profile legal battle
with Disney, Warner Bros, 20th Century Fox, and Lucasfilm. These Hollywood studios
have taken legal action in an effort to gut the 2005 Family Movie Act and prevent
VidAngel from lawfully empowering parents and families to filter content on modern
devices in their homes.

Yesterday, Judge Andre Birotte, Jr. granted Disney's request for a Preliminary
Injunction against VidAngel in the Central District of California. Today, one day after
that decision, VidAngel hosted a launch party in Provo, Utah where CEO Neal
Harmon outlined an exciting path forward for the company in front of hundreds of
fans, investors, employees, and the media.
S.A.0810
http://www.prnewswire.com/news-releases/vidangel-charts-path-forward-ceo-announces-innovative-vidan... 12/14/2016

Case "The legal battle for filtering is far from over," Filed Neal Harmon, CEO of 3 Page ID #:5181
2:16-cv-04109-AB-PLA Document 154-8 said 12/15/16 Page 3 of VidAngel.
"We are seeking a stay of the injunction, and are appealing the judge's decision. But
as we fight through the legal process, VidAngel will continue to be America's home
for family-friendly content.

"That's why today we're announcing the launch of VidAngel Studios -- something we
have been working on for years. Beginning in 2017, we'll offer original family-friendly
content, with technical innovations that will provide a unique experience."

To watch the video go
to https://www.facebook.com/VidAngel/videos/667506653433869/.

In the video, Harmon details:

• VidAngel's path forward in a long legal battle to come, most immediately by
filing a motion for a stay on the preliminary injunction.
• The launch of VidAngel Studios, an innovation offering original, family-friendly
films created to be filtered on the platform.

About VidAngel

VidAngel is the market-leading entertainment platform empowering users to filter
language, nudity, violence, and other content from movies and TV shows. VidAngel's
success has been well documented, earning a #1 BestCompany.com user rating and
making VidAngel one of the fastest growing entertainment companies in the U.S.

Contact: [e-mail]

SOURCE VidAngel, Inc.

S.A.0811
http://www.prnewswire.com/news-releases/vidangel-charts-path-forward-ceo-announces-innovative-vidan... 12/14/2016

Case 2:16-cv-04109-AB-PLA Document 154-9 Filed 12/15/16 Page 1 of 2 Page ID #:5182

EXHIBIT H

S.A.0812

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S.A.0813

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#:5186

EXHIBIT J

S.A.0814

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#:5187

S.A.0815

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#:5188

S.A.0816

Case 2:16-cv-04109-AB-PLA Document 92 Filed 10/03/16 Page 1 of 13 Page ID #:3285

1 GLENN D. POMERANTZ (SBN 112503)
[e-mail]
2 KELLY M. KLAUS (SBN 161091)
[e-mail]
3 ROSE LEDA EHLER (SBN 296523)
[e-mail]
4 ALLYSON R. BENNETT (SBN 302090)
[e-mail]
5 MUNGER, TOLLES & OLSON LLP
355 South Grand Avenue, Thirty-Fifth Floor
6 Los Angeles, California 90071-1560
Telephone: [phone]
7 Facsimile: [phone]
8 Attorneys for Plaintiffs and
Counter-Defendants
9
10

UNITED STATES DISTRICT COURT

11

CENTRAL DISTRICT OF CALIFORNIA

12

WESTERN DIVISION

13
14 DISNEY ENTERPRISES, INC.;
LUCASFILM LTD. LLC;
15 TWENTIETH CENTURY FOX FILM
CORPORATION and WARNER
16 BROS. ENTERTAINMENT INC.,
Plaintiffs and CounterDefendants,

17
18
19
20
21
22

vs.
VIDANGEL, INC.,
Defendant and CounterClaimant.

Case No. 16-cv-04109-AB (PLAx)
REDACTED VERSION OF
DOCUMENT PROPOSED TO BE
FILED UNDER SEAL
SUPPLEMENTAL DECLARATION
OF ROBERT SCHUMANN IN
SUPPORT OF PLAINTIFFS’
MOTION FOR PRELIMINARY
INJUNCTION
Judge: Hon. André Birotte Jr.
Date: October 31, 2016
Time: 10:00 a.m.
Crtrm.: 4
Trial Date:

None Set

23
24
25
26
27
28
S.A.0817
SUPP. DECL. OF ROBERT SCHUMANN
CASE NO. 16-CV-04109-AB (PLAX)

Case 2:16-cv-04109-AB-PLA Document 92 Filed 10/03/16 Page 2 of 13 Page ID #:3286

1 I, Robert Schumann, declare as follows:
2

1.

I have personal knowledge of the facts set forth herein, except as to

3 those stated on information and belief and, as to those, I am informed and believe
4 them to be true. If called as a witness, I could and would testify competently to the
5 facts stated herein.
6

2.

I submit the following supplemental declaration on behalf of Plaintiffs

7 in the above-referenced action. In addition to the materials listed in my declaration
8 of August 22, 2016, I have reviewed the declarations of Sigurd Meldal and Neal
9 Harmon; the deposition transcript of Tedd Cittadine; and VidAngel’s Opposition to
10 Plaintiffs’ Motion For Preliminary Injunction. I also have reviewed the other
11 documents identified in Exhibit A hereto and any other documents referenced in this
12 Supplemental Declaration or in my August 22 Declaration.
13

Dr. Meldal Agrees That CSS, AACS And BD+ Prevent Access To, And

14

Copying Of, Content On DVDs And Blu-Ray Discs

15

3.

As I explained in my August 22 Declaration, CSS, AACS and BD+ use

16 a combination of encryption and authentication measures to prevent unauthorized
17 access to or copying of the encrypted content on DVDs and Blu-ray discs. See
18 Schumann Decl. ¶¶ 20-34. These mechanisms are designed to ensure that the
19 content on a protected disc will be played only by authorized DVD and Blu-ray
20 players that have the necessary “keys” to decrypt the encrypted content and the
21 required credentials to authenticate the player to the disc drive. Absent the
22 introduction of illegal circumvention technology, DVD and Blu-ray players have
23 those keys and credentials only if they are licensed by the relevant licensing
24 organization, such as the DVD Copy Control Association (“DVD CCA”) in the case
25 of CSS; or the Advanced Access Content System Licensing Administrator (“AACS
26 LA”) in the case of AACS.
27

4.

Although licensed players can decrypt content on discs protected by

28 CSS, AACS or BD+ during playback, licensed players cannot decrypt the content
-2S.A.0818
SUPP. DECL. OF ROBERT SCHUMANN
CASE NO. 16-CV-04109-AB (PLAX)

Case 2:16-cv-04109-AB-PLA Document 92 Filed 10/03/16 Page 3 of 13 Page ID #:3287

1 on an encrypted disc to allow copying of that content. CSS, AACS and BD+ thus
2 ensure that a licensed player will enable the contemporaneous decryption of the disc
3 and playback of content on that viewer. CSS, AACS and BD+ do not otherwise
4 allow for access to that content, including access that would allow the user to copy
5 the content without encryption. In other words, if a user somehow were able to
6 bypass or remove the measures that prevent access and copying, the content still
7 would be encrypted, meaning that the user could not view the content, convert it to a
8 different format or edit that content. The user would need to decrypt the content in
9 order to carry out any of those processes.
10

5.

Dr. Meldal agrees with my conclusion that CSS, AACS and BD+ use a

11 combination of encryption and authentication to prevent unauthorized access to the
12 content on DVDs and Blu-ray discs. See Meldal Decl. ¶¶ 9-10 (stating that he
13 “agree[s] with [Mr. Schumann’s] descriptions of how CSS, AACS and BD+ each
14 function” and that “[b]y definition, it is impossible to access, view, copy or alter in
15 any way a motion picture contained on an encrypted digital disc without first
16 unlocking the encryption”). He also agrees that, in the absence of software that
17 removes or bypasses the encryption (software that is, as I discuss below, illegal),
18 CSS, AACS and BD+ would prevent the ordinary consumer from copying or
19 otherwise gaining access to the content on encrypted DVDs or Blu-ray discs. Id. at
20 ¶¶ 9-10, 12.
21

Dr. Meldal Agrees That VidAngel Decrypts The Encrypted Content On DVDs

22

And Blu-ray Discs

23

6.

As I explained in my August 22 Declaration, because VidAngel uses

24 DVDs and Blu-ray discs to obtain the copies of Plaintiffs’ works that VidAngel
25 streams, VidAngel must first use illegal software to decrypt the encrypted content
26 on the discs in order to allow it to create digital copies of that content (a process
27 generally referred to as “ripping”) and convert it to a useable format. At his
28 deposition, Mr. Harmon described this process as “open[ing] a decrypted version of
-3S.A.0819
SUPP. DECL. OF ROBERT SCHUMANN
CASE NO. 16-CV-04109-AB (PLAX)

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S.A.0820

Case 2:16-cv-04109-AB-PLA Document 92 Filed 10/03/16 Page 5 of 13 Page ID #:3289

1 license AACS and BD+, and people and entities determined to bypass those
2 protection measures.
3

10.

AnyDVD HD enables its customers to receive updates to its illegal

4 circumvention software through an online database. When a customer like
5 VidAngel “buys” AnyDVD HD, that customer is not receiving a one-time product,
6 such as a software file on a computer disc. The customer instead is paying for a
7 subscription, which provides access to whatever is the most up-to-date version of
8 the illegal software. The customer then can use the updated software to circumvent
9 AACS and BD+ on new titles as they are released on Blu-ray discs.
10

11.

Dr. Meldal describes AnyDVD HD as “readily available software” that

11 is “easily accessible, despite the fact that much of that software is no longer readily
12 sold in the United States.” Meldal Decl. ¶ 12. Dr. Meldal neglects to mention,
13 however, the reason why such programs are generally unavailable in the United
14 States: They are widely recognized to be illegal ripping software, the sale and
15 distribution of which I understand to be prohibited under the DMCA.
16

12.

AnyDVD HD is currently sold by an entity called RedFox, which

17 operates from Belize. See Ex. C (screenshot of RedFox page discussing its
18 products, including AnyDVD HD, showing its URL as “www.redfox.bz”). RedFox
19 is a successor to the company SlySoft, which was shut down in February of this
20 year, and which previously sold AnyDVD HD.2 During its existence, SlySoft
21 operated from Antigua and Barbuda.
13.

22

SlySoft was included—along with sites like ThePirateBay.se and

23 Rapidgator.net—in the Office of United States Trade Representative’s (“USTR”)
24 2013 Out-of-Cycle Review of Notorious Markets, which “identifies select online
25
26

2

See, e.g., ArtsTechnica, “DRM Defeaters Defeated? Slysoft Ceases Operations,”
27 available at http://arstechnica.com/tech-policy/2016/02/drm-defeaters-defeatedslysoft-ceases-operations/.
28
-5S.A.0821
SUPP. DECL. OF ROBERT SCHUMANN
CASE NO. 16-CV-04109-AB (PLAX)

Case 2:16-cv-04109-AB-PLA Document 92 Filed 10/03/16 Page 6 of 13 Page ID #:3290

1 and physical marketplaces that reportedly engage in and facilitate substantial piracy
2 and counterfeiting.” Ex. D at 27. The USTR selects websites for inclusion “both
3 because they exemplify concerns about trademark counterfeiting and copyright
4 piracy on a global basis and because the scale and popularity of these marketplaces
5 can cause economic harm to U.S. and other IPR holders.” Id. The USTR report
6 described SlySoft as a company that “sells software that removes region coding and
7 other technological protection measures from optical disks so that they can be
8 viewed and copied without authorization of copyright holders.” Id. at 34.
9

14.

In 2014, the owner of SlySoft, Giancarla Bettini, was found guilty in

10 Antigua of criminally violating that country’s anti-circumvention law.3
15.

11

On February 5, 2016, shortly before SlySoft was shut down, AACS LA

12 requested that the USTR add Antigua and Barbuda as a priority watch country under
13 Section 182 of the Trade Act of 1974 for its “failure to provide adequate remedies to
14 enforce its prohibition on circumvention of technological protections measures.”
15 See Ex. E at 46. AACS LA noted that SlySoft’s AnyDVD HD program is “the best
16 known, and to [AACS LA’s] knowledge the most widely used, program for
17 circumventing implementations of AACS Technology and gaining access to the
18 motion picture content protected by [AACS].” Id. at 47.
16.

19

Dr. Meldal and I agree that, if VidAngel did not use AnyDVD HD or

20 similar products to decrypt DVDs and Blu-ray discs, VidAngel would be not have
21 the ability to: (a) copy the unencrypted digital content from encrypted discs;
22 (b) upload the content onto VidAngel’s internal computer system or third-party
23 servers; (c) convert that content to a format that facilitates streaming; or (d) stream it
24
25
26

3

See, e.g., DigitalDigest.com, “SlySoft Owner Found Criminally Guilty For Making
27 Blu-ray Ripper,” available at http://www.digital-digest.com/news-63893-SlysoftOwner-Found-Criminally-Guilty-For-Making-Blu-ray-Ripper.html.
28
-6S.A.0822
SUPP. DECL. OF ROBERT SCHUMANN
CASE NO. 16-CV-04109-AB (PLAX)

Case 2:16-cv-04109-AB-PLA Document 92 Filed 10/03/16 Page 7 of 13 Page ID #:3291

1 over the Internet. VidAngel takes all of these actions to operate its streaming
2 service.
3

17.

Dr. Meldal states that decryption is necessary for VidAngel to filter

4 content obtained from DVDs and Blu-ray discs. See Meldal Decl. ¶ 18. It is
5 fundamental, however, that decryption is necessary for VidAngel to stream the
6 content that it rips from DVDs and Blu-ray discs. If VidAngel did not decrypt using
7 illegal circumvention software, VidAngel would not be able convert the protected
8 content into the viewable digital copies that VidAngel uses to stream performances
9 to its customers.
10

18.

Dr. Meldal states that he finds VidAngel’s use of AnyDVD HD and

11 similar software to be analogous to the “unlocking” of encryption that occurs when
12 a licensed player is used to lawfully view a DVD or Blu-ray disc. Meldal Decl.
13 ¶ 40. Both processes involve decryption, but they are not equivalent. As I have
14 described above, an authorized DVD or Blu-ray player decrypts a DVD or Blu-ray
15 disc during playback pursuant to a license from the relevant licensing organization.
16 Decryption occurs with authorization and at the same time that the disc is played; no
17 permanent, decrypted copy of the content is made as part of the authorized
18 playback. CSS, AACS and BD+ are specifically designed to allow such authorized
19 decryption, while otherwise preventing access to the digital content on the protected
20 disc.
21

19.

VidAngel, by contrast, uses illegal ripping software to bypass CSS,

22 AACS and BD+ protection in order to create an unencrypted, permanent digital
23 copy of the content on the disc. I understand that the CSS, AACS and BD+
24 licensing terms do not authorize this type of access. Licensed disc players are
25 specifically designed to prevent—and, in the ordinary course of their operation, do
26 prevent—users like VidAngel from copying unprotected digital content from discs,
27 manipulating that content and streaming it over the Internet.
28
S.A.0823

-7SUPP. DECL. OF ROBERT SCHUMANN
CASE NO. 16-CV-04109-AB (PLAX)

Case 2:16-cv-04109-AB-PLA Document 92 Filed 10/03/16 Page 8 of 13 Page ID #:3292

1

20.

I therefore disagree with Dr. Meldal that “[i]t is inherent in the

2 decryption process that a local version of the unlocked content be created—be it in
3 memory or storage.” Id. ¶ 20. While it is true that licensed CSS, AACS and BD+
4 implementations must decrypt content, that decrypted content must be placed into
5 protected memory, cannot be maintained in that memory for longer than necessary
6 to affect the playback, and represents a minor fraction of the overall content at any
7 point in time. In short, licensed CSS, AACS, and BD+ implementation are allowed
8 to maintain ephemeral snipits of the content in the clear. They are specifically NOT
9 allowed to put it in “other storage” as Dr. Meldal states. As a result, a primary
10 purpose of using illegal ripping software is that, in the ordinary course of their
11 operation, CSS, AACS and BD+ use encryption, among other measures, to prevent
12 access to and copying of content contained on DVDs and Blu-ray discs. People use
13 AnyDVD HD and similar software precisely so that the content on the disc will be
14 stripped of its protective layers and copied to another medium without protection.
15

Dr. Meldal Agrees That VidAngel Creates Digital Copies Of The Content On

16

Blu-ray Discs And DVDs And Uploads That Content Onto Computer Servers

17

21.

My review of Dr. Meldal’s Declaration confirms my original opinion

18 about how VidAngel works. Dr. Meldal uses highly technical terms in his
19 declaration. The process that Dr. Meldal describes is quite straightforward:
20 (a) VidAngel purchases a copy of a movie on DVD or Blu-ray disc (I use “movie”
21 in this Declaration to refer to motion pictures and television programs contained on
22 DVDs or Blu-ray discs); (b) VidAngel inserts a copy of the disc into the optical
23 drive of a computer; (c) AnyDVD HD (or a similar ripping program) runs in the
24 background, decrypting the contents of the encrypted disc; (d) VidAngel copies the
25 content of the disc; (e) VidAngel uploads the digital copy of the content onto
26 computer servers; (f) VidAngel prepares the content for filtering and converts it into
27 the proper format for HTTP Live Streaming (“HLS”); and (g) VidAngel streams the
28 content from a copy of the movie that VidAngel has uploaded to and stored on the
-8S.A.0824
SUPP. DECL. OF ROBERT SCHUMANN
CASE NO. 16-CV-04109-AB (PLAX)

Case 2:16-cv-04109-AB-PLA Document 92 Filed 10/03/16 Page 9 of 13 Page ID #:3293

1 computer servers, not from the original DVD or Blu-ray disc. See Meldal Decl.
2 ¶ 37.
3

22.

Dr. Meldal’s declaration also confirms my original understanding of

4 how VidAngel’s filtering technology works. See id. VidAngel streams content to
5 its customers over the Internet via HLS. HLS works by dividing a movie into short
6 segments (generally, no more than ten seconds in length) that the user’s computer
7 then requests, in the correct order, to play the movie. VidAngel’s filtering
8 technology allows it to “tag” segments as containing particular types of content that
9 the user may want to filter. The user then selects which filters to apply.
10

23.

When a user chooses to filter a certain type of visual content, such as a

11 fight between two characters, VidAngel’s technology causes the user’s computer not
12 to obtain the stream of the segment that includes that particular piece of visual
13 content. That segment is skipped and never streamed to the user. If a user chooses
14 to filter audio content, VidAngel’s technology creates an altered segment that mutes
15 the audio content while leaving the visual content unchanged. The user’s computer
16 than downloads the altered segment, rather than the original segment.
17

24.

Dr. Meldal does not dispute that VidAngel
.

18
19

25.

While I agree with Dr. Meldal about how VidAngel’s service operates,

20 I disagree with his conclusion that “VidAngel’s service does not even make a ‘copy’
21 of the original motion picture in any traditional sense.” Meldal Decl. ¶ 38. Based
22 on my review of Dr. Meldal’s declaration, Mr. Harmon’s deposition and VidAngel’s
23 documents, it is my professional opinion that VidAngel makes and stores at least
24 four different, digital copies of each work that it offers to its users. Those copies are
25 stored on the third-party servers that VidAngel leases and are streamed to
26 VidAngel’s customers over the Internet.
27

26.

Mr. Harmon, for example, testified at his deposition that in order to

28 provide filtering, VidAngel must “make a copy of the M2TS files—or the MPEG 2
-9S.A.0825
SUPP. DECL. OF ROBERT SCHUMANN
CASE NO. 16-CV-04109-AB (PLAX)

Case 2:16-cv-04109-AB-PLA Document 92 Filed 10/03/16 Page 10 of 13 Page ID #:3294

1 files” on the discs, and must “make a copy of the disc.” “M2TS” and “MPEG 2” are
2 merely different formats for storing audio-visual content. See Ex. B (Harmon Dep.
3 60:4-21). When Mr. Harmon refers to copying the “MPEG 2” and “M2TS” files, he
4 is referring to making a digital copy of the movie content on a DVD or Blu-ray disc
5 (after that content has been decrypted using AnyDVD HD).
6

27.

Dr. Meldal similarly refers to copying the content on discs and

7 uploading that content onto third party servers. Meldal Decl. ¶ 37.4 That content is
8 ultimately converted into a different format that facilitates HLS streaming.
9 According to Dr. Meldal, VidAngel creates at least four copies of the movie in that
10 format, each at a different “bitrate.” Id. ¶ 37(vi)(a).5
28.

11

Because, as I noted above, HLS operates by dividing content into short

12 segments, which are then downloaded by the customer’s computer and displayed to
13 the costumer in the correct order, VidAngel may not store the digital copies of
14 Plaintiffs’ works as a single file. Rather, at least according to Dr. Meldal’s
15 declaration, see Meldal Decl. ¶ 37(b), VidAngel appears to store that content in
16 segments. That the digital copies of the movies may be stored in segments,
17 however, does not mean that they are not copies. It is simply an artifact of how
18 streaming works. If one were to put all of the segments together, one would have
19 the entire movie, and in fact this is exactly what happens when a VidAngel user
20 “views” a movie. Further, these digital copies are the ones that are streamed to the
21
22
23

4

Dr. Meldal refers to copying “Matroska” files. As relevant here, “Matroska” is
24 simply a particular format for digitally storing audio or visual content—in this case,
the audio or visual content contained in the Matroska files is the digital copy of the
25
movie that VidAngel has ripped from a DVD or Blu-ray disc.
26 5 “Bitrate” is a term that refers to the amount of data allocated to represent the
27 content in its compressed form, typically on average and typically described as bits
per second. Generally, files with higher bitrates allow for higher quality streaming.
28
-10S.A.0826
SUPP. DECL. OF ROBERT SCHUMANN
CASE NO. 16-CV-04109-AB (PLAX)

Case 2:16-cv-04109-AB-PLA Document 92 Filed 10/03/16 Page 11 of 13 Page ID #:3295

1 user: The user’s computer requests each segment from VidAngel’s servers and plays
2 them in order.
3

29.

Dr. Meldal states that VidAngel’s technology “does not create any

4 watchable copy of Plaintffs’ works” and notes that “a user can view the contents of
5 each segment [of a movie] only after it has been streamed in sequence, decrypted
6 with the correct keys . . . and rendered with a VidAngel media player.” Meldal
7 Decl. ¶ 38. The fact that VidAngel places encryption on the segments it streams
8 does not mean that VidAngel has not copied the movie. The content on DVDs and
9 Blu-ray discs is also encrypted, and cannot be viewed absent decryption. But that
10 does not mean that DVDs and Blu-ray discs do not contain copies of movies.
11

It Is Possible To Run A Filtering Service Without Circumventing The

12

Technological Protection Measures On DVDs And Blu-Ray Discs

13

30.

I understand that VidAngel has argued that it is impossible to run a

14 service that filters streamed movies without using an illegal ripping product such as
15 AnyDVD HD to decrypt DVDs and Blu-ray discs. I disagree with that contention.
16

31.

Dr. Meldal himself makes clear that at least one company, ClearPlay,

17 provides filtering without circumvention. See Meldal Decl. ¶ 15. Dr. Meldal states
18 that ClearPlay operates by selling a special DVD player that allows customers to
19 apply filters when watching content on DVDs that they have lawfully obtained.
20 ClearPlay’s DVD player could not function unless it decrypted the content on DVDs
21 during playback. Dr. Meldal, however, states that ClearPlay has lawfully obtained
22 from DVD CCA the CSS “keys” that allow decryption during playback. Assuming
23 that ClearPlay’s DVD Player is properly licensed by the DVD CCA, then that player
24 is authorized to decrypt the content on DVDs during playback. I am not aware of
25 any evidence that ClearPlay uses illegal ripping software to remove CSS protections
26 from DVDs without authorization.
27
28
S.A.0827

-11SUPP. DECL. OF ROBERT SCHUMANN
CASE NO. 16-CV-04109-AB (PLAX)

Case 2:16-cv-04109-AB-PLA Document 92 Filed 10/03/16 Page 12 of 13 Page ID #:3296

1

32.

Dr. Meldal focuses on ClearPlay’s DVD player but, based on my own

2 investigation,6 I understand that ClearPlay also operates a streaming service that
3 allows users to filter content that they have lawfully obtained from Google Play
4 (which I understand to be an authorized licensee of Plaintiffs’ movies and television
5 content). I further understand that ClearPlay allows users to stream filtered content
6 to their computers or, through devices such as Apple TV or Google’s Chromecast
7 device, to their televisions. See Bennett Decl. Ex. A (ClearPlay streaming FAQ).
8 Because ClearPlay works on top of the stream that a user has lawfully obtained from
9 Google Play, I have no reason to believe that ClearPlay decrypts any encrypted
10 content without authorization.
11

That VidAngel Uses Encryption In Conjunction With Its Streaming Service

12

Does Not Mean That Plaintiffs’ Content Is Secure
33.

13

Dr. Meldal states that the copies of Plaintiffs’ works that VidAngel

14 stores on third-party servers are encrypted. Meldal Decl. ¶ 37. That the content is
15 encrypted, however, does not mean that it is secure. Just as illegal technology like
16 AnyDVD HD can be used to remove encryption from DVDs and Blu-ray discs,
17 encryption can also be broken when that content is delivered via streaming. I
18 understand from reviewing the deposition of Mr. Cittadine that,
.

19
20 See Ex. F (Cittadine Dep. 240:17-241:18).
21
22
23
24
25
26
27
28
S.A.0828

6

Dr. Meldal references ClearPlay’s streaming service in passing. Meldal Decl.
¶ 15, Ex. D.
-12SUPP. DECL. OF ROBERT SCHUMANN
CASE NO. 16-CV-04109-AB (PLAX)

Case 2:16-cv-04109-AB-PLA Document 92 Filed 10/03/16 Page 13 of 13 Page ID #:3297

S.A.0829

Case 2:16-cv-04109-AB-PLA Document 91 Filed 10/03/16 Page 1 of 5 Page ID #:3211

1 GLENN D. POMERANTZ (SBN 112503)
[e-mail]
2 KELLY M. KLAUS (SBN 161091)
[e-mail]
3 ROSE LEDA EHLER (SBN 296523)
[e-mail]
4 ALLYSON R. BENNETT (SBN 302090)
[e-mail]
5 MUNGER, TOLLES & OLSON LLP
355 South Grand Avenue, Thirty-Fifth Floor
6 Los Angeles, California 90071-1560
Telephone: [phone]
7 Facsimile: [phone]
8 Attorneys for Plaintiffs
9
10

UNITED STATES DISTRICT COURT

11

CENTRAL DISTRICT OF CALIFORNIA

12

WESTERN DIVISION

13
14 DISNEY ENTERPRISES, INC.;
LUCASFILM LTD. LLC;
15 TWENTIETH CENTURY FOX FILM
CORPORATION and WARNER
16 BROS. ENTERTAINMENT INC.,
Plaintiffs and CounterDefendants,

17
18
19
20

vs.
VIDANGEL, INC.,
Defendant and CounterClaimant.

Case No. 16-cv-04109-AB (PLAx)
REDACTED VERSION OF
DOCUMENT PROPOSED TO BE
FILED UNDER SEAL
DECLARATION OF ALLYSON
BENNETT IN SUPPORT OF
PLAINTIFFS’ MOTION FOR
PRELIMINARY INJUNCTION
Judge: Hon. André Birotte Jr.

22

Date: October 31, 2016
Time: 10:00 a.m.
Crtrm.: 4

23

Trial Date:

21

None Set

24
25
26
27
28
S.A.0830
DECLARATION OF ALLYSON BENNETT I/S/O PRELIMINARY INJUNCTION
CASE NO. 16-CV-04109-AB (PLAX)

Case 2:16-cv-04109-AB-PLA Document 91 Filed 10/03/16 Page 2 of 5 Page ID #:3212

1 I, Allyson Bennett, hereby declare:
2

1.

I am an attorney with the law firm of Munger, Tolles & Olson LLP,

3 counsel for Plaintiffs in this matter. I am a member of the California Bar and am
4 admitted to practice before this Court. I have knowledge of the matters set forth
5 below based on my direct involvement in this matter or the direct involvement of
6 other lawyers at my firm. If called as a witness, I could and would testify
7 competently to the facts stated herein.
8

2.

Attached as Exhibit A are true and correct copies of ClearPlay’s

9 Frequently Asked Questions about streaming, available at
10 https://www.clearplay.com/t-streaming support.aspx and a ClearPlay Letter posted
11 to its website explaining that “ClearPlay filtering works together with movies
12 streamed from Google Play.” The Frequently Asked Questions document is
13 attached as Exhibit D to the declaration of VidAngel’s expert, Sigurd Meldal, but
14 the attachment to the Meldal declaration is not in color.
15

3.

Attached as Exhibit B is a true and correct copy of screenshot printouts

16 from ClearPlay’s Streaming Sign-Up Page, which features a video demonstrating
17 ClearPlay’s streaming product. The Video is accessible at
18 https://try.clearplay.com/streaming-sign-up/ (last visited October 2, 2016).1
19

4.

Attached as Exhibit C are true and correct copies of screenshot

20 printouts from VidAngel’s Facebook pages, containing user comments.
21

5.

Attached as Exhibit D are true and correct copies of screenshot

22 printouts from VidAngel’s Facebook pages, containing user comments posted since
23 the filing of Plaintiffs’ Motion on August 22, 2016.
24

6.

Attached as Exhibit E are true and correct copies of a screenshot

25 printout of the VidAngel “After Movie” survey in which VidAngel asks its users
26

1

Plaintiffs have included a slipsheet with a true and correct copy of a screenshot of
27 the video. If the Court would prefer, Plaintiffs will submit DVDs containing copies
28 of these videos for the Court’s review.
-1S.A.0831
DECLARATION OF ALLYSON BENNETT I/S/O PRELIMINARY INJUNCTION
CASE NO. 16-CV-04109-AB (PLAX)

Case 2:16-cv-04109-AB-PLA Document 91 Filed 10/03/16 Page 3 of 5 Page ID #:3213

1 “Would you have watched [name of movie] without a filter?” This Exhibit also
2 attaches the correspondence from VidAngel’s counsel, Mr. Marquart, to Plaintiffs’
3 counsel, in which Mr. Marquart represents that this document is the “on-line survey
4 questionnaire Mr. Harmon referred to [in his declaration].”
5

7.

To date, VidAngel has not disclosed to Plaintiffs the total number of

6 DVDs or Blu-ray Discs (“Discs”) VidAngel has purchased or the number of streams
7 it has made to users. Exhibit AA to the Declaration of Rose Leda Ehler (“Ehler
8 Decl.”) (Dkt. 30) is a document entitled
9 (“Board Presentation). According to the Board Presentation, VidAngel has provided
10 at least
11 since August 2015. Ehler Decl. Ex. AA at 315. At deposition, VidAngel’s CEO,
12 Mr. Harmon, testified that since January 2016, VidAngel has made between
streams. Id. Ex. EE Tr. 190:2-8. VidAngel also produced an

13

14 Excel file containing a line for each Disc VidAngel has purchased (and its inventory
15 number). The bates number for that document is D00195 but I have not attached it
16 because a printout of the file is over 1,000 pages. That Excel file contains
17 approximately

entries, which would correspond to

Discs

18 purchases as of mid-July 2016, when VidAngel stated the spreadsheet was created.
19 A conservative estimate of the ratio of streams to Discs is
. In other words, based on VidAngel’s documents and

20

21 information produced to date, it appears that VidAngel on average makes
streams to different users for each Disc VidAngel has purchased and

22

23 maintains in its inventory.
24

8.

Attached as Exhibit F is a true and correct copy of a screenshot printout

25 from VidAngel’s Facebook page showing an advertisement for Disney’s new
26 release, Captain America: Civil War (2016).
27

9.

Attached hereto as Exhibit G is a true and correct copy of a screenshot

28 printout from the Harmon Brothers’ website showing the “Team.”
-2S.A.0832
DECLARATION OF ALLYSON BENNETT I/S/O PRELIMINARY INJUNCTION
CASE NO. 16-CV-04109-AB (PLAX)

Case 2:16-cv-04109-AB-PLA Document 91 Filed 10/03/16 Page 4 of 5 Page ID #:3214

1

10.

Attached hereto as Exhibit H is a true and correct copy of

2 correspondence dated July 7, 2016, between Plaintiffs’ counsel and VidAngel’s
3 counsel. In that correspondence, VidAngel’s counsel agreed that Plaintiffs could
4 produce a single witness to testify regarding irreparable harm matters common to all
5 Plaintiffs.
6

11.

Attached as Exhibit I is a true and correct copy of correspondence

7 dated September 15 and 16, 2016, between counsel for VidAngel, Mr. Marquart,
8 and Plaintiffs’ counsel, in which Plaintiffs’ counsel requests the production of
9 underlying survey evidence.
10

12.

Attached as Exhibit J is a true and correct copy of deposition exhibit

11 No. 41 from the August 11, 2016, deposition of Defendants’ Rule 30(b)(6) designee
12 and CEO of VidAngel, Neal Harmon.
13

13.

Attached hereto as Exhibit K is a true and correct copy of

14 correspondence dated June 10, 2016, between Plaintiffs’ counsel and Mr. Harmon
15 asking VidAngel to “stipulate to the entry of a preliminary injunction during the
16 pendency of this litigation.” VidAngel considered this request until June 21, 2016
17 when VidAngel’s counsel informed Plaintiffs’ counsel that it would prefer to litigate
18 the issue.
19

14.

Attached as Exhibit L is a true and correct copy of correspondence

20 dated July 5 , 2016 from Plaintiffs’ counsel to VidAngel’s counsel regarding the
21 stipulated expedited discovery.
22

15.

Attached hereto as Exhibit M are true and correct copies of excerpts

23 from the August 11, 2016, deposition of Defendants’ Rule 30(b)(6) designee and
24 CEO of VidAngel, Neal Harmon.
25
26
27
28
S.A.0833

-3DECLARATION OF ALLYSON BENNETT I/S/O PRELIMINARY INJUNCTION
CASE NO. 16-CV-04109-AB (PLAX)

Case 2:16-cv-04109-AB-PLA Document 91 Filed 10/03/16 Page 5 of 5 Page ID #:3215

S.A.0834

Case 2:16-cv-04109-AB-PLA Document 91-1 Filed 10/03/16 Page 1 of 7 Page ID #:3216

EXHIBIT A

S.A.0835

ClearPlay Streaming Instructions & FAQ

Case 2:16-cv-04109-AB-PLA Document 91-1 Filed 10/03/16 Page 2 of 7 Page ID #:3217
SEARCH MOVIE NAME

Open 10 AM-6 PM MST. 866-788-6992 | HELP
LOGIN | ACTIVATE | SHOP
WHAT IS CLEARPLAY?

OUR PRODUCTS

MOVIES

Home > ClearPlay Streaming Instructions & FAQ

ClearPlay Streaming Instructions & FAQ.
How does it work?
1. Select your favorite movies to watch from our list of streaming titles (requires
Google Chrome). You can pick from our List of Movies you wish to view.

2. Click “Watch Instantly” at the top of the movie page.

3. You will be taken to our ClearPlay Streaming Player.

4a. Log into our online streaming player with your ClearPlay account info.

S.A.0836
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ClearPlay Streaming Instructions & FAQ

Case 2:16-cv-04109-AB-PLA Document 91-1 Filed 10/03/16 Page 3 of 7 Page ID #:3218

4b. If you aren’t already a ClearPlay member, you can try it free for 30 days.

5a. We stream movies from Google Play. Log into your Google Account to confirm
the rental/purchase of the movie you want to stream.

S.A.0837
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ClearPlay Streaming Instructions & FAQ

Case 2:16-cv-04109-AB-PLA Document 91-1 Filed 10/03/16 Page 4 of 7 Page ID #:3219

5b. If you have not rented/purchased the movie you will be asked to rent or buy the
movie in a new pop up window.

5c. Confirm rental or purchase terms (rentals are available within a limited timeframe
after confirmation).

S.A.0838
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ClearPlay Streaming Instructions & FAQ

Case 2:16-cv-04109-AB-PLA Document 91-1 Filed 10/03/16 Page 5 of 7 Page ID #:3220

6. Change your filter settings at the bottom of the screen and enjoy the show!

Enjoy The Stream!

- Does it cost extra?
Rental and purchase fees may apply but the filtering service is included free with
your Clearplay memebership
- Do I need the wireless FilterStik to make it work?
Nope. The FilterStick is only used for our players.
- What devices can I use to watch the movie?
Currently, Mac or PC.

S.A.0839

-Can I adjust what I want to filter out?
Of course! Before the movie starts you can adjust your filter settings below the

https://www.clearplay.com/t-streaming_support.aspx[9/29/2016 9:06:30 PM]

ClearPlay Streaming Instructions & FAQ

Case 2:16-cv-04109-AB-PLA
player window.

Document 91-1 Filed 10/03/16 Page 6 of 7 Page ID #:3221

-Which movies can I watch?
All the movies listed on our streaming movie list. (There are a lot.)
- Does this work on all streaming services?
ClearPlay Streaming works exclusively with rentals and purchases made through
Google Play.
- If I watch the movie directly on Google Play will it be filtered?
No. After renting/purchasing the movie at Google Play, begin filtered playback by
clicking the ClearPlay Streaming individual movie page.
- Can I use Google's Chromecast?
If you have a Chromecast then you can mirror your desktop or laptop to your TV by
using the Chrome Browser “cast” feature. Be aware that we have seen some
slowness with the video being playing on the TV when mirroring.
NOTE: Do not click on the “cast” icon on the ClearPlay streaming player. This will
play the movie on your TV through the Chromecast but it will not be filtered."
- Can I use Apple Air Play?
If you have an Apple TV then you can use Air Play to mirror your laptop to your TV.
This works natively for Safari on a Mac product. If you are on a windows platform
then there are several third party software's that will mirror your laptop or desktop to
your Apple TV.
- How Can I display the movie on my TV?
If you’re using a laptop or desktop that has an HDMI port you can use an HDMI
cable to go from your computer to the TV. There are plenty of tutorials on the web
that will walk you through how to do that with your computer and Operating System.
If your computer does not have and HDMI cable port you can also use cables like
VGA to HDMI or DVI to HDMI, depending on how your computer is set up. You can
find them on Amazon or at any electronic store.
-Why won't the movie play after renting/purchasing it?
Be sure you’re using the latest version of Google Chrome to stream it (other
browsers tend to run into caching problems). If you’re experiencing problems, or
really want to try a different browser, clearing your browser’s cache can help. Here’s
how:
Internet Explorer
Mozilla Firefox
Google Chrome
Apple Safari
I cleared my browser’s cache and I’m still getting an error message when I try
to watch my movie.
ClearPlay filtering is applied to the movie as it streams from Google Play, so if you’re
running into issues your best bet is to check Google Play support documentation.

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© 2012 CLEARPLAY INC. CONTACT US NON-PROFIT SUPPORT FAQ BUY GIFTS HELP
ClearPlay Patents: 6,889,383; 6,898,799; 7,526,784; 7,543,318; 7,577,970; 7,975,021; 8,117,282. More Pending

S.A.0840
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Privacy

Contact Us

Case 2:16-cv-04109-AB-PLA Document 91-1 Filed 10/03/16 Page 7 of 7 Page ID #:3222
Sign In

Filtering & Streaming.
Together.

Dear Friend,
"It's amazing," a friend reminded me, "that movies cost the studios umpteen
million dollars to make, but only cost me a few dollars to see..."
Even more amazing is when a favorite movie inspires me, challenges me to be
better, and truly entertains my whole family. Certainly not every movie
accomplishes this, but when one does, it is worth every dollar!
At ClearPlay we have a favorite word. Together. ClearPlay filtering works
together with movies streamed from Google Play. We launched this service
during Christmas of 2013. The filtering is included in ClearPlay's $7.99 monthly
membership, and the price of a movie from Google Play ranges from $2.99 to
$19.99. Together this is fair for everyone.
I invite you to gather the family, with the comfort and confidence that this is the
legal way to filter streaming movies.
As always, Enjoy the Show!
Together.

Matt
ClearPlay CEO

First month free.
Monthly price after free month ends: $7.99

Join Free For A Month
S.A.0841
http://try.clearplay.com/letter/

9/19/2016

Case 2:16-cv-04109-AB-PLA Document 91-2 Filed 10/03/16 Page 1 of 2 Page ID #:3223

EXHIBIT B

S.A.0842

Case 2:16-cv-04109-AB-PLA Document 91-2 Filed 10/03/16 Page 2 of 2 Page ID #:3224

ClearPlay - Filtering & Streaming. Together.
available at: https://try.clearplay.com/streaming-sign-up/

S.A.0843

Case 2:16-cv-04109-AB-PLA Document 91-11 Filed 10/03/16 Page 1 of 3 Page ID #:3261

EXHIBIT K

S.A.0844

Case 2:16-cv-04109-AB-PLA Document 91-11 Filed 10/03/16 Page 2 of 3 Page ID #:3262

S.A.0845

Case 2:16-cv-04109-AB-PLA Document 91-11 Filed 10/03/16 Page 3 of 3 Page ID #:3263

S.A.0846

Case 2:16-cv-04109-AB-PLA Document 30 Filed 08/22/16 Page 1 of 8 Page ID #:669

1 GLENN D. POMERANTZ (SBN 112503)
[e-mail]
2 KELLY M. KLAUS (SBN 161091)
[e-mail]
3 ROSE LEDA EHLER (SBN 296523)
[e-mail]
4 ALLYSON R. BENNETT (SBN 302090)
[e-mail]
5 MUNGER, TOLLES & OLSON LLP
355 South Grand Avenue, Thirty-Fifth Floor
6 Los Angeles, California 90071-1560
Telephone: [phone]
7 Facsimile: [phone]
8 Attorneys for Plaintiffs
9
10

UNITED STATES DISTRICT COURT

11

CENTRAL DISTRICT OF CALIFORNIA

12

WESTERN DIVISION

13
14 DISNEY ENTERPRISES, INC.;
LUCASFILM LTD. LLC;
15 TWENTIETH CENTURY FOX FILM
CORPORATION and WARNER
16 BROS. ENTERTAINMENT INC.,
Plaintiffs and CounterDefendants,

17
18
19
20
21
22
23

vs.
VIDANGEL, INC.,
Defendant and CounterClaimant.

Case No. 16-cv-04109-AB (PLAx)
REDACTED VERSION OF
DOCUMENT PROPOSED TO BE
FILED UNDER SEAL
DECLARATION OF ROSE LEDA
EHLER IN SUPPORT OF
PLAINTIFFS’ MOTION FOR
PRELIMINARY INJUNCTION
__________________
Judge: Hon. André Birotte Jr.
Date: October 24, 2016
Time: 10:00 a.m.
Crtrm.: 4
Trial Date:

None Set

24
25
26
27
28
S.A.0847
DECLARATION OF ROSE LEDA EHLER I/S/O MOTION FOR PRELIMINARY INJUNCTION
CASE NO. 16-CV-04109-AB (PLAX)

Case 2:16-cv-04109-AB-PLA Document 30 Filed 08/22/16 Page 2 of 8 Page ID #:670

1 I, Rose Leda Ehler, hereby declare:
2

1.

I am an attorney with Munger, Tolles & Olson LLP, counsel for

3 Plaintiffs in this matter. I am a member of the California Bar and am admitted to
4 practice before this Court. I have knowledge of the matters set forth below based on
5 my direct involvement in this matter or the direct involvement of other lawyers at
6 my firm. If called as a witness, I could and would testify competently to the facts
7 stated herein.
8

2.

The parties agreed to exchange expedited discovery covering a number

9 of mutually agreed categories in advance of Plaintiffs’ Motion for Preliminary
10 Injunction. Attached as Exhibit A are true and correct copies of a VidAngel Press
11 Release and various advertisements produced by VidAngel. Also included within
12 this exhibit are true and correct copies of screenshot printouts from various sites,
13 including VidAngel’s website (www.vidangel.com), YouTube
14 (https://www.youtube.com/vidangel)1, Facebook
15 (https://www.facebook.com/VidAngel/) and Twitter
16 (https://twitter.com/VidAngel/with_replies), that contain VidAngel advertisements
17 and marketing messages. In these marketing materials, VidAngel compares its
18 service with licensed legitimate on-demand streaming services and/or offers titles
19 not available on on-demand streaming services and at a lower cost than such other
20 services charge.
21

3.

Attached as Exhibit B are true and correct copies of internal documents

22 produced by VidAngel that discuss its marketing strategy of comparing itself to
23 legitimate on-demand streaming services.
24
25

1

Plaintiffs have included a slipsheet with a true and correct copy of a screenshot
26 from “VidAngel ad with Matt Messe from Studio C” and hyperlink to
https://youtu.be/9XOjdARr87I (last visited Aug. 21, 2016). If the Court would
27 prefer, Plaintiffs will gladly submit DVDs containing copies of these videos for the
28 Court’s review.
-1S.A.0848
DECLARATION OF ROSE LEDA EHLER I/S/O MOTION FOR PRELIMINARY INJUNCTION
CASE NO. 16-CV-04109-AB (PLAX)

Case 2:16-cv-04109-AB-PLA Document 30 Filed 08/22/16 Page 3 of 8 Page ID #:671

1

4.

Attached hereto as Exhibit C is a true and correct copy of a screenshot

2 printout of VidAngel’s Blog (http://blog.vidangel.com) containing a user comment
3 that states: “I could watch Star Wars 7 on VidAngel (only filtering one small thing)
4 for $1 before any other video streaming service had it available. If you guys are
5 allowed to rip, stream and resell DVDs, the other streaming services will want to do
6 it too—it’s only fair.” This document bears the Bates number PL0000394.
7

5.

Attached hereto as Exhibit D is a true and correct copy of a document

8 produced by VidAngel in response to discovery requesting documents sufficient to
9 show VidAngel’s total number of users. This document bears the Bates number
10 D02374.
11

6.

Attached hereto as Exhibit E is a true and correct copy of an article

12 downloaded from the internet, titled “VidAngel Streaming Service: Don’t Like
13 Offensive Content in Movies? No Problem” by Jim Probasco of Benzinga. The
14 article features an interview with VidAngel CEO, Neal Harmon, in which he says
15 that, “if you charge people to use a filter, the market shrinks [from 47%] to less than
16 1% of Americans.” The document bears the Bates numbers PL0000531-33.
17

7.

Attached hereto as Exhibit F is a true and correct copy of a printout

18 from the RedFox.bz website that explains the company was started by “former
19 SlySoft developers and staff” and an article posted on TorrentFreak that explains
20 that the owner of SlySoft had been “found guilty of providing tools to circumvent
21 AACS encryption.”
22

8.

Attached as Exhibit G are true and correct copies of screenshot

23 printouts from various sites, including VidAngel’s Blog, Facebook and Twitter that
24 contain VidAngel marketing in which it highlights that it prices its service at $1 a
25
26
27
28
S.A.0849

-2DECLARATION OF ROSE LEDA EHLER I/S/O MOTION FOR PRELIMINARY INJUNCTION
CASE NO. 16-CV-04109-AB (PLAX)

Case 2:16-cv-04109-AB-PLA Document 30 Filed 08/22/16 Page 4 of 8 Page ID #:672

1 day. This low price is only because VidAngel does not pay licensing fees.
2 VidAngel has posted two videos to YouTube explaining its “buy-sellback” process.2
3

9.

Attached as Exhibit H is a true and correct copy of a screenshot

4 printout from VidAngel’s Twitter page containing a user comment, asking why
5 VidAngel prices individual episodes of television series the same price as individual
6 motion pictures. VidAngel responds that they are “[w]orking on Season pricing.”
7 The document bears the Bates number PL0000341.
8

10.

Attached as Exhibit I are true and correct copies of screenshot printouts

9 from various sites, including from Facebook, Twitter and YouTube3, containing
10 VidAngel user comments, in which the commenters extoll the benefits of VidAngel
11 as compared to other on-demand streaming services, including that VidAngel
12 streams new releases, that it has titles not available on other streaming services, and
13 that VidAngel charges a lower price than those services. Also included are press
14 and blog articles from USA Today, Benzinga and ArtofBeingCheap.com discussing
15 VidAngel as a competitor to licensed on-demand streaming services.
16

11.

Attached as Exhibit J are true and correct copies of screenshot printouts

17 from various sites, including Facebook, Twitter, and VidAngel’s website containing
18 marketing messages promoting VidAngel’s addition of Star Wars: The Force
19
20
21
22
23
24
25

2

Plaintiffs have included a slipsheet with true and correct copies of screenshots
from “How $1 Movies Work on VidAngel Sellback” and hyperlink to
https://youtu.be/wvcF4x1d0xo (last visited Aug. 21, 2016) as well as “How
VidAngel $1 Movies Work in 15 Seconds” and hyperlink to
https://youtu.be/map6EIP41bY (last visited Aug. 21, 2016). If the Court would
prefer, Plaintiffs will gladly submit DVDs containing copies of these videos for the
Court’s review.
3

Plaintiffs have included a slipsheet with a true and correct copy of a screenshot
26 from “VidAngel – An Honest Review” and hyperlink to
http://youtu.be/KG7xgmDHF40 (last visited Aug. 21, 2016). If the Court would
27 prefer, Plaintiffs will gladly submit DVDs containing copies of these videos for the
28 Court’s review.
-3S.A.0850
DECLARATION OF ROSE LEDA EHLER I/S/O MOTION FOR PRELIMINARY INJUNCTION
CASE NO. 16-CV-04109-AB (PLAX)

Case 2:16-cv-04109-AB-PLA Document 30 Filed 08/22/16 Page 5 of 8 Page ID #:673

1 Awakens to VidAngel’s list of available titles on April 5, 2016, and showing that it
2 was available for streaming that day.
3

12.

Attached as Exhibit K are true and correct copies of screenshot

4 printouts from VidAngel’s Facebook and Twitter pages, containing user comments
5 and VidAngel’s responses regarding VidAngel’s decision to remove the auto6 sellback feature and the credits filter.
7

13.

Attached as Exhibit L are true and correct copies of screenshot

8 printouts from VidAngel’s Twitter page, containing user comments complaining
9 about the quality of the viewing experience on VidAngel.
10

14.

Attached as Exhibit M is a true and correct copy of a VidAngel Blog

11 post, dated May 18, 2016, titled, “Is VidAngel’s service legal?” The document
12 bears the Bates numbers PL0000198-202.
13

15.

Attached as Exhibit N are true and correct copies of screenshot

14 printouts from various sites, including Facebook, Twitter, and VidAngel’s Blog,
15 showing VidAngel marketing new releases, including The Revenant (2015),
16 Zootopia (2016), Deadpool (2016), Kung Fu Panda 3 (2016), Batman v. Superman:
17 Dawn of Justice (2016) and Keanu (2016).
18

16.

Attached as Exhibit O are true and correct copies of VidAngel Blog

19 posts, setting forth VidAngel’s response to this lawsuit. The publications include
20 advertisements for t-shirts representing the Plaintiffs as “Darth Mickey with the fox21 tail on the broom.” Another VidAngel Blog post describes this lawsuit as letters
22 between “pen-pals.”
23

17.

Attached hereto as Exhibit P is a true and correct copy of a VidAngel

24 blog post and accompanying user comments that discuss the “buy-sellback”
25 transaction.
26

18.

Attached hereto as Exhibit Q is a true and correct copy of a screenshot

27 printout from Twitter, in which VidAngel posted that filtering “nudity/graphic
28
S.A.0851

-4DECLARATION OF ROSE LEDA EHLER I/S/O MOTION FOR PRELIMINARY INJUNCTION
CASE NO. 16-CV-04109-AB (PLAX)

Case 2:16-cv-04109-AB-PLA Document 30 Filed 08/22/16 Page 6 of 8 Page ID #:674

1 violence/f-bomb” from Fox’s Deadpool omits only 14 minutes of total running time
2 from that motion picture.
3

19.

Attached hereto as Exhibit R is a true and correct copy of deposition

4 exhibit 10 from the August 11, 2016, deposition of Defendants’ Rule 30(b)(6)
5 designee and CEO of VidAngel, Neal Harmon.
6

20.

Attached hereto as Exhibit S is a true and correct copy of deposition

7 exhibit 14 from the August 11, 2016, Rule 30(b)(6) deposition of Mr. Harmon.
8

21.

Attached hereto as Exhibit T is a true and correct copy of deposition

9 exhibit 17 from the August 11, 2016, Rule 30(b)(6) deposition of Mr. Harmon.
10

22.

Attached hereto as Exhibit U is a true and correct copy of deposition

11 exhibit 19 from the August 11, 2016, Rule 30(b)(6) deposition of Mr. Harmon.
12

23.

Attached hereto as Exhibit V is a true and correct copy of deposition

13 exhibit 21 from the August 11, 2016, Rule 30(b)(6) deposition of Mr. Harmon.
14

24.

Attached hereto as Exhibit W is a true and correct copy of deposition

15 exhibit 22 from the August 11, 2016, Rule 30(b)(6) deposition of Mr. Harmon.
16

25.

Attached hereto as Exhibit X is a true and correct copy of deposition

17 exhibit 23 from the August 11, 2016, Rule 30(b)(6) deposition of Mr. Harmon.
18

26.

Attached hereto as Exhibit Y is a true and correct copy of deposition

19 exhibit 26 from the August 11, 2016, Rule 30(b)(6) deposition of Mr. Harmon.
20

27.

Attached hereto as Exhibit Z is a true and correct copy of deposition

21 exhibit 27 from the August 11, 2016, Rule 30(b)(6) deposition of Mr. Harmon.
22

28.

Attached hereto as Exhibit AA is a true and correct copy of deposition

23 exhibit 30 from the August 11, 2016, Rule 30(b)(6) deposition of Mr. Harmon.
24

29.

Attached hereto as Exhibit BB is a true and correct copy of deposition

25 exhibit 33 from the August 11, 2016, Rule 30(b)(6) deposition of Mr. Harmon.
26

30.

Attached hereto as Exhibit CC is a true and correct copy of deposition

27 exhibit 37 from the August 11, 2016, Rule 30(b)(6) deposition of Mr. Harmon.
28
S.A.0852

-5DECLARATION OF ROSE LEDA EHLER I/S/O MOTION FOR PRELIMINARY INJUNCTION
CASE NO. 16-CV-04109-AB (PLAX)

Case 2:16-cv-04109-AB-PLA Document 30 Filed 08/22/16 Page 7 of 8 Page ID #:675

1

31.

Attached hereto as Exhibit DD is a true and correct copy of deposition

2 exhibit 38 from the August 11, 2016, Rule 30(b)(6) deposition of Mr. Harmon.
3

32.

Attached hereto as Exhibit EE are true and correct copies of excerpts

4 from the August 11, 2016, deposition of Defendants’ Rule 30(b)(6) designee and
5 CEO of VidAngel, Neal Harmon.
6

33.

Attached hereto as Exhibit FF is a true and correct copy of a screenshot

7 printout from Twitter, in which a user comments: “@VidAngel and you took away
8 censoring the end credits which was an easy choice if I didn’t really want to censor
9 anything!”
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
S.A.0853

-6DECLARATION OF ROSE LEDA EHLER I/S/O MOTION FOR PRELIMINARY INJUNCTION
CASE NO. 16-CV-04109-AB (PLAX)

Case 2:16-cv-04109-AB-PLA Document 30 Filed 08/22/16 Page 8 of 8 Page ID #:676

S.A.0854

Case 2:16-cv-04109-AB-PLA Document 30-1 Filed 08/22/16 Page 1 of 31 Page ID #:677

EXHIBIT A

S.A.0855

Case 2:16-cv-04109-AB-PLA Document 30-1 Filed 08/22/16 Page 2 of 31 Page ID #:678

For Immediate Release
VidAngel Lets Customers Stream Filtered Movies for One BLEEPING Dollar
$2.5 Million Raised in Seed Funding
SALT LAKE CITY—October 1, 2015—VidAngel allows parents to cut violence, profanity and/or
nudity out of movies and TV shows for the net price of $1 (both filter and movie included). Unlike
Amazon, Google Play, and iTunes, which charge up to $4.99 for streaming, VidAngel costs only
$1 per movie, allowing viewers to watch 5 movies for the price of 1 (see how net $1 sell-back
works HERE). All filters are completely personalized, with customers selecting exactly what to
cut from the film. The company has already raised $2.5 million in seed funding.
VidAngel allows streaming on Apple TV, Roku, Chromecast, computer, tablet, or smartphone. It
requires no subscription, no custom hardware, and no additional purchase, thus eliminating any
need to run to the red-painted box at the grocery store. In addition to SD videos, HD videos are
available for net price of $2.
Over half of all movies produced are rated R or NC-17. Yet almost 3/4 of revenue is generated
by family-friendly movies (G, PG, PG-13), indicating that consumers want more family-friendly
content than Hollywood is currently producing. “Family-friendly films make almost 3 times the
revenue as mature films,” says Neal Harmon, CEO of VidAngel. “We bridge the gap between
what Hollywood wants to make and what families want to watch. The demand is incredibly high.
Our sales are doubling every couple of months because individuals and families choose to cut
out nudity, violence, and swearing to fit their personal preferences.”

D 14650

S.A.0856
EXHIBIT A

Case 2:16-cv-04109-AB-PLA Document 30-1 Filed 08/22/16 Page 3 of 31 Page ID #:679

For years, Hollywood has created different cuts of their movies to reach different audiences: the
studio cut for theaters, the FCC cut for airlines, the director’s cut for film buffs, and the unrated
cut for prurient audiences. Now VidAngel lets you create “Your Cut.” But rather than unilaterally
deciding what is appropriate for customers, VidAngel allows each person to choose what he or
she wants to cut, according to personal preferences.
“People often ask if this is public censorship,” Harmon continues. “Absolutely not. Directors
have the right to create whatever kind of content they want to create. We don’t endorse
censorship of their content in the public sphere. But in the privacy of the home, it is the
individual’s legal right to watch that content in the way they choose. That right is protected by
law.” (Family Entertainment and Copyright Act of 2005)
VidAngel customers can choose exactly what they want to filter-—such as turning off only Fwords, nude scenes, or any other configuration. 50,000 users have already customized 100,000
movies, a number that will grow dramatically now that VidAngel is open for public use.
“Now you can watch movies with the kids without bad words, violence, nudity or sex scenes,”
states Russ Warner, past CEO for ContentWatch in Huffington Post. “Pick a movie… decide
which words and scenes to remove, and then hit play! It's very simple.” And setting VidAngel up
is so easy, anyone can do it.
The VidAngel seed financing of $2.5 million dollars came from institutional and angel investors
including TPP Capital Advisors, early backer of Omniture; Kickstart Seed Fund; Alta Ventures;
and high-profile angel investors Warren Osborn, Blu-ray packaging pioneer for Hollywood; and
John Richards, former CEO of CleanFilms. The $2.5 Million in seed funding has allowed the
company to launch its public BETA of its popular and unique movie viewing service.
About VidAngel
VidAngel is founded by the Harmon brothers, who believe strongly that everyone should have
the freedom to decide what to watch in their own home. Because the Harmons are movie lovers
with young children, they understand the high demand for content that is both high-quality and
family-friendly. They are best known for creating award winning YouTube sensations with tens
of millions of viewers. They launched award winning YouTube breakthroughs like Orabrush,
Orapup, and Poo~Pourri. www.VidAngel.com
Press Contact:
Dave Vance
VidAngel
208-313-7805
[e-mail]

D 14651

S.A.0857
EXHIBIT A

Case 2:16-cv-04109-AB-PLA Document 30-1 Filed 08/22/16 Page 4 of 31 Page ID #:680
From:
Subject:
Date:
To:

Dave Vance d vance09@gma .com
[B og Name] - He p Fam es Watch C ean Mov es for $1
October 13, 2015 at 12:05 PM
Jordan A en ja en@v dange .com

Hi [name],
As you are well aware, moms everywhere are constantly trying to nd clean, safe entertainment for their
families. We at VidAngel.com would like to team up with [blog name] to make this possible — and give you
some compensation in return.
What is VidAngel?
VidAngel.com is a streaming service similar to Net ix that allows parents to cut violence, language, and/or
sex/nudity out of movies and TV shows. It allows you, as the parent, to decide exactly what your family
should and should not be watching, in a totally legal way.
In addition to making movies clean, VidAngel also makes them cheap ($1 for SD, $2 for HD) using a sellback
option described in this video.Watching a movie on VidAngel is up to 80% cheaper than watching with
another service (iTunes, Amazon Video, Google Play).
What is the VidAngel Af liate Program?
A VidAngel Af liate creates an account at ShareASale.com, connects with VidAngel's pro le, and
uses the ads/links provided by VidAngel to send readers from their blog/site to VidAngel.com.
A VidAngel Af liate earns $7 for each new customer they send our way that watches a movie from
our service.
Visit our Af liate Program Page for more information.
And if that's not enough...
We would like to offer you $25 VidAngel credit so you can fully test the service before promoting it on [blog
name].
We would love to team up with you and give families the service they've wanted for so long!
Let us know what you think, and feel free to contact me with any questions!
Jordan Allen | Assistant Marketing Director
Email: [e-mail]
Phone: [phone]
Check out our new site!

S.A.0858

D 14393
EXHIBIT A

Case 2:16-cv-04109-AB-PLA Document 30-1 Filed 08/22/16 Page 5 of 31 Page ID #:681
7/20/2016

Screen Shot 2016-07-15 at 5.01.39 PM.png

https://drive google.com/drive/folders/0B0COzmRd1Nl4TEV1Nkdvc3hpcDQ

1/1

D 14630

S.A.0859
EXHIBIT A

Case 2:16-cv-04109-AB-PLA Document 30-1 Filed 08/22/16 Page 6 of 31 Page ID #:682
7/20/2016

Screen Shot 2016-07-15 at 4.56.42 PM.png

https://drive google.com/drive/folders/0B2onm9GeBvjbdHdLcmpTN3JqYlk

1/1

D 14629

S.A.0860
EXHIBIT A

Case 2:16-cv-04109-AB-PLA Document 30-1 Filed 08/22/16 Page 7 of 31 Page ID #:683
7/20/2016

Screen Shot 2016-07-15 at 4.56.09 PM.png

https://drive google.com/drive/folders/0B2onm9GeBvjbdHdLcmpTN3JqYlk

1/1

D 14627

S.A.0861
EXHIBIT A

Case 2:16-cv-04109-AB-PLA Document 30-1 Filed 08/22/16 Page 8 of 31 Page ID #:684
7/20/2016

Screen Shot 2016-07-15 at 4.55.54 PM.png

https://drive google.com/drive/folders/0B2onm9GeBvjbdHdLcmpTN3JqYlk

1/1

D 14626

S.A.0862
EXHIBIT A

Case 2:16-cv-04109-AB-PLA Document 30-1 Filed 08/22/16 Page 9 of 31 Page ID #:685
7/20/2016

Screen Shot 2016-07-15 at 4.53.08 PM.png

https://drive google.com/drive/folders/0B2onm9GeBvjbdHdLcmpTN3JqYlk

1/1

D 14623

S.A.0863
EXHIBIT A

Case 2:16-cv-04109-AB-PLA Document 30-1 Filed 08/22/16 Page 10 of 31 Page ID #:686
7/20/2016

Screen Shot 2016-07-15 at 4.51.26 PM.png

https://drive google.com/drive/folders/0B2onm9GeBvjbdHdLcmpTN3JqYlk

1/1

D 14622

S.A.0864
EXHIBIT A

Case 2:16-cv-04109-AB-PLA Document 30-1 Filed 08/22/16 Page 11 of 31 Page ID #:687
7/20/2016

Screen Shot 2016-07-15 at 4.49.17 PM.png

https://drive google.com/drive/folders/0B2onm9GeBvjbdHdLcmpTN3JqYlk

1/1

D 14621

S.A.0865
EXHIBIT A

Case 2:16-cv-04109-AB-PLA Document 30-1 Filed 08/22/16 Page 12 of 31 Page ID #:688

S.A.0866
EXHIBIT A

Case 2:16-cv-04109-AB-PLA Document 30-1 Filed 08/22/16 Page 13 of 31 Page ID #:689
7/20/2016

image.png

https://drive google.com/drive/folders/0B2onm9GeBvjbdHdLcmpTN3JqYlk

1/1

D 14607

S.A.0867
EXHIBIT A

Case 2:16-cv-04109-AB-PLA Document 30-1 Filed 08/22/16 Page 14 of 31 Page ID #:690

S.A.0868
EXHIBIT A

Case 2:16-cv-04109-AB-PLA Document 30-1 Filed 08/22/16 Page 15 of 31 Page ID #:691

VidAngel ad with Matt Meese from Studio C
available at: https://youtu.be/9XOjdARr87I

PL0000541
S.A.0869

EXHIBIT A

Case 2:16-cv-04109-AB-PLA Document 30-1 Filed 08/22/16 Page 16 of 31 Page ID #:692

S.A.0870
EXHIBIT A

Case 2:16-cv-04109-AB-PLA Document 30-1 Filed 08/22/16 Page 17 of 31 Page ID #:693

S.A.0871
EXHIBIT A

Case 2:16-cv-04109-AB-PLA Document 30-1 Filed 08/22/16 Page 18 of 31 Page ID #:694

S.A.0872
EXHIBIT A

Case 2:16-cv-04109-AB-PLA Document 30-1 Filed 08/22/16 Page 19 of 31 Page ID #:695

S.A.0873
EXHIBIT A

Case 2:16-cv-04109-AB-PLA Document 30-1 Filed 08/22/16 Page 20 of 31 Page ID #:696

S.A.0874
EXHIBIT A

Case 2:16-cv-04109-AB-PLA Document 30-1 Filed 08/22/16 Page 21 of 31 Page ID #:697

S.A.0875
EXHIBIT A

Case 2:16-cv-04109-AB-PLA Document 30-1 Filed 08/22/16 Page 22 of 31 Page ID #:698

S.A.0876
EXHIBIT A

Case 2:16-cv-04109-AB-PLA Document 30-1 Filed 08/22/16 Page 23 of 31 Page ID #:699

S.A.0877
EXHIBIT A

Case 2:16-cv-04109-AB-PLA Document 30-1 Filed 08/22/16 Page 24 of 31 Page ID #:700

S.A.0878
EXHIBIT A

Case 2:16-cv-04109-AB-PLA Document 30-1 Filed 08/22/16 Page 25 of 31 Page ID #:701

S.A.0879
EXHIBIT A

Case 2:16-cv-04109-AB-PLA Document 30-1 Filed 08/22/16 Page 26 of 31 Page ID #:702

S.A.0880
EXHIBIT A

Case 2:16-cv-04109-AB-PLA Document 30-1 Filed 08/22/16 Page 27 of 31 Page ID #:703

S.A.0881
EXHIBIT A

Case 2:16-cv-04109-AB-PLA Document 30-1 Filed 08/22/16 Page 28 of 31 Page ID #:704

S.A.0882
EXHIBIT A

Case 2:16-cv-04109-AB-PLA Document 30-1 Filed 08/22/16 Page 29 of 31 Page ID #:705

S.A.0883
EXHIBIT A

Case 2:16-cv-04109-AB-PLA Document 30-1 Filed 08/22/16 Page 30 of 31 Page ID #:706

S.A.0884
EXHIBIT A

Case 2:16-cv-04109-AB-PLA Document 30-1 Filed 08/22/16 Page 31 of 31 Page ID #:707

S.A.0885
EXHIBIT A

Case 2:16-cv-04109-AB-PLA Document 30-3 Filed 08/22/16 Page 1 of 2 Page ID #:709

EXHIBIT C

S.A.0886

Case 2:16-cv-04109-AB-PLA Document 30-3 Filed 08/22/16 Page 2 of 2 Page ID #:710

S.A.0887
EXHIBIT C

Case 2:16-cv-04109-AB-PLA Document 30-7 Filed 08/22/16 Page 1 of 27 Page ID #:721

EXHIBIT G

S.A.0888

Case 2:16-cv-04109-AB-PLA Document 30-7 Filed 08/22/16 Page 2 of 27 Page ID #:722

S.A.0889
EXHIBIT G

Case 2:16-cv-04109-AB-PLA Document 30-7 Filed 08/22/16 Page 3 of 27 Page ID #:723

S.A.0890
EXHIBIT G

Case 2:16-cv-04109-AB-PLA Document 30-7 Filed 08/22/16 Page 4 of 27 Page ID #:724

S.A.0891
EXHIBIT G

Case 2:16-cv-04109-AB-PLA Document 30-7 Filed 08/22/16 Page 5 of 27 Page ID #:725

S.A.0892
EXHIBIT G

Case 2:16-cv-04109-AB-PLA Document 30-7 Filed 08/22/16 Page 6 of 27 Page ID #:726

S.A.0893
EXHIBIT G

Case 2:16-cv-04109-AB-PLA Document 30-7 Filed 08/22/16 Page 7 of 27 Page ID #:727

S.A.0894
EXHIBIT G

Case 2:16-cv-04109-AB-PLA Document 30-7 Filed 08/22/16 Page 8 of 27 Page ID #:728

S.A.0895
EXHIBIT G

Case 2:16-cv-04109-AB-PLA Document 30-7 Filed 08/22/16 Page 9 of 27 Page ID #:729

S.A.0896
EXHIBIT G

Case 2:16-cv-04109-AB-PLA Document 30-7 Filed 08/22/16 Page 10 of 27 Page ID #:730

S.A.0897
EXHIBIT G

Case 2:16-cv-04109-AB-PLA Document 30-7 Filed 08/22/16 Page 11 of 27 Page ID #:731

S.A.0898
EXHIBIT G

Case 2:16-cv-04109-AB-PLA Document 30-7 Filed 08/22/16 Page 12 of 27 Page ID #:732

S.A.0899
EXHIBIT G

Case 2:16-cv-04109-AB-PLA Document 30-7 Filed 08/22/16 Page 13 of 27 Page ID #:733

S.A.0900
EXHIBIT G

Case 2:16-cv-04109-AB-PLA Document 30-7 Filed 08/22/16 Page 14 of 27 Page ID #:734

S.A.0901
EXHIBIT G

Case 2:16-cv-04109-AB-PLA Document 30-7 Filed 08/22/16 Page 15 of 27 Page ID #:735

S.A.0902
EXHIBIT G

Case 2:16-cv-04109-AB-PLA Document 30-7 Filed 08/22/16 Page 16 of 27 Page ID #:736

S.A.0903
EXHIBIT G

Case 2:16-cv-04109-AB-PLA Document 30-7 Filed 08/22/16 Page 17 of 27 Page ID #:737

S.A.0904
EXHIBIT G

Case 2:16-cv-04109-AB-PLA Document 30-7 Filed 08/22/16 Page 18 of 27 Page ID #:738

S.A.0905
EXHIBIT G

Case 2:16-cv-04109-AB-PLA Document 30-7 Filed 08/22/16 Page 19 of 27 Page ID #:739

S.A.0906
EXHIBIT G

Case 2:16-cv-04109-AB-PLA Document 30-7 Filed 08/22/16 Page 20 of 27 Page ID #:740

S.A.0907
EXHIBIT G

Case 2:16-cv-04109-AB-PLA Document 30-7 Filed 08/22/16 Page 21 of 27 Page ID #:741

S.A.0908
EXHIBIT G

Case 2:16-cv-04109-AB-PLA Document 30-7 Filed 08/22/16 Page 22 of 27 Page ID #:742

S.A.0909
EXHIBIT G

Case 2:16-cv-04109-AB-PLA Document 30-7 Filed 08/22/16 Page 23 of 27 Page ID #:743

S.A.0910
EXHIBIT G

Case 2:16-cv-04109-AB-PLA Document 30-7 Filed 08/22/16 Page 24 of 27 Page ID #:744

S.A.0911
EXHIBIT G

Case 2:16-cv-04109-AB-PLA Document 30-7 Filed 08/22/16 Page 25 of 27 Page ID #:745

S.A.0912
EXHIBIT G

Case 2:16-cv-04109-AB-PLA Document 30-7 Filed 08/22/16 Page 26 of 27 Page ID #:746

How $1 Movies Work on VidAngel Sellback
available at: https://youtu.be/wvcF4x1d0xo

PL0000234

S.A.0913

EXHIBIT G

Case 2:16-cv-04109-AB-PLA Document 30-7 Filed 08/22/16 Page 27 of 27 Page ID #:747

How VidAngel $1 Movies Work in 15 Seconds
available at: https://youtu.be/map6EIP41bY

PL0000158

S.A.0914

EXHIBIT G

Case 2:16-cv-04109-AB-PLA Document 30-10 Filed 08/22/16 Page 1 of 7 Page ID #:774

EXHIBIT J

S.A.0915

Case 2:16-cv-04109-AB-PLA Document 30-10 Filed 08/22/16 Page 2 of 7 Page ID #:775

S.A.0916
EXHIBIT J

Case 2:16-cv-04109-AB-PLA Document 30-10 Filed 08/22/16 Page 3 of 7 Page ID #:776

S.A.0917
EXHIBIT J

Case 2:16-cv-04109-AB-PLA Document 30-10 Filed 08/22/16 Page 4 of 7 Page ID #:777

S.A.0918
EXHIBIT J

Case 2:16-cv-04109-AB-PLA Document 30-10 Filed 08/22/16 Page 5 of 7 Page ID #:778

S.A.0919
EXHIBIT J

Case 2:16-cv-04109-AB-PLA Document 30-10 Filed 08/22/16 Page 6 of 7 Page ID #:779

S.A.0920
EXHIBIT J

Case 2:16-cv-04109-AB-PLA Document 30-10 Filed 08/22/16 Page 7 of 7 Page ID #:780

S.A.0921
EXHIBIT J

Case 2:16-cv-04109-AB-PLA Document 30-30 Filed 08/22/16 Page 1 of 1 Page ID #:869

EXHIBIT DD

REDACTED VERSION OF
DOCUMENT PROPOSED TO BE
FILED UNDER SEAL

S.A.0922

Case 2:16-cv-04109-AB-PLA Document 30-31 Filed 08/22/16 Page 1 of 1 Page ID #:870

EXHIBIT EE

REDACTED VERSION OF
DOCUMENT PROPOSED TO BE
FILED UNDER SEAL

S.A.0923

Case 2:16-cv-04109-AB-PLA Document 29 Filed 08/22/16 Page 1 of 15 Page ID #:646

1 GLENN D. POMERANTZ (SBN 112503)
[e-mail]
2 KELLY M. KLAUS (SBN 161091)
[e-mail]
3 ROSE LEDA EHLER (SBN 296523)
[e-mail]
4 ALLYSON R. BENNETT (SBN 302090)
[e-mail]
5 MUNGER, TOLLES & OLSON LLP
355 South Grand Avenue, Thirty-Fifth Floor
6 Los Angeles, California 90071-1560
Telephone: [phone]
7 Facsimile: [phone]
8 Attorneys for Plaintiffs and
Counter-Defendants
9
10

UNITED STATES DISTRICT COURT

11

CENTRAL DISTRICT OF CALIFORNIA

12

WESTERN DIVISION

13
14 DISNEY ENTERPRISES, INC.;
LUCASFILM LTD. LLC;
15 TWENTIETH CENTURY FOX FILM
CORPORATION and WARNER
16 BROS. ENTERTAINMENT INC.,
Plaintiffs and CounterDefendants,

17
18
19
20
21
22

vs.
VIDANGEL, INC.,
Defendant and CounterClaimant.

Case No. 16-cv-04109-AB (PLAx)
REDACTED VERSION OF
DOCUMENT PROPOSED TO BE
FILED UNDER SEAL
DECLARATION OF ROBERT
SCHUMANN IN SUPPORT OF
PLAINTIFFS’ MOTION FOR
PRELIMINARY INJUNCTION
Judge: Hon. André Birotte Jr.
Date: October 24, 2016
Time: 10:00 a.m.
Crtrm.: 4
Trial Date:

None Set

23
24
25
26
27
28
S.A.0924
DECLARATION OF ROBERT SCHUMANN
CASE NO. 16-CV-04109-AB (PLAX)

Case 2:16-cv-04109-AB-PLA Document 29 Filed 08/22/16 Page 2 of 15 Page ID #:647

DECLARATION OF ROBERT SCHUMANN

1
2

I, Robert Schumann, declare as follows:

3

1.

I have been retained by Plaintiffs as an expert in this litigation. I have

4 personal knowledge of the facts set forth herein, except as to those stated on
5 information and belief and, as to those, I am informed and believe them to be true.
6 If called as a witness, I could and would testify competently to the facts stated
7 herein.
8

2.

I have worked in the computer and technology industry for the past 31

9 years. In 1985, I received a Bachelor of Science in Computer Science from
10 Rochester Institute of Technology. Since that time, I have worked in various facets
11 of the computer industry, in connection with the design and development of
12 computer software, computer networking systems, computer automation, consumer
13 electronics, large-scale database processing, physical and electronic Audio/Video
14 distribution systems, digital security and other content-protection systems. During
15 this time, I have been personally involved in and overseen the development and
16 licensing of sophisticated technical specifications including work on industry17 standard specifications for digital content processing and security; the design and
18 development of software in a variety of computer languages, including C++; the
19 design and development of consumer electronics products and devices, including
20 hardware DVD players, web-based services and the integration and licensing of
21 third-party software packages, technologies and associated technical specifications.
22

3.

I have seventeen issued and pending United States Patents, many of

23 which involve digital content protection and consumer products. I was a founding
24 member of the Digital Watermarking Alliance, an industry trade group for digital
25 watermarking, and have spoken extensively at trade shows and other professional
26 venues on content security.
27

4.

From August of 1999 until October 2008, I was President and General

28 Manager of Cinea, Inc. Cinea specialized in developing and operating content
-2S.A.0925
DECLARATION OF ROBERT SCHUMANN
CASE NO. 16-CV-04109-AB (PLAX)

Case 2:16-cv-04109-AB-PLA Document 29 Filed 08/22/16 Page 3 of 15 Page ID #:648

1 security solutions for digital content, particularly motion picture content. Among
2 other products, Cinea developed and sold the SView DVD player for use in
3 professional content production as well as distribution of screeners to highly
4 controlled audiences. This was an enhanced, DVD CCA-licensed DVD player that
5 incorporated a Cinea-proprietary content security system in addition to the Content
6 Scramble System (CSS).
7

5.

I have previously testified in three cases regarding the Content

8 Scramble System and related technology: Universal City Studios, Inc. v. Reimerdes,
9 No. 00-Civ.-0277 (LAK) (S.D.N.Y. 2000), 321 Studios, Inc. v. Metro Goldwyn
10 Mayer Studios, Inc., No. C-02-1995-SI (N.D. Cal. 2004) and RealNetworks, Inc. v.
11 DVD Copy Control Association, Inc.,641 F. Supp. 2d 913 (N.D. Cal. 2009). I also
12 testified in an arbitration as an expert on the online video industry on behalf of
13 NBCUniversal and Hulu. Attached as Exhibit A is a copy of my resume.
14

6.

The following analysis is based upon my professional experience with

15 CSS, AACS and BD+, as well as my usage and testing of the VidAngel service. I
16 have also reviewed associated design and development documents, VidAngel’s
17 Answer and Counter Complaint, and the deposition testimony of Neal Harmon. I
18 have also reviewed the other documents identified in Exhibit B as well as any other
19 documents referenced in this Declaration.
20
21

The VidAngel Service
7.

VidAngel is an online streaming service that allows customers to watch

22 film and television content via the Internet on a variety of devices, including
23 personal computers, iPads, mobile phones, and on their television through a device
24 like Apple TV, Roku, or Google Chromecast. It also requires users to set at least
25 one filter. The filters have the effect of muting audio content or skipping
26 audiovisual content in categories specified by VidAngel and selected by the users.
27 Based on my own investigation of the VidAngel service, documents provided by
28
S.A.0926

-3DECLARATION OF ROBERT SCHUMANN
CASE NO. 16-CV-04109-AB (PLAX)

Case 2:16-cv-04109-AB-PLA Document 29 Filed 08/22/16 Page 4 of 15 Page ID #:649

1 VidAngel and the deposition testimony of Neal Harmon, it is my professional
2 opinion that VidAngel operates as follows.
3

8.

VidAngel delivers content to users by streaming that content over the

4 Internet. In this context, “streaming” simply means the delivery of content to a
5 user’s device over the Internet. Here, VidAngel streams content to consumers
6 using, among other technologies, a video content delivery protocol called HTTP
7 Live Streaming, or HLS. Rather than using a single huge file, HLS divides the
8 content into many short media segments, with each segment generally lasting
9 between two and ten seconds and downloaded by the user’s device individually. At
10 the beginning of an HLS streaming session, the user’s device downloads an index
11 file, which provides the device a list of segment files that the device can then request
12 and play in order to watch the content.
13

9.

VidAngel’s filtering technology allows it to

14
15
16
Until the lawsuit was filed, one category of filterable content

17

18 that VidAngel offered was skipping the opening or closing credits.
19
20

10.

When a user streams a movie or television show from VidAngel, the

21 filtering technology
22
23
24
25
26
27

11.

28
S.A.0927

-4DECLARATION OF ROBERT SCHUMANN
CASE NO. 16-CV-04109-AB (PLAX)

Case 2:16-cv-04109-AB-PLA Document 29 Filed 08/22/16 Page 5 of 15 Page ID #:650

1
2
3
4
5
6
7
8
9
10
11
12

12.

Based on my review of VidAngel’s documents and the deposition

13 testimony of Neal Harmon, I believe that
14
15
16
17
18
19
20
21
22

VidAngel Obtains Plaintiffs’ Content On DVDs And Blu-ray Discs

23

13.

To implement its streaming service, VidAngel requires a digital copy of

24 Plaintiffs’ films and television content. To acquire the digital version of a particular
25 piece of content VidAngel purchases copies of Plaintiffs’ movies and television
26 shows on DVDs and Blu-ray discs, circumvents the digital content protection
27 associated with the Blu-ray and DVD content and then copies that content onto its
28
S.A.0928

-5DECLARATION OF ROBERT SCHUMANN
CASE NO. 16-CV-04109-AB (PLAX)

Case 2:16-cv-04109-AB-PLA Document 29 Filed 08/22/16 Page 6 of 15 Page ID #:651

1 servers. This process of removing content protection then copying the unprotected
2 content is popularly referred to as “ripping.”
3

14.

A DVD, or “Digital Versatile Disc,” is a high capacity digital storage

4 medium, which can store data such as personal files, emails, etc. Depending on its
5 configuration, a DVD can store up to a maximum of 18 gigabytes of data. By
6 comparison, a typical audio CD will store about 700 megabytes of data. Since one
7 gigabyte equals 1024 megabytes, a 9 gigabyte DVD holds many times more—more
8 than 12 times more—data than a 700 megabyte CD.
9

15.

DVDs’ large capacities allow them to store motion pictures (movies).

10 DVDs used to store motion pictures will most often hold approximately 9 gigabytes
11 of data. Content on DVDs is stored in a Standard Definition format. This format is
12 a relatively low-resolution format (640x480 pixels per frame) and thus provides a
13 good picture but not a modern High Definition image.
14

16.

Blu-ray discs are a newer high capacity storage medium. The term

15 “blu-ray” refers to the blue laser that is used to read the disc. Blu-ray discs can store
16 even more data than DVDs. A Blu-ray disc can store a maximum of 128 gigabytes
17 of data, and, when used for motion pictures, will most commonly hold about 50
18 gigabytes—more than five times the storage capacity of the typical DVD. Content
19 on Blu-ray discs is encoded in a high definition format, typically 1080P, which
20 represents an image of 1920x1280 pixels per frame. Blu-ray discs have a
21 significantly higher image quality than DVD discs due to their denser pixel count.
22

17.

Subject to the security and encryption restrictions discussed below,

23 both DVDs and Blu-ray discs are viewable either on a television (using a stand24 alone DVD player or Blu-ray player) or on a computer with a DVD or Blu-ray drive
25 and specialized playback software.
26

18.

DVDs and Blu-ray discs offer many advantages over VHS cassettes,

27 including a much better viewing experience, but they also make a more attractive
28 target for individuals to copy their content without authorization. When one copies
-6S.A.0929
DECLARATION OF ROBERT SCHUMANN
CASE NO. 16-CV-04109-AB (PLAX)

Case 2:16-cv-04109-AB-PLA Document 29 Filed 08/22/16 Page 7 of 15 Page ID #:652

1 the contents from a VHS tape, the quality of the copy is less than that of the original.
2 The same is not true for digital formats like DVDs and Blu-ray discs. For those
3 formats, the copy and the original are of the same quality. Further, digital copies are
4 much easier to distribute than analog copies. Accordingly, a movie that has been
5 copied can easily be uploaded online and distributed around the world. There are,
6 therefore, security measures that can be used for both DVDs and Blu-ray discs to
7 protect their contents.
8

19.

Based on my review of VidAngel’s documents, my own review of the

9 VidAngel service, and the deposition testimony of Neal Harmon, I believe that
10 VidAngel almost always uses
11 than

as the source of the digital copies rather

. This allows VidAngel to make higher quality copies of the movies and

12 television shows. VidAngel will use
13 only when

as the source for their ripped content

are unavailable

14
15

See Ex. D.

16

CSS Is An Effective Access-Control System For DVDs

17

20.

Plaintiffs in this case use the Content Scramble System (“CSS”) in

18 order to protect their copyrighted works on DVDs. CSS is a digital rights
19 management system that prevents access to—but not viewing of—digital copies of
20 works stored on DVDs in order to prevent effective copying. Both DVD player
21 manufacturers and DVD content distributors can obtained authorization to use CSS
22 only through a license from the DVD Copy Control Association (“DVD CCA”). A
23 license allows a DVD player manufacturer to obtain the necessary requirements and
24 specifications for building a CSS-compliant DVD player (i.e., one that is capable of
25 lawfully accessing and playing a DVD that is protected by CSS) and for obtaining
26 access to the necessary “keys” that enable the content on a CSS-protected DVD to
27 be lawfully unscrambled.
28
S.A.0930

-7DECLARATION OF ROBERT SCHUMANN
CASE NO. 16-CV-04109-AB (PLAX)

Case 2:16-cv-04109-AB-PLA Document 29 Filed 08/22/16 Page 8 of 15 Page ID #:653

1

21.

CSS uses several layers of different types of protection mechanisms,

2 including authentication, encryption, secure storage of encryption keys, time3 variable session keys, and other technological measures. CSS works slightly
4 differently depending on whether the user is using a computer or a standalone DVD
5 player to access a DVD disc. Because I understand VidAngel to use a computer to
6 circumvent CSS protections from DVDs, this declaration focuses on the aspects of
7 CSS that control access to CSS-protected content with computers.
8

22.

CSS has control measures that operate across three different mediums:

9 the DVD disc itself, software players (players that are implemented primarily as
10 software on computer systems) and the DVD drive (an optical DVD Disc reader that
11 is capable of operating as an internal or peripheral component of a personal
12 computer or other computing device). First, the data on the DVD disc is encrypted,
13 with decryption “keys” stored in areas of the disc that are inaccessible without
14 software that implements CSS. Second, the DVD drive provides an additional layer
15 of protection. It requires authentication, which requires that receiving software
16 programs are trustworthy, and uses other methods of encryption before it will
17 transmit certain types of information from the disc.
18

23.

For example, CSS provides for a “locking” mechanism, whereby a

19 computer’s DVD Drive will not allow access to CSS-protected content on a DVD
20 disc unless and until the DVD Drive has confirmed that the software seeking access
21 is an authentic CSS-compliant DVD player that can be trusted. If the DVD player
22 software is unable to provide this authentication, indicating to the DVD drive that it
23 is “safe” to release the DVD data, then the protected contents of the DVD will
24 remain “locked” in the DVD drive.
25

24.

CSS also utilizes encryption. Encryption selectively scrambles the

26 video stream. Only devices that have access to the “decryption keys” can
27 descramble the data. This encryption provides an additional layer of copy- and
28 access-protection to the protection provided by the “locking” mechanism. Thus,
-8S.A.0931
DECLARATION OF ROBERT SCHUMANN
CASE NO. 16-CV-04109-AB (PLAX)

Case 2:16-cv-04109-AB-PLA Document 29 Filed 08/22/16 Page 9 of 15 Page ID #:654

1 even if one were able to defeat the “locking” mechanism and gain unauthorized
2 access to the protected files on the DVD disc, the data would be scrambled and thus
3 neither viewable nor playable.
4

25.

In addition to encryption, CSS utilizes an “authentication” mechanism,

5 which requires that an authorized player engage in a bi-directional dialogue with the
6 DVD Drive before playing back the video content of a DVD disc. This
7 authentication mechanism further ensures that the DVD content cannot be played
8 back unless such authentication with the DVD Drive is successful. Authentication
9 with the DVD Drive will fail if the DVD being played is not in the DVD Drive.
10

26.

Notably, the process described above allows a licensed-DVD player to

11 enable the viewing of an authorized DVD’s contents. The DVD CCA license
12 prohibits DVD players from copying, or enabling the copying of, the content on a
13 CSS-protected DVD.
14
15

AACS And BD+ Are Effective Access-Control Systems For Blu-ray Discs
27.

In order to protect the copyrighted content on Blu-ray discs, all

16 Plaintiffs use the Advanced Access Content System (“AACS”), and Twentieth
17 Century Fox Film Corporation (“Fox”) additionally uses BD+ protection for content
18 on Fox’s Blu-ray discs. Like CSS, both AACS and BD+ effectively prevent access
19 to the digital content on Blu-ray discs, while still allowing the viewing of that
20 content through the use of licensed Blu-ray players. Also similar to CSS, Blu-ray
21 player manufacturers and Blu-ray content distributors can obtain authorization to
22 use AACS and BD+ only through the authorized licensing organization.
23

28.

Like CSS, AACS uses a combination of encryption and authentication

24 to protect the content on Blu-ray discs. The content on a Blu-ray disc is encrypted.
25 It can be decrypted only by using certain “keys,” called “Title Keys.” Each Title
26 Key is also encrypted, using a different key generated from the “Media Key” (which
27 is necessary to decrypt the encrypted Title Key) stored on the Blu-ray disc, along
28 with the encrypted Title Key. The place where the Media Key is stored is called the
-9S.A.0932
DECLARATION OF ROBERT SCHUMANN
CASE NO. 16-CV-04109-AB (PLAX)

Case 2:16-cv-04109-AB-PLA Document 29 Filed 08/22/16 Page 10 of 15 Page ID #:655

1 “Media Key Block.” In addition to storing Keys, the Media Key Block also
2 provides a mechanism whereby certain Blu-ray players can be prevented from being
3 able to play back content if the players become compromised.
4

29.

The Blu-ray disc also contains a Volume ID, which is an identifier

5 stored on the disc.
6

30.

In order to play content protected by AACS, licensed Blu-ray players

7 contain several “Device Keys” that allow the players to decrypt the content on the
8 Blu-ray disc. First, the Blu-ray player must decrypt the Media Key Block, which
9 provides the player with the Media Key. Second, the player must obtain the Volume
10 ID, which requires the player to have the correct certificate from the licensing body
11 that develops and licenses AACS (the Advanced Access Content System Licensing
12 Administrator (“AACS LA”)). Only by using both the Volume ID and the Media
13 Key can the player decrypt the Title Key, which is, in turn, used to decrypt the
14 encrypted content on the Blu-ray disc.
15

31.

In the absence of the appropriate keys and certificate, even if one were

16 able to copy the contents off a Blu-ray disc onto another storage device, the content
17 would still be encrypted. Thus, the content would be neither viewable nor playable.
18 Nor would a user be able to manipulate this encrypted content, such as by editing
19 the content or changing the files from one format to another.
20

32.

BD+ is a second, optional, layer of protection that can be used on top of

21 AACS. BD+ is a protection system that is implemented through the use of security
22 programs that are specific to a particular movie title (or a particular version of that
23 movie title) that are included on the Blu-ray disc. Those programs are then read and
24 executed by a special BD+ software module, known as a “virtual machine,” that is
25 included in licensed Blu-ray players. When executed by the Virtual Machine, the
26 BD+ security programs can perform various functions, including determining
27 whether the Blu-ray player has been compromised.
28
S.A.0933

-10DECLARATION OF ROBERT SCHUMANN
CASE NO. 16-CV-04109-AB (PLAX)

Case 2:16-cv-04109-AB-PLA Document 29 Filed 08/22/16 Page 11 of 15 Page ID #:656

1

33.

In addition, when a disc is protected by BD+, the files on the disc can

2 be scrambled in a way that is specific to the relevant title. The BD+ virtual machine
3 then obtains the title-specific code from the disc as well as a “fix-up” table that
4 allows the virtual machine to descramble the scrambled content. In the absence of a
5 licensed Blu-ray player, the content would remain scrambled and could not be
6 viewed or played.
7

34.

A key feature of both the AACS and BD+ protection systems is the

8 ability to dynamically change, over time, components of the system and thus allow
9 content owners to continually update their security protocols. Thus, entities that
10 seek to illegally remove AACS and/or BD+ protections from Blu-ray discs can do
11 so only if they are also able to continually update their software.
12 VidAngel Removes The Encryption From CSS-Protected DVDs And BD+ And
13

AACS-Protected Blu-ray Discs And Copies The Unencrypted Contents To Its

14

Internal Computer System

15

35.

As noted above, in order to obtain digital copies of Plaintiffs’ content,

16 VidAngel must copy that content off of DVDs and Blu-ray discs. VidAngel does so
17 as follows:
18

36.

Regardless of whether VidAngel uses DVDs or Blu-ray discs,
. In the

19

20 ordinary course, however, those files would remain encrypted by CSS, AACS
21 and/or BD+. Accordingly, even if VidAngel could copy the files, it could not view
22 them, play them, or manipulate them. VidAngel admits that it uses a product called
23 AnyDVD HD to remove CSS protection from DVDs and AACS and BD+
24 protection from Blu-ray discs.
25
26

37.

VidAngel places the disc, whether it be a Blu-ray disc or a DVD
AnyDVD HD then runs in the background,

27 circumventing the encryption from the DVD or Blu-ray disc.
28
S.A.0934

-11DECLARATION OF ROBERT SCHUMANN
CASE NO. 16-CV-04109-AB (PLAX)

Case 2:16-cv-04109-AB-PLA Document 29 Filed 08/22/16 Page 12 of 15 Page ID #:657

1
2

.

3

38.

AnyDVD HD is a well-known, windows-based circumvention software

4 that allows for read-access to DVDs protected by CSS and Blu-ray discs protected
5 by AACS and BD+, in the process removing those protections from the Blu-ray and
6 DVD discs.
7

39.

AnyDVD is currently sold by RedFox. RedFox is based in Belize.

8 According to RedFox’s website, RedFox is run by developers and staff members of
9 the former company SlySoft,1 whose owner was previously convicted in a foreign
10 jurisdiction of providing tools to circumvent AACS encryption.2 SlySoft, whose
11 logo was a red fox, was shut down earlier this year due to “regulatory
12 requirements.”3
13

VidAngel Prepares The Digital Files Obtained From The DVD And Blu-ray

14

Discs For Filtering And Streaming
40.

15

After obtaining the digital contents of DVDs and Blu-ray discs,

16 VidAngel prepares the content for filtering and streaming.
17
18
19
20
21
22
23

1

See “About,” RedFox.bz available at https://www.redfox.bz/en/about.html (last
visited Aug. 21, 2016).

2

Slysoft DVD Ripper Owner Found Guilty in Criminal Action, TorrentFreek
24 available at https://torrentfreak.com/slysoft-dvd-ripper-owner-found-guilty-in25 criminal-action-140403/ (last visited Aug. 21, 2106).
3
26 See Eric Bangeman, “DRM Defeaters Defeated? SlySoft Ceases Operations”,
ArsTechnica.com, available at http://arstechnica.com/tech-policy/2016/02/drm27 defeaters-defeated-slysoft-ceases-operations/ (last visited Aug. 21, 2016); see also
28 SlySoft, available at http://www.slysoft.com/ (last visited Aug. 21, 2016).
S.A.0935

-12DECLARATION OF ROBERT SCHUMANN
CASE NO. 16-CV-04109-AB (PLAX)

Case 2:16-cv-04109-AB-PLA Document 29 Filed 08/22/16 Page 13 of 15 Page ID #:658

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19

.

20

By Removing The Encryption From DVDs And Blu-Ray Discs And Allowing

21

The Digital Content Of The Discs To Be Copied Onto A Computer In A

22 Useable Format, VidAngel Circumvents The Technological Measures Designed
23 To Prevent The Accessing And Copying of Copyrighted Content On DVDs And
24
25

Blu-ray Discs
43.

As described above, VidAngel not only accesses and copies files off of

26 DVDs and Blu-ray discs, but it does so in a way that allows the files to be viewed,
27 played, and edited. None of those functions would be possible if CSS, AACS or
28 BD+ protections remained in place. Rather, VidAngel uses the circumvention
-13S.A.0936
DECLARATION OF ROBERT SCHUMANN
CASE NO. 16-CV-04109-AB (PLAX)

Case 2:16-cv-04109-AB-PLA Document 29 Filed 08/22/16 Page 14 of 15 Page ID #:659

1 software, AnyDVD HD, to remove the encryption from DVDs and Blu-ray discs to
2 make a usable copy of the digital content on the discs.
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
S.A.0937

-14DECLARATION OF ROBERT SCHUMANN
CASE NO. 16-CV-04109-AB (PLAX)

Case 2:16-cv-04109-AB-PLA Document 29 Filed 08/22/16 Page 15 of 15 Page ID #:660

S.A.0938

Case 2:16-cv-04109-AB-PLA Document 28 Filed 08/22/16 Page 1 of 14 Page ID #:632

1 GLENN D. POMERANTZ (SBN 112503)
[e-mail]
2 KELLY M. KLAUS (SBN 161091)
[e-mail]
3 ROSE LEDA EHLER (SBN 296523)
[e-mail]
4 ALLYSON R. BENNETT (SBN 302090)
[e-mail]
5 MUNGER, TOLLES & OLSON LLP
355 South Grand Avenue, Thirty-Fifth Floor
6 Los Angeles, California 90071-1560
Telephone: [phone]
7 Facsimile: [phone]
8 Attorneys for Plaintiffs
9
10

UNITED STATES DISTRICT COURT

11

CENTRAL DISTRICT OF CALIFORNIA

12

WESTERN DIVISION

13
14

DISNEY ENTERPRISES, INC.;
15 LUCASFILM LTD. LLC;
TWENTIETH CENTURY FOX FILM
16 CORPORATION and FOX BROS.
ENTERTAINMENT INC.,
17
Plaintiffs and CounterDefendants,
18
19

vs.

20 VIDANGEL, INC.,
21

Defendant and CounterClaimant.

Case No. 16-cv-04109-AB (PLAx)
DECLARATION OF TEDD
CITTADINE IN SUPPORT OF
PLAINTIFFS’ MOTION FOR
PRELIMINARY INJUNCTION
Judge: Hon. André Birotte Jr.
Date: October 24, 2016
Time: 10:00 a.m.
Crtrm.: 4
Trial Date:

None Set

22
23
24
25
26
27
28
S.A.0939
DECLARATION OF TEDD CITTADINE I/S/O PLAINTIFFS’ MOTION FOR PRELIMINARY INJUNCTION
16-CV-04109-AB (PLAX)

Case 2:16-cv-04109-AB-PLA Document 28 Filed 08/22/16 Page 2 of 14 Page ID #:633

1 I, Tedd Cittadine, declare as follows:
2

1.

I am the Senior Vice President, Digital Distribution at 20th Century

3 Fox Home Entertainment, which is part of Plaintiff Twentieth Century Fox Film
4 Corporation (“Fox”). I submit this declaration in support of the motion by Plaintiffs
5 in this action for a preliminary injunction. Except as to those matters stated on
6 information and belief, the facts stated herein are known to me personally. As to
7 those matters stated on information and belief, I am informed of the facts and
8 believe them to be true. If called upon and sworn as a witness, I could and would
9 testify competently to the contents of this Declaration.
10
11

INTRODUCTION
2.

In my position, I generally oversee our digital business, including the

12 negotiation of digital distribution agreements in the United States and Canada with
13 third party companies who provide our copyrighted entertainment content (motion
14 pictures and television shows, collectively “content”) directly to customers. We
15 refer to these business partners as our “clients.” I have worked in digital distribution
16 in various roles at Fox since 2009.
17

3.

From my professional experience, I am familiar with Fox’s efforts to

18 partner with our clients to distribute our content to consumers across a range of
19 digital viewing options. Through publicly available sources, such as industry
20 publications and the media, I also have knowledge about the analogous efforts of
21 other motion picture studios and the general means by which other studios,
22 including the other Plaintiffs in this action, distribute their content.
23

4.

I understand that Defendant VidAngel, Inc. markets a service that

24 allows consumers to stream our content, and the content of other creators of motion
25 pictures and television shows, over the internet for a fee of $1 or $2 a day. This sort
26 of consumer offering—daily access to a particular movie or television show—is
27 known generally as on-demand streaming. VidAngel does not have a license
28 agreement with Fox to copy, distribute or transmit Fox’s copyrighted content.
-1S.A.0940
DECLARATION OF TEDD CITTADINE I/S/O PLAINTIFFS’ MOTION FOR PRELIMINARY INJUNCTION
16-CV-04109-AB (PLAX)

Case 2:16-cv-04109-AB-PLA Document 28 Filed 08/22/16 Page 3 of 14 Page ID #:634

1

5.

In this Declaration, I describe Fox’s digital business generally and the

2 type of immediate and irreparable harm that Fox faces unless VidAngel’s
3 unauthorized exploitation of our content is enjoined: (a) harm to our basic right to
4 control how, when and through which channels our content is disseminated for
5 viewing by consumers; (b) harm to the market for the online distribution of our
6 content and to our relationships with authorized distributors, including undermining
7 the ability of these distributors to provide their licensed offerings; (c) harm to our
8 ability to secure and protect our content in the online environment; and (d) harm to
9 the overall development of the on-demand streaming market by the provision of
10 user-viewing experiences without our rigorous quality controls. I believe that the
11 other Plaintiffs in this lawsuit face similar harm from VidAngel’s unauthorized
12 activities. The threat of these harms has increased as VidAngel has grown in both
13 the number of titles it makes available and in the number of end consumers it serves.
FOX’S DIGITAL BUSINESS

14
15

6.

Fox is widely known and recognized for its motion pictures, many of

16 which are very popular with consumers—just to name a few, The Martian (2015),
17 Avatar (2009) and Home Alone (1990). Fox also has popular television content,
18 including the Homeland series.
19

7.

Fox and its affiliates invest substantial resources to bring motion

20 pictures and television shows to consumers. Each project involves substantial risk
21 because the upfront costs of producing, marketing and distributing a major motion
22 picture can be tens of millions of dollars or more. Our willingness to incur this risk
23 depends on our ability to earn a return on our substantial investment through
24 charging for the rights to reproduce, distribute and perform our content. The
25 success we have in achieving a return on our investment then determines whether
26 we can agree to produce new creative works and how much we can spend in doing
27 so.
28
S.A.0941

-2DECLARATION OF TEDD CITTADINE ISO PLAINTIFFS’ MOTION FOR PRELIMINARY INJUNCTION
16-CV-04109-AB (PLAX)

Case 2:16-cv-04109-AB-PLA Document 28 Filed 08/22/16 Page 4 of 14 Page ID #:635

1

8.

The lynchpin of our business is our ability to charge for the right to

2 reproduce, distribute, perform or otherwise use our intellectual property. Being able
3 to control the exploitation of the exclusive rights we hold in our copyrighted works
4 is crucial to this endeavor. Copyright protection ensures this control, which allows
5 us to earn returns on our substantial investment and to continue producing film and
6 television content in the future.
7

9.

We offer Fox content to the public through a range of offerings that

8 meet customer demand and at retail price points (set by our clients) tailored to those
9 choices. Currently, Fox (as I understand is also true of the other Plaintiffs),
10 individually and through our affiliates and licensees, offer the following options:
11

Customers can see our movies in the theater;

12

they can buy a copy on DVD or Blu-ray Disc (“purchase a physical

13

Disc copy”);

14

they can download and license long-term digital rights to a copy

15

through a service like iTunes or Amazon Video (“purchase a digital

16

download copy”);

17

they can rent a physical copy at a brick-and-mortar store or kiosk, like

18

Redbox;

19

they can rent a movie on demand for a limited period of time through a

20

cable, satellite, or internet video-on-demand platform, such as iTunes

21

or Google Play (transactional “on-demand streaming”);

22

they can access and view a movie on demand through a subscription

23

streaming service like Netflix, Hulu, HBO NOW or HBO GO1

24

(subscription “on-demand streaming”);

25
26

1

HBO offers HBO NOW as a standalone on-demand streaming service. HBO GO
27 also streams on-demand but is included with the HBO cable television subscription
28 channel.
-3S.A.0942
DECLARATION OF TEDD CITTADINE ISO PLAINTIFFS’ MOTION FOR PRELIMINARY INJUNCTION
16-CV-04109-AB (PLAX)

Case 2:16-cv-04109-AB-PLA Document 28 Filed 08/22/16 Page 5 of 14 Page ID #:636

1

they can watch it on a subscription cable television channel like HBO;

2

or

3

they can, eventually, watch it for free on network television.

4 Each of these options is known as a “distribution channel” and is designed to
5 provide different value to consumers matched to their willingness to pay. My
6 business focuses on the multiple online distribution channels.
7

10.

Fox’s digital distribution business has become increasingly important

8 in recent years, and we are always looking for new opportunities to grow our
9 business and respond to consumer demand through partnerships with current and
10 new clients.
11

11.

Fox’s partnerships with clients take time and resources. Including

12 myself, we have approximately 73 individuals who work full time either negotiating
13 or maintaining our relationships with our digital clients.
14

12.

We have also been very deliberate in our digital strategy and the terms

15 and conditions on which we have agreed to license our content to online services
16 like VUDU, iTunes, Google Play, Netflix and others. Just by way of general
17 example, Fox’s agreements for streaming often include, among other terms:
18 (a) detailed provisions requiring technological measures to protect the security of
19 the transmission of the content to ensure against unlawful access, copying and
20 piracy, (b) provisions requiring a certain level of quality for the content’s display, to
21 ensure that consumers are receiving appropriate value, and (c) restrictions on
22 making the content available during certain blackout periods where other clients
23 have paid for exclusive distribution rights. Unlicensed services such as VidAngel
24 act independent of these terms, thereby undermining our business and the market
25 more generally.
26
27
28
S.A.0943

-4DECLARATION OF TEDD CITTADINE ISO PLAINTIFFS’ MOTION FOR PRELIMINARY INJUNCTION
16-CV-04109-AB (PLAX)

Case 2:16-cv-04109-AB-PLA Document 28 Filed 08/22/16 Page 6 of 14 Page ID #:637

1

VIDANGEL THREATENS FOX AND PLAINTIFFS WITH IMMEDIATE

2

AND IRREPARABLE HARM
13.

3

VidAngel threatens a variety of serious and irreparable harms to Fox

4 and the other Plaintiffs if permitted to continue its unauthorized operations.
5 VidAngel Harms Plaintiffs’ Right To Control The Distribution Of Their Content
14.

6

VidAngel’s unlicensed use of Fox’s content threatens the cornerstone

7 of our digital business—exclusive control over the distribution of our copyrighted
8 works. The ultimate success or failure of our business depends on a carefully
9 designed strategy to build demand for our content with consumers across a variety
10 of viewing options provided by our clients. We therefore negotiate with our clients
11 over how (under what conditions), when (on what date and for what duration), what
12 (which titles) and for how much (at what wholesale price) they can obtain the rights
13 to distribute and publicly perform our content.
15.

14

An example of how we strategically exercise our exclusive right to

15 control the dissemination of our content in order to maximize its value is the
16 strategy of “windowing.” At Fox, we enter into agreements with clients that restrict
17 when (in which “window”) after a particular Fox title is released to the home
18 entertainment market that particular client has the right to distribute or perform it.2
19 Clients are generally willing to pay more for the right to distribute or perform
20 movies in an earlier window when that content is new, or newer, to the movie21 watching public. Some clients will pay more for the exclusive right to distribute and
22 perform our movies during a particular time period. Fox must then negotiate
23 restrictions in other license agreements to allow for these exclusivity periods.
24 Because VidAngel operates illegally (free from licensing restrictions), it risks
25
2

Fox’s strategy is unique and the other Plaintiffs likely employ different specific
windowing strategies. Nonetheless, some form of windowing is central to any
27 distribution strategy and allows a content company to match different viewing
28 offerings with the willingness to pay of consumers.
-5S.A.0944
26

DECLARATION OF TEDD CITTADINE ISO PLAINTIFFS’ MOTION FOR PRELIMINARY INJUNCTION
16-CV-04109-AB (PLAX)

Case 2:16-cv-04109-AB-PLA Document 28 Filed 08/22/16 Page 7 of 14 Page ID #:638

1 making our movies available during windows occupied by different distribution
2 channels or exclusivity periods held by one or more specific clients, thus interfering
3 with Fox’s contractual commitments, its relationship with its clients and its ability to
4 negotiate similar deals in the future.
5

16.

I am aware that VidAngel has interfered with legitimate services’

6 negotiated rights by offering Plaintiffs’ content during exclusive windows. The
7 most salient example—albeit of a non-Fox title—is Star Wars: The Force Awakens
8 (2015), owned by Plaintiff Lucasfilm. It is well known that The Force Awakens was
9 an immensely popular motion picture. Its release to the home entertainment market
10 was very much anticipated and scheduled for April 5, 2016. Public reports made
11 clear that it would be available on DVD, Blu-ray Disc and digital download, but that
12 it would not be offered for on-demand streaming in that same window. On the very
13 same day, April 5th, VidAngel released The Force Awakens for on-demand
14 streaming, thereby competing directly with these other exclusive viewing options
15 and preempting legitimate on-demand streaming services.
16

17.

Although Star Wars: The Force Awakens is not a Fox title, unlicensed

17 use of such a popular film concerns me. VidAngel’s conduct shows that it has
18 interfered and (unless enjoined) will continue to interfere with exclusive windowing
19 rights, undermining our clients’ ability to maximize the value of the rights we grant
20 them and, in turn, harming Fox’s relationships with them and ability to negotiate for
21 similar rights in the future.
22 VidAngel Harms Plaintiffs’ Relationships With Clients By Undermining Their
23 Ability to Provide Licensed Offerings
24

18.

Fox’s relationships with the companies that distribute and perform our

25 content are very important. The success of our business is very much intertwined
26 with the success of their business.
27

19.

Our clients worry about unlicensed services in the market that compete

28 with their business on unfair terms. They complain to us in partnership meetings,
-6S.A.0945
DECLARATION OF TEDD CITTADINE ISO PLAINTIFFS’ MOTION FOR PRELIMINARY INJUNCTION
16-CV-04109-AB (PLAX)

Case 2:16-cv-04109-AB-PLA Document 28 Filed 08/22/16 Page 8 of 14 Page ID #:639

1 and especially in negotiations, that it is difficult to compete with services that, like
2 VidAngel, do not act pursuant to licensing restrictions. This is especially true for
3 unlicensed services that do not pay for the content they exploit. Our clients
4 complain that it is difficult to compete with unlicensed services’ low-cost (or even
5 free) offerings. As a result, these unlicensed services are a problem for the entire
6 legitimate market for home entertainment, and in particular, for the online
7 distribution market.
8

20.

VidAngel is a quintessential example of the sort of unlicensed service

9 that undermines the market for authorized content and interferes with our client
10 relationships. VidAngel markets itself as offering discounted streaming—a mere $1
11 or $2 per day for movies and television episodes. In contrast, licensed services’
12 transactional on-demand streaming retail prices typically are $2.99 to $5.99 per
13 rental and their digital download prices typically are $9.99 to $19.99 for a
14 permanent copy. By offering consumers on-demand streaming at a lower price—
15 which VidAngel can offer only because it misappropriates Fox’s content—
16 VidAngel threatens the business of all of our clients who have negotiated legal,
17 authorized licenses for those rights.
18

21.

VidAngel’s marketing and advertising further threatens to confuse

19 consumers and upset the balance between on-demand streaming and physical
20 rentals. VidAngel operates an on-demand streaming service but some of its
21 marketing compares it to physical DVD rental services, like Redbox. This threatens
22 to confuse consumers because the two distribution channels offer different value
23 propositions. Fox makes its titles available in physical disc form to Redbox, which
24 generally operates in a later window than on-demand streaming services and only
25 offers physical rentals. Because consumers generally have a lower willingness to
26 pay in later release windows, Redbox charges a lower price to consumers (e.g., $1
27 per night for DVD rentals from its kiosks). In contrast, on-demand streaming
28 services operate in an earlier window and have the rights to stream Fox’s content
-7S.A.0946
DECLARATION OF TEDD CITTADINE ISO PLAINTIFFS’ MOTION FOR PRELIMINARY INJUNCTION
16-CV-04109-AB (PLAX)

Case 2:16-cv-04109-AB-PLA Document 28 Filed 08/22/16 Page 9 of 14 Page ID #:640

1 over the internet, which many consumers find more convenient. VidAngel’s
2 marketing confuses the two—seemingly trying to convince consumers that they can
3 have the value of on-demand streaming of newer releases for the price of a Redbox
4 rental. By confusing consumers as to the different value propositions, VidAngel
5 threatens to undermine our clients’ abilities to provide their licensed offerings.
6

22.

These harms, in particular, only worsen as VidAngel grows. As a

7 relative matter, a very small and unknown unlicensed service does less harm
8 because it does not pose a serious threat to our clients’ businesses. Once an
9 unlicensed service reaches a certain size or level of notoriety, however, the threat
10 increases dramatically. I am aware that VidAngel, in recent months, has been
11 aggressively marketing its service to consumers and has grown its user-base
12 substantially. This concerns me because as VidAngel continues to grow and gain
13 consumers (at the expense of lawful services) the threat to our relationships with
14 clients and the market for authorized streaming will only increase.
15 VidAngel Harms Plaintiffs’ Ability To Secure And Protect Their Content
16

23.

VidAngel takes away Fox’s right to control the security with which our

17 content is transmitted to the public. This undermines the steps that Fox and the
18 other Plaintiffs take to prevent unauthorized access, illegal copying, and piracy—
19 problems that threaten serious harm to our industry.
20

24.

The internet has been a very valuable tool for digital distribution of our

21 content, especially with the rise of mobile devices. However, the internet can also
22 be used to access, copy and exploit our content on a mass scale. Our industry has
23 responded to this challenge by developing rigorous digital rights management
24 (“DRM”) technology and other means of ensuring the security of digital streams and
25 copies transmitted over the internet.
26

25.

Before Fox grants any client the right to stream or digitally distribute

27 our content, we do a thorough and detailed review of the service’s security
28 protocols. After investigating these security measures, we negotiate stringent
-8S.A.0947
DECLARATION OF TEDD CITTADINE ISO PLAINTIFFS’ MOTION FOR PRELIMINARY INJUNCTION
16-CV-04109-AB (PLAX)

Case 2:16-cv-04109-AB-PLA Document 28 Filed 08/22/16 Page 10 of 14 Page ID #:641

1 security and protection requirements that the client must follow. Our agreements
2 also contain provisions for steps a client must take if there is a breach of that
3 security. Because VidAngel’s transmission of Fox’s content is unlicensed, Fox has
4 not had the ability to vet and negotiate security protocols to protect our content
5 when streamed by VidAngel. Likewise, Fox has no recourse if whatever security
6 measures VidAngel does use fail.
7 VidAngel Undermines Our Ability To Insist On Quality Controls, Which In Turn
8 Threatens The Continued Development Of The Online Market
9

26.

VidAngel’s unlicensed service further threatens the development and

10 growth of the on-demand streaming market. Fox works closely with its clients to
11 ensure that customers receive an optimal viewing experience. Customers’ positive
12 experiences with on-demand streaming encourages them to use licensed services
13 more. This is important to the continued and sustained growth of the on-demand
14 streaming market, and to digital home entertainment more broadly.
15

27.

VidAngel harms consumers’ perceptions of the on-demand streaming

16 market by providing a sub-optimal consumer experience, thereby tarnishing
17 consumer perception of on-demand streaming generally and discouraging
18 consumers from using legitimate on-demand streaming services. For instance,
19 before granting a client the rights to transmit our movies, Fox vets that entity to
20 ensure that it will provide a high-quality viewing experience to customers. In
21 contrast, Fox has no control over the quality of the transmission of the movies from
22 VidAngel and thus I worry that poor quality transmissions could lead to consumer
23 dissatisfaction and damage to consumer perception of on-demand streaming.
24

28.

A bad viewing experience could also tarnish consumers’ views of Fox

25 and our branded content. Consumers may come to associate the poor quality with
26 the Fox film they were attempting to watch (in addition to, or instead of VidAngel).
27 We want the movie-watching public to have the best possible experience so they
28
S.A.0948

-9DECLARATION OF TEDD CITTADINE ISO PLAINTIFFS’ MOTION FOR PRELIMINARY INJUNCTION
16-CV-04109-AB (PLAX)

Case 2:16-cv-04109-AB-PLA Document 28 Filed 08/22/16 Page 11 of 14 Page ID #:642

1 continue to choose watching movies and television, and Fox-branded content in
2 particular, for their entertainment.
3

29.

I understand that VidAngel may tell its customers that certain movies

4 are “out-of-stock.” This message of unavailability is inconsistent with the idea of
5 video “on demand” and risks causing consumer frustration and confusion, thereby
6 hurting the broader on-demand streaming market. This is of particular significance
7 since the “always available, never out of stock” character of on-demand streaming is
8 one of the essential differentiating characteristics of the on-demand experience from
9 that of traditional, physical DVD rental (e.g. Redbox).
10

30.

I also understand that VidAngel limits the number of devices to which

11 a consumer can stream. The ability to stream on several devices for personal or
12 family use (e.g. mobile phone and tablet) is another value proposition of the on13 demand streaming market. Again, this availability across a number of devices
14 differentiates on-demand streaming from physical DVD rentals and is important to
15 encouraging consumers to purchase from authorized on-demand services.
16

31.

Fox invests significant amounts of money to market and promote the

17 availability of its various motion pictures and television shows for on-demand
18 streaming. Fox also expends substantial effort and resources in working with our
19 clients to ensure the best possible viewing experience for consumers. These efforts
20 will be hampered if VidAngel’s sub-optimal experience turns consumers away from
21 the on-demand streaming market and Fox’s movies and television shows.
22 The Harms That VidAngel Causes Are Immediate And Irreparable
23

32.

VidAngel threatens immediate harm to Fox because it directly

24 interferes with exclusive releases to particular licensees. For example, Fox grants
25 HBO exclusive windows for certain movies, in which they are not available for on26
27
28
S.A.0949

-10DECLARATION OF TEDD CITTADINE ISO PLAINTIFFS’ MOTION FOR PRELIMINARY INJUNCTION
16-CV-04109-AB (PLAX)

Case 2:16-cv-04109-AB-PLA Document 28 Filed 08/22/16 Page 12 of 14 Page ID #:643

1 demand streaming on other services.3 Right now, both The Martian (2015) and
2 Brooklyn (2015) are within these HBO exclusive windows. Customers can watch
3 them on the HBO subscription cable channel through on-demand streaming on HBO
4 NOW or HBO GO. They are not available on other on-demand streaming services.
5 VidAngel nonetheless has these same movies available for on-demand streaming on
6 its service—directly impacting HBO’s exclusive window.
7

33.

Likewise, VidAngel threatens immediate harm to Fox because it

8 interferes with the exclusive windows for other distribution channels. New releases
9 are first released to distributors that sell digital download copies. Shortly thereafter
10 they are released for purchase on physical Disc. During these initial release
11 windows, they are typically not available for on-demand streaming. VidAngel,
12 however, offers newly released titles soon after they are released for purchase on
13 physical Disc. Accordingly, for each new release that VidAngel offers, it interferes
14 with the exclusive window that iTunes, Google Play, VUDU and others have to sell
15 digital downloads before the title becomes available for on-demand streaming.
16

34.

The threat from each of the harms that I have described above has

17 increased and continues to increase as VidAngel grows in size and more
18 aggressively markets its service. Specifically, each new Fox title that VidAngel
19 adds to its service poses a new threat to Fox’s ability to control its copyrighted
20 works and that work in particular.
35.

21

I am informed and believe that, in or around July 2015, VidAngel’s

22 outside counsel sent letters to the General Counsel of Fox’s corporate parent (and
23 the General Counsels of the corporate parents of the other Plaintiffs as well as other
24 motion picture studios) regarding its service. I understand from reviewing that letter
25 that VidAngel at that time claimed to have fewer than 5,000 users and was still in a
26
27

3

During these windows consumers can purchase permanent copies of Fox’s movies
28 through purchasing a physical Disc copy or a digital download copy.
-11S.A.0950
DECLARATION OF TEDD CITTADINE ISO PLAINTIFFS’ MOTION FOR PRELIMINARY INJUNCTION
16-CV-04109-AB (PLAX)

Case 2:16-cv-04109-AB-PLA Document 28 Filed 08/22/16 Page 13 of 14 Page ID #:644

1 “limited beta test.” That letter does not say when VidAngel planned to launch its
2 service publicly. I am informed and believe that my colleagues in Fox’s legal
3 department, in conjunction with legal counsel through the Motion Picture
4 Association of America (“MPAA”), immediately commenced investigation of
5 VidAngel’s potential liability. I am further informed and believe that Fox’s legal
6 department, in conjunction with counsel for the other Plaintiffs, continued to
7 monitor VidAngel’s activities and growth through the first part of 2016 as VidAngel
8 began to more aggressively market its service, ultimately filing suit on June 9.
9

36.

VidAngel’s growth has been cause for concern. Our clients would not

10 notice (let alone complain) about a service with a mere 5,000 users, but one with
11 100,000 users is much more problematic. I am not aware of any specific complaints
12 about VidAngel, but know that VidAngel’s presence as one more, quickly growing,
13 unlicensed service in the market will frustrate our client relationships, negotiations
14 and the growth of the on-demand streaming market more generally.
15

37.

It is my strong belief that these harms to our relationships with clients

16 and the on-demand streaming market, though they are likely to be very significant,
17 will be extremely hard to measure in dollar terms. It will be extraordinarily difficult
18 to assess what impact VidAngel has on the on-demand streaming market, and how
19 much of that it is a result of negative consumer experiences with services like
20 VidAngel, and even more difficult to assess the effect on Fox of the disruption of its
21 relationships with legitimate licensees.
22

38.

For these reasons, Fox and the Plaintiffs will suffer immediate and

23 irreparable injury unless the Court enjoins VidAngel’s service.
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S.A.0951

-12DECLARATION OF TEDD CITTADINE ISO PLAINTIFFS’ MOTION FOR PRELIMINARY INJUNCTION
16-CV-04109-AB (PLAX)

Case 2:16-cv-04109-AB-PLA Document 28 Filed 08/22/16 Page 14 of 14 Page ID #:645

S.A.0952

Case 2:16-cv-04109-AB-PLA Document 14 Filed 07/22/16 Page 1 of 5 Page ID #:123

1 GLENN D. POMERANTZ (SBN 112503)
[e-mail]
2 KELLY M. KLAUS (SBN 161091)
[e-mail]
3 ROSE LEDA EHLER (SBN 296523)
[e-mail]
4 ALLYSON R. BENNETT (SBN 302090)
[e-mail]
5 MUNGER, TOLLES & OLSON LLP
355 South Grand Avenue, Thirty-Fifth Floor
6 Los Angeles, California 90071-1560
Telephone: [phone]
7 Facsimile: [phone]
8 Attorneys for Plaintiffs and
Counter-Defendants
9
RYAN G. BAKER (SBN 214036)
10 [e-mail]
JAIME MARQUART (SBN 200344)
11 [e-mail]
SCOTT M. MALZAHN (SBN 229204)
12 [e-mail]
BRIAN T. GRACE (SBN 307826)
13 [e-mail]
BAKER MARQUART LLP
14 2029 Century Park East, Sixteenth Floor
Los Angeles, California 90067
15 Telephone: [phone]
Facsimile: [phone]
16
Attorneys for Defendant and
17 Counter-Claimant VidAngel, Inc.
18

UNITED STATES DISTRICT COURT

19

CENTRAL DISTRICT OF CALIFORNIA

20

WESTERN DIVISION

21 DISNEY ENTERPRISES, INC.;
LUCASFILM LTD. LLC;
22 TWENTIETH CENTURY FOX FILM
CORPORATION and WARNER
23 BROS. ENTERTAINMENT INC.,
Plaintiffs and CounterDefendants,

24
25
26
27
28

vs.

Case No. 16-cv-04109
STIPULATION REGARDING
PRELIMINARY INJUNCTION
BRIEFING AND HEARING
SCHEDULE
Judge: Hon. André Birotte Jr.

VIDANGEL, INC.,

Ctrm: 4

Defendant and CounterClaimant.

S.A.0953
STIPULATION REGARDING PRELIMINARY INJUNCTION SCHEDULE

Case 2:16-cv-04109-AB-PLA Document 14 Filed 07/22/16 Page 2 of 5 Page ID #:124

1

Plaintiffs and Counter-Defendants Disney Enterprises, Inc., Lucasfilm Ltd.

2 LLC, Twentieth Century Fox Film Corporation, and Warner Bros. Entertainment
3 Inc. (collectively, “Plaintiffs”) and Defendant and Counter-Claimant VidAngel, Inc.
4 (“Defendant”) (Plaintiffs and Defendant are jointly referred to as the “Parties”), by
5 and through their respective counsel of record, hereby stipulate to the following
6 briefing schedule and hearing date for Plaintiffs’ Motion for a Preliminary
7 Injunction, subject to the approval of the Court:
8

WHEREAS, Plaintiffs filed their Complaint on June 9, 2016, Dkt. No. 1;

9

WHEREAS, Defendant filed and served its Answer and Affirmative Defenses

10 to Complaint and Counter-Complaint on July 13, 2016, Dkt. No. 11;
11

WHEREAS, Plaintiffs have informed Defendant that they intend to file a

12 Motion for a Preliminary Injunction;
13

WHEREAS, the Parties have met and conferred and agreed to conduct limited

14 expedited discovery across several agreed-upon categories of documents and
15 witness testimony related to Plaintiffs’ Motion and Defendant’s Opposition thereto;
16

WHEREAS, the Parties also have met and conferred and agreed to a proposed

17 briefing schedule and hearing date on Plaintiffs’ Motion; and
18

WHERAS, the Parties believe that good cause exists for the briefing and

19 hearing schedule proposed herein, provided that the schedule will be convenient for
20 the Court.
21

IT IS HEREBY STIPULATED between Plaintiffs and Defendant, by and

22 through their undersigned attorneys:
23
24

August 22, 2016;

25

Defendant’s Opposition will be filed and served on September 12, 2016;

26

Plaintiffs’ Reply will be filed and Served on October 3, 2016; and

27

If convenient for the Court, the Motion shall be noticed for hearing October,

28
S.A.0954

Plaintiffs’ Motion for Preliminary Injunction will be filed and served on

17, 2016, at 10:00 am.
-2STIPULATION REGARDING PRELIMINARY INJUNCTION SCHEDULE

Case 2:16-cv-04109-AB-PLA Document 14 Filed 07/22/16 Page 3 of 5 Page ID #:125

1 DATED: July 22, 2016

MUNGER, TOLLES & OLSON LLP

2
3
By:

/s/ Kelly M. Klaus
KELLY M. KLAUS
Attorneys for Plaintiffs

4
5
6 DATED: July 22, 2016
7

BAKER MARQUART LLP

8
9
10

By:

/s/ Jaime Marquart
JAIME MARQUART
Attorneys for Defendant

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S.A.0955

-3STIPULATION REGARDING PRELIMINARY INJUNCTION SCHEDULE

Case 2:16-cv-04109-AB-PLA Document 14 Filed 07/22/16 Page 4 of 5 Page ID #:126

1
2

FILER’S ATTESTATION
I, Kelly M. Klaus, am the ECF user whose identification and password are

3 being used to file this Stipulation and Proposed Order Regarding Preliminary
4 Injunction Briefing and Hearing Schedule. Pursuant to Civil Local Rule 55 4.3.4(a)(2)(i), I hereby attest that the other above-named signatories concur in this
6 filing.
7 DATED: July 22, 2016
8
9
10

/s/ Kelly M. Klaus
KELLY M. KLAUS

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S.A.0956

-4STIPULATION REGARDING PRELIMINARY INJUNCTION SCHEDULE

Case 2:16-cv-04109-AB-PLA Document 14 Filed 07/22/16 Page 5 of 5 Page ID #:127

S.A.0957