VidAngel LLC v. Clearplay, Inc.
Filing
314
MEMORANDUM DECISION & ORDER:The court GRANTS VidAngels Motion for Partial Summary Judgment as to the non-patent claims. Signed by Judge David Barlow on 11/20/2023. (kpf)
THE UNITED STATES DISTRICT COURT
DISTRICT OF UTAH
MEMORANDUM DECISION AND
ORDER GRANTING [271]
COUNTERCLAIM DEFENDANTS’
MOTION FOR PARTIAL SUMMARY
JUDGMENT
VIDANGEL LLC,
Plaintiff,
v.
CLEARPLAY, INC.; and DOES 1 through
10,
Case No. 2:14-cv-00160-DBB-CMR
District Judge David Barlow
Defendants.
CLEARPLAY, INC.,
Counterclaim Plaintiff,
v.
VIDANGEL LLC, JEFFREY HARMON,
NEAL HARMON, and DOES 1 through 10,
Counterclaim Defendants.
In December of 2013, VidAngel filed this case against ClearPlay, seeking declaratory
judgment of non-infringement on ClearPlay’s patents, or a judgment of invalidity of ClearPlay’s
patents. 1 ClearPlay initially counterclaimed for patent infringement. 2 In June of 2022, ClearPlay
amended its Answer and added two additional counterclaims: a claim for violation of the Digital
Millennium Copyright Act, and a claim for tortious interference with prospective economic
1
2
Compl. for Declaratory J. of Patent Non-Infringement and Invalidity (“Compl.”), ECF No. 1.
See Answer to Compl., Countercls., and Third-Party Claims, ECF No. 20.
1
relations. 3 Now, VidAngel seeks summary judgment on the two non-patent counterclaims. 4 For
the following reasons, the court grants VidAngel’s motion.
BACKGROUND
Both VidAngel and ClearPlay offer products designed to remove objectionable content—
profanity, nudity, violence, etc.—from multimedia. 5 On December 30, 2013, after receiving a
demand letter from ClearPlay that asserted VidAngel was infringing on ClearPlay’s patents,
VidAngel commenced this suit.6 ClearPlay responded by filing six counterclaims, each asserting
that VidAngel infringed on ClearPlay’s patents. 7 From February 2015 to November 2016, the
case was stayed pending inter partes review of ClearPlay’s patents. 8 The case was again stayed
in March 2017 pending the outcome of litigation between VidAngel and various movie studios. 9
And on October 18, 2017 VidAngel filed for bankruptcy, 10 triggering an automatic stay under 11
U.S.C. § 362. The studios litigation resulted in a finding that VidAngel violated various studios’
copyrights, which in turn resulted in a judgment of $62 million against VidAngel, entered in
September 2019. 11
In January 2022, after all stays were lifted, ClearPlay moved to amend its answer and
counterclaims to add the non-patent counterclaims at issue here. 12 The parties at that time
Third Am. Answer to Compl. and Countercls. (“Countercls.”) ¶¶ 53–67, ECF No. 232.
VidAngel LLC, Jeffrey Harmon, and Neal Harmon’s Mot. for Summ. J. on ClearPlay’s Countercls. 7 and 8
(“VidAngel Mot.”), ECF No. 271.
5
See ClearPlay, Inc.’s Mem. in Opp’n to VidAngel LLC, Jeffrey Harmon, and Neal Harmon’s Mot. for Summ. J. on
ClearPlay’s Countercls. 7 and 8 (“ClearPlay Opp’n”) at 9, ECF No. 286.
6
Compl. ¶ 21–24; Countercls. ¶ 21–24.
7
Answer to Compl., Countercls., and Third-Party Claims 9–16.
8
Order Granting Countercl. Def.s’ Mot. for Stay Pending Inter Partes Review, ECF No. 131; Docket Text Order
Reopening Case, ECF No. 138.
9
Mem. Decision and Order Granting Mot. to Stay and Denying Mot. for Scheduling Order, ECF No. 159.
10
Notice of Bankruptcy, ECF No. 170.
11
See ClearPlay Opp’n 10–11.
12
Mot. to Amend, ECF No. 199.
3
4
2
disputed whether ClearPlay should be permitted to add the claims, given the prior bankruptcy
proceeding and discharge. 13 The court held that given ClearPlay’s averment that it only
discovered evidence relevant to the two additional claims after bankruptcy discharge, the
amendment was timely and presented no particular prejudice to VidAngel. 14 ClearPlay filed its
amended pleading on June 23, 2022. 15 ClearPlay alleges that VidAngel continued to violate
movie studios’ copyrights by streaming illegally-copied content to its customers after the entry
of a permanent injunction in the litigation with the various movie studios. 16 From this conduct,
ClearPlay alleges that VidAngel violated copyright law and committed tortious interference
against ClearPlay. 17
On May 16, 2023, VidAngel moved for summary judgment on the non-patent claims. 18
ClearPlay filed its opposition on June 23, 2023. 19 VidAngel filed its reply on July 28, 2023. 20
STANDARD
Summary judgment is appropriate if “there is no genuine dispute as to any material
fact and the movant is entitled to judgment as a matter of law.” 21 “A fact is material if, under
the governing law, it could have an effect on the outcome of the lawsuit. A dispute over a
material fact is genuine if a rational jury could find in favor of the nonmoving party on the
See Order Granting ClearPlay’s Mot. for Leave to Amend 3, ECF No. 231.
Id.
15
Countercls.
16
Countercls. ¶¶ 56–59.
17
Id. at ¶¶ 53–67.
18
VidAngel Mot.
19
ClearPlay Opp’n.
20
Reply in Support of VidAngel’s Mot. For Summary Judgment on ClearPlay’s Counterclaims 7 and 8 (“VidAngel
Reply”), ECF No. 298.
21
Fed. R. Civ. P. 56(a).
13
14
3
evidence presented.” 22 “‘All disputed facts must be resolved in favor of the party resisting
summary judgment.’” 23 However, “if the nonmovant bears the burden of persuasion on a
claim at trial, summary judgment may be warranted if the movant points out a lack of
evidence to support an essential element of that claim and the nonmovant cannot identify
specific facts that would create a genuine issue.” 24
DISCUSSION
In support of its Motion, VidAngel makes five arguments: (1) the non-patent claims
cannot be based on any conduct prior to VidAngel’s bankruptcy confirmation 25; (2) ClearPlay
falls outside the zone of interests of the Digital Millennium Copyright Act (“DMCA”) 26; (3)
ClearPlay’s DMCA claims fail for a lack of evidence 27; (4) ClearPlay’s tortious interference
claim is preempted by the DMCA 28; and (5) ClearPlay’s tortious interference claim fails for a
lack of evidence on the intentional interference element. 29 Because the court finds the second and
fifth arguments to be dispositive, it does not reach the remaining issues.
A. Zone of Interests of the DMCA
The “DMCA” 30 was passed “to update domestic copyright law for the digital age.” 31 The
DMCA added to Title 17 a chapter dealing with circumvention of copyright protection. 32 17
22
Doe v. Univ. of Denver, 952 F.3d 1182, 1189 (10th Cir. 2020) (quoting Jones v. Norton, 809 F.3d 564, 573 (10th
Cir. 2015)).
23
White v. Gen. Motors Corp., 908 F.2d 669, 670 (10th Cir. 1990).
24
McCoy v. Meyers, 887 F.3d 1034, 1044 (10th Cir. 2018) (quoting Patel v. Hall, 849 F.3d 970, 978 (10th Cir.
2017)).
25
VidAngel Mot. 6.
26
Id. at 8.
27
Id. at 14.
28
Id. at 12–14.
29
Id. at 17.
30
See Pub. L. No. 105-304, 112 Stat. 2860 (1998).
31
BWP Media USA, Inc. v. Clarity Digit. Grp., LLC, 820 F.3d 1175, 1177 (10th Cir. 2016) (quoting Viacom Int’l,
Inc. v. YouTube, Inc., 676 F.3d 19, 26 (2d Cir. 2012)).
32
See 17 U.S.C. §§ 1201–1205.
4
U.S.C. § 1201(a) provides that “[n]o person shall circumvent a technological measure that
effectively controls access to a work protected under this title.” 33
VidAngel argues that the DMCA does not extend a private cause of action to ClearPlay
because ClearPlay is not the copyright owner or the owner of a technological system meant to
protect copyrighted works. 34 ClearPlay responds by citing a number of cases that find that the
DMCA does not only apply to copyright owners. 35 It emphasizes that the purpose of the DMCA
is to strengthen copyright protection and contends that its counterclaim furthers this purpose. 36
VidAngel replies by pointing out that ClearPlay’s only alleged injury is by reason of being a
competitor, and no case has extended the DMCA to injuries based only on competitive
disadvantage. 37
While 17 U.S.C. § 1203 provides that “[a]ny person injured by a violation of section
1201 . . . may bring a civil action in an appropriate United States district court for such
violation,” 38 the U.S. Supreme Court has found that “a statutory cause of action extends only to
plaintiffs whose interests ‘fall within the zone of interests protected by the law invoked.’” 39 And
17 U.S.C. § 1201(a)(1)(A).
VidAngel Mot. 8–9.
35
ClearPlay Opp’n 22–23.
36
Id. at 23–24.
37
VidAngel Reply 11–14; see also Countercls. ¶¶ 60–61.
38
17 U.S.C. § 1203(a).
39
Lexmark Intern., Inc. v. Static Control Components, Inc., 572 U.S. 118, 129 (2014) (quoting Allen v. Wright, 468
U.S. 737, 751 (1984)).
33
34
5
while the zone of interests inquiry is not particularly demanding, 40 it is not enough that the
statute at issue provides a cause of action to “any person injured.” 41
Section 1201 is plainly meant to encourage technological measures that control access to
a copyrighted work. 42 Several non-binding cases have found that the cause of action in 17 U.S.C.
§ 1203 is not limited exclusively to copyright owners. 43 However, these cases extend the cause
of action in Section 1203 only so far as owners of the technology alleged to have been
circumvented. 44 The court is not aware of any cases extending the cause of action in Section
1203 beyond copyright owners and owners of an access control measure. Given the language of
Section 1201—“[n]o person shall circumvent a technological measure that effectively controls
access to a work protected under this title” 45—the court concludes that the zone of interests of
Section 1201 includes copyright owners and owners of an access control measure, 46 but does not
Id. at 130 (“[T]he test ‘forecloses suit only when a plaintiff’s “interests are so marginally related to or inconsistent
with the purposes implicit in the statute that it cannot reasonably be assumed that”’ Congress authorized that
plaintiff to sue.” (quoting Match-E-Be-Nash-She-Wish Band of Pottawatomi Indians v. Patchak, 567 U.S. 209, 225
(2012))).
41
See id. at 122, 129–30; see also Ass’n of Data Processing Service Orgs., Inc. v. Camp, 397 U.S. 150, 156 (1970)
(engaging in the zone of interests inquiry notwithstanding the Administrative Procedure Act’s grant of a cause of
action to any person “aggrieved by agency action”).
42
See 17 U.S.C. § 1201(a).
43
See, e.g., RealNetworks, Inc. v. Streambox, Inc., No. 2:99-cv-02070, 2000 WL 127311, *3, 6 (W.D. Wash. Jan.
18, 2000) (holding RealNetworks could sue under Section 1203 given that it’s technology protected owners’
copyrights); EchoStar Satellite, LLC v. Viewtech, Inc., 543 F.Supp.2d 1201, 1206 (S.D. Cal. 2008) (holding
EchoStar could sue under Section 1203 given that it had authority to control copyrighted works); D&J Optical, Inc.
v. Wallace, No. 1:14-cv-658-MHT, 2015 WL 1474146, *6 (M.D. Ala. Mar. 31, 2015) (rejecting the argument that a
plaintiff could not sue for an alleged violation of Section 1201 because they were not the copyright owner); DISH
Network LLC v. Whitehead, No. 3:09-cv-532-J-32JRK, 2011 WL 6181732, *5 (M.D. Fla. Dec. 13, 2011) (granting
summary judgment to holders of access control measures). But see Sheldon v. Plot Com., 15-CV-5885 (CBA)
(CLP), 2016 WL 5107072, * 9–10 (E.D.N.Y. Aug. 26, 2016) (suggesting the Section 1203’s zone of interests is
limited to copyright owners).
44
See sources cited supra note 43.
45
17 U.S.C. § 1201(a)(1)(A).
46
Indeed, this is also the conclusion reached by the treatise cited by ClearPlay. See 4 Melville B. Nimmer & David
Nimmer, Nimmer on Copyright § 12A.12 (Matthew Bender rev. ed., updated 2023) (noting that cases recognize
statutory standing in “plaintiffs who provide security measures rather than being content owners”).
40
6
extend to those who merely allege competitive disadvantage flowing from the alleged violation
of copyrights or circumvention of access control measures in which they have no legal interest.
RealNetworks, Inc. v. Streambox, Inc. 47 is illustrative. There, RealNetworks sued
Streambox for a violation of the DMCA. 48 RealNetworks provided software that enabled
multimedia streaming. 49 Its software secured “the content against unauthorized access or
copying,” and the court found that this feature was a large part of RealNetworks’ success. 50
Streambox had developed a product that would allow users to access RealNetworks’ files located
on its servers for download. 51 The court found that this product would harm RealNetworks,
given that RealNetworks’ customers could be led to believe that their content was not actually
secure from unauthorized copying. 52 While the court there was not faced with a zone of interests
issue, it held that RealNetworks had statutory standing. 53 It is not hard to see why RealNetworks
would fall within the zone of interests of the DMCA: it supplied an access control measure under
Section 1201 that was being circumvented, and its injuries were proximately caused by that
circumvention. Therefore, the copyrighted work was less secure, contrary to the purposes of the
statute.
The difference between the findings in RealNetworks and the undisputed facts in this case
highlights why ClearPlay does not fall within the zone of interests of the DMCA. It is undisputed
that “ClearPlay does not claim that it owns the copyrighted material that VidAngel has
2000 WL 127311 (W.D. Wash. Jan. 18, 2000).
Id. at *1.
49
Id. at *1–2.
50
Id. at *2–3.
51
Id. at *4.
52
Id. at *5.
53
Id. at *6.
47
48
7
infringed,” 54 nor does it “claim that a copyright owner has authorized it to protect the
copyrighted material.” 55 And crucially, “ClearPlay does not claim that it supplies any accesscontrol technology that VidAngel has circumvented.” 56 Nor does ClearPlay allege that is an
agent or otherwise in privity with any such individual or entity. Unlike in RealNetworks, where
the technology at issue actually secured against copyright violations, ClearPlay can only claim
that its suit indirectly furthers the purposes of the statute by increasing enforcement (through
litigation) of copyright violations. 57 By ClearPlay’s logic, anyone who could establish any
Article III injury—no matter how remote—could still sue under any statute on the grounds that
increased litigation supports enforcement of the statute. That cannot be correct. Put otherwise,
that Congress intended a statute to be enforced does not mean that anyone seeking to enforce that
statute falls within its zone of interests.
Therefore, because there is no dispute of material fact that ClearPlay is not a copyright
owner or a supplier of a technological control-measure, or in privity with the same, and because
these facts establish that ClearPlay is not within the zone of interests of Section 1201, VidAngel
is entitled to judgment as a matter of law on ClearPlay’s DMCA claim.
B. Tortious Interference
VidAngel argues that ClearPlay has failed to present a genuine issue of material fact as to
one of the elements of its tortious interference claim. 58 The elements of tortious interference
under Utah law are: (1) intentional interference with existing or potential economic relations; (2)
ClearPlay Opp’n 7.
Id.
56
Id.
57
Cf. id. at 23–24.
58
VidAngel Mot. 17–19.
54
55
8
by improper means; (3) that causes injury to the plaintiff. 59 Only the first element is apparently at
issue. 60
The question in this case is whether competition alone, assuming improper means, is
sufficient to establish that an entity intentionally interfered with existing or potential economic
relations. St. Benedict’s Development Co. v. St. Benedict’s Hospital 61 is helpful. There, the
hospital leased land to the development company which was to “construct, operate, and maintain
a medical office building” on that land. 62 The parties entered into several subsequent agreements,
under which the development company would construct new office buildings adjacent to the
original, and under which the hospital would help the development company obtain tenants for
the new building. 63 Tenants of one of the old buildings “notified the development company that
they did not intend to renew their leases” but would instead move to the new building once
completed. 64 The development company alleged that the hospital had solicited tenants to not
renew their existing leases, and instead to move into the new building. 65 The Utah Supreme
Court held that this “allegation of solicitation” was sufficient to state a claim for the first
element. 66 This kind of direct solicitation or interference has routinely been held to satisfy the
first element. 67 Indeed, as the Utah Supreme Court observed in the seminal case establishing
59
Eldridge v. Johndrow, 2015 UT 21, ¶ 70, 345 P.3d 553 (quoting Leigh Furniture & Carpet Co. v. Isom, 657 P.2d
293 (Utah 1982)).
60
ClearPlay argues that the second element is indisputably established, see ClearPlay Opp’n 36 n.21, and VidAngel
apparently does not argue otherwise, cf. VidAngel Reply 18–20. And neither party clearly argues that ClearPlay has
or has not raised a dispute as to material fact on the third element.
61
811 P.2d 194 (Utah 1991).
62
Id. at 196.
63
Id. at 196–97.
64
Id. at 197.
65
Id. at 201.
66
Id.
67
See, e.g., Leigh Furniture, 657 P.2d at 305–07 (holding frequent disruptions during business hours was sufficient
to find intentional interference); see also Overstock.com, Inc. v. SmartBargains, Inc., 2008 UT 55, ¶¶ 2, 18–19, 192
9
tortious interference in Utah: “Driving away an individual’s existing or potential customers is the
archetypical injury this cause of action was devised to remedy.” 68 The parties do not cite any
Utah caselaw holding that competition alone is sufficient.
The only evidence ClearPlay raises in an effort to resist summary judgment is that
VidAngel has a competitive advantage over ClearPlay. 69 It contends that some current customers
switched to VidAngel’s services, and that potential customers purchased VidAngel’s services
rather than Clearplay’s, because ClearPlay was unable to stream filtered content to its
customers. 70 But this is immaterial to ClearPlay’s claim; the evidence does not show the kind of
activities that are required to prove intentional interference. Nothing in the evidence offered by
ClearPlay suggests that VidAngel intentionally directed its activities at ClearPlay in the way
tortious interference requires; that ClearPlay is a competitor, even the main competitor, of
VidAngel is insufficient. Under ClearPlay’s theory of the case, any time a business violated the
law (assuming that any such violation indeed is sufficient to establish the improper means
element), its competitors would have a cause of action for tortious interference simply by virtue
of the competitive advantage caused by the violation. Such is not the case. And contrary to
ClearPlay’s suggestion, 71 merely attracting another business’s customers with a competing
product is not the same thing as driving them away. ClearPlay identifies no Utah case so holding,
and the court is not aware of any.
P.3d 858 (implying that the intentional interference element was satisfied when one company caused pop-up
advertisements to appear on its competitor’s website).
68
Leigh Furniture, 657 P.2d at 306.
69
See ClearPlay Opp’n 15–16.
70
Id.
71
Id. at 37.
10
Therefore, there is no dispute of material fact as to whether VidAngel intentionally
interfered with ClearPlay’s current or prospective economic relations. VidAngel is entitled to
judgment as a matter of law on ClearPlay’s tortious interference claim.
ORDER
Accordingly, the court GRANTS VidAngel’s Motion for Partial Summary Judgment as
to the non-patent claims.
Signed November 20, 2023.
BY THE COURT
________________________________________
David Barlow
United States District Judge
11
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?