DMCA Anti-Circumvention Covers Access and Use Control Technological Protection Measures: Ninth Circuit | Practical Law

DMCA Anti-Circumvention Covers Access and Use Control Technological Protection Measures: Ninth Circuit | Practical Law

In Disney Enterprises, Inc. v. VidAngel, Inc., the US Court of Appeals for the Ninth Circuit held on two issues of first impression that the Family Movie Act of 2005 (FMA) does not exempt VidAngel from copyright infringement liability for streaming filtered versions of unauthorized digital copies of copyrighted works, and the Digital Millennium Copyright Act of 1998 (DMCA) prohibits circumvention of technological protection measures that control both access to and copying of copyrighted works.

DMCA Anti-Circumvention Covers Access and Use Control Technological Protection Measures: Ninth Circuit

by Practical Law Intellectual Property & Technology
In Disney Enterprises, Inc. v. VidAngel, Inc., the US Court of Appeals for the Ninth Circuit held on two issues of first impression that the Family Movie Act of 2005 (FMA) does not exempt VidAngel from copyright infringement liability for streaming filtered versions of unauthorized digital copies of copyrighted works, and the Digital Millennium Copyright Act of 1998 (DMCA) prohibits circumvention of technological protection measures that control both access to and copying of copyrighted works.
On August 24, 2017, in Disney Enterprises, Inc. v. VidAngel, Inc., the US Court of Appeals for the Ninth Circuit affirmed the US District Court for the Central District of California's preliminary injunction against VidAngel, Inc.'s online streaming service and circumvention of technological protection measures (TPMs) ( (9th Cir. Aug. 24, 2017)). Deciding two issues of first impression, the court held that:
  • The Family Movie Act of 2005 (FMA) does not exempt VidAngel from liability for copyright infringement for transmitting filtered versions of copyrighted works when the filtered transmissions are from unauthorized digital copies of the works (17 U.S.C. § 110(11)).
  • The anti-circumvention provision of the Digital Millennium Copyright Act of 1998 (DMCA) does cover TPMs that control both access to and use of a copyrighted work (17 U.S.C. § 1201(a)(1)).
Disney Enterprises, Inc., LucasFilm Ltd., Twentieth Century Fox Film Corp., and Warner Brothers Entertainment (collectively, the Studios) produce and distribute copyrighted movies and television shows. The Studios use encryption-based TPMs, including Content Scramble System and Advanced Access Content System, that allow consumers to use players from licensed manufacturers to lawfully decrypt a disc's content only for playback, not for copying or other use.
VidAngel operates an online streaming service in which it:
  • Purchases multiple authorized copies of DVDs or Blu-ray disc movies and television shows.
  • Decrypts one disc of each work to create a digital copy of the work.
  • Removes objectionable content, per customer preference, from the digital copy and streams a filtered version of the digital copy to customers.
In June 2016, the Studios sued VidAngel, alleging copyright infringement and circumvention of the TPMs controlling access to its copyrighted works in violation of the DMCA. In response, VidAngel denied the allegations and raised the affirmative defenses of fair use and legal authorization under the FMA. The Studios moved for a preliminary injunction.
The district court granted the motion and:
  • Found VidAngel's actions likely violated both the DMCA and the Copyright Act.
  • Enjoined VidAngel from:
    • circumventing the TPMs controlling access to the copyrighted works;
    • copying these works; and
    • streaming, transmitting, or otherwise publicly performing them electronically.
On appeal, the Ninth Circuit affirmed the district court's preliminary injunction, holding that:
  • Even though VidAngel lawfully purchased the original discs containing the Studios' works, it was only entitled to sell or transfer possession of the originally purchased discs and therefore infringed the Studios' copyrights by reproducing those works in digital form.
  • The FMA is not a defense to VidAngel's actions because VidAngel's filtering is done on a digital copy and not one of the originally purchased discs. The FMA permits filtering of limited portions of audio or video content, transmitted to a private household only if the filtered transmission is directly from an authorized copy of the work because:
    • the plain meaning and statutory context of Section 110(11) and the legislative history and goal of the statute support this interpretation;
    • ignoring VidAngel's intermediate steps if the initial step came from a legally purchased title would create a loophole and sanction copyright infringement if it filters some content and a legitimate copy of the work was lawfully purchased at some point;
    • all piracy originates in some way from a legitimate copy; and
    • if simply purchasing an authorized copy precluded infringement liability under the FMA, the statute would severely erode the commercial value of the public performance right in the digital context, allowing, for example, unlicensed streams which filter out only a movie's credits.
  • The four fair use factors weigh against a finding of fair use.
  • VidAngel is likely liable under the DMCA because:
    • although the statutory language on its face distinguishes between TPMs that control access to a copyrighted work, which are expressly covered only by Section 1201(a)'s prohibition on circumvention, and TPMs that control copying or other use of a copyrighted work, which are expressly covered only by the anti-trafficking provision of Section 1201(b), Section 1201(a)'s anti-circumvention provision also covers TPMs that control both access to and use of copyrighted works;
    • VidAngel’s decryption of the TPMs in its purchased discs to copy works, rather than merely access the works for playback, could constitute both unlawful circumvention of access controls under Section 1201(a)(1)(A) and unlawful copying under Section 106(1) of the Copyright Act, even if not covered by Section 1201(b); and
    • nothing in the legislative history suggests that VidAngel's use of decryption software did not circumvent an access control in violation of Section 1201(a)(1)(A) simply because there are other authorized ways to access the Studios' works.
Practitioners should be aware that the Ninth Circuit, in deciding two issues of first impression in this case, adopted interpretations of both the FMA and the DMCA that protect the digital reproduction and public performance rights of copyright owners from exploitation of potential statutory loopholes by owners of lawfully purchased copies of copyrighted works.