Disney wins $62.4M in case of infringement by video service

LOS ANGELES -- A federal jury found video service VidAngel Inc.'s stated ignorance of the law was no excuse for infringement, granting a $62.4 million award Monday to plaintiff Disney Enterprises LLC and a host of other studios.

VidAngel issued a statement late Monday saying it would appeal and also would explore bankruptcy.

Attorneys for VidAngel argued throughout the weeklong trial that its executives truly believed in their business model, a video service with a vast library of newly released and classic films that could be downloaded with a number of family friendly filtering options. They also believed their method for collecting and redistributing the films -- purchasing DVD copies of the films and converting them to a digital format for resale -- was protectable under the Family Home Movie Act of 2005.

The plaintiffs conversely argued that VidAngel saw the Family Home Movie Act as nothing more than a bulwark to shield the company from litigation. U.S. District Judge Andre Birotte of the Central District of California, who oversaw this month's damages trial, issued a court order in 2016 enjoining the company from continuing service after finding the act didn't protect VidAngel from infringement. Disney Enterprises LLC et al. v. VidAngel Inc., 16-cv-064109 (C.D. Cal, filed June 9, 2016).

Apparently the jury was largely unconvinced of VidAngel's ignorance, finding the company liable for willful infringement. The jury gave the plaintiff studios -- which also included Marvel, Lucas Film, and New Line Cinemas, among others -- an award of $75,000 for each individual infringement by VidAngel.

Given 819 instances of apparent infringement by VidAngel and an additional $1 million award for violation of the Digital Millennium Copyright Act, the total plaintiffs' award came to $62.4 million.

While undoubtedly a huge win for the plaintiffs, the award is almost exactly half of what they were seeking. The plaintiffs, arguing at trial that VidAngel ignored warnings from its lawyers and even from a judge to continue profiting off its infringing business model, asked the jury to award $150,000 for each individual infringement. That's the maximum amount a plaintiff can pursue for willful infringement under the U.S. Civil Code.

Attorneys for the plaintiff at Munger, Tolles and Olson LLP were not immediately available for comment Monday.

VidAngel CEO Neal Harmon issued the following statement: "We disagree with today's ruling and have not lessened our resolve to save filtering for families one iota. VidAngel plans to appeal the District Court ruling, and explore options in the bankruptcy court. Our court system has checks and balances, and we are pursuing options on that front as well."

In a statement, plaintiff Warner Brothers Entertainment Inc. praised the court for its ruling.

"The jury today found that VidAngel acted willfully, and imposed a damages award that sends a clear message to others who would attempt to profit from unlawful infringing conduct at the expense of the creative community," the company statement read.