Professional Documents
Culture Documents
rbaker@bakermarquart.com
2 Jaime Marquart (Bar No. 200344)
jmarquart@bakermarguart.com
3 Scott M. Mafzahn (Bar No. 229204)
smalzahn@bakermarquart.com
4 BrianT. Grace (Bar No. 307826)
bgrace@bakermarquart.com
5 BAKER MARQUART LLP
2029 Century Park East, Sixteenth Floor
6 Los Angeles, California 90067
Telephone: (424) 652-7800
7 Facsimile: (424) 652-7850
8 PeterK. Stris (BarNo. 216226)
peter. stris@strismaher. com
9 Brendan Maher (!3ar No. 217043)
brendan.maher@strismaher.com
10 Elizabeth Brannen~ar No. 226234)
elizabeth.brannen strismaher.com
11 Daniel Geys~r
Bar o. 230405)
daniel.ge_y~er strismaher.com
12 STRIS & M
RLLP
725 South Figueroa Street;.. Suite 1830
13 Los Angeles, California 9u0 17
Telephone: (213) 995-6800
14 Facsimile: (213) 261-0299
David W. Quinto (Bar No. 106232)
dquinto@ VidAngel. com
3007 Frallklin Canyon Drive
Beverly Hillsf California 9021 o
Telephone: 213) 604-1777
Facsimile: 732) 377-0388
Attorneys for Defendant and
19 Counterclaimant VidAngel, Inc.
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WESTERN DIVISION
DISNEY ENTERPRISES, INC.;
LUCASFILMLTD. LLC;
TWENTIETH CENTURY FOX FILM
CORPORATION; AND WARNER
BROS. ENTERTAINMENT, INC.,
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Plaintiffs,
vs.
VIDANGEL, INC.,
Defendant.
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VIDANGEL, INC.,
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Counterclaim Defendants.
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DECLARATION OF NEAL HARMON N
SUP PORT OF EX PARTE APPLICATION TO
TAY
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counterclaimant Vid.Angel, Inc. I have personal knowledge of the facts set forth
herein and if called and sworn as a witness, I could and would testify competently
hereto.
2.
Play's streaming only to customers who access its eCommerce website online
through a desktop browser), Vid.Angel makes 84.3 percent of its sales through app
stores such as Roku, Apple, Google Play, and Amazon Fire TV. To avoid risking
disruptions to their users' experience during a critical time of the year, the Apple
and Roku stores do not permit modifications to their applications during the holiday
season. These hard deadlines for publishing new apps, out of necessity, create
earlier deadlines for developers to submit builds of app updates for review and
approval by the respective app stores. For example, Roku, which has a thorough debug and user-interface testing process before publishing a company's app, will not
accept any new app updates after November 15. As of December 12, 2016, this
holiday blackout window had already begun for the largest platform through which
VidAngel sells content (Roku - over a third of our purchases). Because of its twoday review period, we are now in that holiday window for Apple too, meaning that
VidAngel cannot modify its most popular apps until early January.
4.
IfVidAngel were to remove existing titles from its library during the
black-out period for modifying apps, the system could not be modified to recognize
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1 titles that were no longer available for sale. Those titles would still appear to be
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available even though VidAngel had removed them. The only alternative would be
for VidAngel to completely turn off in-app purchasing across the board-which
would prevent VidAngel from offering content that it is directly licensed to filter
and stream or as to which the rights holders have no objection to VidAngel ' s
service. As a result, during the app black-out period, we are unable to modify our
system to block access to just the plaintiffs' titles without causing major customer
confusion about which titles are and are not available for purchase. To immediately
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VidAngel has entered into licenses to filter and stream certain works
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released by entities that are not party to the Directors Guild of America' s collective
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exclusive licensing contract with Excel Entertainment to filter and stream The Last
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Descent commencing December 15, 2016. If we were required to shut down our
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entire system immediately or disable in-app purchasing across the board because we
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are currently unable to modify our apps to remove selected titles, we would
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necessarily have to block access to any works we are licensed to filter and stream
(because the works catalog and purchasing system are coupled together).
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The rights for our content are controlled by over 125 studios or
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distributors, the vast majority of whom have neither joined in the litigation nor
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expressed any complaint to VidAngel. Since the injunction issued, we have been
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stay of the preliminary injunction, it will cease filtering and streaming them and will
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also cease buying new DVD and Blu-ray discs of their movies unless they are
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willing to enter into a covenant not to sue without waiver of any legal position or
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argument for the duration of the appeal. To date, one such company-MGM-has
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rejected our request for a covenant not to sue and we have yet to hear from many
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others.
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Even ifVidAngel were able to update its apps despite the blackout
period, it is not an easy process to modify in-app purchasing. Once a title has been
made available for purchase, rolling it back is not an easy process. This is because
disable in-app purchasing for all titles, but it cannot use the existing in-app
purchasing functionality to restrict certain titles that have previously been made
available for purchase. On the other hand, we cannot tum off in-app purchases
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altogether because doing so would prevent us from selling and/or renting other
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content.
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In addition, until VidAngel can update its apps after the blackout
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period, removing titles would also prevent customers from being able to use the app
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functionality that currently enables them to sell back and receive monetary credit for
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titles that they previously purchased. This would create confusion and a massive
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Similarly, more than 20,000 discs in our vault are permanently owned
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permanently owned discs. To immediately block access to all (or all of plaintiffs')
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customers who permanently owned discs that they now could not watch, with no
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support issues. That is because until the apps can be updated (including to reflect
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what we are doing or to let them know that VidAngel will give them credit for
selling their discs back to VidAngel. Although we have our customer's e-mail
addresses, e-mail messages we send to our customers are typically opened only
about 20 percent of the time. As a consequence, many of our apps customers would
likely not understand why our system would neither permit them to sell their discs
back nor give them credit for doing so, or to stream content they previously
purchased and permanently own. We are trying to ensure that customers know
which movies they have purchased, even if they cannot watch them, and that they
have the opportunity to sell those movies back. To avoid creating enormous
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consumer ill will, we need time to make our apps ready to explain what is happening
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without having movies simply disappear from the apps without notice.
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3,500 to 7000 per week. IfVidAngel were forced to shut down without messaging
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within the apps to directly explain the situation for its approximately 200,000
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customers, its team of 14 people would be unable to address the influx even if they
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Regardless of the app blackout period, it will take time for VidAngel to
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develop updated apps to address the issues that result from the preliminary
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injunction order. Because each of the apps is developed to use the interfaces native
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to a given platform, there are some functions that must be hard-coded in, such as
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such as removing all or a significant number of titles from the site, or removing the
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required. All changes have to be thoroughly vetted and tested before VidAngel can
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submit them to the app stores; otherwise, the app review process will reject them
and/or we run the risk of publishing bugs. In addition, VidAngel has to ensure that
any changes do not break older versions of the apps, which customers may continue
to run.
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January 5, 2017, to modify our Apple app based on our previous experience with its
app store and its resumption date for modifying apps, and until January 25,2017, for
the Roku apps because it does not permit modifications to be submitted until
January and then requires two weeks for expedited review. Allowing VidAngel that
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time would allow at least some of these issues to be mitigated if no stay of the
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indicated that, absent a stay, it might sever relations with VidAngel as early as next
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Supplemental Declaration of Kelly Klaus) that VidAngel had just added two new
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titles they own. This was not intended to be disrespectful or a flout of anything, and
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VidAngel has asked for a stay. Nevertheless, to address the concern identified in the
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supplemental declaration, VidAngel will not add any other titles owned or licensed
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operate in a fully lawful manner and fully respects the authority of this Court. It is,
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and always has been, VidAngel 's intent to comply fully and in all respects with all
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orders the Court has issued or may issue. But in view of the facts that VidAngel has
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now offered its service for just under two years; the plaintiffs waited 11 months after
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receiving written notice explaining VidAngel's service simply to file their complaint
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(and never sent any preliminary cease-and-desist letters); the plaintiffs never sought
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a temporary restraining order but took another four months after filing suit to
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conduct discovery and have their motion heard; and the Court understandably took
several weeks to consider the parties' various arguments and issue its ruling,
VidAngel requests that it be allowed a reasonable time to comply fully with the
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