Case 2:16-cv-04109-AB-PLA Document 190-1 Filed …blog.vidangel.com/wp-content/uploads/2017/07/...725 S. Figueroa St, Suite 1830 Los Angeles, CA 90017 Telephone: (213) 995-6800 Facsimile:

SUPPLEMENTAL DECLARATION OF DAVID QUINTO IN SUPPORT OF VIDANGEL’S MOTION TO CLAIFY OR CONSTRUCT PRELIMINARY INJUNCTION

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Ryan G. Baker (Bar No. 214036) [email protected]

Jaime Marquart (Bar No. 200344) [email protected] Scott M. Malzahn (Bar No. 229204) [email protected] Brian T. Grace (Bar No. 307826) [email protected] BAKER MARQUART LLP 2029 Century Park East, Sixteenth Fl. Los Angeles, California 90067 Telephone: (424) 652-7800 Facsimile: (424) 652-7850

Peter Stris (Bar No. 216226) [email protected] Brendan Maher (Bar No. 217043) [email protected] Elizabeth Brannen (Bar No. 226234) [email protected] Daniel Geyser (Bar No. 230405) [email protected] STRIS & MAHER LLP 725 S. Figueroa St, Suite 1830 Los Angeles, CA 90017 Telephone: (213) 995-6800 Facsimile: (213) 261-0299

David Quinto (Bar No. 106232) [email protected] VIDANGEL, INC. 3007 Franklin Canyon Drive Beverly Hills, CA 90210-1633 Telephone: (213) 604-1777

Attorneys for Defendant and Counterclaimant VidAngel, Inc.

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

WESTERN DIVISION

DISNEY ENTERPRISES, INC.; LUCASFILM LTD. LLC; TWENTIETH CENTURY FOX FILM CORPORATION; AND WARNER BROS. ENTERTAINMENT, INC.,

Plaintiffs,

vs.

VIDANGEL, INC.,

Defendant.

CASE NO. 16-cv-04109-AB (PLAx) SUPPLEMENTAL DECLARATION OF DAVID QUINTO IN SUPPORT OF VIDANGEL, INC.’S MOTION TO CLARIFY OR CONSTRUCT PRELIMINARY INJUNCTION ORDER (DKT. 144) [Reply and Meldal Decl. filed concurrently herewith] Judge: Hon. André Birotte Jr. Date: July 24, 2017 Time: 10:00 a.m. Courtroom: 7B Trial Date: None Set

Case 2:16-cv-04109-AB-PLA Document 190-1 Filed 07/10/17 Page 1 of 57 Page ID #:5928

mailto:[email protected]



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http://maps.google.com/?q=725+South+Figueroa+Street%2C+Suite+1830Los+Angeles%2C+CA+90017

tel:+12139956800

SUPPLEMENTAL DECLARATION OF DAVID QUINTO IN SUPPORT OF VIDANGEL’S MOTION TO CLARIFY OR CONSTRUCT PRELIMINARY INJUNCTION

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VIDANGEL, INC.,

Counterclaimant,

vs.

DISNEY ENTERPRISES, INC.; LUCASFILM LTD. LLC; TWENTIETH CENTURY FOX FILM CORPORATION; AND WARNER BROS. ENTERTAINMENT, INC.,

Counterclaim Defendants.


1 SUPPLEMENTAL DECLARATION OF DAVID QUINTO IN SUPPORT OF VIDANGEL’S MOTION TO CLARIFY OR CONSTRUCT PRELIMINARY INJUNCTION

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I, David Quinto, declare as follows:

1. I am the general counsel of defendant and cross-complainant VidAngel,

Inc. I make this declaration of my personal and firsthand knowledge and, if called

and sworn as a witness, I could and would testify competently hereto.

2. When I wrote to Plaintiffs in mid-January describing VidAngel’s then

contemplated service in great detail, Plaintiffs thought about how to respond for 13

days before adopting the ostrich defense and burying their heads in the sand. They

did not ask any questions. They did not express any concerns specific to the

proposed technology. They did not even ask to be kept apprised of the status of

VidAngel’s development efforts or to be notified when alpha and beta testing began.

3. On June 13, with great fanfare and a live stream (watched live by over

50,000 persons and now by close to a quarter million persons), VidAngel announced

its new technology and the resumption of its service. And still Plaintiffs chose not

to ask questions, express specific objections, or request to be kept apprised.

4. On June 20, the day after VidAngel filed its first motion to clarify or

construct the preliminary injunction, Plaintiffs’ counsel sent me an e-mail message

raising questions concerning VidAngel’s new service for the first time. The

questions raised were, however, both anticipated by and answered in VidAngel’s

moving papers.

5. On June 22, 2017, this Court denied Plaintiffs’ June 20, 2017 ex parte

application to delay any ruling on VidAngel’s motion for five or more months and

required them to respond to VidAngel’s motion. (Dkt. 186.) On June 27, 2017, I

received an e-mail message from Plaintiffs’ counsel Kelly Klaus claiming that

Plaintiffs once again needed discovery. This time the discovery Plaintiffs claimed

to need was different from the discovery they claimed to need on June 20. Although

Plaintiffs said they wanted to understand how VidAngel’s new technology works,



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they demanded to discover a lot more than that and refused to accept discovery

sufficient to satisfy their purported concern. A true and correct copy of the e-mail

correspondence between Mr. Klaus and me regarding Plaintiffs’ requested discovery

is attached as Exhibit A.

6. I specifically agreed to disclose to Plaintiff’s expert: the source code for (i) accessing the video and audio output from the LSS; (ii) all copying of video and audio output originating from the LSS; (iii) streaming files from any server copies to users; and (iv) interactions with the LSS, including “monitoring” the user’s LSS account while VidAngel is streaming to the user. To the extent that VidAngel’s new service uses third party source code, applications or tools in connection with any of the foregoing, Plaintiffs request that VidAngel provide Plaintiffs with the name of, any instructions or operating configurations for, and access to such third-party source code, applications or tools. If feasible (and provided it does not limit Plaintiffs’ ability to inspect the source code), Plaintiffs’ expert will review all source code responsive to this request remotely, with a login and full access to VidAngel’s backend system. 7. I also offered to disclose the source code related to digital rights

management: As you know, much of VidAngel’s source code used in the current technology is borrowed from its legacy system, as to which plaintiffs have already had discovery. That includes, for example, the source code related to DRM/security. Because plaintiffs have previously had discovery of the legacy software, VidAngel’s proposal allows them a second bite at the apple. Put another way, our proposal affords plaintiffs more than we believe they are entitled to. 8. Further, to aid Plaintiffs’ expert in understanding precisely how

VidAngel’s new technology operates, I offered to allow Plaintiffs’ expert to speak

directly to VidAngel’s chief programmer to ask questions “related to understanding

the code and its functionalities.”



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9. Mr. Klaus insisted that Plaintiffs’ demand was all or nothing: either

they would be allowed to take discovery of everything they sought (including

VidAngel’s communications with its customers including, in particular, customer

complaints), or they would refuse to accept any discovery. Mr. Klaus attached a

number of examples of customer complaints to his declaration in opposition to

VidAngel’s motion—all made during VidAngel’s testing period when its customers

were not being charged.

10. Remarkably, Mr. Klaus (who earlier argued to the Court in November

that VidAngel could stream movies using the same method as ClearPlay purportedly

used notwithstanding ClearPlay’s ability to stream new movies had been terminated

more than two months earlier) filtered an exhibit to his declaration in opposition to

this motion. Exhibit E to his declaration (Dkt. 188-8) purported to show a screen

capture of e-mail messages concerning a bug in VidAngel’s new system, but Mr.

Klaus filtered out and secretly redacted a Google Trends chart showing there was

more public interest in VidAngel after it announced its new service than in

December before the Preliminary Injunction enjoined its legacy disc-based service,

Plaintiffs’ attempts to promote ClearPlay’s service. Attached as Exhibit B is a true

and correct copy of the unfiltered post that includes the Google Trends chart.

11. As VidAngel explained to this Court and Plaintiffs in opposing the

preliminary injunction motion, streaming services such as ClearPlay’s rely on the

goodwill of licensed streaming services (“LSSs”) and the Directors Guild of

America (“DGA”). In fact, after ClearPlay’s ability to stream new movies

terminated in September 2017, it has also not been able to resume filtering and

streaming Netflix movies and television shows. Notably, Plaintiffs were

unconcerned then that VidAngel had received a violation of terms of service notice

from Google several years ago when it offered a service similar to ClearPlay’s

current service and are unconcerned now that ClearPlay’s current service also



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violates those terms of service. Coincidently, even Sony’s recent attempt to offer

two dozen family friendly airline versions of its movies was thwarted by the DGA.

Attached as Exhibit C is a true and correct copy of a Hollywood Reporter article

published on June 13, 2017 entitled “Sony’s Sanitized Movie Initiative Faces

Growing Opposition.” After that article appeared, Sony terminated its service.

12. Attached as Exhibit D is a true and correct copy of the amendment

VidAngel has proposed to the Copyright Act. If enacted, the amendment would

ensure that filtering companies are permitted to provide families with access to

filtered content for viewing in the home in the manner in which the majority of

American families now consume content:

No person asserting the rights of a copyright owner of a motion picture may prevent through contractual restrictions the provision of services, computer programs, or technologies for making imperceptible limited portions of audio or video content of a motion picture transmitted to a household for private viewing. No person providing an authorized digital transmission of a motion picture to any household for private viewing may interfere with the ability of such household to receive the transmission with limited portions of the audio or video content thereof made imperceptible if no fixed copy of the altered version of the motion picture is created and if the person’s ability to provide any authorized digital transmission is not harmed.

13. Plaintiffs will point to the existence of poor quality filtering services

like ClearPlay’s that ride on top of authorized streams as evidence that the Family

Movie Act “works” and that VidAngel’s proposed amendment to it is

unnecessary. However, as illustrated below, ClearPlay’s streaming service is

severely limited in comparison to VidAngel’s new service. ClearPlay’s service

works only with one app (and then not with high definition (“HD”) 1080p or 4k

content.) In comparison, VidAngel’s service works across a broad range of apps,

with 1080p and 4k:



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14. That Plaintiffs support poor quality filtered streaming services while

seeking to prevent the best one from operating is also illustrated in the following

comparison.



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15. Plaintiffs know that VidAngel’s competitors will never succeed using

their technologies. This is reflected by the current number of persons each

competitor has listed on their Chrome application: ClearPlay has only 5,514 persons

listed as subscribers, while Cleamstreamit has 151 and UFilter has but 111.

Attached as Exhibits E, F, and G are true and correct copies of recent screenshots

showing the number ClearPlay, Cleanstreamit, and UFilter Chrome applicants,

respectively. Based on its own experience, VidAngel knows that a substantial

percentage of the purporsted subscribers will never actually use ClearPlay’s,

Cleanstreamit’s, or UFilter’s services.

16. According to an independent ratings service, Disney Movies Anywhere

and WB Movies All Access have much lower consumer satisfaction scores than

VidAngel enjoys as illustrated below:

17. Plaintiffs’ claimed concerns regarding the security-related aspects of

VidAngel’s new technology, which are unchanged from the now enjoined

technology, are makeweight. Prior to the injunction, VidAngel offered thousands

of motion pictures to over 1,000,000 viewers, yet Plaintiffs have never pointed to

even one breach of VidAngel’s security or any injury whatever resulting from

VidAngel’s use of the security and DRM aspects of its technology.



















































Documents

Case 2:16-cv-04109-AB-PLA Document 190-1 Filed …blog.vidangel.com/wp-content/uploads/2017/07/...725 S. Figueroa St, Suite 1830 Los Angeles, CA 90017 Telephone: (213) 995-6800 Facsimile: