                FOR PUBLICATION

  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT


DISNEY ENTERPRISES, INC.;                 No. 16-56843
LUCASFILM LTD. LLC; TWENTIETH
CENTURY FOX FILM CORPORATION;               D.C. No.
WARNER BROTHERS                          2:16-cv-04109-
ENTERTAINMENT, INC.,                        AB-PLA
     Plaintiffs-Counter-Defendants-
                         Appellees,
                                            OPINION
                 v.

VIDANGEL, INC.,
     Defendant-Counter-Claimant-
                       Appellant.



      Appeal from the United States District Court
         for the Central District of California
      André Birotte, Jr., District Judge, Presiding

          Argued and Submitted June 8, 2017
                Pasadena, California

                 Filed August 24, 2017
2             DISNEY ENTERPRISES V. VIDANGEL

    Before: Carlos T. Bea and Andrew D. Hurwitz, Circuit
      Judges, and Leslie E. Kobayashi, * District Judge.

                   Opinion by Judge Hurwitz


                          SUMMARY **


             Preliminary Injunction / Copyright

    The panel affirmed the district court’s preliminary
injunction against the defendant in an action under the
Copyright Act and the Digital Millennium Copyright Act.

    Defendant VidAngel, Inc., operated an online streaming
service that removed objectionable content from movies and
television shows. VidAngel purchased physical discs
containing copyrighted movies and television shows,
decrypted the discs to “rip” a digital copy to a computer, and
then streamed to its customers a filtered version of the work.

    The panel held that the district court did not abuse its
discretion in concluding that VidAngel’s copying infringed
the plaintiffs’ exclusive reproduction right. Because
VidAngel did not filter authorized copies of movies, it was
unlikely to succeed on the merits of its defense that the
Family Movie Act of 2005 exempted it from liability for


     *
      The Honorable Leslie E. Kobayashi, United States District Judge
for the District of Hawaii, sitting by designation.
    **
       This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
            DISNEY ENTERPRISES V. VIDANGEL                   3

copyright infringement. VidAngel also was unlikely to
succeed on its fair use defense.

     The panel held that the district court also did not abuse
its discretion in concluding that the plaintiffs were likely to
succeed on their DCMA claim. The panel held that the anti-
circumvention provision of the DMCA, 17 U.S.C. § 1201(a),
covered the plaintiffs’ technological protection measures,
which controlled both access to and use of the copyrighted
works.

    The panel affirmed the district court’s findings regarding
the likelihood of irreparable harm, the balancing of the
equities, and the public interest.


                         COUNSEL

Peter K. Stris (argued), Elizabeth Rogers Brannen, Dana
Berkowitz, and Victor O’Connell, Stris & Maher LLP, Los
Angeles, California; Brendan S. Maher, Daniel L. Geyser,
and Douglas D. Geyser, Stris & Maher LLP, Dallas, Texas;
Ryan Geoffrey Baker, Jaime Wayne Marquart, and Scott M.
Malzahn, Baker Marquart LLP, Los Angeles, California;
David W. Quinto, VidAngel Inc., Beverly Hills, California;
Shaun P. Martin, University of San Diego School of Law,
San Diego, California; for Defendant-Counter-Claimant-
Appellant.

Donald B. Verrilli Jr. (argued), Munger Tolles & Olson LLP,
Washington, D.C.; Glenn D. Pomerantz, Kelly M. Klaus,
Rosa Leda Ehler, and Allyson R. Bennettt, Munger Tolles &
Olson LLP, Los Angeles, California; for Plaintiffs-Counter-
Defendants-Appellees.
4           DISNEY ENTERPRISES V. VIDANGEL

William A. Delgado, Willenken Wilson Loh & Delgado
LLP, Los Angeles, California; Susanna Frederick Fischer,
Columbus School of Law, The Catholic University of
America, Washington, D.C.; for Amici Curiae U.S.
Representatives John Hostettler and Spencer Bachus.

Mitchell L. Stoltz and Kit Walsh, San Francisco, California,
as and for Amicus Curiae Electronic Frontier Foundation.

James M. Burger, Thompson Coburn LLP, Washington,
D.C.; Mark Sableman, Thompson Coburn LLP, St. Louis,
Missouri; for Amicus Curiae ClearPlay, Inc.

Dean E. Short, Short Legal Group, Newport Coast,
California; Bruce H. Turnbull, Turnbull Law Firm PLLC,
Washington, D.C.; for Amici Curiae DVD Copy Control
Association Inc., and Advanced Access Content System
License Administrator LLC.

Eleanor M. Lackman and Lindsay W. Bowen, Cowan
DeBaets Abrahams & Sheppard LLP, New York, New York;
Keith Kupferschmid and Terry Hart, The Copyright
Alliance, Washington, D.C.; for Amicus Curiae The
Copyright Alliance.


                        OPINION

HURWITZ, Circuit Judge:

   VidAngel, Inc. operates an online streaming service that
removes objectionable content from movies and television
shows. VidAngel purchases physical discs containing
copyrighted movies and television shows, decrypts the discs
            DISNEY ENTERPRISES V. VIDANGEL                  5

to “rip” a digital copy to a computer, and then streams to its
customers a filtered version of the work.

    The district court found that VidAngel had likely
violated both the Digital Millennium Copyright Act and the
Copyright Act, and preliminarily enjoined VidAngel from
circumventing the technological measures controlling access
to copyrighted works on DVDs and Blu-ray discs owned by
the plaintiff entertainment studios, copying those works, and
streaming, transmitting, or otherwise publicly performing or
displaying them electronically. VidAngel’s appeal presents
two issues of first impression. The first is whether the
Family Movie Act of 2005 exempts VidAngel from liability
for copyright infringement. 17 U.S.C. § 110(11). The
second is whether the anti-circumvention provision of the
Digital Millennium Copyright Act covers the plaintiffs’
technological protection measures, which control both
access to and use of copyrighted works. 17 U.S.C.
§ 1201(a)(1). The district court resolved these issues against
VidAngel. We agree and affirm the preliminary injunction.

              FACTUAL BACKGROUND

   The copyrighted works.

    Disney Enterprises, LucasFilm Limited, Twentieth
Century Fox Film Corporation, and Warner Brothers
Entertainment (“the Studios”) produce and distribute
copyrighted motion pictures and television shows. The
Studios distribute and license these works for public
dissemination through several “distribution channels”:
(1) movie theaters; (2) sale or rental of physical discs in
DVD or Blu-ray format; (3) sale of digital downloads
through online services, such as iTunes or Amazon Video;
(4) on-demand rental for short-term viewing through cable
and satellite television or internet video-on-demand
6              DISNEY ENTERPRISES V. VIDANGEL

platforms, such as iTunes or Google Play; and
(5) subscription on-demand streaming online outlets, such as
Netflix, Hulu, HBO GO, and cable television.

    To maximize revenue, the Studios employ “windowing,”
releasing their works through distribution channels at
different times and prices, based on consumer demand.
Typically, new releases are first distributed through digital
downloads and physical discs, and are only later available
for on-demand streaming. The Studios often negotiate
higher licensing fees in exchange for the exclusive rights to
perform their works during certain time periods. Digital
distribution thus provides a large source of revenue for the
Studios.

    The Studios employ technological protection measures
(“TPMs”) to protect against unauthorized access to and
copying of their works. They use Content Scramble System
(“CSS”) and Advanced Access Content System (“AACS”),
with optional “BD+,” to control access to their copyrighted
content on DVDs and Blu-ray discs, respectively. These
encryption-based TPMs allow consumers to use players
from licensed manufacturers only to lawfully decrypt a
disc’s content, and then only for playback, not for copying. 1




    1
      Thus, as the licensors of CSS and AACS, amicus curiae DVD
Copy Control Association, Inc. and Advanced Access Content System
License Administrator, LLC, explain, “[i]ndividual consumers
purchasing a DVD or Blu-ray Disc are not provided the keys or other
cryptographic secrets that are necessary for playback. They must use a
licensed player which, in turn, must abide by the technical specifications
and security requirements imposed by [their] licenses.”
               DISNEY ENTERPRISES V. VIDANGEL                          7

    VidAngel’s streaming service.

    VidAngel offers more than 2500 movies and television
episodes to its consumers. It purchases multiple authorized
DVDs or Blu-ray discs for each title it offers. VidAngel then
assigns each disc a unique inventory barcode and stores it in
a locked vault. VidAngel uses AnyDVD HD, a software
program, to decrypt one disc for each title, removing the
CSS, AACS, and BD+ TPMs on the disc, and then uploads
the digital copy to a computer. 2 Or, to use VidAngel’s
terminology, the “[m]ovie is ripped from Blu-Ray to the gold
master file.”       After decryption, VidAngel creates
“intermediate” files, converting them to HTTP Live
Streaming format and breaking them into segments that can
be tagged for over 80 categories of inappropriate content.
Once tagged, the segments are encrypted and stored in cloud
servers.

    Customers “purchase” a specific physical disc from
VidAngel’s inventory for $20. The selected disc is removed
from VidAngel’s inventory and “ownership” is transferred
to the customer’s unique user ID. However, VidAngel
retains possession of the physical disc “on behalf of the
purchasers,” with the exception of the isolated cases in
which the consumer asks for the disc. To date, VidAngel
has shipped only four discs to purchasers.




     2
       AnyDVD HD is sold by RedFox, a Belize-based company run by
former employees of a company convicted overseas for trafficking in
anti-circumvention technology and identified by the United States Trade
Representative as selling software that facilitates copyright violations.
AnyDVD is commercially available outside of the United States.
8              DISNEY ENTERPRISES V. VIDANGEL

    After purchasing a disc, a customer selects at least one
type of objectionable content to be filtered out of the work. 3
VidAngel then streams the filtered work to that customer on
“any VidAngel-supported device, including Roku, Apple
TV, Smart TV, Amazon Fire TV, Android, Chromecast,
iPad/iPhone and desktop or laptop computers.” The work is
streamed from the filtered segments stored in cloud servers,
not from the original discs. Filtered visual segments are
“skipped and never streamed to the user.” If the customer
desires that only audio content be filtered, VidAngel creates
and streams an altered segment that mutes the audio content
while leaving the visual content unchanged. VidAngel
discards the filtered segments after the customer views them.

     After viewing the work, a customer can sell the disc
“back to VidAngel for a partial credit of the $20 purchase
price,” less $1 per night for standard definition purchases or
$2 per night for high-definition purchases. VidAngel
accordingly markets itself as a $1 streaming service. After a
disc is sold back to VidAngel, the customer’s access to that
title is terminated. 4 Virtually all (99.6%) of VidAngel’s
customers sell back their titles, on average within five hours,
and VidAngel’s discs are “re-sold and streamed to a new


      3
        VidAngel initially permitted streaming without filters. It then
began requiring a filter, but soon discovered customers were selecting
inapplicable filters (e.g., a Star Wars character for a non-Star Wars
movie) to obtain unfiltered films. VidAngel subsequently required
filtering to correspond to the specific movie being streamed, but
permitted the single required filter to be simply for the opening or closing
credits. After the Studios brought this action, VidAngel began requiring
customers to “pick at least one additional [non-credits] filter.”
     4
       VidAngel previously permitted customers to select “automatic
sellback,” but eliminated that feature after this suit was filed.
              DISNEY ENTERPRISES V. VIDANGEL                         9

customer an average of 16 times each in the first four weeks”
of a title’s release.

        VidAngel’s growth.

    In July 2015, VidAngel sent letters to the Studios
describing its service. The letters explained that VidAngel
was in “a limited beta test of its technology” and had only
4848 users, and concluded: “If you have any questions
concerning VidAngel’s technology or business model,
please feel free to ask. If you disagree with VidAngel’s
belief that its technology fully complies with the Copyright
Act . . . please let us know.” The Studios did not respond,
but began monitoring VidAngel’s activities.

     VidAngel opened its service to the general public in
August 2015. Its marketing emphasized that it could stream
popular new releases that licensed video-on-demand
services like Netflix could not, for only $1. For example,
when VidAngel began streaming Disney’s Star Wars: The
Force Awakens, it was available elsewhere only for purchase
on DVD or as a digital download, not as a short-term rental.
Similarly, VidAngel began streaming Fox’s The Martian
and Brooklyn while those works were exclusively licensed
to HBO for on-demand streaming. Customers responded
favorably. 5 And, a survey indicated that 51% of VidAngel’s
users would not otherwise watch their selections without
filtering.


    5
       For example, one customer tweeted: “Son asked for #StarWars A
New Hope. Not on Netflix, Google play charges $19.99. Streamed HD
on @VidAngel. $2 & hassle free!” Another gave VidAngel a 5-star
rating on Facebook, explaining: “We bought Star Wars and sold it back
for a total of $1 when it was like $5 to rent on Amazon. So even if you
don’t need content cleaned, it’s a great video service.”
10          DISNEY ENTERPRISES V. VIDANGEL

    VidAngel eventually reached over 100,000 monthly
active users. When the Studios filed this suit in June 2016,
VidAngel offered over 80 of the Studios’ copyrighted works
on its website. VidAngel was not licensed or otherwise
authorized to copy, perform, or access any of these works.

           PROCEDURAL BACKGROUND

    The Studios’ complaint alleged copyright infringement
in violation of 17 U.S.C. § 106(1), (4), and circumvention of
technological measures controlling access to copyrighted
works in violation of the Digital Millennium Copyright Act
of 1998 (“DMCA”), 17 U.S.C. § 1201(a)(1)(A). VidAngel
denied the statutory violations, raising the affirmative
defenses of fair use and legal authorization by the Family
Movie Act of 2005 (“FMA”), 17 U.S.C. § 110(11). The
Studios moved for a preliminary injunction, and after
expedited discovery, the district court granted the motion.

    The district court found that the Studios had
demonstrated a likelihood of success on the merits of both
their DMCA and copyright infringement claims. It first
found that VidAngel violated § 1201(a)(1)(A) of the DMCA
by circumventing the technological measures controlling
access to the Studios’ works. The district court also
concluded that VidAngel violated the Studios’ exclusive
right to reproduce their works under § 106(1) by making
copies of them on a computer and third-party servers. It also
held that VidAngel violated the Studios’ exclusive right to
publicly perform their works under § 106(4), because at
most the customers “own” only the physical discs they
“purchase,” not the digital content streamed to them.

   The district court rejected VidAngel’s FMA defense,
holding that “VidAngel’s service does not comply with the
express language of the FMA,” which requires a filtered
               DISNEY ENTERPRISES V. VIDANGEL                        11

transmission to “come from an ‘authorized copy’ of the
motion picture.” § 110(11)). The district court also found
that VidAngel was not likely to succeed on its fair use
defense, emphasizing that the “purpose and character of the
use” and “effect of the use upon the potential market for or
value of the copyrighted work” factors weighed in favor of
the Studios. 17 U.S.C. § 107.

    The district court concluded that the Studios had
demonstrated a likelihood of irreparable injury from
VidAngel’s interference “with their basic right to control
how, when and through which channels consumers can view
their copyrighted works” and with their “relationships and
goodwill with authorized distributors.” Finally, the court
found that “the balance of hardships tips sharply in [the
Studios’] favor.”

    The court therefore preliminarily enjoined VidAngel
from copying and “streaming, transmitting, or otherwise
publicly performing or displaying any of Plaintiff’s
copyrighted works,” “circumventing technological measures
protecting Plaintiff’s copyrighted works,” or “engaging in
any other activity that violates, directly or indirectly,”
17 U.S.C. §§ 1201(a) or 106. VidAngel timely appealed. 6

   JURISDICTION AND STANDARD OF REVIEW

    We have jurisdiction of this appeal under 28 U.S.C.
§ 1292(a)(1) and review the district court’s entry of a

    6
       Both the district court and this court denied VidAngel’s motions
for a stay of the preliminary injunction. Before its motions were denied,
VidAngel continued to stream the Studios’ copyrighted works and added
at least three additional works to its inventory. The district court held
VidAngel in contempt for violating the preliminary injunction. The
contempt citation is not involved in this appeal.
12           DISNEY ENTERPRISES V. VIDANGEL

preliminary injunction for abuse of discretion. Garcia v.
Google, Inc., 786 F.3d 733, 739 (9th Cir. 2015) (en banc).
“Because our review is deferential, we will not reverse the
district court where it got the law right, even if we would
have arrived at a different result, so long as the district court
did not clearly err in its factual determinations.” Id. (citation
omitted, alteration incorporated); see also Pimentel v.
Dreyfus, 670 F.3d 1096, 1105 (9th Cir. 2012) (per curiam)
(asking whether the district court “identified the correct legal
rule” and whether its application of that rule “was
(1) illogical, (2) implausible, or (3) without support in
inferences that may be drawn from the facts in the record”
(citation omitted)).

                        DISCUSSION

    A party can obtain a preliminary injunction by showing
that (1) it is “likely to succeed on the merits,” (2) it is “likely
to suffer irreparable harm in the absence of preliminary
relief,” (3) “the balance of equities tips in [its] favor,” and
(4) “an injunction is in the public interest.” Winter v. Nat.
Res. Def. Council, Inc., 555 U.S. 7, 20 (2008). A preliminary
injunction may also be appropriate if a movant raises
“serious questions going to the merits” and the “balance of
hardships . . . tips sharply towards” it, as long as the second
and third Winter factors are satisfied. All. for the Wild
Rockies v. Cottrell, 632 F.3d 1127, 1134–35 (9th Cir. 2011).
The district court applied both of these standards.

     Likelihood of success on the merits.

    Likelihood of success on the merits “is the most
important” Winter factor; if a movant fails to meet this
“threshold inquiry,” the court need not consider the other
factors, Garcia, 786 F.3d at 740, in the absence of “serious
questions going to the merits,” All. for the Wild Rockies,
            DISNEY ENTERPRISES V. VIDANGEL                 13

632 F.3d at 1134–35. However, “once the moving party has
carried its burden of showing a likelihood of success on the
merits, the burden shifts to the non-moving party to show a
likelihood that its affirmative defense will succeed.” Perfect
10, Inc. v. Amazon.com, Inc., 508 F.3d 1146, 1158 (9th Cir.
2007). Thus, if the Studios demonstrated a likelihood of
success on their copyright infringement and DMCA claims,
the burden shifted to VidAngel to show a likelihood of
success on its FMA and fair use affirmative defenses. Id.

   A. Copyright infringement.

    To establish direct copyright infringement, the Studios
must (1) “show ownership of the allegedly infringed
material” and (2) “demonstrate that the alleged infringers
violate at least one exclusive right granted to copyright
holders under 17 U.S.C. § 106.” Id. at 1159 (citation
omitted). VidAngel’s briefing on appeal does not contest the
Studios’ ownership of the copyrights, instead focusing only
on the second requirement.

     Copyright owners have the exclusive right “to reproduce
the copyrighted work in copies,” or to authorize another to
do so. 17 U.S.C. § 106(1). VidAngel concedes that it copies
the Studios’ works from discs onto a computer. VidAngel
initially argued that because it lawfully purchased the discs,
it can also lawfully re-sell or rent them. But, lawful owners
“of a particular copy” of a copyrighted work are only entitled
to “sell or otherwise dispose of the possession of that copy,”
not to reproduce the work. 17 U.S.C. § 109(a). The district
court thus did not abuse its discretion in concluding that
VidAngel’s copying infringed the Studios’ exclusive
reproduction right. See MAI Sys. Corp. v. Peak Comput.,
Inc., 991 F.2d 511, 518 (9th Cir. 1993) (transferring digital
files “from a permanent storage device to a computer’s
RAM” is “copying” under § 106); Sega Enters. Ltd. v.
14                 DISNEY ENTERPRISES V. VIDANGEL

Accolade, Inc., 977 F.2d 1510, 1518 (9th Cir. 1993) (holding
that § 106 “unambiguously . . . proscribes ‘intermediate
copying’” (citation omitted)). 7

     B. Defenses to copyright infringement.

         1. The Family Movie Act.

    The FMA was designed to allow consumers to skip
objectionable audio and video content in motion pictures
without committing copyright infringement.            Family
Entertainment and Copyright Act of 2005, Pub. L. No. 109-
9, Title II, §§ 201, 202(a), 119 Stat. 218 (2005). The statute
provides, in relevant part:

         Notwithstanding the provisions of section
         106, the following are not infringements of
         copyright:

         [. . .]

         the making imperceptible, by or at the
         direction of a member of a private household,
         of limited portions of audio or video content
         of a motion picture, during a performance in
         or transmitted to that household for private
         home viewing, from an authorized copy of
         the motion picture, or the creation or
         provision of a computer program or other
         technology that enables such making
         imperceptible and that is designed and

     7
      Indeed, at oral argument, VidAngel conceded that it relies entirely
on the FMA and fair use as affirmative defenses to the reproduction
claim.
             DISNEY ENTERPRISES V. VIDANGEL                  15

       marketed to be used, at the direction of a
       member of a private household, for such
       making imperceptible, if no fixed copy of the
       altered version of the motion picture is
       created by such computer program or other
       technology.

17 U.S.C. § 110(11).

     We have had no previous occasion to interpret the FMA,
so we begin with its text. See Hernandez v. Williams,
Zinman & Parham PC, 829 F.3d 1068, 1072 (9th Cir. 2016).
The statute clearly identifies two acts that “are not
infringements of copyright.” § 110(11). First, it authorizes
“making imperceptible”—filtering—by or at the direction of
a member of a private household, of limited portions of
audio or video content of a motion picture, during
performances or transmissions to private households, “from
an authorized copy of the motion picture.” Id. Second, the
statute authorizes the creation or distribution of any
technology that enables the filtering described in the first
provision and that is designed and marketed to be used, at
the direction of a member of a private household, for that
filtering, if no fixed copy of the altered version of the motion
picture is created by the technology. Id. Thus, the second
act authorized by the FMA—the creation or distribution of
certain technology that enables “such” filtering—necessarily
requires that the filtering be “from an authorized copy of the
motion picture.” Id.

     Indeed, VidAngel concedes that under the FMA, “the
filtering must come ‘from an authorized copy’ of the movie.”
But, VidAngel argues that because it “begins its filtering
process with an authorized copy”—a lawfully purchased
16             DISNEY ENTERPRISES V. VIDANGEL

disc—“any subsequent filtered stream” is also “from” that
authorized copy.

    We disagree. The FMA permits “the making
imperceptible . . . of limited portions of audio or video
content of a motion picture, during a performance in or
transmitted to [a private household], from an authorized
copy of the motion picture.” § 110(11) (emphasis added). It
does not say, as VidAngel would have us read the statute,
“beginning from” or “indirectly from” an authorized copy.
See id. VidAngel “would have us read an absent word into
the statute,” but, “[w]ith a plain, nonabsurd meaning in view,
we need not proceed in this way.” Lamie v. U.S. Tr.,
540 U.S. 526, 538 (2004). Rather, the most natural reading
of the statute is that the filtered performance or transmission
itself must be “from” an authorized copy of the motion
picture. See Yates v. United States, 135 S. Ct. 1074, 1085
(2015) (plurality opinion) (“The words immediately
surrounding [‘from’ in § 110(11)] . . . cabin the contextual
meaning of that term.”); Antonin Scalia & Bryan Garner,
Reading Law: The Interpretation of Legal Texts 148–49
(2012) (explaining that a “postpositive modifier”—that is,
one “positioned after” multiple phrases or clauses, such as
“from an authorized copy” here—modifies all the preceding
clauses, unless a “determiner” is repeated earlier in the
sentence). 8


     8
       In support of its argument that the transmission need only be the
culmination of a process that begins with the possession of an authorized
copy, VidAngel offers the following analogy: “Holiday cards are best
described as coming from loved ones, even though the mailman serves
as an intermediary. Only a hypertechnical interpretation would insist the
card came from the mailman.” But, VidAngel is not a mailman who
simply delivers movies from the seller to the customer in their original
form—it delivers digital, altered copies of the original works, not the
              DISNEY ENTERPRISES V. VIDANGEL                      17

    The statutory context of § 110(11) supports this
interpretation. See Yates, 135 S. Ct. at 1081–82 (noting that
the interpretation of statutory language is “determined not
only by reference to the language itself, but as well by the
specific context in which that language is used, and the
broader context of the statute as a whole” (citation omitted,
alterations incorporated)). The FMA was enacted as part of
Title II of the Family Entertainment and Copyright Act of
2005, which is entitled “exemption from infringement for
skipping audio and video content in motion pictures.” Pub.
L. No. 109-9, § 202(a), 119 Stat. 218. It is found in a sub-
section of 17 U.S.C. § 110, which is entitled “Limitations on
exclusive rights: Exemption of certain performances and
displays.” These headings indicate that the FMA exempts
compliant filtered performances, rather than the processes
that make such performances possible. See Yates, 135 S. Ct.
at 1083 (looking to statute heading to “supply cues” of
Congress’s intent). Indeed, the title of § 110 indicates that it
is directed only at “certain performances and displays” that
would otherwise infringe a copyright holder’s exclusive
public performance and display rights, see 17 U.S.C.
§ 106(4), (5), (6), while other limitations on exclusive rights
in Title 17 are directed at the reproduction right. Compare
§ 110 with § 108 (“Limitations on exclusive rights:
Reproduction by libraries and archives”).

    Moreover, the enacting statute was created “to provide
for the protection of intellectual property rights.” Pub. L.
No. 109-9, 119 Stat. 218. Notably, the FMA concludes by
noting: “Nothing in paragraph (11) shall be construed to
imply further rights under section 106 of this title, or to have
any effect on defenses or limitations on rights granted under

discs. Moreover, if we adopted VidAngel’s reading of “from,” the card
would be “from” Hallmark, the card creator, not the loved one.
18             DISNEY ENTERPRISES V. VIDANGEL

any other section of this title or under any other paragraph of
this section.” § 110. VidAngel’s interpretation of the
statute—which permits unlawful decryption and copying
prior to filtering—would not preserve “protection of
intellectual property rights” or not “have any effect” on the
existing copyright scheme. See Yates, 135 S. Ct. at 1083
(explaining that “[i]f Congress indeed meant to make” a
statute “an all-encompassing” exemption, “one would have
expected a clearer indication of that intent”).

    VidAngel argues that the FMA was crafted “to avoid
turning on the technical details of any given filtering
technology,” citing the statutory authorization of “the
creation or provision of . . . other technology that enables
such making imperceptible.” § 110(11)). 9 But, the phrase
“such making imperceptible” clearly refers to the earlier
description of “making imperceptible,” which must be “from
an authorized copy of the motion picture.” § 110(11). Thus,
even if VidAngel employs technology that enables filtering,
the FMA exempts that service from the copyright laws only
if the filtering is from an authorized copy of the motion
picture.      VidAngel’s interpretation, which ignores
“intermediate steps” as long as the initial step came from a
legally purchased title and the final result involves “no fixed
copy of the altered version,” ignores this textual limitation. 10



     9
      Because this argument was not raised below, we would be hard-
pressed to find that the district court abused its discretion by failing to
address it. We address it nonetheless.
     10
       At oral argument, VidAngel asserted that the FMA’s prohibition
on creating a “fixed copy of the altered version” contemplates that fixed
copies of the authorized copy can be made. We disagree. The FMA
states only that, when streaming from an authorized copy, “the altered
               DISNEY ENTERPRISES V. VIDANGEL                        19

    More importantly, VidAngel’s interpretation would
create a giant loophole in copyright law, sanctioning
infringement so long as it filters some content and a copy of
the work was lawfully purchased at some point. But,
virtually all piracy of movies originates in some way from a
legitimate copy. If the mere purchase of an authorized copy
alone precluded infringement liability under the FMA, the
statute would severely erode the commercial value of the
public performance right in the digital context, permitting,
for example, unlicensed streams which filter out only a
movie’s credits. See 4 Patry on Copyright § 14:2 (2017). It
is quite unlikely that Congress contemplated such a result in
a statute that is expressly designed not to affect a copyright
owner’s § 106 rights. § 110. See Hernandez, 829 F.3d at
1075 (adopting an interpretation because it “is the only one
that is consistent with the rest of the statutory text and that
avoids creating substantial loopholes . . . that otherwise
would undermine the very protections the statute provides”).

    And, although we need not rely upon legislative history,
it supports our conclusion. The FMA’s sponsor, Senator
Orrin Hatch, stated that the Act “should be narrowly
construed” to avoid “impacting established doctrines of
copyright” law and “sets forth a number of conditions to
ensure that it achieves its intended effect.” 151 Cong. Rec.
S450-01, S501 (daily ed. Jan. 25, 2005). Thus, “an
infringing performance . . . or an infringing transmission . . .
are not rendered non-infringing by section 110(11) by virtue
of the fact that limited portions of audio or video content of
the motion picture being performed are made imperceptible
during such performance or transmission in a manner
consistent with that section.” Id. Indeed, Senator Hatch

version of the motion picture” created by the filtering technology cannot
be fixed in a copy. § 110(11).
20             DISNEY ENTERPRISES V. VIDANGEL

stressed that “[a]ny suggestion that support for the exercise
of viewer choice in modifying their viewing experience of
copyrighted works requires violation of either the copyright
in the work or of the copy protection schemes that provide
protection for such work should be rejected as counter to
legislative intent or technological necessity.” Id.

     Senator Hatch identified “the Clear Play model” as one
intended to be protected by the FMA. Id. So did the House
of Representatives. H.R. Rep. No. 109-33, pt. 1, at 70 (2005)
(minority views); Derivative Rights, Moral Rights, and
Movie Filtering Technology: Hearing Before the Subcomm.
on Courts, the Internet, and Intellectual Prop. of the H.
Comm. on the Judiciary, 108th Cong. (2004) (ClearPlay
CEO testimony). 11 ClearPlay sells a fast-forwarding device
which uses video time codes to permit customers to skip
specific scenes or mute specific audio; it does not make
copies of the films because the time codes are “integrated”
into the disc’s encrypted content and players licensed to
decrypt and play the content. Not surprisingly, therefore, the
only other court to construe the FMA has held that
ClearPlay’s technology “is consistent with the statutory
definition,”     Huntsman        v.    Soderbergh,        No.
Civ.A02CV01662RPMMJW, 2005 WL 1993421, at *1 (D.
Colo. Aug. 17, 2005), but that a filtering technology that
made digital copies from lawfully purchased discs and then
filtered them, as VidAngel does, is not, Clean Flicks of


     11
        Indeed, the legislative history stresses that the FMA was a
response to litigation between ClearPlay and several studios. 150 Cong.
Rec. H7654 (daily ed. Sept. 28, 2004) (statement of Rep. Jackson-Lee);
see also Family Movie Act of 2004, H.R. Comm. on the Judiciary Rep.
No. 108-670 at 41–42 (dissenting views) (opposing the FMA because it
“takes sides in a private lawsuit” and “is specifically designed to legalize
ClearPlay technology”).
            DISNEY ENTERPRISES V. VIDANGEL                 21

Colo., LLC v. Soderbergh, 433 F. Supp. 2d 1236, 1238, 1240
(D. Colo. 2006).

    VidAngel does not stream from an authorized copy of
the Studios’ motion pictures; it streams from the “master
file” copy it created by “ripping” the movies from discs after
circumventing their TPMs. The district court therefore did
not abuse its discretion in concluding that VidAngel is
unlikely to succeed on the merits of its FMA defense to the
Studios’ copyright infringement claims.

       2. Fair use.

    “[T]he fair use of a copyrighted work, including such use
by reproduction in copies . . . is not an infringement of
copyright.” 17 U.S.C. § 107. In determining whether the
use of a copyrighted work is fair, we consider:

       (1) the purpose and character of the use,
       including whether such use is of a
       commercial nature or is for nonprofit
       educational purposes; (2) the nature of the
       copyrighted work; (3) the amount and
       substantiality of the portion used in relation
       to the copyrighted work as a whole; and
       (4) the effect of the use upon the potential
       market for or value of the copyrighted work.

Id. Although we must consider all of these factors “together,
in light of the purposes of copyright,” we are not confined to
them; rather, we must conduct a “case-by-case analysis.”
Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 577–78
(1994).

    The district court correctly identified the four fair use
factors and applied them. VidAngel concedes that the
22           DISNEY ENTERPRISES V. VIDANGEL

district court correctly found that the second and third
factors—“the nature of the copyrighted work” and “the
amount and substantiality of the portion used in relation to
the copyrighted work as a whole”—weigh against finding
fair use. VidAngel claims, however, that the district court
abused its discretion with respect to the first and fourth
factors.

    In addressing the first factor, the court asks “whether the
new work merely supersedes the objects of the original
creation, or instead adds something new, with a further
purpose or different character . . . [;] in other words, whether
and to what extent the new work is ‘transformative.’” Id. at
579 (citations omitted, alterations incorporated); see
§ 107(1). VidAngel concedes its use is commercial, and thus
“presumptively . . . unfair.” Leadsinger, Inc. v. BMG Music
Publ’g, 512 F.3d 522, 530 (9th Cir. 2008) (citation omitted).
But, it argues that its use is “profoundly transformative”
because “omissions can transform a work,” affirming
“[r]eligious convictions and parental views.”

    The district court found, however, that “VidAngel’s
service does not add anything to Plaintiff’s works. It simply
omits portions that viewers find objectionable,” and
transmits them for the “same intrinsic entertainment value”
as the originals. This factual finding was not clearly
erroneous. Although removing objectionable content may
permit a viewer to enjoy a film, this does not necessarily
“add[] something new” or change the “expression, meaning,
or message” of the film. Campbell, 510 U.S. at 579. Nor
does reproducing the films’ discs in digital streaming format,
because “both formats are used for entertainment purposes.”
Kelly v. Arriba Soft Corp., 336 F.3d 811, 819 (9th Cir. 2003).
Star Wars is still Star Wars, even without Princess Leia’s
bikini scene.
            DISNEY ENTERPRISES V. VIDANGEL                 23

    Moreover, VidAngel’s service does not require
removing a crucial plot element—it requires the use of only
one filter, which can be an audio filter temporarily silencing
a portion of a scene without removing imagery, or skipping
a gratuitous scene. Indeed, the FMA sanctions only making
“limited portions” of a work imperceptible. 17 U.S.C.
§ 110(11). The district court did not abuse its discretion in
finding that VidAngel’s use is not transformative. See Kelly,
336 F.3d at 819 (“Courts have been reluctant to find fair use
when an original work is merely retransmitted in a different
medium . . . . for entertainment purposes.” (footnote
omitted)).

    The fourth fair use factor evaluates “the extent of market
harm caused by” the infringing activity and “whether
unrestricted and widespread conduct of the sort engaged by
the defendant . . . would result in a substantially adverse
impact on the potential market for the original.” Campbell,
510 U.S. at 590 (citation omitted, alteration incorporated);
see § 107(4). Because the district court concluded that
VidAngel’s use was commercial and not transformative, it
was not error to presume likely market harm. Leadsinger,
512 F.3d at 531.

    VidAngel argues that its service actually benefits the
Studios because it purchases discs and expands the audience
for the copyrighted works to viewers who would not watch
without filtering. But, the district court found that
“VidAngel’s service [is] an effective substitute for
Plaintiff’s unfiltered works,” because surveys suggested that
49% of its customers would watch the movies without filters.
This finding was not clearly erroneous. VidAngel’s
purchases of discs also do not excuse its infringement. See
A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1017
(9th Cir. 2001) (“Any allegedly positive impact of
24             DISNEY ENTERPRISES V. VIDANGEL

defendant’s activities on plaintiffs’ prior market in no way
frees defendant to usurp a further market that directly derives
from reproduction of the plaintiffs’ copyrighted works.”)
(quoting UMG Recordings, Inc. v. MP3.com, Inc., 92 F.
Supp. 2d 349, 352 (S.D.N.Y. 2000)). And, the market factor
is less important when none of the other factors favor
VidAngel. See Leadsinger, 512 F.3d at 532. 12

    Finally, VidAngel argues that its service is “a
paradigmatic example of fair use: space-shifting.” But, the
case it cites states only that a portable music player that
“makes copies in order to render portable, or ‘space-shift,’
those files that already reside on a user’s hard drive” is
“consistent with the [Audio Home Recording] Act’s main
purpose—the facilitation of personal use.” Recording Indus.
Ass’n of Am. v. Diamond Multimedia Sys., Inc., 180 F.3d
1072, 1079 (9th Cir. 1999). The reported decisions
unanimously reject the view that space-shifting is fair use
under § 107. See A&M Records, 239 F.3d at 1019 (rejecting
“space shifting” that “simultaneously involve[s] distribution
of the copyrighted material to the general public”); UMG
Recordings, 92 F. Supp. 2d at 351 (rejecting “space shift” of
CD files to MP3 files as “another way of saying that the
unauthorized copies are being retransmitted in another

     12
        VidAngel also argues that creating an “intermediate copy” for
filtering is a “classic fair use.” The cases it cites are inapposite, because
VidAngel does not copy the Studios’ works to access unprotected
functional elements it cannot otherwise access. See Sega, 977 F.2d at
1520 (“Where there is good reason for studying or examining the
unprotected aspects of a copyrighted computer program, disassembly for
purposes of such study or examination constitutes a fair use.”); Sony
Comput. Entm’t, Inc. v. Connectix Corp., 203 F.3d 596, 602–07 (9th Cir.
2000) (copying necessary “for the purpose of gaining access to the
unprotected elements of Sony’s software” was fair use and not a “change
of format”).
               DISNEY ENTERPRISES V. VIDANGEL                         25

medium—an insufficient basis for any legitimate claim of
transformation”).     Indeed, in declining to adopt an
exemption to the DMCA for space-shifting, see 17 U.S.C.
§ 1201(a)(1)(C), the Librarian of Congress relied on the
Register of Copyright’s conclusion that “the law of fair use,
as it stands today, does not sanction broad-based space-
shifting or format-shifting.” Exemption to Prohibition on
Circumvention of Copyright Protection Systems for Access
Control Technologies, 80 Fed. Reg. 65944-01, 65960 (Oct.
28, 2015) (to be codified at 37 C.F.R. pt. 201). And, even
assuming space-shifting could be fair use, VidAngel’s
service is not personal and non-commercial space-shifting:
it makes illegal copies of pre-selected movies and then sells
streams with altered content and in a different format than
that in which they were bought. 13


      13
         Because the Studios are likely to succeed on the merits of their
reproduction claim, and VidAngel is unlikely to succeed on the merits of
its affirmative defenses, we therefore need not reach the district court’s
alternative § 106 ground for imposing the preliminary injunction—the
public performance right. See 17 U.S.C. § 502(a) (authorizing a court to
enter a temporary injunction “on such terms as it may deem reasonable
to prevent or restrain infringement of copyright”); Perfect 10, 508 F.3d
at 1159 (holding that plaintiff must show defendant infringed “at least
one exclusive right” under § 106); see also Video Pipeline, Inc. v. Buena
Vista Home Entm’t, Inc., 342 F.3d 191, 197 (3d Cir. 2003) (explaining
that “for preliminary injunction purposes, [plaintiff] needed to show”
only that the defendant’s action “likely violates any provision of § 106,”
and the district court’s injunction, based upon likely violations of
multiple subsections of § 106, “would not be affected by any conclusion
[the appellate court] might make as to whether” defendant’s actions
violated a different subsection of § 106). The district court properly
enjoined VidAngel from streaming, transmitting, or otherwise publicly
performing or displaying any of the Studios’ works, because such actions
all stem from either past or future unauthorized copying. See 2 Nimmer
on Copyright § 8.02(c) (2017) (“[S]ubject to certain . . . exemptions,
copyright infringement occurs whenever an unauthorized copy . . . is
26             DISNEY ENTERPRISES V. VIDANGEL

     C. Circumvention of access control measures under
        the Digital Millennium Copyright Act.

    The district court also did not abuse its discretion in
finding that the Studios are likely to succeed on their DMCA
claim. In relevant part, that statute provides that “[n]o
person shall circumvent a technological measure that
effectively controls access to a [copyrighted] work.”
17 U.S.C. § 1201(a)(1)(A). Circumvention means “to
decrypt an encrypted work . . . without the authority of the
copyright owner.” § 1201(a)(3)(A). VidAngel concedes
that CSS, AACS, and BD+ are encryption access controls,
and that it “uses software to decrypt” them. But, it argues
that, “like all lawful purchasers, VidAngel is authorized by
the Studios to decrypt [the TPMs] to view the discs’
content.”

    The argument fails. Section 1201(a)(3)(A) exempts from
circumvention liability only “those whom a copyright owner
authorizes to circumvent an access control measure, not
those whom a copyright owner authorizes to access the
work.” MDY Indus., LLC v. Blizzard Entm’t, Inc., 629 F.3d
928, 953 n.16 (9th Cir. 2011). MDY acknowledged a circuit
split between the Second Circuit and the Federal Circuit
regarding “the meaning of the phrase ‘without the authority
of the copyright owner,’” and chose to follow the Second
Circuit’s approach in Universal City Studios, Inc. v. Corley.


made, even if it is used solely for the private purposes of the reproducer,
or even if the other uses are licensed.”); Flava Works, Inc. v. Gunter,
689 F.3d 754, 762–63 (7th Cir. 2012) (explaining that “copying videos
. . . without authorization” constitutes direct infringement and plaintiff
would therefore “be entitled to an injunction,” even if the defendant does
not “perform” the works itself).
              DISNEY ENTERPRISES V. VIDANGEL                        27

Id. (citing 273 F.3d 429, 444 (2d Cir. 2001)). 14 Corley
rejected the very argument VidAngel makes here: “that an
individual who buys a DVD has the ‘authority of the
copyright owner’ to view the DVD, and therefore is
exempted from the DMCA pursuant to subsection
1201(a)(3)(A) when the buyer circumvents an encryption
technology in order to view the DVD on a competing
platform.” 273 F.3d at 444. Rather, the Second Circuit
explained, § 1201(a)(3)(A) “exempts from liability those
who would ‘decrypt’ an encrypted DVD with the authority
of the copyright owner, not those who would ‘view’ a DVD
with the authority of a copyright owner.” Id.

    Like the defendant in Corley, VidAngel “offered no
evidence that [the Studios] have either explicitly or
implicitly authorized DVD buyers to circumvent encryption
technology” to access the digital contents of their discs. Id.
Rather, lawful purchasers have permission only to view their
purchased discs with a DVD or Blu-ray player licensed to
decrypt the TPMs. Therefore, VidAngel’s “authorization to
circumvent” argument fails. 15

    VidAngel also argues, for the first time on appeal, that
the TPMs on the Studios’ discs are use controls under
    14
        Although MDY and Corley involved claims under § 1201(a)(2)
rather than § 1201(a)(1), both provisions rely on the definition of
circumvention in § 1201(a)(3)(A), so the same analysis applies to claims
under both provisions. See MDY, 629 F.3d at 953 n.16; Corley, 273 F.3d
at 444.
    15
      The two Ninth Circuit cases cited by VidAngel in support of its
argument interpret different phrases, “without authorization” and
“exceeds authorized access,” in a different statute, the Computer Fraud
and Abuse Act, 18 U.S.C. § 1030. See United States v. Nosal, 676 F.3d
854, 856–63 (9th Cir. 2012) (en banc); LVRC Holdings LLC v. Brekka,
581 F.3d 1127, 1132–35 (9th Cir. 2009).
28          DISNEY ENTERPRISES V. VIDANGEL

§ 1201(b) rather than access controls under § 1201(a), and
therefore it cannot be held liable for circumventing them.
Unlike § 1201(a), § 1201(b) does not prohibit circumvention
of technological measures. Rather, it “prohibits trafficking
in technologies that circumvent technological measures that
effectively protect ‘a right of a copyright owner,’” meaning
the “existing exclusive rights under the Copyright Act,” such
as reproduction.       MDY, 629 F.3d at 944 (quoting
§ 1201(b)(1)). In other words, § 1201(b) governs TPMs that
control use of copyrighted works, while § 1201(a) governs
TPMs that control access to copyrighted works. Id. at 946
(explaining that DMCA “created a new anticircumvention
right in § 1201(a)(2) independent of traditional copyright
infringement and granted copyright owners a new weapon
against copyright infringement in § 1201(b)(1)”).

    But, even assuming that VidAngel’s argument is not
waived, it fails. VidAngel contends that because the Studios
object only to decryption to copy—a use of the copyrighted
work—but permit those who buy discs to decrypt to view—
a way of accessing the work—the TPMs are “conditional
access controls [that] should be treated as use controls”
governed by § 1201(b). VidAngel therefore argues that
because it only circumvents use controls, but does not traffic,
it does not violate the DMCA. But, the statute does not
provide that a TPM cannot serve as both an access control
and a use control. Its text does not suggest that a defendant
could not violate both § 1201(a)(1)(A), by circumventing an
access control measure, and § 106, by, for example,
reproducing or publicly performing the accessed work.
Indeed, this court has acknowledged that a TPM could “both
(1) control[] access and (2) protect[] against copyright
infringement.” MDY, 629 F.3d at 946.
               DISNEY ENTERPRISES V. VIDANGEL                        29

    To be sure, “unlawful circumvention under § 1201(a)—
descrambling a scrambled work and decrypting an encrypted
work—are acts that do not necessarily infringe or facilitate
infringement of a copyright.” Id. at 945. Thus, a defendant
could decrypt the TPMs on the Studios’ discs on an
unlicensed DVD player, but only then “watch . . . without
authorization, which is not necessarily an infringement of
[the Studios’] exclusive rights under § 106.” Id. But, when
a defendant decrypts the TPMs and then also reproduces that
work, it is liable for both circumvention in violation of
§ 1201(a)(1)(A) and copyright infringement in violation of
§ 106(1). See Murphy v. Millennium Radio Grp. LLC,
650 F.3d 295, 300 (3d Cir. 2011) (“Thus, for example, if a
movie studio encrypts a DVD so that it cannot be copied
without special software or hardware, and an individual uses
his own software to ‘crack’ the encryption and make copies
without permission, the studio may pursue the copier both
for simple infringement under the Copyright Act and,
separately, for his circumvention of the encryption . . . under
the DMCA.”). 16

    VidAngel relies heavily on the DMCA’s legislative
history, which states that “1201(a)(2) and (b)(1) are ‘not
interchangeable,’” and that circumvention of a TPM
controlling access “is the electronic equivalent of breaking
into a locked room in order to obtain a copy of a book.”
MDY, 629 F.3d at 946–47 (citations omitted). VidAngel
argues that it instead was given the key to a locked room and

    16
        VidAngel argues that adopting this view would “deepen[] a
controversial split with the Federal Circuit” regarding whether § 1201(a)
requires an “infringement nexus.” See Chamberlain Grp., Inc. v. Skylink
Techs., Inc., 381 F.3d 1178 (Fed. Cir. 2004). But this panel is bound by
MDY. See 629 F.3d at 950. In any event, even assuming a nexus is
required for dual access-use controls, VidAngel’s circumvention was for
an infringing use—to copy.
30           DISNEY ENTERPRISES V. VIDANGEL

entered the room only to take a photograph of the room’s
contents. But, it was never given the “keys” to the discs’
contents—only authorized players get those keys.
VidAngel’s decision to use other software to decrypt the
TPMs to obtain a digital copy of the disc’s movie thus is
exactly like “breaking into a locked room in order to obtain
a copy of a [movie].” Id. at 947 (citation omitted). Nothing
in the legislative history suggests that VidAngel did not
circumvent an access control simply because there are
authorized ways to access the Studios’ works. See, e.g.,
WIPO Copyright Treaties Implementation and On-line
Copyright Infringement Liability Limitation, H.R. Rep. No.
105–551, pt. 1 at 18 (1998) (presuming that a defendant
“obtained authorized access to a copy of a work” before it
circumvented the TPMs or circumvented “in order to make
fair use of a work”).

     Finally, VidAngel contends that a TPM cannot serve as
both an access and use control, because that would permit
copyright holders to prohibit non-infringing uses of their
works. It cites a Final Rule of the Library of Congress
stating that “implementation of merged technological
measures arguably would undermine Congress’s decision to
offer disparate treatment for access controls and use
controls.” Exemption to Prohibition on Circumvention of
Copyright Protection Systems for Access Control
Technologies, 65 Fed. Reg. 64,556-01, 64,568 (Oct. 27,
2000). But, the Rule also states that “neither the language of
section 1201 nor the legislative history addresses the
possibility of access controls that also restrict use.” Id. And,
it concludes that “[it] cannot be presumed that the drafters of
section 1201(a) were unaware of CSS,” which existed “when
the DMCA was enacted,” and “it is quite possible that they
anticipated that CSS would be” an access control measure
               DISNEY ENTERPRISES V. VIDANGEL                         31

despite involving “a merger of access controls and copy
controls.” Id. at 64,572 n.14.

    Because VidAngel decrypts the CSS, AACS, and BD+
access controls on the Studios’ discs without authorization,
the district court did not abuse its discretion in finding the
Studios likely to succeed on their § 1201(a)(1)(A)
circumvention claim. 17

    Irreparable harm.

    A preliminary injunction may issue only upon a showing
that “irreparable injury is likely in the absence of an
injunction.” Winter, 555 U.S. at 22. VidAngel contends that
once the district court concluded the Studios were likely to
succeed on their copyright infringement claim, it relied on a
forbidden presumption of harm rather than “actual
evidence.” See Flexible Lifeline Sys., Inc. v. Precision Lift,
Inc., 654 F.3d 989, 998 (9th Cir. 2011) (per curiam).
However, the district court expressly rejected any such
presumption, instead extensively discussing the declaration
of Tedd Cittadine, Fox Senior Vice President of Digital
Distribution. Crediting this “uncontroverted evidence,” the
district court found that the Studios showed “VidAngel’s
service undermines [their] negotiating position . . . and also
damages goodwill with licensees,” because it offers the

     17
        VidAngel argued in its briefing that the FMA immunizes it from
liability for the DMCA claim, but conceded at oral argument that it is
“not arguing that the FMA is a defense to the DMCA claim.” And,
although it also claimed a fair use defense, VidAngel did not advance
any arguments for why its violation of § 1201(a)(1)(A) is a fair use
independent of those it advances for its copyright infringement. Thus,
even assuming that fair use can be a defense to a § 1201(a) violation, the
defense fails for the same reasons it does for the copyright infringement
claim.
32           DISNEY ENTERPRISES V. VIDANGEL

Studios’ works during negotiated “exclusivity periods” and
because licensees raised concerns about “unlicensed
services like VidAngel’s.”

    VidAngel argues that these harms are “vague and
speculative,” but the district court did not abuse its discretion
in concluding otherwise. Although Cittadine’s declaration
does not state that licensees have specifically complained
about VidAngel, it says that licensees complain that “it is
difficult to compete with” unlicensed services. The Studios
also provided uncontroverted evidence that VidAngel
offered Star Wars: The Force Awakens before it was
available for legal streaming and offered The Martian and
Brooklyn during HBO’s exclusive streaming license.

    This evidence was sufficient to establish a likelihood of
irreparable harm. The district court had substantial evidence
before it that VidAngel’s service undermines the value of the
Studios’ copyrighted works, their “windowing” business
model, and their goodwill and negotiating leverage with
licensees. See, e.g., WPIX, Inc. v. ivi, Inc., 691 F.3d 275,
285–86 (2d Cir. 2012) (holding that “streaming copyrighted
works without permission,” including at times “earlier . . .
than scheduled by the programs’ copyright holders or
paying” licensees was likely to cause irreparable harm to
copyright owners’ “negotiating platform and business
model”); Fox Television Stations, Inc. v. FilmOn X LLC,
966 F. Supp. 2d 30, 50 (D.D.C. 2013) (rejecting contention
that harms to negotiation leverage with licensees were “pure
speculation” and noting existence of an uncontroverted
“sworn declaration from a senior executive at Fox who states
that [licensees] have already referenced businesses like [the
defendant] in seeking to negotiate lower fees”). And,
although VidAngel argues that damages could be calculated
based on licensing fees, the district court did not abuse its
            DISNEY ENTERPRISES V. VIDANGEL                 33

discretion in concluding that the loss of goodwill,
negotiating leverage, and non-monetary terms in the
Studios’ licenses cannot readily be remedied with damages.
See Herb Reed Enters., LLC v. Fla. Entm't Mgmt., Inc.,
736 F.3d 1239, 1250 (9th Cir. 2013) (“Evidence of loss of
control over business reputation and damage to goodwill
could constitute irreparable harm.”); WPIX, 691 F.3d at 286.

    VidAngel also argues that the Studios’ delay in suing
obviates a claim of irreparable harm. But, “courts are loath
to withhold relief solely” because of delay, which “is not
particularly probative in the context of ongoing, worsening
injuries.” Arc of Cal. v. Douglas, 757 F.3d 975, 990 (9th
Cir. 2014) (citation omitted). The district court found that
the Studios’ “delay in seeking an injunction was reasonable
under the circumstances, their alleged harms are ongoing,
and will likely only increase absent an injunction.” This
finding, based on the Studios’ cautious investigation of
VidAngel, their decision to sue only after VidAngel
expanded from beta-testing into a real threat, and
VidAngel’s admission that “it intends to continue to stream
[the Studios’] works and add other future releases, unless
enjoined,” was not an abuse of discretion.

       Balancing the equities.

    Before issuing a preliminary injunction, “courts must
balance the competing claims of injury and must consider
the effect on each party of the granting or withholding of the
requested relief.” Winter, 555 U.S. at 24 (citation omitted).
VidAngel argues that the district court abused its discretion
by failing to consider the harm to its “fledgling business”
from an injunction. However, the district court did consider
the harm to VidAngel—in both its original order and again
in denying a stay—and concluded that “lost profits from an
activity which has been shown likely to be infringing . . .
34            DISNEY ENTERPRISES V. VIDANGEL

merit[] little equitable consideration.” Triad Sys. Corp. v.
Se. Express Co., 64 F.3d 1330, 1338 (9th Cir. 1995) (citation
omitted). VidAngel argues that the district court erred in
relying on cases that predate Winter and eBay Inc. v.
MercExchange, LLC, 547 U.S. 388 (2006). But, those
subsequent cases held only that the district court must
balance the harms to both sides before issuing an injunction,
Winter, 555 U.S. at 24; eBay Inc., 547 U.S. at 391–93, and
do not undermine the long-settled principle that harm caused
by illegal conduct does not merit significant equitable
protection.

    The district court might have provided greater detail in
balancing the equities. But, contrary to VidAngel’s
assertions, the court did not conclude that the Studios were
“automatically” entitled to an injunction once it found that
their “copyright [was] infringed.” eBay, 547 U.S. at 392–
93. Nor did it relegate its “entire discussion” of the required
equity balancing to “one . . . sentence” without analysis.
Winter, 555 U.S. at 26. Rather, it concluded that the only
harm VidAngel asserted—financial hardship from ceasing
infringing activities—did not outweigh the irreparable harm
likely to befall the Studios without an injunction. This was
not an abuse of discretion. See All. for the Wild Rockies,
632 F.3d at 1138. 18


     18
        Moreover, most of the evidence VidAngel cites to show damage
to its business was not submitted to the district court until after the
preliminary injunction was issued. See, e.g., Declaration of David
Quinto in Support of VidAngel, Inc.’s Opposition to Plaintiffs’ Ex Parte
Application for an Order to Show Cause at 2 (“The parties never briefed
or explained . . . why it is impossible for VidAngel to comply
immediately with the preliminary injunction without ceasing business
activities entirely.”); Declaration of Neal Harmon in Support of
VidAngel, Inc.’s Ex Parte Application to Stay Preliminary Injunction
              DISNEY ENTERPRISES V. VIDANGEL                        35

        Public interest.

     Finally, the court must “pay particular regard for the
public consequences in employing the extraordinary remedy
of injunction.” Winter, 555 U.S. at 24 (citation omitted).
VidAngel argues that the preliminary injunction harms the
public’s interest in filtering, enshrined in the FMA. But, as
the district court recognized, this argument “relies on
VidAngel’s characterization of its service as the only
filtering service” for streaming digital content. It is
undisputed that ClearPlay offers a filtering service to Google
Play users, and the district court did not clearly err in finding
that other companies could provide something “similar to
ClearPlay’s.” That VidAngel believes ClearPlay’s service is
technically inferior to its own does not demonstrate that
consumers cannot filter during the pendency of this
injunction.

    On the other hand, as the district court concluded, “the
public has a compelling interest in protecting copyright
owners’ marketable rights to their work and the economic
incentive to continue creating television programming” and
motion pictures. WPIX, 691 F.3d at 287 (citing Golan v.
Holder, 565 U.S. 302, 328 (2012)). The Studios own
copyrights to some of the world’s most popular motion
pictures and television shows. In light of the public’s clear
interest in retaining access to these works, and the ability to
do so with filters even while VidAngel’s service is
unavailable, we conclude that the district court did not abuse




Pending Appeal Or, Alternatively, Pending Decision by the Ninth Circuit
on Stay Pending Appeal at 5 (declaring that VidAngel can modify its
applications by January 2017).
36           DISNEY ENTERPRISES V. VIDANGEL

its discretion in finding that a preliminary injunction is in the
public interest. Id. at 288.

                       CONCLUSION

     The judgment of the district court is AFFIRMED.
