Family friendly streaming service VidAngel is refusing to shut down, in defiance of a court order issued earlier in December. The service, which alters copyrighted material in order to remove adult language, violence and nudity, was found to be in violation of the law and ordered to temporarily stop circumventing copyright protections, copying copyrighted materials, and streaming them over the internet.

Warner Bros., Disney and Fox studios had won a preliminary injunction against Utah-based VidAngel, after arguing that it was effectively operating as an unlicensed video-on-demand streaming service. U.S. District Judge Andre Birotte Jr. agreed, saying that VidAngel didn’t have the right to hack the DVDs to remove copyright and stream them to customers, because the digital content it was streaming doesn’t come from an authorized copy.

VidAngel has tried to find loopholes in the law to make its service work. Its business model involves selling DVDs for $20 to customers, then buying them back for $19 after they’re viewed. That means it’s effectively offering $1 movie rentals. In the meantime, it removes the copyright protection the DVDs and Blu-rays in order to censor its content before streaming the movie over the internet to customers.

The company said it had the right to offer customers a private performance of the movie, and that the Family Home Movie Act of 2005 allowed the use of technology to censor the DVDs. But the judge said the Movie Act requires an “authorized copy” of the film, which VidAngel doesn’t have. In addition, the judge said that even if VidAngel created a valid ownership interest in the DVD, it would only apply to the physical disk – not the content it’s streaming from its servers. (VidAngel has been streaming from a master copy of the movie, not the DVD the customer temporarily owned).

The studios say they’re now bringing VidAngel’s defiance of the injunction to the court’s attention.

In a joint statement from Warner Bros, Disney and Fox, the studios said the following:

“Defying last week’s injunction, VidAngel continues to illegally stream our content without a license and is expanding its infringement by adding new titles. We have brought VidAngel’s indefensible violation of the injunction to the court’s attention. As the court made clear in its order, VidAngel’s unauthorized acts of ripping, copying and streaming our movies and TV shows infringe copyright and violate the Digital Millennium Copyright Act. VidAngel’s filtering of content has nothing to do with the claims against it and does not excuse its illegal activities.”

In a new filing, the studios note that not only has VidAngel refused to shut down, it’s also continuing to add new releases to its service. This includes Warner Bros.’s “Sully” and “Storks” as well as Fox’s “Miss Peregrine’s Home for Peculiar Children.”

These titles were not released on DVD until after the preliminary injunction was issued. And, as with other titles VidAngel offers, their release on the service is undercutting the studios’ windowing system. That is, movies generally first become available for rent or purchase, before they’re made available for streaming. VidAngel does not have streaming deals with the studios.

The studios now want VidAngel held in contempt.

“If VidAngel will not comply with the Preliminary Injunction immediately,” the studios said in a filing with the U.S. District Court of California, Western Division. “Plaintiffs will have no option other than to move ex parte for an order to show cause why VidAngel should not be held in contempt.”

VidAngel, of course, is appealing the preliminary injunction, with plans to fund its court battles thanks to money raised from its customers through crowdfunding.

However, its application to stay the preliminary injunction doesn’t give it the right to continue its business in the meantime, the studios argue.

A video statement from VidAngel (see below), indicates the company’s plans to take the battle all the way to the Supreme Court.