UPDATED with VidAngel reaction: The 9th Circuit Court of Appeals today upheld a lower court ruling that stopped movie-filtering service VidAngel from operating. The decision all but brings to an end the legal fight waged by Disney, 20th Century Fox and Warner Bros to halt the service, arguing its practices violated copyright law.

The original preliminary injunction was granted in December. The 9th Circuit heard the appeal in June, with VidAngel arguing its system to provide users with edited versions of movies should be permitted under the Family Movie Act and fair use.

VidAngel offered its users “clean” versions of existing movies by cracking the encryption on discs, then selling and repurchasing the content in transactions with consumers who specified edits. In effect, the sale and re-purchase created a cheap, family-friendly rental of films.

But the three-judge panel today agreed (read the ruling here) with the district court decision, saying “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.”

“We are of course disappointed in this decision and we’re reviewing our strategy for moving forward,” VidAngel appellate attorney Peter K. Stris said.

In June, VidAngel launched as a revised streaming service that works in tandem with conventional movie and TV streaming services like Amazon and Netflix. That site was still operational as of today.

“Today’s decision has absolutely no impact on VidAngel’s current service, we remain open for business,” VidAngel CEO Neal Harmon said in a statement today. “While all of the legal back-and-forth plays out, we know our customers are grateful to still have a way to protect their kids and filter harmful content. On the legal front, we are just getting started. We will fight for a family’s right to filter on modern technology all the way.”