Redbox Says It Will Still Sell Codes to Disney Movies — Just Not the New Ones

A federal judge on Aug. 30 granted the Walt Disney Co.’s request for a preliminary injunction against Redbox selling digital codes to Disney movies.

However, the ban only applies to newer “combo pack” releases with a revised disclaimer on the package. Redbox says this means it may continue selling digital codes to earlier Disney releases such as Frozen and “Star Wars” movies.

Judge Dean Pregerson ruled that Disney’s amended language accompanying packaged media combo retail releases (which include digital codes) sufficiently prohibits private parties from selling copyrighted content without permission.

“Because Redbox did not obtain an ownership right to any digital content when it purchased combo Packs, Disney has adequately shown that it is likely to succeed on its claim that Redbox encouraged Redbox customers to infringe Disney’s copyrights by redeeming codes in violation of the license terms set forth on the redemption sites,” Pregerson wrote.

In February, a federal court denied Disney a preliminary injunction against Redbox after the studio alleged the kiosk vendor committed copyright misuse on 19 of its most recent movies. Disney and subsidiaries Lucasfilm and Marvel Studios in April filed an amended complaint against Redbox, including changing user-guidelines on its packaged-media releases, beginning with Black Panther.

In a statement to Media Play News, Redbox said, “In a second attempt to obtain a broad injunction against Redbox regarding the sale of digital codes, Disney asked the court to retreat from its prior ruling that Disney abused its copyright on some 19 Disney, Pixar, Lucasfilm and Marvel titles. The court previously found that Disney’s copyrights for these titles were unenforceable against Redbox.

“Nothing disturbs that prior ruling in favor of Redbox. Redbox remains free to sell codes for those prior titles. This morning’s ruling is limited to digital codes for certain titles, like Black Panther, that contain new disclosures, but were distributed after the 19 titles listed in Disney’s complaint. Redbox has never attempted to sell, and had no plans to sell, digital codes for Black Panther. Disney, therefore, has not been damaged by Redbox’s business practices, and the ruling compels no change in Redbox’s business practices.

“The same isn’t true for Disney. In addition to having been forced to change misleading language on its packaging and its websites, Disney now must offer consumers the ability to return digital codes or combo packs for a refund if they disagree with digital license terms. In fact, the court’s order expires in 90 days unless Disney ‘clearly and prominently indicates’ that consumers can obtain a refund if they do not agree with Disney’s restrictions.

“The court’s decision once again maintains Redbox’s stance as an advocate for the consumer. We look forward to finalizing our victories in court.”

Disney is the only studio that won’t sell discs directly to Redbox, forcing the company to buy them at retail. Last year, Redbox also began offering for sale the digital codes that come with its purchased Disney discs, citing the First Sale Doctrine to federal copyright law, which provides that someone who lawfully acquires a copyrighted work is allowed to sell or dispose of it however they want. Video retailers in the early 1980s successfully argued that First Sale gave them the right to rent videocassettes they had legally purchased and pocket the rental fees.

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