Disney Stop Redbox Selling Digital Movie Codes

Today, Disney was able to secure federal judgment against Redbox from selling digital movie codes at their kiosks. Redbox have been purchasing combo packs featuring DVD, Blu-Ray and digital code, and then selling the items individually.

Disney previously failed to stop Redbox from selling the digital codes, when a Federal Judge Dean Pregerson deemed the language on their combo packs wasn’t explicit enough. Which saw Disney change the wording on their combo packs, starting with the release of Marvel’s Black Panther, which the Judge says is sufficient, and granted the injunction.

“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,”

“Under the old terms, a Combo Pack owner who disposed of the discs was indeed left with a worthless code because continued possession of the discs was a condition of digital access. Now, however, digital access is conditioned not on possession of the discs, but on the manner of Code acquisition. A Combo Pack owner who disposes of the discs is left with the same digital access rights he or she always possessed. Although Redbox is correct that, because Codes are not separately transferable, a Combo Pack owner cannot transfer a Code if he or she disposes of the discs first, the right to transfer a separate Code is not protected by the first sale doctrine or any unconditional ownership rights… A copyright misuse defense, therefore, is unlikely to succeed.”

Redbox have argued that Disney is trying to shut down a low cost competitor. They will continue to sell older titles, but new releases will all include the wording to stop Redbox selling them.

Source – Variety