×
You will be redirected back to your article in seconds

Judge Rejects Disney’s Bid for an Injunction Against Redbox

A judge on Tuesday rejected Disney’s request for an injunction to block Redbox from selling download codes, dealing a significant setback in the studio’s battle with its low-cost competitor.

Disney sued Redbox in December, alleging that the kiosk company’s sale of download codes for Disney movies constituted copyright infringement. Redbox obtains the codes by buying DVD combo packs, which include a DVD, a Blu-ray, and a download code. Though Disney typically includes a warning with combo packs that “codes are not for sale or transfer,” Redbox separates the codes from the discs and sells them individually.

In his ruling Tuesday, Judge Dean Pregerson held that Disney’s warning does not create a binding contract. Pregerson distinguished the language from other “box-top” licenses that are more detailed and which have been upheld.

Pregerson was also persuaded by Redbox’s argument that Disney is misusing its copyright by imposing restrictions on consumers’ ability to redeem the digital downloads. The license agreement for the download codes requires a consumer to affirm that he or she is the owner of the physical discs that come with the combo pack. But Pregerson held that Disney has no right to restrict consumers’ ability to resell the DVD and Blu-ray discs.

“This improper leveraging of Disney’s copyright in the digital content to restrict secondary transfers of physical copies directly implicates and conflicts with public policy enshrined in the Copyright Act, and constitutes copyright misuse,” Pregerson held.

There was a silver lining in the ruling for Disney, as Pregerson rejected Redbox’s contention that the digital codes should be covered by the “first-sale doctrine.” The doctrine holds that copyright holders cannot control what happens to a copy of a work after the “first sale.” An author may not prevent a reader from selling a used book, and a composer cannot block the resale of a record.

The doctrine applies to the physical discs, and Redbox argued it should apply to the download codes as well. Disney countered that by using a code to download a movie, consumers are creating a new copy, not transferring an existing one, and therefore the “first-sale doctrine” does not apply. Pregerson sided with Disney, finding that the doctrine is inapplicable to the case.

However, in refusing to grant the injunction, Pregerson held that Disney has not shown that it is likely to prevail on its case. A hearing on Redbox’s motion to dismiss the case is set for March 5.

Redbox has filed its own countersuit, accusing Disney of anti-competitive tactics in trying to stamp out a potential rival to its forthcoming streaming service.

More Biz

  • Plume of black smoke rising from

    Lawsuit Expected Next Week in Response to Universal Music Fire

    A Los Angeles law firm representing several Universal Music recording artists affected by the 2008 fire that destroyed a huge number of master recordings is expected to file a lawsuit as early as next week. King told Variety that he expects to sue for negligence and other torts. He declined to identify his clients, saying [...]

  • Nicholas Sparks

    Nicholas Sparks Responds as LGBT Discrimination Claim Resurfaces

    Nicholas Sparks, the prolific author of romance novels, is facing renewed allegations that he discriminated against gay students at his Christian school in North Carolina. The allegations were first leveled by Saul Benjamin, the former headmaster of the Epiphany School of Global Studies, in a wrongful termination suit he filed in 2014. Benjamin’s suit alleged [...]

  • Tyler the Creator and DJ Khaled

    Inside the DJ Khaled-Tyler, the Creator Chart Battle

    The controversy surrounding the recent chart battle between DJ Khaled and Tyler the Creator — in which a bundle promoting Khaled’s album was disqualified from adding to its sales tally for the May 24 Billboard 200 album chart, allowing the No. 1 spot to go to Tyler’s “Igor” — has been a first-class problem for [...]

  • Cuba Gooding Jr. Diversity

    Cuba Gooding Jr. Charged with Misdemeanor Forcible Touching

    Actor Cuba Gooding, Jr., has been charged with a misdemeanor count of forcible touching following an incident at a nightclub, the New York Police Department said Thursday. Gooding turned himself in to NYPD detectives on Thursday, surrounded by a throng of media. Later in the day, he was arraigned in front of Judge Herb Moses. [...]

  • Contract Placeholder Business WGA ATA Agent

    CAA Challenges Writers Guild of America's Legal Standing in Packaging Fee Lawsuit

    CAA has challenged the Writers Guild of America’s legal standing for bringing forth the lawsuit against Hollywood’s four largest talent agencies over the issue of packaging fees. CAA’s latest legal response to the suit filed by the WGA in Los Angeles Superior Court in April asserts that the guild does not have the right to [...]

More From Our Brands

Access exclusive content