×

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

  • Timbaland

    Hipgnosis Songs Acquires Timbaland Catalog

    The fast-rising Hipgnosis Songs Fund Limited continues its aggressive growth surge, acquiring a catalog from songwriter-producer-artist Timbaland that comprises 108 albums and songs. Timbaland is one of the most successful songwriter-producers in the hip-hop/R&B realm: The catalog includes hits by Justin Timberlake, Missy Elliott, Aaliyah, Jay-Z, Nelly Furtado, 50 Cent, Madonna, 2Pac, Rihanna, Drake and [...]

  • Rufus Wainwright Signs With BMG for

    Rufus Wainwright Signs With BMG for New Studio Album

    Singer-songwriter Rufus Wainwright has signed a new global recordings agreement with BMG to release his upcoming studio album. The still-untitled album, Wainwright’s ninth of original material and first since 2012, is described in the announcement as “a return to form and his most accessible album to date.” To that end, it is “the bookend” to [...]

  • Kevin Feige Marvel Studios Variety Cover

    Kevin Feige Named Chief Creative Officer of Marvel

    Kevin Feige’s universe continues to grow. The mastermind of the Marvel Cinematic Universe has been named Chief Creative Officer, Marvel in addition to being president of Marvel Studios, Variety has learned. He will now be responsible for the overall creative direction of Marvel’s storytelling across mediums, including publishing, film, TV, and animation. Marvel Television and [...]

  • China presentation mipcom

    Reality Shows, Rom-Coms and Ping Pong Dramas: Chinese Producers Show Off TV Exports

    At its best, television serves as a mirror for its audience. This year, the Mipcom conference trained its annual country-of-focus spotlight on original TV content produced in China. That proved to be a timely choice as the conference came on the heels of last week’s headline-making clashes between Chinese and Western cultural values in the [...]

  • Felicity Huffman

    Felicity Huffman Reports to Federal Prison to Serve Two-Week Sentence

    Felicity Huffman reported to federal prison in Dublin, Calif., on Tuesday morning to begin her two-week sentence for paying to cheat on her daughter’s SAT test. Huffman pleaded guilty to one count of fraud, admitting that she paid $15,000 to consultant Rick Singer to boost her daughter’s SAT score. Judge Idira Talwani sentenced her last [...]

  • Sallie Krawcheck

    Sallie Krawcheck's Ellevest Launches Women-Focused Impact Investment Platform

    Ellevest, the female-focused investment platform headed by Sallie Krawcheck, has launched an impact investment fund that will court high-net-worth women in entertainment and other sectors who want to tailor their stock portfolios to favor companies with good track records on a range of social concerns. Krawcheck, who was one of the highest-ranking women on Wall [...]

More From Our Brands

Access exclusive content