×

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.

Popular on Variety

More Biz

  • Beverly Hills Realtor Accused of Stealing

    Beverly Hills Realtor Accused of Stealing From Usher, Adam Lambert

    A Beverly Hills real estate agent has been arrested on charges of stealing from the homes of celebrities, including Usher, Adam Lambert and “Real Housewives” star Dorit Kemsley. Jason Emil Yaselli, 32, is accused of encouraging an accomplice, Benjamin Ackerman, to enter homes during open houses in order to steal from them. Ackerman allegedly sold [...]

  • Pod Save America Hosts on Trump

    'Pod Save America' Hosts on Trump, the Democratic Primary and What's Wrong With Cable News

    Like many Democrats, Tanya Somanader was blindsided by the 2016 presidential election. A veteran of the Obama White House and a former speechwriter and digital specialist for House Speaker Nancy Pelosi, Somanader was gearing up for a Hillary Clinton administration. Instead, she had to grapple with the reality of a Donald Trump presidency. “A lot [...]

  • Ann Sarnoff Warner Bros

    Ann Sarnoff Formally Takes Reins of Warner Bros. as CEO

    The Ann Sarnoff era at Warner Bros. has begun. Sarnoff formally took the reins as Warner Bros. chair-CEO on Thursday, two months after she was appointed to the post. Sarnoff told employees in a memo that she has been impressed by the company’s track record during the past year amid a period of upheaval for [...]

  • Former movie producer Harvey Weinstein (L)

    Harvey Weinstein to Be Arraigned on New Indictment

    Harvey Weinstein is set to appear in court on Monday for an arraignment on a new indictment, the Manhattan D.A.’s office said Thursday. Prosecutors announced last week that they would seek a fresh indictment, which would allow actress Annabella Sciorra to testify at Weinstein’s trial. The move came after Justice James Burke ruled on Aug. [...]

  • AI Technology David Beckham

    How AI Tech Is Changing Dubbing, Making Stars Like David Beckham Multilingual

    David Beckham does not speak Arabic, Hindi or Mandarin. But when the soccer legend starred in a PSA for malaria awareness this spring, he effortlessly switched among these and six other languages, thanks to cutting-edge technology that could soon change how Hollywood localizes its movies and TV shows. The PSA in question was produced with technology [...]

  • Eminem Publisher Sues Spotify, Claiming Copyright

    Eminem Publisher Sues Spotify, Claiming Massive Copyright Infringement

    Eight Mile Style, a publishing company that holds administration rights to Eminem’s early catalog, filed a major copyright infringement lawsuit against Spotify late Thursday, claiming that the streaming giant has no license to host about 250 of Eminem’s songs, while also taking aim at the Music Modernization Act, the federal law enacted last year to [...]

  • iQIYI headquarters building in Beijing

    China’s iQIYI in Talks for Indonesia Expansion

    Chinese streaming firm iQIYI is in negotiations to expand further into Southeast Asia through a venture with Indonesia’s Media Nusantara Citra. iQIYI announced its first step outside Chinese-majority territories in June, when it revealed a linkup in Malaysia with pay-TV leader Astro. It also operates in Taiwan. In April, the company said that it planned [...]

More From Our Brands

Access exclusive content