×
You will be redirected back to your article in seconds

Redbox Claims Disney Suit Is a Bid to Block Digital Competition

Redbox has fired back against Disney’s efforts to block it from selling download codes, alleging that Disney’s copyright lawsuit is simply an effort to thwart a competitor.

Disney sued in December and sought an injunction to bar Redbox from distributing digital download codes for Disney films. Redbox does not have a distribution agreement with Disney. Instead, it buys up DVD and Blu-ray combo packs, which include codes to download the films, and then sells those codes separately through its network of kiosks.

Disney contends that Redbox is violating the terms of sale of the combo packs, which — at least in some instances — include specific language stating that “Codes are not for sale or transfer.” Redbox offers digital downloads at a significant discount from the download prices available on other services.

Redbox, however, argues that the codes should not be treated any differently than the physical discs, which Redbox is entitled to distribute just as if it were any other video rental business. In its argument opposing Disney’s request for an injunction, Redbox invokes the “first sale doctrine,” which holds that a copyright owner cannot prohibit a purchaser from reselling a copy of a work, such as a used book.

The key question is whether selling the download codes and allowing customers to download a copy of a movie, constitutes “reproduction” under federal copyright law. Disney contends that it does, and that Redbox is infringing on its exclusive right to distribute its works. Redbox argues that customers are not creating a new copy of the film — they are simply redeeming the copy that has already been sold to Redbox.

Redbox also argues that Disney is seeking to clear the field of rivals to its own forthcoming streaming service.

“Plaintiffs seek to stifle competition to more smoothly launch Disney’s own digital content streaming service, maximize the price other services like iTunes and Amazon (and their customers) pay for Disney movies, and secure a greater market share for Hulu — the viewing service Disney will control as part of its $52 billion acquisition of 21st Century Fox,” argued Michael A. Geibelson, Redbox’s attorney. “These anti-consumer and anti-competitive ends do not support a preliminary injunction, and neither do the plaintiffs’ evidence or applicable law.”

Redbox says it has invested $700,000 in launching its digital download service, which would be squandered should an injunction be issued. Disney’s motion for an injunction is set to be heard on Feb. 5 before Judge Dean Pregerson in Los Angeles federal court.

The suit comes as Disney and the other major studios, along with Netflix and Amazon, are also seeking to stamp out streaming devices that use Kodi software to enable streaming of copyrighted works.

Redbox Disney by gmaddaus on Scribd

More Biz

  • Netflix-logo-N-icon

    Netflix Raises $2.2 Billion Through Junk-Bond Offering

    Netflix just went deeper into hock: The company announced the pricing of unsecured bonds in a transaction raising around $2.2 billion, giving it more cash to invest in content, real estate and infrastructure. The streamer had said Tuesday that it planned to raise $2 billion through a new debt offering, bringing its long-term debt to [...]

  • Ridiculous Six

    Netflix Benefits From Changes in New Mexico's Production Incentives

    When New Mexico’s new governor, Democrat Michelle Lujan Grisham, signed SB2 in late March, the headline was that it more than doubled the annual cap on the state’s 25%- to 30%-per-project refundable film and TV tax credit, from $50 million to $110 million.  Arguably more noteworthy, however, was the new law’s provision that the cap [...]

  • Gabrielle Union Marketing Summit

    Listen: How Gabrielle Union Bet on Herself and Changed Her Brand

    Actress Gabrielle Union said she was nearly 17 years past the expiration date of her mass appeal when she got the brand partnership of her dreams. “They tell you that after 26, ‘Honey, hang it up,'” Union said on the latest episode of the Variety podcast “Strictly Business.” The episode was recorded during a keynote [...]

  • Spotify logo is presented on a

    Spotify Sued by India’s Oldest Label, Will Remove Catalog From Platform

    Just weeks after Spotify launched in India without securing rights from Warner/Chappell Music Publishing, it is being sued by the country’s oldest record label, Saregama, and will remove that company’s 120,000-song catalog from its platform within 10 days, according to reports in Inc42 and Music Business Worldwide. The streaming giant had approached the label for [...]

  • DJ Mormile and Jeff Burroughs Def

    Def Jam Appoints DJ Mormile, Jeff Burroughs to Senior Posts

    Def Jam Recordings has appointed industry veterans DJ Mormile and Jeff Burroughs (pictured above, right and left, respectively) to senior executive roles in its Los Angeles and New York offices, respectively. The announcement was made today by label Chairman & CEO Paul Rosenberg. Mormile — the L.A.-based manager who counts producer Mike Will Made It and [...]

  • Mustard Signs With Sony/ATV Music Publishing

    Mustard Signs With Sony/ATV Music Publishing (EXCLUSIVE)

    Sony/ATV Music Publishing has signed Grammy-winning songwriter, artist and producer Mustard (formerly known as DJ Mustard) to a worldwide deal. The Los Angeles-based hitmaker has worked with artists including YG, Rihanna, 2 Chainz, Drake, Migos, Chris Brown, Nipsey Hussle, Big Sean and many others, and won Best R&B Song at this year’s Grammy Awards for [...]

  • NFL-Sunday-Ticket-DIRECTV

    AT&T CEO Expects DirecTV to Keep NFL Sunday Ticket Exclusively

    AT&T believes it will hang on to DirecTV’s exclusive rights for the NFL Sunday Ticket, even as the league has said it’s considering ending the satellite operator’s exclusivity to extend the out-of-home games package to streaming platforms. “The exclusivity [of Sunday Ticket] should remain as we go forward on DirecTV,” AT&T CEO and chairman Randall [...]

More From Our Brands

Access exclusive content