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Disney Just Got A Win In Lawsuit Against Redbox
The Disney legal department seems to be about as busy as any other division of the company, but like the rest of the organization, it's good at what it does. We have another example of this in a judge's decision to grant a preliminary injunction against Redbox in the on-going dispute over the resale of digital movie codes. Although, to be fair, it did take Disney two tries to get this victory.
The dispute between Disney and Redbox stems from the latter company purchasing Disney "Combo Packs," Blu-Ray discs that include a digital download code for the same film, and then reselling the code to consumers at a discount compared to what purchasing a digital movie from Disney would cost. While the code specifically stated it was not for sale or transfer, Redbox argued that under the first sale doctrine it had the right to do with the code what they wished because they purchased it legally. The judge eventually ruled in favor of Redbox, writing that Disney's restrictive licensing terms constituted a misuse of copyright.
However, Disney went back and changed the language in its combo packs and the terms of use on the digital movie redemption site. Basically, if you redeem a digital code for a Disney movie now you are agreeing to a set of terms and conditions that includes the provision that digital codes may not be sold separately. According to The Hollywood Reporter, this was enough to get the judge to rule in Disney's favor. Redbox is now enjoined from selling Disney digital codes.
The change in language began with the Blu-ray release of Black Panther and Redbox has made it clear that, while it will not resell digital codes for that film, in fact, Redbox states it never tried to sell Black Panther codes, but that it will continue to resell codes to earlier films that don't use the current language. Essentially, Redbox believes the ruling doesn't actually impact the company, since it'll continue to sell the codes to the previous films and won't start selling codes to movies they already weren't selling.
This is clearly a big win for both Disney and the traditional channels through which one can purchase a digital movie, like iTunes or Amazon. Disney's digital movies traditionally sell for $19.99 through those outlets, making the films a little on the high side price wise compared to many. It's likely part of the reason why purchasing discounted codes through Redbox was so attractive to consumers, and why Disney wanted to shut it down.
This is a preliminary injunction, so it's possible Redbox could come back and try to fight it if the company can find a new angle from which to make an argument.
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