On Tuesday, a judge rejected Disney’s request for an injunction which would stop Redbox from selling digital download codes. This is quite an upset for Disney. The court battle between the two companies has been on-going since December when Disney sued Redbox for copyright infringement.
Redbox has been purchasing Disney DVD combo packs, which include a Blu-Ray, DVD and a digital download code. The company has then been selling the codes individually even though Disney includes a warning, “codes are not for sale or transfer”. However, Judge Dean Pregerson ruled that this warning does not create a binding contract and rejected Disney’s request to stop Redbox from selling the codes.
Pregerson agreed with Redbox’s argument that Disney’s copyright does not extend to a consumer’s ability to resell codes, Blu-ray discs or DVDs. “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,” said Pregerson.
Further, Redbox argued that the “first-sale doctrine” should apply to the resale of the codes. The doctrine states that once a copy of work has been sold for the first time, copyright holders cannot control what happens thereafter. However, Pregerson sided with Disney finding the doctrine does not apply as digital codes allow consumers to create a new copy rather than transfer an existing copy.
It seems Disney is not likely to succeed based on Pregerson’s decision to reject the injunction. Redbox has filed a motion to have the case dismissed and the hearing is set for March 5th. In addition, the company has filed a countersuit, in which they accuse Disney of engaging in “anti-competitive tactics” in an attempt to remove competition for their future streaming service.
Continue to follow along with Chip and Co. for updates on the lawsuit.
Source Credit Variety
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