Disney granted injunction against DVD kiosk company

Disney won an injunction against Redbox that prevents the DVD kiosk company from selling digital codes to be redeemed for copies of films.

The injunction was handed down by the US District Court for the Central District of California.

In November 2017, Disney accused Redbox of illegally selling Disney’s digital film codes to customers. The codes can be redeemed online by customers to access copies of films. Disney’s subsidiaries Marvel and Lucasfilm also joined the claim.

Disney sells codes in its combination packages that also include a Blu-ray disc and DVD. According to the media company, the outside packaging of these combination packs says that the codes are not for sale or transfer.

The initial complaint alleged that Redbox’s sale of the codes was in “blatant disregard of clear prohibitions against doing so” and violated Disney’s copyright.

Disney claimed that Redbox purchases and disassembles Disney’s combination packages before renting the disks through its kiosks and selling the codes separately.

The claim listed “Frozen”, “Rogue One: A Star Wars Story”, and “Iron Man 3” as films that Redbox had sold the codes for.  

Redbox responded to the complaint by claiming that Disney was engaging in copyright misuse in order to protect its pending streaming service.

In February, the district court initially sided with Redbox and, as a result, Disney changed the language on its combination packages, the term of use on its download sites and amended its complaint.

Whereas before the combination packages said, “Codes are not for sale or transfer”, it now reads; “Digital code redemption requires prior acceptance of license terms and conditions”. The packaging also tells customers that the digital code contained in the package may not be sold separately.

Disney then filed an amended complaint in April.

Yesterday, the district court said that Redbox did not gain an ownership right to any digital content upon purchasing combination packages. The court ruled that Disney had shown that the DVD kiosk company had encouraged customers to infringe Disney’s copyright when redeeming the codes.

Disney was granted an injunction preventing Redbox from selling and transferring Disney’s standalone codes included in combination packs that bear the updated licence terms.