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Businesses Movies The Courts Entertainment

Disney Sues Redbox, Hoping To Block Digital Movie Sales (marketwatch.com) 285

phalse phace writes: About 1 month ago, Redbox started selling through their kiosks slips of paper with codes on them that lets the buyer download a digital copy of a Disney movie.But Disney says that's a no-no and this week it sued Redbox in an attempt to stop the code sales. According to Marketwatch: "Walt Disney sued Redbox on Thursday in an attempt to stop the DVD rental company from selling digital copies of its movies. Privately held Redbox last month began offering consumers codes they can use to download a digital copy of a Disney movie. Redbox charges between $7.99 and $14.99 for slips of paper with the codes to download Disney films such as "Cars 3" and "Star Wars: The Force Awakens." That is less than those movies cost to buy and download from Apple's iTunes Store. Redbox is only offering digital copies of Disney movies because it doesn't have a distribution arrangement with the studio and buys retail copies of its discs to rent to customers. Those retail DVDs come with digital download codes."

Disney Sues Redbox, Hoping To Block Digital Movie Sales

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  • by Anonymous Coward

    Can't Redbox resell anything they buy, especially at retail?

    https://en.wikipedia.org/wiki/First-sale_doctrine

    • From what I've gathered, there are a few issues at play:
      1) Redbox neither purchased a digital copy, nor are they selling a digital copy. They purchased and are selling a code that can be used to redeem a digital copy. That said, to actually redeem the digital copy, one needs to agree to Disney's license.

      2) Redbox is almost certainly aware that it won't be legal for their customers to redeem those digital copies without also owning a physical copy, since the fine print in these sorts of licenses almost alway

      • Yes, the first-sale doctrine means that Disney exhausted their rights to the items included in the purchase at the time of sale, but the digital copy wasn't included in the purchase.

        The digital copy was included in the purchase of box set but in the US, for digital copies, the first sale doctrine does not neatly apply [wikipedia.org] for the obvious reason that a physical copy might degrade over time while a digital copy does not and can be copied multiple times. However, in Europe, if the digital copy could be transferred and made unusable to the previous owner then a re-sell of digital copy is permissible. Now if this happened in Europe, then Redbox could be in the clear because once a code is used

      • From what I've gathered, there are a few issues at play:
        1) Redbox neither purchased a digital copy, nor are they selling a digital copy. They purchased and are selling a code that can be used to redeem a digital copy. That said, to actually redeem the digital copy, one needs to agree to Disney's license.

        2) Redbox is almost certainly aware that it won't be legal for their customers to redeem those digital copies without also owning a physical copy, since the fine print in these sorts of licenses almost always requires that the person also owns a physical copy. As such, those codes are worthless without the physical copy.

        3) Redbox is apparently selling the codes as if they are a standalone means to purchase a digital copy, even though they can't be used that way. In doing so, there's an argument to be made that they're either engaging in fraud by portraying the product as something other than it is, or else that they're inducing others to engage in illegal behavior by selling an item that they have every reason to believe will be used illicitly.

        Yes, the first-sale doctrine means that Disney exhausted their rights to the items included in the purchase at the time of sale, but the digital copy wasn't included in the purchase. The code to redeem it was. And while it's likely perfectly legal to sell the code, portraying it as a standalone item that can be legally used by others without any additional purchase is exactly the sort of thing that I'd expect to see end up in court.

        Even if you want to pretend Disney's terms are enforceable:

        Buy retail movie + code package.
        Sell code and movie together to customer.
        Buy movie back from customer.

    • Yes, they can. Unfortunately, Disney's lawyers will surely win out.

  • This is ridiculous. When Redbox bought the discs, they bought the codes too, since they are included with the disc.

    Just as I can sell my code to someone after buying a personal copy of the movie, Redbox should have the right to sell their code as well. If they don't sell the code, and leave it with the disc, the first person to rent the movie will get the code anyway.

    If Disney has a problem with this, they should just stop including the codes with the discs.

    • Re: (Score:2, Informative)

      by Anonymous Coward
      The codes are only for use by the owner of the disc. You cannot rent, borrow, or covertly steal a code from a friend. You must be the owner of the physical disc. People that Redbox gives these codes to are not the owners; they are simply renting the disc from the true owner (Redbox). This should be open-and-shut.
      • by v1 ( 525388 ) on Friday December 01, 2017 @11:09AM (#55657835) Homepage Journal

        I doubt this will come down to whether or not RedBox is violating the terms. It's more likely to come down to whether or not those terms are legal and enforceable, and that's the angle you'll see RedBox use in their defense.

        I for one find it insulting that I buy something and then am held to some terms of its use. It's mine, I paid for it, and you should have no right to tell me how I'm allowed to use it now that it's my property not yours. So I'd like to see RedBox win this.

      • by mysidia ( 191772 ) on Friday December 01, 2017 @11:29AM (#55657965)

        The codes are only for use by the owner of the disc. You cannot rent, borrow, or covertly steal a code from a friend. You must be the owner of the physical disc.

        Says who? Maybe I bought the disk and refused to agree to any such restriction.
        A product purchased at retail is mine, AND I have the right to re-sell anything i've purchased in whole or in part.

        A retailer or manufacturer cannot legally bundle items together and prevent me from dividing the bundle and reselling --- that is, unless they make me commit to the terms prior to the sale.

    • A while ago a company (I think it was CDBaby) tried to offer a service where if you proved you had a real CD, they would allow you to stream the contents of the CD from their servers - so no-one was streaming music for anything they didn't already have a physical copy of.

      They still lost, and this I think will be even a more clear cut loss.

      • How so? You walk into a Walmart and movie on Bluray that comes with a digital download for $10. You take the slip of paper with the digital code and sell it to a friend for $5. Your friend activates the digital copy and watches the movie and you watch the movie on your disk.

        Redbox goes into Walmart and buys a copy of the same movie. Why are they treated differently?

        • I think that means there is clear case law that the digital license is separate from the viewing rights of the disc. First Sale doctrine applies.

        • Redbox goes into Walmart and buys a copy of the same movie. Why are they treated differently?

          Redbox is retailer. You are not.There are different rules if you are business or a private individual especially in copyright law. If you did this for a living, I would think the movie studios would go after you.

        • Redbox goes into Walmart and buys a copy of the same movie. Why are they treated differently?

          Because RedBox is easier to find and prosecute, and the payoff would be bigger. To sue "you" in your description, they'd have to know you did it, know who you are, and they'd be lucky to get a few hundred dollars in compensation.

          It's the same thing as, say, littering. Someone throwing a paper cup out of their car window on I-95 with no police around is treated entirely differently to someone who loads up their t

    • by bws111 ( 1216812 )

      You didn't buy the 'code' any more than you bought 'the movie'. You bought piece of media containing 'the movie' and a piece of paper that contains a code. Sell that physical media? Fine. Sell a copy of the media (which contains the movie you supposedly 'bought')? Nope. Sell that piece of paper? Fine. Sell a COPY of the piece of paper? Not nearly as clear cut.

      • Sell that piece of paper? Fine. Sell a COPY of the piece of paper? Not nearly as clear cut.

        Raise.com is a whole marketplace that lets you sell copies of an e-gift card code. They haven't been shut down and I think this is (effectively) the same thing.

        As long as only one person gets to redeem the code, and Redbox never agreed to any ToS with Movies Anywhere, I don't see the problem.

  • This is just too devastating to Darth Mouses Business model.

    Disney HAS to stop this through any means.

    Not like Darth Mouse is above Evil methods.

  • ...Or Disney could just change their download activation servers to not allow the block of codes sold to RedBox. Isn't that what the digital activation servers are FOR?
    • They don't have an agreement with Redbox. Redbox is buying the discs retail. In other words, they buy the retail disc/code, sell the code and rent out the disc. Seems pretty reasonable to me. No different than if I bought a dictionary, cut it in half, and sold one person A-M and another N-Z
  • by Cajun Hell ( 725246 ) on Friday December 01, 2017 @12:13PM (#55658291) Homepage Journal

    Redbox sells code to download. User uses code to download file from .. where? Are they downloading from Disney or from Redbox?

    If they're just selling Disney downloads, I don't understand what Disney's claim would be.

    If they're selling their own pirated copies of Disney movies, then I'm surprised this is merely a civil action.

    • Redbox buys it's dvds from a third party as they do not have any agreement with Disney. As such they are retail dvds that include a code as a benefit for the purchaser. The code is a Disney provided code, and I would guess the content is on Disney servers.

  • Disney is trying to conflate Federal Copyright Law with unenforceable post purchase terms found inside the box (per US supreme court decision). Disney may not like it, but the digital code is part of what is purchased (and in fact propping up the price of Bluray discs to an extent) and is covered under the first sale principle. The sad fact is that this is really Congress fault over at least the last 14 years. The Democrat controlled congress (2006 to 2014?) did nothing to fix or clarify ownership rights

  • In other words (Score:4, Insightful)

    by Opportunist ( 166417 ) on Friday December 01, 2017 @12:47PM (#55658573)

    Use Bittorrent and avoid all the hassle.

  • by WolfgangVL ( 3494585 ) on Friday December 01, 2017 @01:14PM (#55658799)

    This is Disney, so even if Redbox wins this, they will lose anyway when ol Steamboat Willy rewrites the copyright laws again.

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