Disney Looks to Stop Redbox From Selling 'Black Panther' Download Codes

A new bid for a preliminary injunction comes after Disney revises online licensing terms upon a judge's conclusion it is committing copyright misuse.
Courtesy of Marvel Studios
'Black Panther'

Having suffered an embarrassing legal loss, Disney is telling a judge that it has solved a problem that led to the startling conclusion that the company is committing copyright misuse. After making changes to the way it licenses its works online, Disney submitted a new injunction bid on Monday that is aimed at preventing Redbox from selling movie download codes.

In a lawsuit, Disney contends that Redbox is violating its copyrights by disassembling "Combo Packs" — a Blu-ray disc, a DVD and a movie download code which can be redeemed through authorized digital outlets.

On Feb. 21, U.S. District Court Judge Dean Pregerson denied Disney's first motion for a preliminary injunction on the basis that Redbox could assert a viable copyright misuse defense.

Pregerson said there was no dispute that Disney couldn't prevent consumers from transferring the Blu-ray discs and DVDs contained within Combo Packs. Copyright's first sale doctrine provides that someone who lawfully acquires a copyrighted work is entitled to sell or dispose of their copy. While Pregerson wouldn't go so far as to hold that a movie download code constituted such a legally transferable copy, the judge flagged how Disney's restrictive license terms for RedeemDigitalMovie.com could give the entertainment giant power beyond the scope of its copyright to works like Star Wars and Frozen.

"Combo Pack purchasers cannot access digital movie content, for which they have already paid, without exceeding the scope of the license agreement unless they forego their statutorily-guaranteed right to distribute their physical copies of that same movie as they see fit," wrote the judge at the time. "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."

Disney disagrees with the decision, but is nevertheless attempting to satisfy the judge's concerns and moot the copyright misuse defense.

"Following the Order, Disney revised the terms on RedeemDigitalMovie.com and Movies Anywhere," states Disney's new injunction motion. "To redeem a Code through either site, a user must represent that he or she, or a member of his or her family, 'obtained the [C]ode in an original disc + code package [i.e., a Combo Pack] and the [C]ode was not purchased separately.'"

Disney says the change means that a user can now redeem the code without actually possessing the discs that were part of the underlying Combo Pack. The plaintiff hopes this clarifies that the focus is on how the movie code was acquired, and time will tell whether that's enough for the judge.

In the meantime, Disney tells the judge that after modifying online licensing terms and providing it to Redbox, the defendant still refuse to stop selling codes.

"Within the last month, Redbox started selling Codes for Coco and Thor: Ragnarok," continues the motion. "Absent an injunction, Redbox will continue to sell Codes for Disney’s next Combo Pack release (Black Panther) and releases after that ad infinitum. Disney therefore renews its motion for a preliminary injunction."

The full motion is below.