On November 30, the Walt Disney Company filed a lawsuit against Redbox, alleging that Redbox has been illegally selling digital download codes for Disney, Lucasfilm, and Marvel films. Disney’s complaint lists claims of copyright infringement, breach of contract, tortious interference with contract, false advertising, and unfair competition. It is seeking an injunction to prevent Redbox from selling the codes, profits from sales, and damages of up to $150,000 per title.
Disney alleges that Redbox has been buying copies of its combo packs, which include a DVD, Blu-ray disc, and digital download code and disassembling the package to rent out the discs from Redbox’s kiosks and separately sell the download code. Combo packs are sold by Disney for a discounted aggregate price to incentivize consumers to buy both the physical and digital copies instead of a single disc package or digital download. Disney intends that the digital codes are used by the person who purchase the combo pack, as indicated by the “Codes are not for sale or transfer” label printed on the packaging. Disney claims when Redbox customers use the download code purchased from Redbox, “they do so without authorization and in violation of Plaintiffs’ exclusive rights under copyright.” The codes, which are printed on an insert inside the combo pack, can be redeemed at one of several websites. These websites require that users comply with terms and conditions before redeeming a code, which includes verifying that they are authorized to use the digital code.
In the complaint, Disney claims that Redbox sells the download codes online and through kiosks, marketing them as “cheap” and a “Smart buy.” Redbox’s price for the download code is less than the cost of the Disney combo pack, which Disney claims “significantly undercuts” the normal price.
Disney and co-plaintiffs Buena Vista Home Entertainment, Lucasfilm, and MVL Film Finance, an arm of Marvel, claim they will continue to lose revenue if Redbox is permitted to sell the codes. The plaintiffs are being represented by Glenn Pomerantz and Kelly Klaus of Munger, Tolles & Olson. Redbox said it doesn’t comment on pending litigation, but “we feel very confident in our pro-consumer position.”
Ben Fritz, Disney Sues Redbox Over Digital Movie Sales, The Wall Street Journal (Nov. 30, 2017), https://www.wsj.com/articles/disney-sues-redbox-over-digital-movie-sales-1512094838.
Complaint and Demand for Jury Trial, Disney Enter. v. Redbox Automated Retail, LLC, No. 2:17-cv-08655 (C.D. Cal. Nov. 30, 2017).
Dominic Patten, Disney Goes Rabid Over Redbox Selling Digital Movie Codes, Scores Bill Nye Win, Deadline (Dec. 1, 2017), http://deadline.com/2017/12/disney-sues-redbox-digital-movie-codes-lawsuit-bill-nye-1202218213/.
Eriq Gardner, Disney Sues Redbox Over Sale of Movie Download Codes, The Hollywood Reporter (Dec. 1, 2017), https://www.hollywoodreporter.com/thr-esq/disney-sues-redbox-sale-movie-download-codes-1063361.
Ryan Faughnder, Disney Sues Redbox to Stop Digital Movie Sales, In the Latest Feud Between the Companies, Los Angeles Times (Dec. 1, 2017), http://www.latimes.com/business/hollywood/la-fi-ct-disney-redbox-feud-20171201-story.html.
Todd Spangler, Disney Sues to Block Redbox’s Digital Movie Sales, Variety (Dec. 1, 2017), http://variety.com/2017/digital/news/disney-sues-redbox-digital-movie-downloads-1202627882/.