Tuesday, January 23, 2018

"Redbox's late entry into the digital download business has been complicated by a longstanding feud with . . . the Walt Disney Co"


Redbox buys combo packs of movies at physical retailers. Each pack contains a DVD, a Blu-ray disc and a piece of paper with a code that lets customers download a digital copy of the movie. After Redbox buys the packs, it takes them apart and sells the codes to customers, who can then redeem the codes at dedicated websites such as Disney's Movies Anywhere service.


Disney is asking the court to block Redbox from reselling the codes and is demanding damages in the form of Redbox profits from the sales, or up to $150,000 per infringed work.


Firing back at Disney, Redbox says its service is protected by the "first sale doctrine," a key part of copyright law that says someone who buys a copyrighted work is allowed to resell it or give it away, as long as they don't make their own copies to sell.

That's the principle that protects people selling used DVDs and records on eBay and to used video stores. Redbox argues that selling a slip of paper with a code printed on it is, in effect, no different from reselling a Blu-ray disc.

Disney says digital codes are different because a new copy of the work is created when a person uses the code to download the movie. Redbox would be facilitating the illegal duplication of a film, according to Disney.

"It ends up being an existential question, which is, 'what is Disney selling?'" said Greenberg Glusker's Moss. "Is there some affirmative right to download the film attached to the code? To my knowledge, no court has ever determined that."