Legal Dispute Between Disney and Redbox Continues to Heat Up

Posted Thu Apr 12, 2018 at 03:06 PM PDT by

The battle between the two companies is only intensifying.

As reported back in December, Disney is suing Redbox for reselling digital copy codes of its films, and in February the studio was dealt a major blow in its case when a California federal judge rejected its motion for a preliminary injunction to stop the rental company. Now, Disney has put forth an amended complaint with the US District Court in Los Angeles to once again call for an injunction.

Meanwhile, Redbox has filed its own amended complaint against Disney in response, alleging that the studio is making it unfairly difficult for the rental business to purchase Disney combo packs for its service. Furthermore, the allegations go so far as to claim that a Redbox employee was recently threatened with prison time for buying copies of Coco

Redbox first began selling digital copy codes for Disney films in October for around $5 - $15 per title. The company obtains the codes from inserts that are included with the retail discs it buys for its DVD and Blu-ray rental kiosks. The selection of movies includes many popular titles like Star Wars: The Force AwakensGuardians of the Galaxy Vol. 2The Jungle BookMoanaFrozen, and more. After buying a code, users can pick-up a printout with details on how to use it from one of Redbox's kiosks. The codes can then be used to redeem a digital copy of the selected movie through various supported services and devices.

As part of its lawsuit, Disney is claiming that by reselling these codes Redbox is violating the studio's contracts and copyrights since Disney clearly states that these codes are not for sale on its packaging. As such, Disney is seeking an injunction on the sale of its digital codes through Redbox. With that said, the request was initially denied in court by a California federal judge who based his ruling on potential copyright misuse by Disney itself. For its part, Disney now says it has addressed this concern by changing the language in its online license agreements to make it more clear that only the customer who actually buys a combo pack can redeem the digital copy. As such, the studio is once again attempting to get an injunction against Redbox.

In the other corner, Redbox is now claiming that Disney is trying to unjustly prevent the company from buying combo packs. To do so, the complaint alleges that the studio is using an in-store merchandising company called Anderson Merchandisers to help stop Redbox from buying discs in store. According to Redbox, one major retailer has even been told to prohibit Redbox employees from purchasing more than five Disney discs. On that note, the complaint states that one Redbox employee was threatened with prison time for buying combo packs of Coco, and the company believes that the threats were made by a representative of Anderson or Disney.

The next step is set for June 4, when another hearing will be held to consider Disney's injunction. 

Sources: Deadline 1, Deadline 2, Variety

Tags: Disney, Redbox, MoviesAnywhere, Digital Copies, Streaming (all tags)