Disney and Redbox are currently facing off in a court battle over reselling DVD, Blu-ray, and digital download versions of movies. Disney sells combo packs of their movies that include one DVD disc, one Blu-ray disc, and one download or streaming access code for the movies. The combo packs include packaging language indicating that items in the combo packs “cannot be resold individually” and placing other restrictions on the use of the combo packs. Redbox bought the combo packs at issue in retail stores and rents the DVD discs and Blu-ray discs to consumers in automated kiosks. Recently, Redbox started separately selling the access codes at their website. Disney sued Redbox claiming Redbox’s sales of the codes without the discs is copyright infringement.
The case is at an early stage, but Disney’s motion for a preliminary injunction against Redbox was denied. Among other things, the Court held that the packaging license language cannot prevent the owner of a particular copy of a copyrighted work from selling or otherwise disposing of that copy. Thus, Disney’s requirement in the packaging language that the items in the combo pack “cannot be resold individually” has no binding effect on consumer’s future behavior. Redbox may face other issues down the line, but the packaging language does not stop them from selling the discs and codes separately.
Read the full opinion here, Disney Enterprises, Inc. v. Redbox Automated Retail, LLC.