Now, Disney tells customers, “Digital code redemption requires prior acceptance of license terms and conditions,” “The digital code contained in this package may not be sold separately” and more.ĭisney positioned this as an enforceable “clickwrap” agreement that required affirmative assent. Black Panther became the first product incorporating the change.
Pregerson wrote in his first decision the problematic nature of how Disney was improperly leveraging “digital content to restrict secondary transfers of physical copies” and said this “implicates and conflicts with public policy enshrined in the Copyright Act, and constitutes copyright misuse.”Īfter the decision, Disney changed the language on its Combo Pack boxes, changed the download sites’ terms of use and amended its complaint with a new attempt at an injunction. Here, the issue was the first sale doctrine, which provides that someone who lawfully acquires a copyrighted work is entitled to sell or dispose of their copy.
In the earlier decision, Pregerson analyzed whether restrictive license terms improperly granted Disney power beyond the scope of its copyright. The problem was in packaging that stated, “Codes are not for sale or transfer,” which conditioned use on a user representing that he or she “is the owner of the physical product that accompanied the digital code at the time of purchase.” District Court Judge Dean Pregerson saw merit to Redbox’s position that Disney had misused its copyrights to films such as Frozen and Star Wars. Maybe surprisingly, Redbox won the first round. So Redbox got ahold of Disney’s “combo packs,” which include a Blu-ray disc, a DVD and a digital code, and disassembled it, offering only the download code at a cheaper price.ĭisney was upset and filed a copyright lawsuit. But online streaming has disrupted the business now owned by the private equity giant Apollo Global Management. Redbox operates DVD rental kiosks in retail stores throughout the nation. This case has hardly been easy for the studio.
On Thursday, a California federal judge granted a motion for a preliminary injunction. Disney has prevailed on its second attempt to stop Redbox from selling digital codes that consumers can redeem at online outlets to access copies of Black Panther and other movies.