The Burbank entertainment giant filed an amended complaint today with U.S. District Court in Los Angeles, saying its made changes to its online license agreements to address the judge’s concerns that the earlier language over-reached “the scope of its copyright.”
The new language on Disney’s RedeemDigitalMovie.com or Movies Anywhere sites makes it abundantly clear that only those consumers who purchase its “Combo Packs” — a boxed set of movie discs that includes a DVD and a higher-resolution Blu-ray or Digital HD disc — have the right to redeem the digital download of the same movie.
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The timing is likely not coincidental: Disney plans to release of its blockbuster film Black Panther for home viewing in May.
Redbox has been purchasing the Combo Packs, repackaging these download codes and selling them separately a low-price alternative to consumers. The company, best known for its seemingly ubiquitous red kiosks, argues it has the right to do so under the first sale doctrine, which limits a copyright owner’s exclusive right to distribute its copyrighted works to the initial sale.
Disney argued that no digital copy exists until the user downloads it, so the studio owns the exclusive right to reproduce a copyrighted work online.
The home-entertainment arm, in its amended complaint, asks the court to issue an injunction to stop this practice, which it argues is harming Disney’s relationships with other movie distributors and retailers — and contributes to copyright infringement.
“Redbox is unfairly undercutting Disney’s licensees by charging substantially less for codes than the price licensees charge for digital downloads,” said Disney/ABC Home Entertainment President Janice Marinelli in a court filing.
Marinelli argues Redbox’s practices are hurting Disney’s business.
“The obvious consequence of Redbox undercutting of licensee prices is that licensees will likely sell fewer digital downloads of Disney movies and Disney will earn less revenue,” Marinelli wrote. “Although the exact amount cannot be easily quantified.”
A hearing is set for June 4.
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