Like most Americans, it’s possible that you’ve enjoyed the convenience of a kiosk service to rent DVDs, Bluray discs and video games. However, the day and age of movies and games on discs are ending putting services like Redbox in hot water.
In order to remain competitive, Redbox is launching a Beta Version streaming service that provides its customers with movies and games on demand. This new service allows users to download movies, making Redbox competitive with other streaming sites such as Netflix, Hulu, Amazon and Youtube. But one company is claiming that what Redbox is doing is illegal and is taking them to court over it.
Disney claims Redbox is infringing on copyright
Disney is pursuing legal action against Redbox for allowing customers to download movies such as “Star Wars: The Force Awakens” and “Beauty and the Beast” without having copyrights. According to the lawsuit, Disney accuses Redbox of selling redeemable digital codes that were included in Disney movie multi-packs. Redbox would receive the multi-packs, separate the items and sell the codes and discs individually to customers. By buying in bulk and selling the items separately, Redbox is able to offer customers discounted streaming and renting prices compared to other streaming sites on the market.
In doing so, Disney claims that Redbox is violating copyright infringement and contract law. The lawsuit alleges that Redbox is reselling digital codes even though they are marked “not for sale or transfer.” Disney is asking the U.S. District Court in Los Angeles to block Redbox from distributing the codes to consumers. They are also seeking up to $150,000 per infringed work.
Redbox rejects copyright infringement claim
But Redbox isn’t going down without a fight. In court this month, Redbox told the court that they are invoking the “first sale doctrine.” The doctrine states that a copyright owner cannot bar a person from reselling copies of a work. In court, the attorney for Redbox argued that the digital codes should be treated the same as the sale of physical discs that are sold in traditional video rental businesses.
The court will have to decide if digital copies of movies are considered “reproduction” in accordance with federal copyright law. Redbox adamantly refutes the claim that it is infringing on any copyright laws. Instead, the company’s attorney argues that Disney is trying to stifle the competition among streaming services. Disney recently acquired 21st Century Fox as a part of a $52 billion deal. As part of that acquisition, Disney will control Hulu, a competitor streaming site to Redbox.
A hearing on the motion for an injunction on behalf of Disney will be heard in Los Angeles federal court on Feb 5. If the court finds that Redbox is infringing on copyright, you may soon see some of your favorite titles disappear from the company’s services altogether.