Disney DVD & Blu-Ray: Do Combo Packs Pose Legal Problem?
Yes, I still buy physical DVDs & Blu-Rays.
However, I won’t buy any physical media if it does not include a digital copy. And, since I buy too many Disney disks, I can now arrange a tour for a family of four to the Walt Disney Studios via DisneyMovieRewards.com.
I kid you not.
Redbox vs. Disney
But apparently, Redbox isn’t kidding anyone either. As they have repeatedly taken Disney to court over rights to the digital codes in The Mouse’s digital combo packs.
That said, don’t mess with Mickey.
The decline of the home entertainment market caused Disney to begin selling “combo packs” comprised of a Blu-ray disc, a DVD and a code allowing the download of popular films such as Star Wars and Black Panther. The decline of DVD rentals then caused Redbox to also look for a new product. The company began using its kiosks to disassemble Disney’s “combo packs” and re-sell the codes separately. Disney insisted in a lawsuit that this activity amounted to a breach of contract and a violation of copyright law. Redbox responded that Disney was engaging in copyright misuse to protect its own coming streaming service.
Yada, yada, yada…
Disney vs. Redbox
Anyway, the suit and countersuits and the counter-counter suits finally hit a crossroads last week.
Of eight causes of action, six were dismissed by the judge. One claim of false advertising as a violation of the Lanham Act has been upheld. Redbox says that Disney falsely claims that it owns all download codes which can only be redeemed by recipients of Combo Packs. In addition, there is a broader claim of unfair competition, which even Disney agrees only has standing as long as other claims by Redbox have standing, but since the one other cause has been upheld, this one gets to hang around as well.
Disney Wins. Sort’ve.
The decision also rejects copyright misuse and tortious interference claims (“[T]here is nothing inherently improper with Disney entering into restrictive agreements with its distributors”) before getting to one claim that Redbox definitely can pursue — false advertising under the Lanham Act.
According to Redbox, Disney falsely stated that it owns all download codes, which can only be redeemed by recipients of combo packs.
“Although Redbox consumers do not ever encounter Disney’s Combo Pack packaging, code purchasers cannot redeem download codes without viewing Disney’s redemption website terms, including representations that Disney owns the download codes and that codes cannot be redeemed by standalone purchasers,” writes Pregerson. “Disney argues that these representations cannot lead to lost sales for Redbox unless a consumer “determines that Redbox is engaged in unlawful conduct… and decides not to buy additional Codes from Redbox… That appears, however, to be precisely what Redbox alleges. Redbox has, therefore, alleged statutory standing under the Lanham Act.”
So, by insinuating that “standalone” purchasers of Disney’s digital codes are doing so unlawfully — which apparently is false — Redbox does have a leg to stand on. I think.
However, as I have a headache, and assume that most of all of this will become moot when Disney+ comes aboard (which reminds me that I better arrange my tour shortly), I’m closing the book on this post. In the meantime, if you’d like to read (decipher?) the actual legal decision, check out the actual 23-page document.