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Disney has won a preliminary injunction against Redbox, concerning the video kiosk company reselling digital download codes for new movies.

Redbox is reselling digital download codes from Disney movies

According to the Los Angeles Times, Redbox has been buying DVD and Blu-ray videos and removing the paper slip with the digital download code on it. Then the company has repackaged the codes and sold the codes at their kiosks. Redbox customers could then take these digital codes home, redeem the codes online and then own a permanent copy of the movie.

The video rental company has no agreement with any of the studios, and Disney argues Redbox violated its terms and conditions because the movie packages state the codes are not to be sold or transferred. Redbox stated their ability to sell the codes is protected under the first sale doctrine portion of copyright law.

Language on video packaging deemed not enforceable

Disney’s first request for an injunction was rejected in February because the language on the packaging was not deemed to be an enforceable contract. The entertainment company went back and then changed the language and made the warning more explicit on new movies like “Black Panther.”

It is these new movies with the revamped warning that the U.S. district judge ruled may constitute copyright infringement. Redbox has reacted to the ruling by saying the company will continue to sell digital codes for older movies with the less strongly worded warning.

What does the first sale doctrine protect?

According to the U.S. Department of Justice, the first sale doctrine allows someone that has purchased a copy of copyrighted work from the person that holds the copyright to sell, dispose of or show that specific copy of the work. This doctrine does not allow anyone to make an unauthorized reproduction of the copyrighted work. The first sale doctrine protection also does not extend to anyone who has acquired the copyrighted work by rental, lease or loan, but does not own the copyright.

What is considered an enforceable contract?

For a contract to be deemed enforceable, it must contain three elements: an offer, consideration and acceptance. The offer element is pretty straightforward. Consideration means that something of value most be offered in the contract. Then acceptance occurs when the other party has agreed to the offer.

In the case of Disney and Redbox, by purchasing the DVDs and Blu-rays, it could be argued that Redbox accepted the contract that legally bound the company not to sell or transfer the digital download codes. For now, it seems the court agrees that Redbox did enter into this enforceable contract, and the selling of the digital download codes on the new movies is not protected under the first sale doctrine.

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