LOS ANGELES – In a ruling made on Aug. 29, the U.S. District Court for the Central District of California said Redbox isn’t allowed to sell standalone codes from Disney.
The court granted a preliminary injunction in the matter, which restrained and enjoined Red Box from selling or otherwise transferring standalone codes included in Combo Packs with certain license terms.
The standalone codes are part of Disney’s Combo Packs, which are a DVD and/or Blu-ray Disc version of a Disney movie plus a piece of paper containing a download code that can be used online to stream movies, the district court said.
When Redbox started selling the downloadable codes individually, Disney filed a lawsuit and sought a preliminary injunction enjoining Redbox from offering standalone Disney codes for sale, the opinion stated.
According to the district court, Disney alleged that Redbox committed copyright infringement, breached a contract Redbox enters into when it purchases Combo Packs, interfered with Disney’s contractual relations and violated California false advertising and unfair competition laws.
This district court initially denied Disney’s motion for a preliminary injunction, saying the specific language printed on the Combo Pack boxes doesn’t prove breach of contract or copyright infringement.
The court said Disney then changed the language on its Combo Pack boxes, changed the download sites’ terms of use, and amended its complaint.
“Disney’s Combo Pack packaging for the movie 'Black Panther' is the first to reflect changes implemented after this court’s denial of Disney’s first motion for a preliminary injunction,” the opinion stated.
According to the court, Disney’s new language says “the digital code contained in this package may not be sold separately and may be redeemed only by the recipient of this combination package or a family member.”
Disney’s first amended complaint stated a single cause of action against Redbox over allegations of contributory copyright infringement and renews the motion for a preliminary injunction enjoining Redbox from selling Disney’s download codes, according to the district court.
According to the opinion, a party seeking a preliminary injunction must also show that it will suffer irreparable harm in the absence of an injunction.
“Disney has presented extensive evidence that Redbox’s code sales are damaging Disney’s relationships with its licensees,” the opinion stated. “This evidence is sufficient to warrant injunctive relief.”
According to the court, Redbox said it doesn’t intend to sell "Black Panther" codes and there is no irreparable harm if the court’s consideration is limited to the "Black Panther" language.
“Although there appears to be no dispute that Redbox is not selling 'Black Panther' codes, Redbox’s motivations are unknown to the court,” the opinion stated. “In light of Redbox’s position on the instant motion, it is clear that Redbox does not concede that it cannot sell 'Black Panther' codes without contributorily infringing upon Disney’s copyrights.”
The court said Redbox’s voluntary decision not to sell certain codes up to this point in time does not demonstrate a lack of irreparable harm.
The court added that Disney has also proved that an injunction protecting its copyright would be in the public interest.
Despite Redbox’s argument, the court ruled that Redbox can be liable if its customers violate Disney’s terms for the purchase of codes.