Last week in class we discussed Disney’s involvement in the Sony decision, and how it was actually most likely extremely beneficial to Disney that their side lost the case. This was because Disney movies, and the merchandising that goes along with them, have been very lucrative.
I found this recent article though, which describes another legal battle that Disney has initiated related to its movies and copyright. This past December, Disney filed suit against Redbox seeking to obtain an injunction that would force Redbox to stop including in its movie rentals digital download codes for Disney films. Apparently, Redbox sells digital download codes that it finds in the physical copies of Disney movies that it purchases. However, a California federal judge denied the injunction and has accused Disney of “copyright misuse.” Evidently, copyright law states that once customers buy a physical copy of a movie, they are free to sell the download codes. The next hearing in the case will be held tomorrow, March 5, on Redbox’s motion to dismiss.
This reminds me of the Napster case, where the issue of song files shared v song files owned turned on whether the underlying song and rights to it had been properly purchased.
This case with Disney and Redbox seems like an interesting twist on Napster in that the Court seems to say that purchasing the physical film comes with the right to the download codes as well since the idea is that the original user should be able to access their film from anywhere, without the disc. I’m surprised then that the Court is analogizing purchase with rental. It seems that Disney’s main contention is that Redbox users rent, not purchase the film and therefore unfairly get the benefit of purchasing the codes at the discount price of renting the film. I would guess that Redbox will use a similar argument as Aereo and Napster, that the liability ultimately falls on the customer to not improperly sell or transfer the codes. So it’s really surprising that the court has already said that the provision of “do not sell or transfer” is not a binding contract and thust can’t hold the customer liable.
I think that’s a really interesting legal question the court is confronted with in this case. I guess the current copyright is not very well suited to deal with the new trend of providing buyers of physical copies with download codes to get a digital version. This is, because the exhaustion of copyright once a single copy of a copyrighted work is sold means that the seller loses its copyright in this specific copy. However, whether the digital version is a part of this copy seems less clear to me. I guess I would argue that it would not be compatible with the theory of exhaustion of copyright if Disney would be allowed to restrict the resell of download codes for digital copies, hence, I agree with the court.