Disney Sues to Stop Redbox’s Sale of Download Codes

LOS ANGELES (CN) – Redbox, the go-to for last-minute movie-rental choices, illegally sells download codes for Disney, Lucasfilm and Marvel movies, according to a federal lawsuit.

In a Nov. 30 complaint, Disney says Redbox Automated Retail recently began illegally selling digital codes to customers in “blatant disregard of clear prohibitions against doing so and in violation of plaintiffs’ copyrights.”

The codes come as part of a combo package that includes a Blu-ray Disc and a DVD, in packages marked with a label that says “Codes are not for sale or transfer.” Those codes can be redeemed online at website where consumers can access digital copies of the movie.

But Disney says Redbox “buys and disassembles the combo packs, then rents the discs through its kiosks and sells the codes separately in violation of this prohibition.”

“In addition,” the complaint continues, “Redbox sells the codes with the intent that its customers download or otherwise access the motion picture to which the codes provide access, with full knowledge that doing so violates the terms and conditions of plaintiffs’ copyright licenses governing that access.”

Disney says Redbox markets the codes as “cheap” and a “smart buy,” and the customers are getting quite a deal since Disney – and other studios – only put the access codes into the premium-priced combo packs. A look at Redbox’s website shows codes going for between $4 and $15.

In an email, Redbox said while it doesn’t comment on pending litigation, “we feel very confident in our pro-consumer position.”

Disney says codes sold by Redbox include “Pirates of the Caribbean: Dead Men Tell No Tales,” “Beauty and the Beast,” “Finding Dory,” “Rogue One: A Star Wars Story,” “Star Wars: Episode VII – The Force Awakens,” “Guardians of the Galaxy Vol. 2,” and “Iron Man 3.”

Disney and its co-plaintiffs Buena Vista Home Entertainment, Lucasfilm, and Marvel Comics’ film arm MVL Film Finance say they have lost and will continue to lose sales as a result of Redbox’s actions.

The companies’ claims include copyright infringement, breach of contract, tortious interference with contract, false advertising and unfair competition. They seek a court order blocking Redbox from selling the digital access codes, and general and punitive damages and restitution.

They are represented by Glenn Pomerantz and Kelly Klaus of Munger, Tolles & Olson in LA and San Francisco, respectively.

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