Disney Sues Redbox, Hoping To Block Digital Movie Sales (marketwatch.com)

phalse phace writes: About 1 month ago, Redbox started selling through their kiosks slips of paper with codes on them that lets the buyer download a digital copy of a Disney movie.But Disney says that's a no-no and this week it sued Redbox in an attempt to stop the code sales. According to Marketwatch: "Walt Disney sued Redbox on Thursday in an attempt to stop the DVD rental company from selling digital copies of its movies. Privately held Redbox last month began offering consumers codes they can use to download a digital copy of a Disney movie. Redbox charges between $7.99 and $14.99 for slips of paper with the codes to download Disney films such as "Cars 3" and "Star Wars: The Force Awakens." That is less than those movies cost to buy and download from Apple's iTunes Store. Redbox is only offering digital copies of Disney movies because it doesn't have a distribution arrangement with the studio and buys retail copies of its discs to rent to customers. Those retail DVDs come with digital download codes."

Comments

First Sale Doctrine?

[Anonymous Coward]

Can't Redbox resell anything they buy, especially at retail?

https://en.wikipedia.org/wiki/First-sale_doctrine

Re:First Sale Doctrine?

[HalAtWork]

They probably didn't agree to it so now they're selling it to someone else who will accept it

Re:First Sale Doctrine?

[BronsCon]

I know the Supreme Court has upheld shrinkwrap licenses, but anyone with any critical thinking ability whatsoever can see how that decision was wrong.

I shouldn't post this early in the morning. The Supreme Court struck down the shrinkwrap license in the case that made it in front of them. And they were right to do so.

Re:First Sale Doctrine?

[networkBoy]

If it qualifies to be called a "Shrink Wrap License" then it holds water plenty fine. Just ask the supreme court ;)

Re:First Sale Doctrine?

[bws111]

But the 'goods' that were purchased are a box, some physical media, and a piece of paper with a code. If they were actually selling any of those things then first sale might apply. But they aren't selling any of those purchased goods, they are selling a COPY of one of the purchased goods.

Re:First Sale Doctrine?

[bws111]

What license are you talking about? When you buy the disc, you also buy a piece of paper with a code to get a digital copy. The piece of paper is your license to get the digital copy. If Redbox were actually selling that piece of paper, THEN there could be arguments made about licenses and whether or not first sale applies. But they aren't doing that, they are making COPY of the piece of paper, and selling that. How would first sale, or what is or is not printed on the outside of the box authorize that?

Re:First Sale Doctrine?

[BronsCon]

There is wording on that slip of paper stating that it cannot be transferred or sold. That is the license to which I am referring, and it matters not one bit as you can't read it before you buy, anyway; the Supreme Court has already ruled on that matter.

The code itself is a fact and, therefore, exempt from copyright protection.

Re:First Sale Doctrine?

[alva_edison]

seems like their

they're

I have brought great shame to my family.

Re: First Sale Doctrine?

[sexconker]

That's not an argument.

R buys product X.
R sells part of X to U.
D, creator of X, cries foul.

R has no agreement with D.
D has no legal claim to X once R buys X.
D has no right to interfere with transactions between R and U.

Redbox is buying the discs at retail, pulling the discs and codes, renting/selling the discs and selling the codes.
They have every right to do this under the first sale doctrine. Disney cannot impose any limitation on what Redbox does with the discs or code slips once Redbox buys them. Redbox is free to do whatever the fuck they want. Worst case, Disney will claim copyright over the code and Redbox will email a picture of the slip of paper immediately and then ship the slip of paper via snail mail for a few cents more. It's the same deal with game download / DLC / demo / etc. access codes given as bundles / swag / promos.

Re:First Sale Doctrine?

[BronsCon]

Its okay, you corrected you're error, your fine. ;)

Re:The codes come with the discs, and are paid for

[Anonymous Coward]

The codes are only for use by the owner of the disc. You cannot rent, borrow, or covertly steal a code from a friend. You must be the owner of the physical disc. People that Redbox gives these codes to are not the owners; they are simply renting the disc from the true owner (Redbox). This should be open-and-shut.

Re:The codes come with the discs, and are paid for

[v1]

I doubt this will come down to whether or not RedBox is violating the terms. It's more likely to come down to whether or not those terms are legal and enforceable, and that's the angle you'll see RedBox use in their defense.

I for one find it insulting that I buy something and then am held to some terms of its use. It's mine, I paid for it, and you should have no right to tell me how I'm allowed to use it now that it's my property not yours. So I'd like to see RedBox win this.

But if the box says "no transfers"...

[SB5407]

Not that I don't whole heartedly agree that all the non-IP rights of first sale should apply and Redbox should be free to do this (because i do agree and they should be able to do this), but the legal commentary you linked to points out that because the decision hinged on the fact that the software company printed the statement "Required terms are inside the box" instead of the actual terms, that they could have prevented the problem by printing the actual terms on the outside of the box. Which frankly, sucks. Because companies then get to force thier terms on people for simply purchasing a copy of a work. It's my damn copy of the work, I should be able to do with it what I please subject to the same copyright law that books get.

Software vendors can take away from this decision some useful tips. Vendors may want to consider giving users the opportunity to review their license terms and conditions by printing them on the outside of their software packaging or otherwise making them available at retail outlets where their products are sold. For phone orders, vendors may consider providing purchasers copies of the license agreement in advance of consummating a transaction, or at least informing purchasers at the time of purchase that the transaction is subject to the terms of the license agreement.

Re:But if the box says "no transfers"...

[SB5407]

Both parties state their terms

Aha! That's the part I have a problem with. The software distributor gets to state their terms, but the potential buyer at the store effectively does not. And, there is no negotiation for consideration and/or terms. Therefore, I would like law and/or jurisprudence to come down and state "There was no negotiation, and therefore, no agreement could have been entered into".

Re:But if the box says "no transfers"...

[Anonymous Coward]

Therefore, I would like law and/or jurisprudence to come down and state "There was no negotiation, and therefore, no agreement could have been entered into".

That should be a no-brainer, super-low bar.

You don't go far enough, though. It's hard for anyone to take seriously that "terms printed on the box" are the same as terms of the sale. There are lots of things printed on the box, such as the fact that Luke Skywalker is the galaxy's last hope or that Arnold is The Terminator. Did you agree to those things, too?

Not to mention that you buy plenty of things before ever seeing the box.

You don't ever signal your agreement, you don't ever communicate your agreement, and the other party doesn't even have any evidence that you agreed. All they can do is pretend to have inferred it. "You bought it, so we assume you ended up agreeing to it."

The type of "contract" that we're talking about here, would only ever be attempted by a criminal who had fraudulent intent. There are not any legitimate uses for "now that you've bought it, let me tell you more about what you agreed to."

I have worked at a software company where we got customers to actually sign contracts at the time they handed us the check, and then that contract was stored in our file cabinet. It's a totally viable way to do business and I got a couple decades of paychecks out of it. If today's media and software companies can't make it work for them, that's their problem and we shouldn't tolerate them acting like criminals all simply because "it's too hard to get agreement prior to the sale." Boo hoo!

These terms are bullshit and any company trying to defraid people with them, should be treated as what they are. A legitimate business wouldn't ever do anything even like that, ever.

And yes, also, you didn't get to negotiate. Or rather, you didn't decide when you were negotiating. Sounds like they somehow sent you a piece of paper but never had you sign it and return it, yes? You know, you could mail them your terms, too. No, they probably won't sign them and send them back, but their argument is that such things aren't needed. Terms-agreement isn't an interactive process, according to them.

If they can negotiate terms after the sale, so can you. If they claim that "negotiation" consists of telling (usually obscurely and/or indirectly) the other person the terms and not taking no for an answer -- actually, not even ever getting an answer at all -- why can't you?

Once you open the doors to absolutely unsupported bullshit that is totally unlike all other contract negotiations, anything goes. When a bully unilaterally changes the rules to "there are no rules" right before punching you, they shouldn't be surprised to end up with a bloody nose too.

Re:But if the box says "no transfers"...

[MitchDev]

" purchase is a contract, mind you."

So if you steal/shoplift the disk, there is no "agreement".... ;)

Re:But if the box says "no transfers"...

[sexconker]

There has to be opportunity to negotiate to meet the legal "meeting of the minds" requirement.
If there's no opportunity to negotiate, there's no contract. A mere purchase is not a contract. A sale (with a bill of sale, etc.) often is.

One sided contracts hold some weight, but not much, because there's no indication that a person was informed of, understood, or agreed to the egregious bullshit hidden deep within. This is why you sign and initial multiple times on a rental agreement, purchase agreement for a vehicle, gym membership, etc. underneath specific clauses.

This is why shysty shops have a sign saying "ALL SALES FINAL" posted somewhere in view of the counter. The shop owner can spout his bullshit about how he'll treat you right, but he'll lie about what he said if you take him to court. Instead, he'll bring a photo of that sign as seen from where you stood at the counter, and a copy of the dated receipt which has similar language on the bottom / back. Proceeding with the transaction despite that clear and obvious sign and the ability to ask the shop owner about it counts. Shrink wrap licenses don't count. Printing terms on the box may count, if they're big enough and obvious enough that a person would see and read them before deciding to make a purchase.

Too this date, I've only seen small print, summary terms and conditions on the box of most products. That's not going to convince anyone that someone agreed to them.

Re:The codes come with the discs, and are paid for

[mysidia]

The codes are only for use by the owner of the disc. You cannot rent, borrow, or covertly steal a code from a friend. You must be the owner of the physical disc.

Says who? Maybe I bought the disk and refused to agree to any such restriction.
A product purchased at retail is mine, AND I have the right to re-sell anything i've purchased in whole or in part.

A retailer or manufacturer cannot legally bundle items together and prevent me from dividing the bundle and reselling --- that is, unless they make me commit to the terms prior to the sale.

Re:The codes come with the discs, and are paid for

[j_rhoden]

I think the question Redbox is going for here is does First Sale Doctrine apply. Disney can say whatever they want on the box, but if the court says it falls under the First Sale Doctrine then it doesn't matter what Disney thinks.

Re:The codes come with the discs, and are paid for

[BronsCon]

The code is part of the sale. It's printed on a slip included with the disc. By accepting the code when whoever I sell it to enters it, they're agreeing to that second transaction you allude to, as well.

Who sends it?

[Cajun Hell]

Redbox sells code to download. User uses code to download file from .. where? Are they downloading from Disney or from Redbox?

If they're just selling Disney downloads, I don't understand what Disney's claim would be.

If they're selling their own pirated copies of Disney movies, then I'm surprised this is merely a civil action.

Re:The codes come with the discs, and are paid for

[olsmeister]

God damn it, now I'm hungry.

Re:This was already sued and lost

[SScorpio]

How so? You walk into a Walmart and movie on Bluray that comes with a digital download for $10. You take the slip of paper with the digital code and sell it to a friend for $5. Your friend activates the digital copy and watches the movie and you watch the movie on your disk.

Redbox goes into Walmart and buys a copy of the same movie. Why are they treated differently?

Re:Or...

[edtice1559]

They don't have an agreement with Redbox. Redbox is buying the discs retail. In other words, they buy the retail disc/code, sell the code and rent out the disc. Seems pretty reasonable to me. No different than if I bought a dictionary, cut it in half, and sold one person A-M and another N-Z

In other words

[Opportunist]

Use Bittorrent and avoid all the hassle.

Dammit

[WolfgangVL]

This is Disney, so even if Redbox wins this, they will lose anyway when ol Steamboat Willy rewrites the copyright laws again.

Re: The codes come with the discs, and are paid fo

[dgatwood]

However, if I somehow charge you $1 to read this post, aware of the fact that you want to read this post to get the code and watch the movie, I have absolutely contributed to infringement of the copyright in the movie.

No, you haven't. The codes are one-time-use codes. If you charge me $1 to read the post, aware of the fact that I'm reading the post to get the code and watch the movie, you're guilty of fraud, not copyright infringement, because that code won't work for me or anyone else.

More to the point, it can reasonably be argued that statements of non-transferability are statements of fact rather than contractual terms binding upon the recipient, because once used, neither the codes nor the content that they allow you to access can be transferred to anyone, because the website doesn't provide that ability.

Finally, Disney's argument is utterly absurd prima facie. Here's a quick reductio ad absurdum. Consider the following two situations:

• I by a Blu-Ray that contains a code for $10 and sell the code to my neighbor for $5.
• My neighbor buys the same Blu-Ray for $10 and redeems the code, then sells me the Blu-Ray for $5.

In both cases, the result is exactly the same: my neighbor has the code, and I have the disc, and we each spent $5 for that privilege. However, under Disney's fallacious logic, the first one is a copyright licensing violation, and the second one is legal use of the right of first sale, even though the result is exactly the same, and the only difference is in how the funds were transferred. Nothing in the Copyright Act can be reasonably construed to intend such an utterly bizarre distinction in legality between those essentially identical acts, and any judge in his/her right mind should laugh in their faces, declare summary judgment for RedBox, and take the rest of the afternoon off for a round of golf.

Just saying.