Black Panther has become a record-breaking film, performing well beyond anyone’s expectations, and even recently surpassing Titanic to become the third highest-grossing film of all time (not adjusting for inflation) at an earnings value of over $1.3 billion dollars. With that kind of unprecedented monumental success, it should be no surprise that Disney, the parent company of Marvel Studios, which produced the film, is doing everything that it can to protect and defend against anyone who may attempt to ride this cash wave to profit off of the notable Wakandan superhero.
After U.S. District Court Judge Dean Pregerson rejected Disney’s original petition for a preliminary injunction against Redbox in February, the entertainment giant is once again trying to block Redbox, the Chicago, Illinois-based automated movie / TV / video game rental company, from selling digital download codes for the Black Panther movie.
In December of last year, Disney sued Redbox for copyright infringement, breach of contract, false advertising, unfair competition, and tortious interference with Disney’s contracts with customers. Redbox then subsequently countersued, claiming that Disney was stifling competition with them in advance of Disney launching its own digital streaming service. Redbox does not actually have any distribution deals with Disney, so it purchases physical copies of movies from retailers, which include combo packs that contain Blu-ray and DVD discs, as well as a code for a digital version. Disney’s original suit claims that “Redbox buys and disassembles the combo packs, then rents the discs through its kiosks.”
Disney’s motion to enjoin Redbox from reselling digital download codes for its movies was denied by Judge Pregerson on the grounds that Disney’s ‘warning’ does not constitute a binding contract between Disney and the consumer, and therefore, Redbox’s actions do not represent any breach of contract. Judge Pregerson explained that it is indisputable that Disney cannot prevent consumers from transferring the Blu-ray discs and DVDs contained within Combo Packs that they purchase. The ‘First Sale Doctrine’ contained within the U.S. Copyright Act of 1976 holds that someone who lawfully acquires a copyrighted work is entitled to sell or dispose of their copy.
While Judge Pregerson didn’t go so far as to hold that a movie download code constitutes a legally transferable copy, the judge did mention that Disney’s restrictive license terms could give them power beyond the scope of its rights under the Copyright Act. The judge wrote that “Combo Pack purchasers cannot access digital movie content, for which they have already paid [for], without exceeding the scope of the license agreement unless they forego their statutorily-guaranteed right to distribute their physical copies of that same movie as they see fit . . . . This improper leveraging of Disney’s copyright in the digital content to restrict secondary transfers of physical copies directly implicates and conflicts with public policy enshrined in the Copyright Act, and constitutes copyright misuse.”
Since Disney is preparing for the home release of Black Panther coming this May, it comes as no shock that Disney isn’t backing down from trying to stop Redbox, and will do whatever it takes. The Burbank, California entertainment behemoth filed an amended complaint on Monday with the U.S. District Court for the Western District of California. A hearing is set for June 4.