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Disney and Redbox have been involved in a heated legal battle for years. Disney has taken issue with Redbox reselling digital movie codes for its films and Redbox doesn’t like the way Disney has allegedly tried to prevent them from doing so. The battle has been going on for two and a half years at this point and while it’s not over yet, it looks like things may be headed in that direction, as a judge just dismissed almost all of Redbox’s countersuit against the Walt Disney Company.
Disney originally brought the lawsuit against Redbox when the company, known mainly for its rental kiosks, started selling digital codes for Disney movies. Redbox was purchasing Disney Combo Packs, putting the discs up for rental, and then selling off the digital code that came in the box, usually at a significant discount compared to what it would cost to buy a movie through a digital storefront like iTunes or Amazon.
Disney sued claiming a violation of the company contracts and copyrights. Initially a judge sided with Redbox, but after Disney made a modification to the language in the licensing agreement for the digital codes, the House of Mouse won out.
However, Redbox countersued Disney over what it claimed was unfair competition by Disney. Redbox claimed that Disney attempted to stifle them in the marketplace, urging distributors to not sell to them. In addition, Redbox claimed that some of the language that Disney used with consumers in regards to the Combo Packs was false.
The countersuit dealt with these issues in a variety of ways including antitrust and copyright misuse. It was here that Disney was recently handed a big win, as THR reports a judge has now thrown out nearly every part of Redbox’s countersuit.
Of eight causes of action, six were dismissed by the judge. One claim of false advertising as a violation of the Lanham Act has been upheld. Redbox says that Disney falsely claims that it owns all download codes which can only be redeemed by recipients of Combo Packs. In addition, there is a broader claim of unfair competition, which even Disney agrees only has standing as long as other claims by Redbox have standing, but since the one other cause has been upheld, this one gets to hang around as well.
All other claims in the suit have been dismissed, though the judge left the door open for Redbox to amend their arguments in all of those cases, so it’s possible we haven’t seen the end of those.
If Redbox decides to amend the arguments on the dismissed claims we could see another round of this. Otherwise the case will move forward on the remaining items at issue. Either way this is a big win for Disney. Still, the battle isn’t over yet.