Disney Ruled against in Redbox case, potentially opening up the ability to resale digital codes - Sensationalist Headlines

[url]https://arstechnica.com/tech-policy/2018/02/judge-slaps-down-disney-effort-to-stop-resale-of-star-wars-download-codes/[/url] [QUOTE]A federal judge in California has rejected Disney's effort to stop Redbox from reselling download codes of popular Disney titles like Frozen, Beauty and the Beast, and the latest Star Wars movies. Judge Dean Pregerson's Tuesday ruling invoked the little-used doctrine of copyright misuse, which holds that a copyright holder loses the right to enforce a copyright if the copyright is being abused. Pregerson faulted Disney for tying digital download codes to physical ownership of discs, a practice that he argued ran afoul of copyright's first sale doctrine, which guarantees customers the right to resell used DVDs. If the ruling were upheld on appeal, it would have sweeping implications. It could potentially force Hollywood studios to stop bundling digital download codes with physical DVDs and force video game companies to rethink their own practices. [/QUOTE] [QUOTE]When you buy a Disney DVD or Blu-ray disc, it will often come bundled with a special code that can be used at one of two Disney-sponsored websites, RedeemDigitalMovies and Disney Movies Anywhere (recently superceded by the multi-studio Movies Anywhere), to obtain a digital copy that can be viewed on PCs and mobile devices. Disney didn't view the DVD and the download code as two separate products. Instead, Disney views them as a customer convenience—a way to allow a single customer to watch the one movie they've purchased on a wide range of devices. But Redbox had a different interpretation. Redbox is in the business of buying DVDs and renting them out to customers. And it saw an opportunity to make some extra money from Disney's download codes. The company started buying DVD-plus-download-code bundles at ordinary retail locations and breaking the bundles apart. Redbox rented out the DVDs and Blu-Ray discs as it always has. But it also began selling the download codes to customers, allowing them to gain a digital copy of a movie for a fraction of the cost of purchasing a digital download directly from Disney. Disney sued, arguing that Redbox was violating the licensing terms that came with the bundle. The Disney DVDs came bundled with a notice that says "codes are not for sale or transfer." Disney argued that Redbox had to accept this condition in order to open the package and gain access to the download code. Disney also argued Redbox was encouraging customers to infringe its copyrights, which could make Redbox liable under the doctrine of contributory infringement. In order to use the download code, Disney requires a customer to "represent" that he or she is the owner of the physical DVD that came with the download. In Disney's view, downloading a movie without owning the associated DVD isn't authorized by Disney's licensing terms and is therefore copyright infringement. Judge Pregerson ruled that merely slapping "codes are not for sale or transfer" on a DVD box isn't enough to create a binding contract. Disney's DVDs also said, "this product cannot be resold or rented individually." But Pregerson noted that isn't true: copyright law's first sale doctrine gives customers the right to resell DVDs whether the publishers wants them to or not. So, Pregerson concluded, there's no reason to treat a one-sentence notice on the outside of a box as a legally binding contract.[/QUOTE] [QUOTE]Grimmelmann told us that a finding of misuse prevents any enforcement of a copyright as long as the misuse continues. If restricting resale of Frozen download codes is copyright misuse, that doesn't just mean that Redbox can re-sell download codes. As long as Disney's misuse continues, Disney can't enforce its Frozen copyright at all.[/QUOTE]

wait you can't re sell digital codes?, I thought you could sell your property

[QUOTE=eirexe;53154595]wait you can't re sell digital codes?, I thought you could sell your property[/QUOTE] aren't most digital codes (and purchases on platforms such as Steam, etc..) just basically leased out to you?

[QUOTE=NitronikALT;53154614]aren't most digital codes (and purchases on platforms such as Steam, etc..) just basically leased out to you?[/QUOTE] this honestly mostly depends on your laws, agreements can't override law

Ah, I remember this case. Leonard French did a video on it some time back. Too lazy to link it, but it basically comes down to Disney trying to skirt the copyright law they helped write and pushed for. Any opportunity where Disney gets taken down a notch is an opportunity well taken in my book

[QUOTE=NitronikALT;53154614]aren't most digital codes (and purchases on platforms such as Steam, etc..) just basically leased out to you?[/QUOTE] That is the argument they try to make is that they are just licenses, but that is by and large an untested argument, and similar ones have failed to be upheld so it's unlikely the license argument would work either.

[QUOTE=eirexe;53154629]this honestly mostly depends on your laws, agreements can't override law[/QUOTE] Agreements can't [I]override [/I]law, but that doesn't mean the agreement is inherently contradictory to what the law says in the first place. Most games are specifically sold as a license allowing certain uses, so you don't actually own it yourself.

[QUOTE=eirexe;53154595]wait you can't re sell digital codes?, I thought you could sell your property[/QUOTE] it hinged upon the wording of disney's tos which forced users to own a physical copy to actually legally possess a digital one, which is illegal. thus redbox was able to resell the codes since disney can't supersede law with their terms of service

[QUOTE=Doctor Zedacon;53154650]That is the argument they try to make is that they are just licenses, but that is by and large an untested argument, and similar ones have failed to be upheld so it's unlikely the license argument would work either.[/QUOTE] It's not really an argument, that's what you're buying when you hit the "purchase" button. [QUOTE=eirexe;53154595]wait you can't re sell digital codes?, I thought you could sell your property[/QUOTE] No. This is also part of why buying license of software online and through other services is so much cheaper than buying the boxed edition. [editline]27th February 2018[/editline] Making it legal to re-sell all software licenses would be a disaster for prices as well as for companies, since there is significant effort in selling a game on ebay or some such after you're done with it vs chucking the code into some website that handles all of it for you. It would just encourage companies to pull even more shit to sieve money out of customers after they've already purchased it initially.