>But in a Tuesday ruling, US District Judge Dean D. Pregerson denied the studio’s request for an injunction, arguing that the warning that “Codes are not for sale or transfer” on the DVD and Blu-ray packaging did not constitute a binding contract. Furthermore, he wrote that the licensing agreements that Disney utilizes on the Movies Anywhere and RedeemDigitalMovie websites improperly forced consumers to give up some of their basic ownership rights.
Well now. That's quite a nice result. I wonder how well this will extend into other "basic ownership rights" in other digital fields.
The issue at hand here seems to be Redbox selling the access codes separately from the DVDs, whereas Disney wants them to be bundled together.
I don't think people buying a new textbook and reselling the bundled access code is a big concern for the publishers - the online content is supplemental to, not duplicative of, the textbook content.
Access codes are really what publishers are banking on for lock-in, and they will happily sell students one sans textbook. It ensures the publisher gets a piece of the pie, regardless of the used and rental markets, or piracy.
Sometimes the access codes do provide e-text, which in this case would then be providing access to someone else (the buyer) other than who originally paid for the hard text (the seller, who is taking a "profit" of sorts). Publishers do typically restrict the access to only the semester the student (the seller) is in that class, however, so it's just temporary access for the buyer.
Or food products that contain a label "Not for resale"... I know a lot of Costco products have this because they sell large quantities, but how is that actually enforced?
There are labelling requirement for sale of food. A product you buy in a multipack at Costco marked, usually, “not labelled for individual sale” just means that the manufacturer has not provided the mandated labeling on the individual packages, so that commercial resale of those individual packages as-is would violate the law.
I would imagine that's different because you have to be a member to buy it. Presumably if they find out that you are selling individual items from a larger set they'll revoke your membership.
It happens in non-member based stores as well, e.g. Kroger has labels on formula asking anyone that sees it for sell elsewhere to call a number. I assume they just do the legal bullying thing as those reselling often probably can't afford the fight.
Quite strange it appears on this large item and not on hardly any other item in the store, especially those that are easier to shoplift. I believe it is to prevent those using government baby formula subsidies from reselling.
Edit: after reading online, I think you are probably right but it seems like a dumb deterrent and inconsistently applied.
It has nothing to do with shoplifting. The seller and manufacturer don't care whether you resell the items, but the Government does. In the U.S., the FDA requires that all packaged food products sold at retail contain a Nutrition Facts label. Multi-packs often don't have Nutrition Facts printed on each component wrapper, and so cannot legally be sold under law. In fact, they are required to have "This unit not labeled for retail sale" printed in such cases.
Those ridiculous "warranty void if sticker removed" stickers have been illegal in the US for decades but companies continue to use them because the vast majority of consumers are not familiar with warranty law, and even if they are nobody is going to bother suing over a warranty claim on sub-$1000 hardware.
Seems very similar to this “Codes are not for sale or transfer” thing.
> Those ridiculous "warranty void if sticker removed" stickers have been illegal in the US for decades
No, they've just had no legal effect. They aren't illegal; that would mean merely placing them on a product would incur some civil or criminal liability for the illegal act.
They do have one legal effect: if the sticker is broken/removed the company has proof that you tried something. Legally they still have to prove your actions did damage, but it eliminates the "but I didn't do anything" defense.
Couldn't I just say "Your honor, I always remove those stickers immediately upon purchase of any electronic product." Removal of the sticker doesn't seem like proof of anything.
Yes, I should have been slightly more specific. The presence of the sticker is by itself technically not illegal. The illegal part is the practice of refusing warranty service for breaking the sticker.
Who gets to decide what constitutes a spare part on, say, a car? Should a cam shaft be a part or is it ok just to sell whole engines? That’s a really nice big can of worms you’re opening.
Just mandate minimum warranty periods like the EU does. If the company wants to only replace whole cars then they can, but they'll bear the cost of doing so.
I don’t see what that’s got to do with after market sale of parts. Of course manufacturers have access to individual components and can stock them during warranty periods as they already have to, but making every single possible component of every product ever sold available indefinitely after the warranty period seems like it would drive costs up through the roof.
I usually find myself arguing against people with what O think is a bit of a blinkered faith in market forces solving all and regulation being the work of the devil. But in this case, unless there really is a demonstrable monopoly position that’s being abused, it should be up to customers to decide if after market parts availability is something they care about in their purchasing decision.
I think the market fails here because consumers don't really have the information to let future part support factor into their purchase decision. Compare lemon laws which are widely accepted as a positive example of regulatory intervention in the market.
"every single possible component of every product ever sold available indefinitely after the warranty period" is a vast overexageration, the limit is generally 10 years for stuff like cars, and it encourages parts to be interchangable to cut down on inventory costs ( and incidentally waste too..)
Such a definition is moot if you could sue for a court order then go to a dealership with a sheriff's deputy in tow and take just the part you wanted out of a brand-new car, and the dealer could in turn recover all of its costs for that now-unsellable vehicle from the manufacturer.
There would be a great incentive to warehouse and sell "spare parts". And they would have to be every individual discrete part, and every subassembly that can be handled as a unit. If you just sold engines, you might end up with an unusable nearly-engine because someone came along and picked just the parts they needed off of it. If you just sold engine parts, you might end up with an unusable nearly-car because someone picked a whole, assembled engine out of it.
So every type of screw, nut, bolt, and washer. Every type of transmission assembly and engine assembly. Every passenger seat. Every floor mat. Every light bulb and every plastic housing. Every wiring harness. Every radio and CD player.
This is itself a great incentive to use COTS parts, reduce number of unique parts, and adhere to standards. Maybe you use a #6 bolt somewhere instead of trimming weight and cost a tiny bit by using a #5 there. Maybe you standardize the dimensions and mount points of your engine compartments, so that 20 years from now, replacement engines can be diverted from the supply chain for newer cars rather than pulled from a warehouse stockpile that has been taking space and gathering dust that whole time. Or maybe you set up your spare parts facility to do on-demand manufacturing or assembly.
It is a big can of worms. But I'd argue that not opening it now would be allowing it to grow even bigger and wormier as time goes on.
If you have an internal ERP product code for the spare part in question, it is swappable.
If the repair shop asks for a single IC chip instead of a complete PCB or ECU, they obviously have the skills and need to replace it, making it a valid spare part request.
If you need software or specialized tools to configure or install a part, you obviously cannot withhold said tools from the repair shop.
Having a part number in my system does not mean that it is a reasonable case for a spare part.
These are actual examples from my business: I have part numbers for raw powders that I have not yet sintered into ceramics. I have part numbers for parts that go into a welded and inseparable sub-assemblies. I have part numbers for components that are bonded together with glass seals that cannot be repaired if separated.
It is easy to see how you cannot just use the BOM to determine the list of spare parts and it is easy to see how a manufacturer could simply pot their whole unit in epoxy for "structural" reasons and prevent any individual spare part or sub-assembly from being useful.
To be fair though, if the law mandated that you make all of those available as spare parts you could. Even if many of them are not useful to most consumers, it's not like you're unable to sell some of the ceramic powder, or one part of a welded component.
But maintaining this inventory of partial parts that maybe one person might request for perhaps long after production has stopped is cost (and space) prohibitive. Sure you could do it, but then it probably wouldn't make sense to build the widget in the first place.
As a manufacture can we do the same? Can I force whoever made the IC that broke to make a new one? It seems like every year we are redesigning out boards because another part went out of production.
We have a lot of embedded systems written in assembly for an 8-bit CPU that is no longer made. The electronics are easy (I'm not an EE) but it will be years before we can replace the software that currently has been running in the field with zero known bugs - I'd love to get those CPUs that work perfectly made again. Instead we bought a warehouse worth, and we hope it is enough to satisfy all our warranty needs.
If your systems are designed for greater modularity, then it would be easier to replace board X version 2, in a vehicle that was manufactured when version 2 was the production-ready part, with a board X hardware version 8, with firmware 8.0-2.2 installed to emulate the part that was shipped with the vehicle.
The important thing is that identical inputs yield identical outputs. The rest of the vehicle doesn't care what's in the black box.
Then you wouldn't have to warehouse old, obsolete parts. You just have to warehouse old, obsolete embedded-software developers. That's probably cheaper if you have enough volume.
Also, if your company is still programming in assembly instead of a higher-level language, such as C, which has been available for 45 years now, I can safely say you are all hoist on your own petard. If you really want reliability, there's always Ada. You can't expect the 80196 to stick around forever.
The point is we need to design hardware version 8, that is not free. Our volumes are not very high: designing revision 7 in the actually lifespan now that we need version 8 means that the cost/per part of version 7 was a few thousand dollars for a board that costs ~$5 to manufacture. If we had known what part would be next version 7 wouldn't have used that part.
The vehicle does not care what is in the black box, but that is only true once input/outputs are actually identical. It is .01 volts different has killed us in random failures. It is 1ms faster, is that better or now - in some cases that 1ms slower was depended on and we didn't know it anymore.
We don't program anything new in assembly. However for a lot of old embedded controllers if it works don't break it. There are no known bugs with the old code. Suddenly the CPU isn't available and we have to create a new one. Marketing can't come up with any new feature that a new CPU would enable so it is strictly and engineering exercise.
> However for a lot of old embedded controllers if it works don't break it.
If you don't maintain it, you are allowing it to break through neglect. That's like saying if the old oil works in an engine, you shouldn't bother changing it. It works great, right up until it doesn't, and then you have a bigger problem.
Software development is an incurable disease. Once you start, you can't ever stop.
Anything that breaks from the final product. So it's up to the companies to decide how modular they make their products. If it's not to modular, then if anything small breaks, then they'll have to replace entire big pieces. If their devices are super-modular, then they will have to replace only that small part. But of course they also have to make all sorts of different small parts, or have contracts with companies that do.
this already happens with lots of car parts. One example: say 20 years ago you repacked bearings, now you "just" buy replacement OEM bearing assemblies because they essentially can't be repacked or even disassembled.
"Fixing" lots of appliances means wholesale replacement of the entire "board" (i.e. component representing 90% of the total electronics) which likely never makes the device as good as new but costs almost as much as a replacement unit.
Component level repairs are definitely possible in many cases - particularly when the issue is a bad electrolytic capacitor or a cracked solder joint - but requires specific electronics experience, which many appliance technicians might not have. Replacing the board becomes a trade-off between more expensive labor vs more expensive parts.
For smaller devices like cell phones it becomes much more difficult due to a combination of miniaturization, specialized parts not available on the general market, and secret schematics that can't easily be derived from the complex multilayer PCBs in use.
It's going to be much cheaper to administer the sale of a single vehicle over the individual sale of each part. I'd expect it to cost maybe twice as much?
Currently I'm looking for a toothed belt for a bread-maker - best price I can find is a quarter of the cost of a new bread-maker (15€ delivered), that seems a bit ridiculous to me.
The belt was in crumbs, locked behind security screws. How many functional devices have been dumped for want of a simple belt replacement I wonder.
That's never been remotely true even with third-party aftermarket parts. I imagine if that were the law, granular parts simply wouldn't be sold by anyone.
5. Government mandates that company must repair any equipment it ever produced free of charge or provide replacement free of charge. No timeouts. Basically extend guarantee to infinity.
> The manufacturer can and will make the device more and more difficult to tear apart
The company built the thing. There are tools, parts, and instructions that tell someone how to put it together. There are also tools, parts, and instructions that tell someone how to take it apart.
It may require special tools and parts, but for any mass-market item it won't be difficult with the right tools and the knowledge of how to do it.
The reason for this is that the company will lose more money by making it difficult to repair for themselves than they will ever lose to a DIY repairman.
My solution for DIY repairs:
- Official, real service manual made available. If you allow the company to provide a "monkey" version they certainly will.
- All neccesary parts and tools available at cost, or the cost of their generic equivalent in case of things like proprietary screwdrivers etc.
There are also tools, parts, and instructions that tell someone how to take it apart.
>Do not try to repair a faulty device. Replace it with a new one in which you transfer the customers data. The device is filled with epoxy glue- disassembly equals destruction.
Imagine BMW can make electronic engine control units for $10 each, and the spare part market will bear them charging $500 for them, so they do charge that much.
When I repair it saves me $500 but when the manufacturer repairs it only saves them $10.
What do you mean by "cheap enough for the manufacturer to just throw out"? The manufacturer generally has no need to fix the devices after the warranty period, they're not necessarily in the repair business. If the devices are designed not to be fixable and need to be replaced then you throw it out and buy a new one from them, earning them more profit than the repair would have. If their warranty defect rate is low enough, they have no need to be able to repair them themselves.
Still, it's one thing to make a device hard to repair - it's another to bring state enforced penalties against people who decide to nevertheless tinker.
> I wonder how well this will extend into other "basic ownership rights" in other digital fields.
It won't, because this is almost entirely about the right of first sale, a doctrine of basic ownership rights in physical items embodying a copyright-protected work. While slips of paper with digital download codes are involved and disks with digital content are involved, it's not really about “digital fields” but physical goods.
I believe this is how it works currently, the only issue is whether or not RedBox can resell the codes they purchase. But to use the code, you need a Disney Anywhere account.
edit: actually, The Verge's article links to a Hollywood Reporter article as its source, which does have a copy. So I should have looked harder. Still...
Disney only lost the preliminary injunction. Redbox can continue to sell codes pending the completion of the full trial (plus appeals, if Disney loses).
With the purchase of most of Fox (pending approval), Disney will own basically every franchise you can name. If there ever were a media company that needed to be broken up, it would be Disney.
It's definitely starting to look like Disney should be broken up, I just hope that they can acquire Fox first so they can keep each franchise together afterwards (e.g. all Star Wars properties owned by one entity, all Marvel properties owned by one entity, etc.)
Oh, for Pete's sake. Breaking up utility or transportation companies is one thing, but this is an entertainment company - not a provider of essential societal infrastructure. And there are still plenty of other companies making movies and comics and TV shows, including other very large ones; Warner Bros, for one, and NBC/Universal, for another. Disney/ABC/Fox has nowhere near a monopoly.
No, I’m arguing that they’re monopolistic, grossly anti-competitive, and that the essential or non-essential nature of their services is another issue.
Saying that Disney is monopolistic in entertainment is like saying Ford is monopolistic in cars. Yes, they're a big player, but as I said several posts ago, there are many, many other companies you can choose from if you so wish.
There's the downside to litigation like this. Loads of people who've never heard of RedBox (like me), now do and have a cheap alternative for Disney movies.
Same here. I occasionally rent movies from Redbox and I wasn't aware of the codes. They're typically far cheaper than renting from Amazon. Sometimes I'll find a relatively newly released movie that I want to watch, and Amazon will want $5.99 to rent it (eg Blade Runner), versus ~$2.12 for the blu ray from Redbox. Amazon's digital rental prices are semi obnoxious at times; Alien Covenant is an ok movie that has been out on disc for a while, Amazon still wants $5.99 to rent it, you can buy the used blu ray from Redbox for $4.23 or rent it for half that. I have a box not far from my house, so I'll just grab the disc while out doing something else.
As a note, it's not Amazon deciding to make the rental price "obnoxious" to take high margins - it's driven by the wholesale prices that they are charged by content licensors for digital rentals.
(I know, this fact doesn't make the digital rental any cheaper...)
I used to work at Amazon (in a different area, but collaborated with people in the video business) and I now work for a company that competes with Amazon's transactional video service.
The world of physical rental - at least in the US, not commenting globally - can rely on the First Sale Doctrine, which dramatically alters the economics.
Also it's very common that getting the CD from amazon is cheaper than the $9.99 that they charge for albums. This is double crazy when you realize that buying many (most?) CDs on amazon cause the MP3s to be added to your amazon account as well.
That's kinda the point of the lawsuit: they can't. Redbox is buying Disney movies at retail. The only way for Disney to stop Redbox from doing what they're doing is to stop selling physical copies of movies.
They are working on their own streaming service so they could stop selling retail copies. I'll admit this won't happen in the next 5 years (depending on the success of their streaming service).
They can stop selling the retail copies with the code included. That would pinch off Redbox, but upset customers.
They could stop offering download codes and instead allow people to register their retail copy to the streaming service with a copy of their receipt. Again, not very consumer friendly, but Disney is big enough to possibly get away with it.
I can see that happening in the next few decades. Once sufficient amount of people have reliable access to internet, the physical option can be dropped completely.
Which ends up hurting us (the consumers) in the end. I will be sad to see digital download codes go the way of the dodo so some corporate fat cat at Redbox can double dip into their profits.
That is what they're doing already, buying discs at retail. So no, Disney can't stop them unless they stop selling physical discs (or stop including digital copies with their physical discs).
They could also do a deal with Redbox to sell bulk rental-version discs at a lower price, which would not include the digital download code included with the retail copies.
But they won't, because Disney is the 800 lb. gorilla that can get whatever it wants by beating its chest and charging...
...the lobbying and litigating costs to its colossumongous IP protection budget.
Well, right, they could contract with them to mutually agree to stop by incentivizing them as you suggest, but I was talking more from a unilateral standpoint.
I think it's because you are probably visiting the site not from US, because I'm not from US too, and was never able to visit redbox.com since the first time I read about this dispute with Disney.
So how does RedBox actually sell the code for such a discount and make profit? Is it because when they buy the physical copy they essentially get two copies? (One physical and one digital) and then they rent the physical one and make profit from that?
I'm not convinced any of the replies to your question really answered it, so I'll add my own:
Redbox rents out DVDs/Blurays from physical kiosks. Normally they buy the discs straight from the studios (or whoever the studios go through). As a fallback, they'll literally buy them from Walmart or whoever, which I'm pretty sure is how they originally started before they were big enough to get the deals going. They still don't have a deal with Disney, so they buy them at retail from some unnamed vendor.
Disney retail movies come with a download code for digital copies, which Redbox has no use for, so they sell that code for cheap and everyone wins (besides Disney). They could literally throw the code away and still profit.
Yeah this makes it seem even weirder that Disney is obsessing over the codes, it isn’t like RedBox is price gouging and making a huge profit off of their work. It isn’t even their main line of revenue.
Disney is upset because it "cheapens" the Disney movies. Why buy the expensive codes elsewhere (bundled with physical copies you may or may not want) when you can get them from Redbox on the cheap?
Exactly, Disney goes to great lengths to keep their main DVDs at premium pricing, including putting them out of print every so often, then re-releasing them later with some newly remastered nonsense.
Let's assume redbox buys a single bluray for $20, and there's rental demand for each movie for 1 year. If variable cost = $1/physical disc per month, then redbox profit per disc would be something like:
P = (# of rentals * $1) - $32
where $32 = the $20 disc cost + monthly var cost
If redbox rents the movie once per week, their per disc annual profit is $20
But, if redbox can now sell the virtual download code for $8 online (essentially $0 variable cost for holding digital inventory), and digital sales has little impact on physical rentals, then the equation would be:
P = (# of rentals * $1) - $32 + $8
With annual profit per disc in the 1x/wk rental case now $28, or a 40% gross margin increase. All #s are just napkin math/assumptions, but it's easy to see the benefit here for redbox.
The license on the Bluray and DVDs that RedBox buys (Rental Licensed) typically require paying out royalties from the rental fee. As with all royalties, these are negotiated, but I have heard from people who ran their own DVD rental store fronts (when that was still a thing) that they could be as much as $5 per rental on.
Also the disk is usually a LOT more expensive (up to $100 for a new blockbuster release). DVD store fronts were already so low margin, it didn't take much disruption before they started to go under.
As the story points out, Redbox don't have an agreement with Disney, and so buy their discs at retail price. It does mean they don't get the new blockbusters (which is why they have deals with other studios), but the costs above are reflective of their costs in this case. If they had a contract with Disney, they would get the block busters (at a higher price), but wouldn't get the digital codes (which are the subject of this case).
I was under impression that those direct deals with distributors are better deals for RedBox than buying discs in retail. Because if they don't get a good deal, they can always buy discs in retail for $20-ish something, and have no restrictions on renting or resaling them, and with no royalties or fees, because of "first sale doctrine".
Yes, but then they only get them once they are on general retail sale, and so don't get the newest (to-rental) movies. They pay more when they have an agreement, but the theory is they make it back from increased rentals (because people can't just buy themselves a copy at the supermarket, and enough people are lazy enough to spend a bit more so they don't have to return it).
Yes, the answer is yes. In fact, Disney movies, like many others in the US, often come in a multi-pack with a Blu-ray, DVD, and a digital code. They can sell the digital code while renting out both the Blu-ray and DVD. Then after a while, sell off those used discs as well once demand goes down (they don't usually sell them all, but they obviously want to reduce inventory in line with a lower demand over time)
My initial response was that Disney should have won this. It seems to me that Disney gets to control the distribution of it's copyrighted materials. They bundle a physical and digital version of the movie. So, 1 purchase = 1 "household" can watch the media privately.
What Redbox is doing is constituting 1 purchase = 2 households can watch the media privately (the renter of the DVD and the purchaser of the code).
I'm not an expert on the First Sale Doctrine, but it seems like the end result is that Disney would sell fewer copies of it's content (i.e. damages) in respect to RedBox's actions.
When you purchase something you have the right to resell it. You aren't purchasing a license, you are purchasing an item, in this case two items: a DVD and a Digital Copy. So just like if I buy a living room set I can now sell the couch and the chair separately.
Disney wants to treat the sticker as a legal license. I too, am not a lawyer, but I think they are on shaky ground.
The entire ruling is very well worth a read. I'm not a lawyer, but these orders tend to read very much like code -- incredibly logical, with source-syntax (case references) when referencing prior cases (both binding & persuasive).
I'd guess this case settles though, far too much for Disney to lose and not enough for them to gain; I'd expect that they'll beef up their labeling.
Unfortunately, the judge (and really, the existing case law) gives them basically a recipe to do what they want to: full license terms on the box top (via the referenced Lexmark case).
I'm also not a lawyer. But, isn't digital ownership more complex than that (if they were to have a better contract)? I don't think you can re-sell your iTunes library or transfer it to a friend.
Though, I'll agree that you should be able to transfer digital goods. Audible supports this for example.
I think the key point here is that Redbox did not buy a digital license from Disney. They bought a box with a DVD and a piece of paper with a code that can be redeemed for a digital license. They rent out the DVD and sell the piece of paper. Both of these are allowed under the first sale doctrine. Disney tried to tack on additional conditions to using the code on the piece of paper which the judge called "improper leveraging of Disney’s copyright in the digital content to restrict secondary transfers of physical copies".
That's a good point. When I was reading about this, I didn't put too much stock in the fact that the code was on a piece of paper in the box. But, it seems that this is a very narrow ruling based on that fact.
Once someone redeems the code, they presumably have to have a Disney account and agree to some kind of terms of service.
And these Disney's digital copy's redemption "terms of service" is the subject of judge's ruling. Because those terms force consumers to acknowledge, that they own the physical copy, which means that these terms put restrictions on the resale of physical copy (i.e. basically forbids reselling), and it's not ok for the judge.
I get that this ruling is focused on the piece of paper before it's redeemed and it's really good that a sticker isn't enough to limit your ability to resell something.
I'm wondering about after someone has redeemed the code. Once someone redeems the code, they presumably have to sign up for an account and agree to a long terms of service, which is (to my understanding) more accepted as a contract. It seems like this ruling doesn't significantly advance the issue of digital ownership.
Looking at Redbox's website, it looks like you have to buy a physical thing containing the code and pick it up at the box. I assume directly telling you the code digitally would be more legally troubling.
They shuck thousands of videos bought at hundreds box stores. It’s just faster and easier to put the code slip in the machine the same time as the disc rather than type all the codes by hand and maybe get it wrong.
Bonus points for that slip having redemption instructions.
The order explicitly rejected RedBox's argument that they're "merely selling a piece of paper" -- the judge basically said the paper and the code printed on it has zero value, the value is entirely in the fact that the code unlocked the copyrighted material.
As such, it'd presumably be identical to sell the codes digitally vs physically, in the court's eyes.
> The case results from Redbox’s lack of an existing business arrangement with Disney. The rental service has distribution deals in place with major studios like Warner Bros., which allow Redbox to purchase physical DVDs and Blu-rays of popular movies that it then offers for rental at its standalone kiosks. Disney has struck no such deal, so Redbox purchases retail copies of the films and rents those discs, instead.
That's basically what VidAngel did -- a physical retail copy for each simultaneous rental -- but the courts shut VidAngel down.
No, it's not what VidAngel did; VidAngel bought and ripped DVDs, Redbox buys DVDs and rents the DVDs it buys, which is unmistakably protected under the First Sale doctrine (the sale of the digital download codes that are sold with the physical media was disputed, but renting the physical media is non-controversial.)
Also, the courts didn't shut VidAngel down; VidAngel is still in operation—for a while apparently defying court orders, now using a different mechanism to achieve a similar effect, though also excluding movies from the studios which sued it.
Redbox rents out the physical disc. VidAngel tried to claim having DVDs gave them the right to stream to send one stream per disc. Sort of like Aereo's arrays of tiny antennas, that didn't hold up in court either.
Companies generally don't get to decide what the people who buy their products get to do with them.
They can "mean for" retail copies to be used by individuals buying and watching them at home, but they don't get to enforce that intention.
Redbox is equal to a regular end-consumer. Because all customers are equal. Everyone has the right to buy something and then sell part of it to someone else if they want.
> retail copies were meant for end consumers, not for another company to hawk and rent out
What's the difference? If I buy a hammer at Home Depot, is there any question that I can rent or loan it to somebody else? Why should intellectual property be any different?
1. Hammers cannot be trivially cloned and mass ditributed digitally for free
2. Every hammer is the same, while every new digital creation (not copy) is possibly the blood , sweat & tears of hundreds of people whose sole source of living is the creation of digital content.
HN has an aversion to DRM & paying for soft goods. I'm assuming you're a software developer. How would you like your creation to be ruthlessly copied and mass distributed, killing the potential revenues it would have brought you, and in extreme cases driving you out of business?
The Redbox thing isn't about copyright infringement as far as I can tell. That's basically what the judge said, right? If I understand it, Redbox was selling unused licenses rather than infringing copies.
You're right though that HN does have an aversion to DRM. How many movies has it successfully kept off of pirate sites?
Did you read the article. It's very much about copyright, and I suspect this will get appealed.
In my opinion, the courts have this wrong on 2 fronts:
1. Redbox != Regular end customer, especially when the good in question contains DRM-ed digital content
2. Redbox doesn't have the authority to sell digital content they haven't produced, just like an iTunes user doesn't have the right to sell an MP3 purchased off iTunes.
Nothing in the decision rests on Redbox being a “regular end consumer”; it rests of first-sale, a legal doctrine which generally stands in direct opposition to the idea of “end consumer” as a role to which a seller can restrict goods.
> Redbox doesn't have the authority to sell digital content they haven't produced
The first sale doctrine gives them the right to disassemble and resell the physical items in the box they purchase, which is what they are doing.
Even Disney isn't arguing that Redbox is illegally selling digital product or violating copyright directly, instead they are claiming that Redbox is contributing to infringement by the end purchasers who are violating the copyright license by using a download code without owning the disk, and that Redbox is violating a purchase contract with Disney entered into by the act of purchasing the package at retail that prohibits separating the physical components notwithstanding the right of first sale.
The judge here upheld the right of first sale against that assault and also stated that the license terms Disney is asserting that end purchasers would violate are themselves an abuse of copyright, because they would prevent the exercise of the right of first sale.
Redbox is not selling digital content they are selling a piece of paper that they legally purchased. This is not at all inconsistent or really comparable to not being able to resell a song that was purchased on iTunes. It's maybe similar to being able to resell an iTunes gift card that came along with the purchase of another item, which would pretty clearly be acceptable.
DRM really isn't involved in any way here - the existence (or lack) of DRM would not change this situation in any way at all.
An iTunes user can't sell a purchased MP3 because that would create a copy which would violate the author's copyright. In the redbox case no such copying actually occurred. At worst they've only violated Disney's terms of use.
I think Redbox has a chance here because they aren't selling digital content. They are selling a code. That digital content is transferred by Disney to the purchaser and Redbox is never in the middle.
> HN has an aversion to DRM & paying for soft goods. I'm assuming you're a software developer. How would you like your creation to be ruthlessly copied and mass distributed, killing the potential revenues it would have brought you, and in extreme cases driving you out of business?
As an open source guy: I would fucking love it.
Just because our economic system doesn't match reality doesn't mean we need to try and patch reality to fit. It means we need to adjust our economic system.
I'm as much as a copyright hawk as anyone else, because content creators need to eat in order to keep creating great content. However even I see no problem here. There is no contract being signed on the sale which says only the person buying the movie can use all the discs and copies included (I haven't bought one, but I saw a comment here about sometimes DVD/BluRay are in the same package.) The fact that multiple CDs are in the package as well as digital download codes means that Disney is essentially selling you multiple copies for the price of one, and it's up to your discretion what you do with those, whether you are an individual or a company.
The line would be crossed if Redbox was copying the CDs to new media that was not sold to them in the original sale. That's obviously infringement. Also, I assume that if Disney tried to make you sign an agreement when you download the digital version that you do in fact also own and possess the physical copy would violate the first sale doctrine. (I am not a lawyer)
Aside from actual first sale doctrine and the like, morally, I am curious what doesn't seem fair about not discriminating against how the purchaser uses what they bought? What doesn't seem fair is you getting to say what your product was meant for and keeping others with other potential uses from purchasing/using.
First sale doctrine - Red Box is selling it to renters who can easily sell it back to Red Box for a slightly lower price (rental fee). i.e. Red Box sells you "Captain America" for $25, you then sell your copy back to Red Box for $25 - $1.50 per day you owned it, so 3 days later it's $20.50, the rental fee being $4.50. But you only ever end up paying the difference because of tax laws.
> The Crux of the legal argument lies in equating Redbox to a regular end-consumer
No, the crux of the legal argument lies in the doctrine of first sale, which applied to any purchaser of physical goods, not just an “end consumer”.
In fact, the doctrine of first sale serves to prevent restraint of trade through trade practices which reduce purchasers to the role of “end consumer.”
HN has an illogical aversion to anything DRM. This particular case is harmful to anyone producing digital good (apps, music, movies, blogs, etc).
Let's understand this really damaging verdict by using an app as an example.
1. Disney puts out an app that can either be bought as a disk at Walmart or as a download on the app store
2. A third party app store that doesn't have a re-seller/partner agreement with Disney buys a disk, and claims that the legal purchase of the disk now entitles it to re-distribute the app as it deems fit, including selling DIGITAL copies of the app on it's own app store.
Does this seem logical or fair to you guys?
The logical fallacy here is in equating the third-party app store to a regular end-user. Additionally, the third-party app store selling the app digitally is equivalent to Spotify streaming content it hasn't licensed under the guise of owning CDs of the said content.
This is wrong and dangerous for the digital economy. If this verdict holds, I should be able to buy MP3s off iTunes and "rent" it to whom-so-ever I want!!
That's not an accurate description of the case. Disney sells packages containing a physical disk and a single-user download code. Redbox is purchasing the packages, using the disks in its rental operation, and selling the download codes that it is not otherwise using.
They aren't selling anything that wasn't in the package they bought (unlike your hypothetical) and isn't selling additional copies of anything.
They are violating language on the packaging, in splitting the items, but the judge has found the limitations attempted to be imposed by that language to be illegal.
> If this verdict holds, I should be able to buy MP3s off iTunes and "rent" it to whom-so-ever I want!!
No, this decision turns entirely on the doctrine of first sale with regard to the physical product Disney is selling. While someone might argue that a first-sale principle should apply to digital products on similar terms with physical ones, that's not either the current law or the decision in this case.
I'd say the logical disconnect is the idea that we should charge for digital goods after they are already made. The costs to duplicate digital goods are so low that they should be treated as free.
No - there's ZERO logic in selling items as a function of the cost of creation or distribution. Pricing has everything to do with the VALUE it offers customers versus the cost that it takes to create it!!
That doesn't relate to my point though. My point is that, while some groups are using archaic thinking in how they offer their value, more people are waking up to the reality that it no longer makes sense to think about goods and services this way.
Not Inaccurate. There's also the correlation between our current form of capitalism and external slavery, environmental destruction, and economic inequality. Just because it boosts a system that you like doesn't make it sustainable.
Then I commented on your style, and your response is a bit mad. If your goal is to ensure that people simply downvote and move on, then keep it up, I can’t and won’t stop you. If you’re really trying to discuss issues with people you might want to work on your style.
HN has an illogical aversion to anything DRM. This particular case is harmful to anyone producing digital good (apps, music, movies, blogs, etc).
Let's understand this really damaging verdict by using an app as an example.
1. Disney puts out an app that can either be bought as a disk at Walmart or as a download on the app store
2. A third party app store that doesn't have a re-seller/partner agreement with Disney buys a disk, and claims that the legal purchase of the disk now entitles it to re-distribute the app as it deems fit, including selling DIGITAL copies of the app on it's own app store.
Does this seem logical or fair to you guys?
Totally. They did what anyone can do, at scale, and calling them “third party App Store” really changes nothing. They have no agreement with Disney and so pay retail for their product and don’t get pre-releases. Fair.
The logical fallacy here is in equating the third-party app store to a regular end-user. Additionally, the third-party app store selling the app digitally is equivalent to Spotify streaming content it hasn't licensed under the guise of owning CDs of the said content.
Not even a little. It would be like Spotify buying physical media and selling one copy of it digitally to one person per purchase.
This is wrong and dangerous for the digital economy. If this verdict holds, I should be able to buy MP3s off iTunes and "rent" it to whom-so-ever I want!!
Yep. Next you’ll tell me that mix tapes and bootlegs were killing physical media.
And lest you forget, piracy is always out there waiting for people like you to put ineffective hurdles in front of fair use.
Well now. That's quite a nice result. I wonder how well this will extend into other "basic ownership rights" in other digital fields.