Redbox v. Universal Will Move Forward

RedboxLogoThough two of its three claims were dismissed by a U.S. District Court judge yesterday, Redbox’s lawsuit against Universal Studios Home Entertainment will proceed. In his opinion, Judge Robert Kugler wrote:

“The court is convinced that plantiff [sic] sufficiently pleaded that Universal has induced or otherwise convinced others to boycott Redbox in distribution of Universal DVDs, producing anti-competitive effects, specifically Redbox’s inability to compete in the DVD rental and sales markets of Universal DVDs.”

Redbox brought the lawsuit against Universal last October over the studio’s attempt to prevent the kiosk DVD rental company from obtaining and renting out new release titles. At issue for Universal is the value of home entertainment, as it objects to Redbox’s $1-per-night-rental policy. Hollywood is taking sides, with 20th Century Fox and Warner Home Entertainment each creating their own release windows that prohibit Redbox from obtaining certain titles for a month after their release. Meanwhile, both Sony and Lions Gate have signed distribution deals with the company.

Both Redbox and Universal claimed victory following the court’s decision yesterday, issuing dueling statements. But it’s likely a bigger relief for Redbox, which has a similar lawsuit pending against Fox and most likely a third one against Warner on the way. Of course, we’ve only just begun, as the actual Universal suit now must be heard.

Claims the judge threw out yesterday included misuse of copyright and contract interference between Redbox and its DVD wholesalers.

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