Disney Facing False Advertisement Claims for Movie Download Codes

There's an old adage that it's never easy at the top and in the case of The Walt Disney Company, that's particularly true. The House of Mouse finds itself embroiled in a legal battle with Redbox with the latter suggesting Disney has be misrepresenting digital downloads to consumers. The court case started a few years ago when Redbox began splitting up Disney's "combo pack" and selling the combo packs themselves.

In one recent ruling, United States District Court Judge Dean Pregerson ultimately sided with Disney, awarding them an injunction against the home media kiosk company, forcing sales of digital codes to stop immediately. Though Disney has won the case so far, Pregerson's most recent decision insists that Redbox has grounds to go after Disney for false advertising.

"Although Redbox consumers do not ever encounter Disney’s Combo Pack packaging," Pregerson writes in his decision. "Code purchasers cannot redeem download codes without viewing Disney’s redemption website terms, including representations that Disney owns the download codes and that codes cannot be redeemed by standalone purchasers."

"Disney argues that these representations cannot lead to lost sales for Redbox unless a consumer “determines that Redbox is engaged in unlawful conduct... and decides not to buy additional Codes from Redbox...," the judge continues. "That appears, however, to be precisely what Redbox alleges. Redbox has, therefore, alleged statutory standing under the Lanham Act.”

President Harry Truman signed the Lanham Act into law on July 5, 1946, which set most of the modern trademark infringement and false advertising laws still in effect today. Judge Pregerson's full decision can be read here, courtesy of THR.

The latest ruling comes just months before The Walt Disney Company is set to launch its biggest foray into digital media yet. Disney+ launches in November at an introductory price of $4.99 per month.

Founded in 2002, Redbox has upwards of 42,000 kiosks spread across the world, making up at least 51 percent of the physical rental market.

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Disney's The Lion King enters theaters July 19th.