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And Warner Makes Three

19 Aug, 2009 By: Chris Tribbey, Thomas K. Arnold

Redbox Automated Retail LLC is going to court a third time, this time filing suit against Warner Home Video over the studio's intention to delay distribution of new DVD releases to Redbox's fleet of 17,000 video rental kiosks by 28 days.

The suit, filed late Aug. 18 in Delaware Federal Court, mirrors similar actions brought against 20th Century Fox Home Entertainment for its 30-day window and Universal Studios Home Entertainment for its 45-day window.

Reading nearly identical to suits filed against Universal and Fox, the suit against Warner reads that “Warner’s actions constitute copyright misuse, violate the antitrust laws and tortiously interfere with Redbox’s existing supply contracts with its distributors.” Redbox asks for declaratory and injunctive relief, as well as money damages. “In particular, Redbox is entitled to a declaration that defendant’s conduct renders its copyrights unenforceable so long as Warner continues to engage in its inequitable and illegal conduct,” the suit reads.

Earlier this week, a federal judge refused Universal's request to dismiss the antitrust lawsuit brought against it by Redbox; however, the judge did dismiss claims of copyright misuse and interference with Redbox’s contracts with distributors VPD and Ingram.

Redbox chief Mitch Lowe once again played the consumer card in explaining the lawsuit, saying in a statement, "Warner Home Video's actions come at the expense of consumers. Redbox remains committed to providing our customers the new-release DVDs they want, where they want, and at the low price they want."

Lowe also said Redbox will continue to carry Warner DVDs, buying them through alternative channels, if necessary, should Warner proceed with its plans to withhold shipments come October.

The suit details an Aug. 13 phone call from Warner representatives to Lowe, in which the studio said starting with DVDs streeting in October, Warner would only provide new releases to Redbox if those titles were subject to a 28-day blackout period. According to the suit, a Warner representative told Lowe that the studio would “forbid VPD, Ingram and other traditional distributors from distributing new-release Warner DVDs to Redbox.”

“Warner has no legally valid right to restrict or govern how or to whom VPD and Ingram resell Warner DVDs that they have purchased,” the suit continues. “But because of Warner’s monopoly power derived from its government-granted copyrights, and its position within the industry, Warner has the power to unlawfully coerce VPD and Ingram to not sell new-release Warner DVDs to Redbox.”


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