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Weinstein-Blockbuster Rental Deal Challenged in Court

The National Entertainment Buying Group and two independent retailers have filed a lawsuit in Massachusetts Superior Court to stop The Weinstein Co. and Genius Products from labeling its sell-thru DVDs as not appropriate for rental, reports VideoBusiness.com. This moves comes on the heels of TWC's recent deal giving Blockbuster exclusive rights to rent Weinstein DVD releases.

As outlined in the First Sale Doctrine, the TWC and Blockbuster deal cannot prevent rental stores from buy TWC releases at retail and renting them. However, Genius ceo Trevor Drinkwater has said the company would label its sell-thru DVDs with a message to consumers that the DVD was intended for sale and shouldn't be rented.

"With the First Sale Doctrine, there's nothing we can do to prohibit someone from walking into Costco and buying the DVD and renting it," Drinkwater told VB. "What we can do as a distributor is brand all Blockbuster DVDs with the Blockbuster logo, and all the DVDs that are out for sale will be clear to consumers as being for sale only. We'll encourage people to call us if they did rent [a DVD that is labeled for sale]."

NEBG -- along with independent retailers Nolan Anaya of Captain Video, Amherst, Massachusetts, and Todd Zaganiacz of Video Zone, South Deerfield, Massachusetts, argue that the labeling is in strict defiance to the First Sale Doctrine. Within the suit, they accuse TWC and Genius of "unfair competition, unfair or deceptive acts and practices, untrue and misleading advertisements, negligent misrepresentation and tortuous interference with advantageous business relations."

NEBG and the two indies are trying to halt any release of DVDs, "that would imply or tend to imply that retailers other than Blockbuster who rent the defendants' DVDs to the public are engaged in wrongdoing."

"It becomes defamation of character," said Zaganiacz, NEBG president/owner of Massachusetts' Video Zone. "It's telling our customers that they are doing something wrong, when in actuality we are not. Under the First Sale Doctrine, we have the right to purchase and then rent out that product."

Genius Products and TWC were not available for comment.

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