Dish Network Debrands Blockbuster Express Kiosks

Blockbuster's new owner tells NCR to remove brand from DVD rental units

ENGLEWOOD, Colo. -- Dish Network Corp. has told NCR Corp. to stop using the Blockbuster brand on its DVD rental vending kiosks, reported The Dallas Morning News. NCR operates about 9,000 of the big blue and yellow Blockbuster Express kiosks.

As recently as April, NCR said it planned to increase the number to 11,000 by year-end, said the report.

As part of Dish's bankruptcy court-approved acquisition of Dallas-based Blockbuster last month, the Englewood, Colo.-based satellite network operator has the option to accept and reject contracts and leases.

Dish [image-nocss] Network and Blockbuster "have exercised their rights to direct NCR Corp. to cease using certain trademarks under the NCR agreement," said a court document cited by the newspaper, filed Tuesday in New York.

Dish also said it is rejecting a joint marketing agreement with NCR as of May 26 when a bankruptcy court hearing is scheduled.

The move to strip NCR of the Blockbuster name is "invalid and unenforceable," said NCR spokesperson Jeff Dudash, according to the report.

The trademark licensing agreement is held by a trust that was not part of Blockbuster's bankruptcy filing last September, Dudash said. "Blockbuster is a beneficiary of that trust, but Dish can't terminate the trademark agreement."

In the court filing, Dish said it has instructed the trustee to terminate the license. Dish may want to operate the kiosk business itself instead of just receiving royalties.

A Blockbuster spokesperson told the Morning News that the company "continues to evaluate the kiosk rental business and the variety of ways we provide access to our expansive inventory of family entertainment."

Under the trademark usage license that dates back to 2008, NCR owns and operates the kiosk and pays Blockbuster fees for using its brand. Duluth, Ga.-based NCR negotiates directly with studios for DVDs.

NCR is installing Blockbuster Express kiosks in 309 RaceTrac convenience stores in Texas and other states. In North Texas, NCR already has kiosks at 7-Eleven and QuikTrip convenience stores and Tom Thumb, Brookshire and Fiesta supermarkets, said the report.