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Netflix Sues Blockbuster for Patent Infringement

Posted by ryuzaki0 on from the lovely-time-of-year-for-an-infringement-case dept.

StrongGlad writes "Is the concept of renting movies over the Internet an original idea that deserves patent protection? Netflix claims it is, and is suing Blockbuster for patent infringement, alleging they are copying its seven-year-old online movie-rental business method. Netflix argues that it has patents covering its many online features, including allowing subscribers to keep DVDs for as long as they want without incurring a late fee, obtaining new DVDs upon return of those already watched, and prioritizing their own personal movie list. Blockbuster, for its part, has counterclaimed, insisting that Netflix is trying to monopolize the online movie-rental industry and stifle competition. Blockbuster also alleges that Netflix obtained its patents fraudulently by failing to disclose pertinent information to the U.S. Patent and Trademark Office, and further contends there is nothing original about renting videos online in the first place."

10 of 268 comments (clear)

  1. Blockbuster may have a case by w33t · · Score: 4, Interesting

    Maybe blockbuster could countersue for the business model of renting movies on a recorded meduim and then returning them to rent of others.

    --
    My Computer Music Tutorial Videos
  2. Ben Franklin said it best... by sugapablo · · Score: 5, Interesting

    In his autobiography, he recounts that he was offered a patent on a new
    kind of stove he invented that was a tremendous improvement in terms of
    heating a building and in reducing the amount of wood needed.

    He declined this patent, stating that from "Principle which has ever
    weigh'd with me on such Occasions, viz."...

    "That as we enjoy great Advantages from the Inventions of others, we
    should be glad of an Opportunity to serve others by any Invention of
    ours, and this we should do freely and generously."

    But screw that, right?

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    Sugapablo
  3. Go blockbuster!! by ConsumerOfMany · · Score: 3, Interesting

    I for one hope Blockbuster wins this hands down. I use Netflix, love the service (6 at a time, one day turnaround and haven't noticed any throttling yet ~35-40 movies month) I tried Blockbusters service and was not thrilled with the selection and turnaround, although not significantly worse just my preference. The shear fact that blockbuster is in the market though is what will keep me happy with Netflix. If Netflix sat as the only one for too long, they would inevitably succumb to greed.

    1. Re:Go blockbuster!! by soft_guy · · Score: 1, Interesting

      I balance him out. I got rid of cable tv - stopped watching TV at all, quit seeing movies, quit buying records except directly from independent artists. I'm fed up with MPAA/RIAA and I'm not going to take it anymore - they can't DRM me if I don't have any media to DRM.

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      Avoid Missing Ball for High Score
  4. Re:Business models? by mTor · · Score: 3, Interesting
    Since when? Well... since 1998, I think. Here's more:
    The patentable assets of the e-commerce business may also include the "business model" of the e-commerce enterprise -- that is, the systems and methods constituting the unique operational structure of the business. The United States Court of Appeals for the Federal Circuit recently has sanctioned such business model patenting (State Street Bank & Trust Co. v. Signature Financial Group, Inc., 149 F.3d 1368 (Fed. Cir. 1998) and AT&T Corp. v. Excel Communications, Inc., 172 F.3d 1352 (Fed. Cir. 1999)). As a consequence, business system/business method patents are now being filed and issued in large numbers. --Steven J. Hultquist, "Maximizing the Value of Proprietary Rights in E-Commerce," IPTL Notes, Winter 1999
    And then this:
    Juno patented an offline ad-delivery process, and Netcentives did the same with its ClickRewards scheme. Cybergold, Priceline, and Open Market have also rushed to patent biz models. Business-model patenting appears to be the lastest, greatest way to gain cred. --Jess Freund, "Hype List," Wired, February 1999
  5. Just in Time for my Meeting by DeanFox · · Score: 2, Interesting


    Netflix is doing a marketing research thing in my area. I've agreed to meet with them in person for 30 minutes next week in exchange for 4 months free service. Now along with their throttling I'll have something else to hit them with.

    Any suggestions of other stuff you'd want them to know or have your complaints heard through me? I'd be glad to bring it forward.

    -[d]-

  6. Re:Busted, but maybe not... by Deadstick · · Score: 5, Interesting

    They certainly developed a silver bullet of a model. I had an interesting experience recently: dropped a fistful of mail into the box at the Post Office, then came to the sickly realization that I had put neither postage nor return-address stamps on. The postmistress sent a helpful clerk -- yes, I said helpful P.O. clerk -- to open the box and stand watch while I rooted out my envelopes.

    That bin was almost a sea of red. Netflix envelopes by the TON. I commented on that, and the clerk said yes, the P.O. was proud of the special handling deal they have.

    Netflix is now the fifth largest user of first-class mail. At the cities where they have processing centers a Netflix truck drops a load of outbound envelopes bagged by ZIP code and pre-sorted down to carrier route, and picks up the incoming directly off the dock.

    rj

  7. Family Video is a nice alternative! by gozar · · Score: 2, Interesting

    For those complaining about Blockbuster, if you have a Family Video store near you, check them out. New movies are $2.59 for a day, but anything old is $1 for 5 days. I've looked into Netflix, but it's more expensive for my viewing habits (a couple of movies a week).

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    What, me worry?
  8. Re:Business models? by greed · · Score: 2, Interesting

    Grandparent should be picking on the "obviousness" criteria. Lots of things are novel--the first time, of course--but that's not enough to be patentable. It has to be non-obvious to someone skilled in the art.

    And I don't really see how Netflix is not obvious to someone skilled in the arts of mail-order subscriptions and rentals.

    (I know that mail-order and rental has been combined before; the video store I worked at in the late 80s had a mail-order sales and rental business for customers in Northern Ontario. It was very expensive, but there wasn't anything else those people could use at the time. Some corporate libraries do a similar thing, using inter-office mail and the mainframe. So it's been a few years since I used one of those....)

  9. Re:Business models? by timeOday · · Score: 2, Interesting
    Your comment resonates with Blockbuster: "Netflix is trying to monopolize the online movie-rental industry and stifle competition."

    But I ask you, what is the point of a patent at all, if not to create a monopoly and stifle competition? Patents are an open admission that pure supply and demand capitalism is not workable (or at least not equitable). I guess the only question is how high the bar must be for an innovation to be deserving of a government-imposed monopoly. Or at least, how long that monopoly should be upheld.