Netflix Sues Blockbuster for Patent Infringement

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."

Comments

Blockbuster may have a case

[w33t]

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

Ben Franklin said it best...

[sugapablo]

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?

Go blockbuster!!

[ConsumerOfMany]

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.

Re:Business models?

[mTor]

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

Re:Busted, but maybe not...

[Deadstick]

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