« US professors accused of being liars and bigots over essay on pro-Israeli lobby | Main | Rochester and the Decline of Cheap Oil »
April 05, 2006
Netflix Suing Blockbuster For Patent Infringement
by Andrew A. Anissi
Dated: April 5, 2006
BACKGROUND:
For those readers stuck in the 20th century, Netflix started up and operated a dvd rental service whereby customers pay a monthly fee (standard service is about $19/month) and then select films online, which are then mailed to them to view and mail back. With the standard service, the customer can only have three films out at once, so it's beneficial to return each film quickly in order to have the next film sent out.
Since this cheap, convenient, unlimited rental business was turning out to be very successful, several other companies such as Blockbuster and Walmart copied the business plan and offered their own such services. The pro to using these other companies seems to be that they're a bit cheaper, and the cons are that Netflix has a better selection, Blockbuster is non-innovative, and Walmart is pure evil.
WHAT'S HAPPENING NOW:
Basically, Netflix has two business method patents on its online dvd rental service, and since Blockbuster is obviously using the exact same method, they're being sued for infringement. My guess is, Blockbuster will assert invalidity of the patents based on 35 U.S.C. Sec. 103 obviousness, and 35 U.S.C. Sec. 102 prior art references. Blockbuster's defense will be pretty good, and Netflix will either settle for a small amount of cash or lose its patents. I'd guess settlement would be the result, since Netflix doesn't want to risk losing its patents and Blockbuster doesn't want to risk being locked out of the online/mail rental business. Settlement would also be good for Blockbuster, because it would allow Netflix to sue Blockbuster's other competitors.
Click here for the Slashdot article.
Posted by andrewanissi at April 5, 2006 11:28 AM