Netflix vs. Blockbuster Patent Infringement Filing
I obtained a copy of the Netflix vs. Blockbuster "Complaint for Patent Infringement and Demand for Jury Trial," a 47 page document that describes the complaint against Blockbuster and includes the related patent documents.
The patents listed in the complaint include 7,024,381 ("approach for renting items to customers"), and 6,584,450 ("method and apparatus for renting items").
Netflix is seeking an injunction, damages, and then triple damages due to Blockbuster's "willful and deliberate infringement" of the 6,584,450 patent.
Dale Dietrich from iMedia Law News has posted a copy of the complaint here.
Thanks to Davis and others who contributed to this story.
Damn. Just when Blockbuster started giving me 1 day shipping (after being a member for almost a year and a half). If Netflix wins this case, I can say bye bye to that.
Posted by: bmovies | April 06, 2006 at 07:50 PM
How ridiculous.
*flash thought*
Perhaps I will patent a "Human Waste Excrement Method" then I could reap dividends each time anyone in America pee's or poop's.
I hope Blockbuser counter sues Reed for being an arrogant ass. That is a sure winner indeed.
Posted by: Rusty Ramrod | April 06, 2006 at 10:14 PM
From Blockbuster's Investors link:
http://www.b2i.us/profiles/investor/ResLibraryView.asp?BzID=553&ResLibraryID=14935&Category=27
"Success Of BLOCKBUSTER Online® Draws Patent Claim"
DALLAS, April 6, 2006 – Blockbuster Inc. (NYSE: BBI, BBI.B) stated today in an 8-K filing with the Securities and Exchange Commission that it believes claims recently filed against its online service by Netflix, Inc. in California federal court are without merit and that the Company intends to defend itself vigorously.
"We believe this lawsuit is an attempt by Netflix to stifle competition and, as a result, reduce consumer choice," said Shane Evangelist, senior vice president and general manager for BLOCKBUSTER Online.
BLOCKBUSTER Online, which gives subscribers one free in-store movie rental each week in addition to their DVDs through the mail, launched in August 2004 and grew its subscriber base from zero to approximately 1.2 million customers by the end of 2005. Netflix, which appears to have singled out Blockbuster and no other online competitor for litigation, waited nearly three years after receiving its first patent and 19 months since the launch of BLOCKBUSTER Online before filing the action.
"The timing of this lawsuit appears to confirm that BLOCKBUSTER Online has emerged as a real competitive force in the online rental industry," added Evangelist. "Apparently Netflix would prefer to take us on in the courts rather than facing us in the marketplace where the consumer is the judge."
Posted by: El Chango | April 06, 2006 at 10:14 PM
Look at the complaint PDF document that has the patents attached. Then look at figures 4 and 6 flowcharts of the first patent - very interesting. Basically Netflix is describing a "max number of outs" per month model in conjunction with a "max number of turns" feature, where if you meet your monthly max number of turns, you can continue getting rentals by paying a surcharge. This pricing is sort of a flat monthly charge with a per rental penalty kicker if you turn over too many rentals during the month. Could this be the next pricing model once Netflix has buried Blockbuster?
Posted by: CJ | April 07, 2006 at 01:33 PM
Sounds exactly what zip.ca does. I wouldn't be against it (though I really do hope they provide for some roll-over for low use customers - even if it's only a few disks worth).
Posted by: gir | April 07, 2006 at 01:40 PM
By the way, the easiest way to snag PDFs of the patents (rather than the ugly USPTO URLs) is to use www.patentreader.com or www.pat2pdf.org.
Posted by: Stephen M. Nipper | April 12, 2006 at 11:19 AM