RSSNetflix Wants Blockbuster Online Shut
By Ed Oswald | Published April 5, 2006, 2:00 PM
Netflix is attempting to have rival Blockbuster Online shut down by suing Blockbuster in a federal court in Northern California on Tuesday. The company claims its biggest competitor is committing patent infringement and is asking for an injunction to bar Blockbuster from allowing online rentals.
Two patents surrounding online DVD rental are held by Netflix. The first was awarded in 2003 and covers the concept of the automatic queue, which customers add to from the company's library and then receive movies in a customizable order of preference.
The second patent was awarded on the day of the lawsuit, and covers the method that allows Netflix subscribers to keep the DVDs for an unlimited amount of time, and "to obtain new DVDs without incurring additional charges and to prioritize and reprioritize their own personal dynamic queue--of DVDs to be rented," the lawsuit reads.
Netflix claims that Blockbuster knew of the company's 2003 patent and its work towards the second, yet ignored them with the launch of Blockbuster Online. Netflix added that the action to sue Blockbuster had to be taken in order to protect its business interests.
Blockbuster had no comment as it had not reviewed the lawsuit as of press time. However, its new online component is playing a huge role in the company's future business strategy.
In mid-March, Blockbuster CEO John Antioco said that online rentals would expand to 20 million households by the end of the decade, with in-store revenue falling some 25 percent during that same time period. Thus, Blockbuster's online component has become increasingly important.
Over a quarter-billion dollars has been invested in the service, and sources tell BetaNews that selling Blockbuster Online subscriptions has become the number one priority in the company's stores, even above in-store rentals. Some locations are expected to sell as many as four subscriptions per week or more, with repercussions for stores that underperform.
While that number may not seem like a lot, across Blockbuster's 6,000 plus locations it adds up to about 120,000 new subscribers per month for the service.
Blockbuster Online currently has one million subscribers, a quarter of Netflix's 4.2 million customers.
How can you patent a business method or form?
Can you patent using the time worn "queue" concept of standing in line?
Maybe I should patent the form I used to send this comment.
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|Does that mean that blockbuster can shut down all other dvd rental places for renting a dvd for 2 nights out of the store or for promising it free next time if they don't have it in store this time!!
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|Intellectual property is a CROCK!
you should get paid for implementing an idea, not having it, no wonder north americans are so freaking FAT and LAZY.
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|Netflix is a short timer. They came out of nowhere and they'll disappear the same way.
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|Dibs on "taking a s***" and "peeing standing up". You heard it here first. Send checks to . . .
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|Someone should patent "good customer service." That would be the safest patent in the world, since NOBODY even tries to deliver that.
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|LMAO!!
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|"...not even two years old.."
I rented from Netflix in December of 1999. Years before Blockbuster hopped on board. Netflix had a hard time making it this big, and then Blockbuster comes along, and wants to capitalize on their innovation. The 90's are over Blockbuster, time for a new rental powerhouse!!!!!!!
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|Im still trying to understand how something like this can be patented...
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|ditto.
Sounds like a dynamic queue to me but don't those exist in almost everywhere in business and on the internet. Because you say it deals with videos instead of widgets does not seem to me to make it unique. Wow! Let somebody put something in a different order then they originally had it. It sounds like a preference order and those have existed long before Netflix. It is nice to have it provided to users but not unique to comptuers online at least not in the last decade. Who are these morons at the patent office that actually thought this was original art. I have been able to do this with computer programs for so many years. Now that somebody says we will give the customer the ability to do this on a website that makes it new art. For example, I once ordered something from this company (prior to the net) and gave them my alternate choices if that preferred item was not in. Called the next day to tell the company that I really wanted to make my number three choice my number one choice. Preference changed in my dynamic queue. But, I guess since the web did not exist at that time then this could not have truly happened. Because, as we all know nothing existed before the internet (or at least original ideas did not exist.) I still don't get it. Patent laws need to be fixed quickly. You know I was taken a picture the other day and I decided I liked my brother in the front and not my cousin. But then I decided now my blue haired aunt would be better in the front then my brother then my cousin. Cool! Sounds like a dynamic queue to me.
Wow! Another big one, allow them to keep it out as long as they want. How is the patentable? I belonged to a video store back in the 80's the let me do this, no kidding. I never paid late charges just could not rent anything else. It was similar to Hollywood Videos all you can eat program (small monthly fee and the store was yours to take anything home). But like I said back this was back in the 80's. I wonder if they can sue Netflix for prior art.
I always find it funny that things that have existed in the brick and morter (sp) world seem to be so unique in the virtual world and get patents for obvious ideas that were never patentable in the non virtual world or the patents have long run out. For example, it is amazing how much more difficult it is to get a business rule patent in the non-virtual business world, but put something oline and you get one without much fuss.
Maybe I am missing something here. A bigger picture? But, I just think this is well "Stoooopid" (barely got that one out :) )
Believe me I prefer Netflix's service quality over Blockbuster anyday. I have used both, but find neither works in the long run. Now I just buy what I want rather then wait a month or more for that DVD evreryone wants.
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|Well, I have to believe that this method of service can't stand up to a challenge. How many methods are there to buy something? You make purchases at a store, at a self checkout, at a drive through, mail order, etc. etc.
Netflix has not patented a technology, but a method. The problem is that the method is the Postal Service. You can't patent the process of mailing... You also can't process a price, such as all-you-can-eat-for-X. If you want to patent your computer program that helps you distribute the newest movies to your worst customers, fine. Go for it.
However, I can't blame Netflix. What do they have to lose? There's 2 fish in the pond.
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|You guys are all off the mark here from a business perspective. (except for melvinram)
Netflix invented the method, and is successful. It applied for, and succesfully patented, these business processes. It has a right to defend them, thus the purpose of the patent itself.
BLOCKBUSTER is in trouble, fighting a losing battle vs. quick-for-sale new releases in stores like Wal-Mart / Target etc.
Consumers have quickly adopted to buying DVDs instead of renting, citing dissatisfaction with late fees. As a last resort (meaning only when they had to because their business is collapsing), Blockbuster dropped late fees.
http://biz.yahoo.com/foo.../114200625709.html?.v=1
http://www.usatoday.com/...06-21-blockbuster_x.htm
Next, Blockbuster is losing bigtime to on-demand content. They are in legal defiance of a US Patent, for which they will be found liable.
Netflix is fine. And an innovator. And fully within its right to defend itself.
http://www.bloomberg.com/apps/quote?ticker=NFLX:US
Get your facts straight or SHADDAP. On the other hand, why to I waste time trying to educate hopelessly ignorant people who don't know the different between business facts and personal diatribe?
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|Is it legal, then, to patent online shopping? Why didn't amazon.com sue everyone else then?
I understand your points completely. What I don't understand is how Netflix obtained the patent in the first place.
"Netflix invented the method, and is successful. It applied for, and succesfully patented, these business processes."
What entails a "method"? A "business process"? Can standing on your head reciting the alphabet backwards be considered a "business practice" and be patented? There has to be a line drawn--so where is it?
I genuinely what an answer. I'm not a biased hard-headed biggot that can't ever change my belief system. I will listen to your response, so please tell me.
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|"Is it legal, then, to patent online shopping? Why didn't amazon.com sue everyone else then?"
news flash, amazon didnt invent online shopping :) if you want to get REALLY technical about things here, before there was an internet, there were other "online services" called BBS's, these were computer communities simular to the internet. a person could log in, interact with others from anywhere that also logged in, they could chat, exchange messages, get and send private messages (simular to email in some ways), download and upload files, play games and more. many bbs's offered products and servioces as part of the benefits to those who subscribed , so in effect, in the 1970's and 1980's before the internet became the monster it is today, there was bbs's selling stuff online :) heheh
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|And in the 1980s, I could go to the video store down the street, rent a movie, and return it whenever I wanted...all we paid was $9.99/month for it. So, can this now defunct family-owned video store sue Netflix for prior art on their 2nd patent? Because clearly this wasn't something Netflix invented. I guess if Donald Trump can trademark the phrase "You're Fired", then anyone can patent a "method" of doing something. I'm gonna run to the patent office and submit my idea of etching written word onto a piece of paper using a writing utencil, because its a common sense method of doing something that has obviously been around a lot longer than my decision to patent it. This is a stupid lawsuit and the patents are ridiculous. I wonder how much these clowns get paid to approve such things?
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|"Get your facts straight or SHADDAP. On the other hand, why to I waste time trying to educate hopelessly ignorant people who don't know the different between business facts and personal diatribe?"
And yet you did. Why is that? No, really. Why?
Tip: to be perceived as an intellectually superior being, which you so clearly desire, do a spell check first, and don't use "SHADDAP"* and then expect people to be impressed by "diatribe."
*(It's the sort of thing an uneducated, hopelessly ignorant person would say).
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|Netflix is suing to "protect their business interests."
That's what you do when you can't win by competing fair and square. Neflix is starting to lose money for at least a couple of reasons: increase in postal rates and competition from Blockbuster. Heck, they've even resorted to punishing their best customers because with their business model they actually lose money from them.
Most importantly Blockbuster has their own stores. In their model you can get in-store rentals as part of your subscription. And they guarantee top level DVD's to be in stock at all times.
Netflix is in trouble. They deserve it for throttling their best customers.
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|NETFLIX SUCKS!
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|So let me get this straight...
I come up with a value added service, but can dis-allow my competition from entering the industry created because of it?
Hello....free-trade....capitalism....anit-monopoly, are these concepts still the foundations of our economic system here in America?
Isn't there some sort of "eminent discovery," on things like this?
How about Blockbuster just one up them and sue them for being in the Video Rental business regardless of distribution method?
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|lmao... oops, i just let one rip, who do i owe? i've got a penny...
On a more serious tone, the case by Netflix is definitely legitimate. Why? Because people did not think about doing the subscription+queue way before Netflix came around.
Sure, the concept of queues existed long before Netflix but Blockbuster would still be charging $4-5 per dvd for a 2 day rental had it not been for Netflix's innovation.
Infact, most successful innovations are about applying existing prinicples and concepts to new industries and fields.
If Blockbuster looses this case, it will be a good thing for them. It will get them to concerntrate on their greatest assets: their stores.
If they would just push the benefit of "why wait when you can get the movie you want, right now and then get another one, and another one, and another one... all the same day, if you have the time to watch 'em" and price it as a monthly subscription ($15,20,25/month for 1,2 or 3 dvds) for unlimited rentals (2-out at a time).
~ melvin ram - search specialist
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|The problem with this though is that this patent prevents anyone from competing online with Netflix. How else can you rent movies online if there is no queue?
And why aren't they suing the other companies that do this - it sounds to me like they only see Blockbuster as a threat and are going after them.
The problem is that patents are far too easy to get. I'm all for protecting new and innovative ideas, but when they prevent competition, that's ridiculous.
What if someone had patented the video game console? Or a hair dryer? Or Dish washer? Or how about the concept of putting together a page of information and having people browse it online - where'd we be today?
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|Waaaaa.....Waaaaaaaaaaa
Cry cry cry...me a river Netflix.
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|I think the DMV (department of motor vehicles) invented the QUEUE. I know it seems like I stand there forever, getting to keep my expiring license until three weeks after it has expired my number is called only to be told that I was in the wrong line and have to get into the "long" line next to me.
Hmm, maybe that's how the DMV could make more money - sue Netflix. ;-)
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|Ahh yes but did you change your preference or did the DMV change it in this scenario. If Netflix is the DMV and you are the person seeking a car renewal or something then it would be as if Netflix decided that they were going to give you "Herbie the Love Bug Rides Again" because they can even though it was not on your list instead of your first choice "King Kong" or "Narnia" the next choice, etc... Hey I claim the patent on this one! I am going to call it my anti-dyanmic queue. I am going to go sue the DMV and make a billion and then I will sue all other governmental organizations (in every country in the world) First the Frech because, well because they are the Fench. Cha-Ching!!! Here that cash register ringing now.
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|Netflix is a scam company, Blockbuster is better ( not by much, if anyone should be shutdown it should be Neflix, not even two years old and has been sued twice and getting ready to be a third time.
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|"....not even two years old...."
Huh?
Netflix has been around since at least early 2000....a few more then 2 years....
Prior to the unlimited system they have now, they charged $2-3 per DVD they rented just like a B&M
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|Be careful how you wipe your a** - I have a few patents on it, so you may end up owing me royalties!
This whole patent process is getting to be quite ridiculous. What's next? I suppose if there is no patent on message boards, I could patent that and then sue the millions of message board creators out there?
I'm all for protecting intellectual property, but I don't think having a queue on a website should really count. There's a difference between patenting something that is truly unique vs patenting something to squash the competition!
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|blockbuster online is horrible anyways. I was never able to find anything that was available. was always 2-4 days late with the rentals. they also have suh a small selection of movies to select compaired to netflix.
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|True, but netflix penalizes the "frequent renters" by not shipping the movies in their queue right away. It does the same thing with new releases - making the renter wait few days (weeks) before shipping the movie.
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|I am a "frequent renter" at Netflix and never have to wait days or weeks before shipping. They always ship the same day that they receive. I drop a movie in the mail on Monday and have a new movie in my hands on Wednesday. When I was with Blockbuster, I would drop a movie in the mail on Monday and was lucky to have a new movie in my hands by Friday. The movie selection at Netflix puts Blockbuster's selection to shame.
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|Absolutely true! Blockbuster throttles their customers as bad, if not worse, than Netflix does, and then blames the Postal Service for it. I put movies in my mailbox on Monday, and Blockbuster just acknowledged them today! I won't get any movies until Weds. of next week. Worthless service!!!
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|...
When the patent system was created, obvious applications of known principles were NOT supposed to be patentable.
Now we all breathlessly await somebody patenting air ...and filing a lawsuit demanding people stop breathing !
...
The Computer Rodent
...
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|so.... whoever "manipulates" air in any manner will be sued
would this patent apply to farting as well ???
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|No, there would have to be either a footnote that allows the displacement of air with the gases from a fart, or a whole other patent in regard to air displacement and the introduction of foreign agents into it.
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|I have used both and did get "throttled" by NF.
I have since moved full time to BB and enjoy (for me) faster service and the free in-store rentals.
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