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."

Business models?

[daeg]

Since when are business models subject to patent rights? Products, yes, but business models?

Re:

[kimvette]

Ever since it has become possible to buy a judge and/or jury.

Re:

[Mr. Underbridge]

Right egg, wrong chicken. The patent has to have been granted before it gets to a jury. This is either on the USPTO and the powers who run it (executive branch? Congress?)

Re:Business models?

[daeg]

USPTO is funded almost entirely by patent fees and is run under the Department of Commerce. The DoC is run from a cabinet position, thus placing it under the Executive Branch. The USPTO is run by an appointee of the President.

Re:

[kimvette]

How the hell is this flamebait? It was a court decision which made business practices patentable. See post (#16067282) elsewhere in this thread.

Don't throw mod points away modding posts down. Sheesh.

Re:

[Teddy Beartuzzi]

Eh? Did you even read that? That Capitol Hill Blue retraction you cite is dated Jul 9, 2003 [capitolhillblue.com]. The Constitution story you're objecting to is two and a half years *after* he stopped using the bogus source Dec 9, 2005 [capitolhillblue.com]

Re:Business models?

[Apocalypse111]

[to ask] Microsoft. They might [to know]. They seem [to patent] everything anyways.

Re:Business models?

[jo_ham]

I think you missed the point of the joke. This was an obvious nod to the (erronously summarised) story earlier this week about MS patenting verb conjugation, adding more fuel to the "patent obvious stuff: profit" model that has been emerging over the past few decades.

Re:

[Apocalypse111]

Thank you for getting my joke. I hope your parent poster remembers that getting modded funny doesn't help karma.

Re:Business models?

[jimfinity]

i would agree with you if i didn't just hate blockbuster so dang much.

four bucks to rent a movie? screw you, blockbuster.

Re:

[daeg]

Four?! Where the hell are you living? It's close to $7 here...

Re:

[aplusjimages]

$7! Damn are they gold plated DVD's. It's $4 in florida. I sure do miss MegaVideo. 99 cent movies.

Re:

[Mister Whirly]

like when you are trying to find a bar or cheese curds...

Re:

[jonwil]

Do a patent search for "amazon.com" "1-click"...

Re:Business models?

[geoffspear]

The 1-click patent is problematic, sure, but it's not really in the same category as this one. This is more like is Amazon tried to patent selling books on the Internet.

Re:Business models?

[RovingSlug]

This is getting so out of hand. People think technology and the internet make these things special somehow. For instance

• Imagine if McDonalds had patented drive through food.

We'd all agree that's stupid, right? Why do people think business models on the internet is any different?

Re:Business models?

[no_pets]

Great example, wrong company.

http://en.wikipedia.org/wiki/Red's_Giant_Hamburgs [wikipedia.org]

Re:Business models?

[rednip]

Great example, wrong company.

Actually that would make Mcdonald's patent example a better real world example, as many of these granted business model patents are just as disputable, as prior art seems to be often overlooked. Many claim that they often violate the novelty, and non-obvious requirements stipulated by patent law as well.

Re:

[StarvingSE]

Yes, they can send the internets to you through the tubes, just like at the bank!

Re:Business models?

[truthsearch]

http://en.wikipedia.org/wiki/Business_method_paten t [wikipedia.org]

The patents

[truthsearch]

For further reference, here are the patents:

6,966,484 [uspto.gov]

Mailing and response envelope

Abstract
A mailing and response envelope for conveying an item from a sender to a recipient and back is disclosed. The envelope comprises a base panel, a sender address panel, and a recipient address panel. The sender address panel is affixed to the base panel by an adhesive region. The sender address panel and adhesive region define a pocket sized to accept an item. The adhesive region extends laterally on the base panel in an amount selected to ensure that a postal cancellation is not applied to an area overlying the item. The recipient address panel is joined to the base panel by a detachable joint. In this configuration, a fragile item may be conveyed from the sender to the recipient and from the recipient back to the sender without damage to the item.

7,024,381 [uspto.gov]

Approach for renting items to customers

Abstract
According to a computer-implemented approach for renting items to customers, customers specify what items to rent using item selection criteria separate from deciding when to receive the specified items. According to the approach, customers provide item selection criteria to a provider provides the items indicated by the item selection criteria to customer over a delivery channel. The provider may be either centralized or distributed depending upon the requirements of a particular application. A "Max Out" approach allows up to a specified number of items to be rented simultaneously to customers. A "Max Turns" approach allows up to a specified number of item exchanges to occur during a specified period of time. The "Max Out" and "Max Turns" approaches may be used together or separately with a variety of subscription methodologies.

Re:

[duerra]

I can undertand the patent case for the envelopes that Netflix uses. That is a pretty novel invention, and one that I have not seen before. They may have a case on that one. I'd also like to hear if anybody has a good rebutall as to why that patent would not be valid.

As for the other patent, I stopped reading at "a computer-implemented approach for renting items to customers". That patent is just lunacy, and as the abstract explains it, I have no idea how it could get through the patent office. That's

Re:

[Andrew Kismet]

The model you describe is usually a non-returnable envelope CONTAINING a reply envelope. This model specifically patents an envelope used for DVDs that the DVD is both sent and returned in via resealable sections. It's the exact design that was copied by LoveFilm, Blockbuster, and ScreenSelect. And more!

Re:

[fullmetal55]

Wow, reading that made me wonder why the hell that is acceptable... It's basically using the Patent office to generate monopolies. as long as you can create a new business process you can hold a monopoly on it. This is not a fair use of the patent laws. I for one am glad that it's not possible in Canada. Anti competitive behaviour should not be patentable. Maybe someone should have patented the process for making money off of patenting processes to establish a monopoly.

Re:

[timeOday]

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

Re:Business models?

[Josh Hiles]

This really is all the court's fault. It was some case called Diamond v. Chakrabarty which defined a patentable item as, "anything under the sun that is made by man." This has opened the door (far wider anyway than it was) to all kinds of ridiculous lawsuits. Witness, a company called Knight and Associates attempting to claim that it's perfectly legal to file patents on plots (for books, movies, etc) and attempting to file said plot. It's just an attempt to set up a monopoly of ideas and eliminate all competition. Truly we live in a wonderfully capitalist society. Our business owners believe in free markets completely and totally, until someone bigger and better comes along and the market dictates their destruction. Then they squawk louder than any socialist I ever heard.

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:

[schon]

Since when are business models subject to patent rights?

Since July 1998. [72.14.253.104]

Re:

[letxa2000]

Blockbuster is right, Netflix is wrong. I think this will be a useful case that could actually highlight just how messed up the patent system is. There is absolutely nothing novel about letting people keep a DVD as long as they want, there's nothing novel about letting them rank the order in which they want to watch them, and there's nothing novel about doing it online.

Re:Business models?

[pluther]

I'm not sure who the first was, but up to 30 years ago, you could rent books on tape the same way. They were mainly marketed to the blind, and you ordered from a paper catalog, not the internet, but the keep them as long as you like, get the next one when you return them ideas were the same.

Also, my local library (Multnomah County, downtown Portland Oregon) did the same thing: for one dollar per book, you could get a book, either from the library or inter-library loan sent to your house. You could only have two out at a time that way, and you could have a queue which, in the mid-80's, you could update online by dialing in (directly, via 300 baud modem!). (You could also update it over the phone, by mail, or in person at the branch, I believe). They would send the next one when you sent one back.

These are the only two I can think of. But any decent patent lawyer should be able to find these and others pretty easily, I would think.

What about other companies doing exactly the same thing? Like DVDBarn, Intelliflix, etc.? Is Netflix suing them, too?

Re:

[DragonWriter]

I'm not sure who the first was, but up to 30 years ago, you could rent books on tape the same way.

Did they use the Netflix style mailer? Did they use the Netflix-style preference lists, or strict this-one-next queues or some other method of selecting what you get? Because those seem to be the two specific patents at issue, and doing something similar in outline but outside of the specific innovation claimed in the patent isn't clearly prior art relevant to the patent.

What about other companies doing exactly

Re:

[greed]

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 O

Re:Business models?

[hey!]

Since when are business models subject to patent rights?

Since July 23, 1998. That was when the United States Court of Appeals for the Federal Circuit handed down the decision in State Street Bank & Trust Company v. Signature Financial Group, Inc.

Products, yes, but business models?

Products are not patentable; it's inventions that are patentable. Prior to the ruling, business methods were often asserted to be abstract ideas, like mathematical algorithms. You can't patent laws of nature, natural phenomenon, or abstract ideas including mathematical algorithms. You can only patent useful, applications of these. By analogy, you can't patent the consumer procrastination, but you can patent exploiting this by creating a subscription service where your competitors are creating rental services.

I think business method patents are a completely unintended result of the constitutional authority to grant patents from article 1 section 8. However, the court's reasoning in State Street v. Signature is impeccable. Congress has been granted the right to patent inventions without any stipulation as to the kind or nature of the invention. Given that this is so, it's hard to argue that novel business methods ar not inventions. Furthermore, the SC has pretty much ruled that the Congress may use the powers it is granted in the Article 1, section 8 in any manner they see fit, even if the results contradict the intent of the framers.

So, if Congress uses those powers in a way that expressly retards the progress of the useful arts and sciences, what matters is the extent of the powers used, not the use to which the powers are put.

So, even if buisness and software patents are manifestly a bad thing, Congress may create them.

In his Second Treatise on Government, John Locke, who was the primary philosophical influence on the framers, described the conditions under which things which are common property can be privatized. The fundamental principle is that any appropriation of the commons as private property requires that "enough and as good" be left for others. Claiming the idea of a business strategy by creating a business method around it seems to fail this test. But then again, if abstract ideas are in the commons (as patent theory says they are) claiming almost any invention as your personal property probably fails this test. Which is why patents are a time limited form of property, if it indeed is proper to call them property at all. They are a deal between the state and the inventor, which the state undertakes for the public good. If the state undertakes such deals against the public good, then the proper response in a democracy is to change the people running the state.

Re:

[dslauson]

I don't want to reward Blockbuster for completely ripping off a very original and innovative business model. Also, I hate blockbuster and their drakonian repressive late fees. They once tried to take me to collections over a three-dollar late fee. I'm now an extremely happy Netflix customer, and never again will I have anything to do with Blockbuster.

Still, this is just stupid. Just because you innovated in a field doesn't mean you should get an automatic and total monopoly on it. This is America, for

Re:

[CastrTroy]

However, I used to use Zip.ca (canadian netflix) but ended up quitting because movies that they said they send out didn't end up in my mail box. Mind you they never held me responsible, or made me pay for the movie, but it often took over 3 weeks for them to clear up that spot in my account. Also, in their terms of service, it said they could hold me responsible and charge me for a movie which got lost in the mail or "stolen" as they call it. I quit because they refused to admit that sometimes movies jus

Re:

[account_deleted]

Comment removed based on user account deletion

Busted, but maybe not...

[Six Nines]

Some of those patent claims sound a little fishy, but IANAL. However, it's interesting that my main squeeze signed up for Blockbuster's service about the same time I got Netflix, and the first comment out of her mouth when describing it to me was: "It's just like Netflix!" Curiouser and curiouser...

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

I'm pulling for Blockbuster

[xannik]

How exactly is renting movies online an original or novel idea? I think Netflix is feeling the pinch in their pockets from Blockbuster and is resorting to some desperate measures. I really hope the courts send a message to businesses that patent lawsuits are not just another source of income.

Re:

[Zenaku]

Maybe it doesn't seem original now that everyone is getting in on the act, but original and novel is exactly what it was. Know of any companies that were using that business model before Netflix? I sure don't. The fact is, it was a brilliant idea that seems obvious in retrospect, as most good ideas do. And they had to overcome several hurdles and solve a lot of problems before it became workable and profitable -- such as finding a way to send dvds through the mail without incurring overly frequent brea

It's not new

[wbean]

When I lived in London in the 50's Harrods had a lending library. You paid a monthly fee and they assigned a librarian to you. He/she (mostly she) picked out books for you - or you could request specific titles. The books were delivered in Harrods green electric vans. When you'd finished a book Harrods would pick it up and ship you another one. Sound like a familiar business model? It even involved technology (the electric vans).

(I've posted this information before, but it seems to bear repeating.)

Re:

[truthsearch]

Harrods used green vans. Netflix uses red envelopes. That's not at all the same business model.

Re:

[KarmaMB84]

God, I hope that was a joke because adding DVD and internet to it shouldn't make it original.

Re:

[Overzeetop]

Well, of course adding DVD doesn't make it original. That's why it has to involve the internet to be both unique and non-obvious. ;-)

Re:

[grahamwest]

I'm not familiar with the Harrod's vans but electric vehicles have been used for milk delivery for many, many years in Britain. Milk floats [wikipedia.org] don't go fast (there are multiple TV sitcom sketches involving milk float chases making light of this fact) or have much range but they are quiet and thus preferable for pre-dawn driving in residential areas.

Re:

[rolfwind]

Imagine if Blockbuster patented renting out movies. Where would netflix be?

Re:I'm pulling for Blockbuster

[kthejoker]

Yes!

Many of those hurdles could no doubt be covered by patents (such as "A Package To Mail A DVD without Breaking It") and good old fashioned business acumen ("We cut an exclusive deal with Fed Ex, and pass the savings on to you") in a way that encourages competition.

Being first matters a lot. It instills loyalty. But it's not a guarantee. And you know what? If some guy can come along and beat you at your own game, that's not inherently a bad thing. And if Blockbuster jacks up the price, someone else will just come along and compete with them, undercut them, and the cycle continues. There's no free pass in the market.

The *real* problem with NetFlix's model is that it's impersonal. It's just a DVD in the mail. Nobody cares about the color of the envelope. In fact, the NetFlix business model is the IDEAL "faceless corporation" business, because it's a

a) middle man service
b) driven by economies of scale
c) for a product everyone wants.

It's not a lemonade stand or a piano lesson. It's hegemony waiting to happen.

Re:

[0xABADC0DA]

Bug#: 821866
Product: Captitalism
Reported Agains: 2.0
Severity: Critical
Status: RESOLVED
Resolution: WONTFIX

Report describes proper operation of Capitalism 2.0 (see spec at Constitution/1_8#commerce). Please read project documentation before submitting further bug reports.

It seems to me that whenever someone comes up with a great new service, some other company barges into the market, undercuts them out of existence, then jacks their prices, cuts their quality of service, and starts finding ways to force addi

Re:

[thaerin]

Maybe it doesn't seem original now that everyone is getting in on the act, but original and novel is exactly what it was. Know of any companies that were using that business model before Netflix? I sure don't. The fact is, it was a brilliant idea that seems obvious in retrospect, as most good ideas do.

Uhm, maybe I'm missing the obvious, but all they did was take Blockbuster and throw it online. It's the same business model, i.e. rent movies, ergo the fact that you have the added setp of having to ship the

Re:

[BalanceOfJudgement]

Uhm, maybe I'm missing the obvious, but all they did was take Blockbuster and throw it online. It's the same business model, i.e. rent movies, ergo the fact that you have the added setp of having to ship the product back and forth from the customer to your warehouse. Seems more like a natural progression of the business model than anything truly unique. They just eliminated the need to spend money on real-estate. *shrug*

Thank you. I said the same thing in an above post - online DVD rentals never seemed n

Re:

[Pollardito]

you're saying that you would have figured it was possible to repeatedly mail DVDs to random customers without losing all of your income to breakage during delivery and the costs of shipping and handling, or turn off their customers with slow delivery or low availability? it certainly doesn't seem obvious to me, it's still not clear how they do it all. but they do, and they've reduced the cost of renting by a lot. i probably rent more than the average 3-at-a-time customers, but i'm going through 4 or 5 mo

Re:

[hurfy]

"such as finding a way to send dvds through the mail without incurring overly frequent breakage, "

They seem to have a seperate patent on their envelopes. I see no problem with that.

The whole business model thing is too much tho. Why can more than one company use advertising to pay for a website, or like someone else said serve drive-thru food, maybe only one company should have been allowed to use telemarketers (ok, not the best example...)

Maybe patent number one would have been for growing food to sell to

Re:

[BalanceOfJudgement]

At what point does it (well, did it) get too absurd ?

I have a patent on that particular arrangement of words.

I'm taking you to court.

Oh, wait...

Re:

[BalanceOfJudgement]

or paying too much in shipping costs to offer the service at a reasonable price.

Netflix overcame that "hurdle" by the very, very fraudulent practice of throttling [msn.com]. I wouldn't call that an innovation.

I was a Netflix user when it first came out, and cancelled the service only because I didn't rent enough discs for it to be useful. Now I use Blockbuster because their delivery is faster (there's a distribution center next town over so I get my DVDs in 1 day, sometimes less if I time it right).

That said, I ne

Re:

[Zenaku]

Netflix overcame that "hurdle" by the very, very fraudulent practice of throttling. I wouldn't call that an innovation.

No, I was referring to the fact that it took several attempts to find a means of packaging the dvd itself that didn't cost too much to make, didn't weigh too much to mail cheaply, could be processed by all of the post offices machines (mail that can't be handled by the machines gets sorted by hand and thus takes longer to reach the destination), and wouldn't be broken by those same machin

Exactly!

[loqi]

Since when do politicians nip problems in the bud? Folks, this has to get worse before it gets better. Our patent system will receive the overhaul it desparately needs when:
A) There's a concrete enough financial interest that it generates a lobby.
B) Joe Sixpack is displeased with the situation.

We can all make B) appear to come a little faster by bitching to our Congress-critters every time we see an abuse like this. Remember net2phone's "method of establishing a communication channel by exchanging IP ad

Re:

[russ1337]

they haven't sued other smaller niche competitors who operate in a similar way

Because it would send the little guys to the cleaners and totally eliminating the little guys one by one will be expensive and also seen as anti-competitive. (i.e trying to gain a monopoly). Suing the 'other big kid on the street' is one lawsuit, probably less total legal cost compared to 100 small suits, and the chances of cashing in big with a 'plug to Blockbusters jugular' are far greater.

Netflix probably has a pretty soli

In other news

[rolfwind]

SCO is suing Netflix for stealing its business method....

Re:

[Zenaku]

Nice! If only I had mod points for you!

I for one...

[mr.newt]

I for one am rooting for the little guy.

Oh, wait...

If it leads to lower prices...

[Thrymm]

Im all for it! Eventhough the pricing isnt bad to begin with!

Re:

[truthsearch]

How would eliminating a competitor lead to lower prices??

Re:

[maxwell demon]

You'll get the stock of that competitor cheaper than ever.

Business Model Patent

[Deathlizard]

Whoa! You can patent a Business model! Hot Damn!!

I guess I should patent my idea of "Method of High Speed Beef and Bread Preparation, Processing and Procurement" and go after a certain clown I know!

(Sarcasm lever high on this post folks)

Re:

[rinkjustice]

I'd mod you up bro, if I had any points. Unfortunately, all I can offer you is moral support.

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.

What a let down....

[Himring]

I'm a big netflix fan. I got into it in order to re-watch the entire xfiles series last year. I also like the story of its origins: someone finally got sick of ridiculous late-fee charges, and in answer, blockbuster lost mega business. Blockbuster countered with its own service which I thought was not doing well against netflix. This latest news seems to indicate otherwise.

But netflix using patent laws this way is crazy. Blockbuster should counter with the charge that they own the ability to perform the action of receiving monetary units for analogue and digital copies of light and audio produced theatrical and documentary events....

Re:

[bmalia]

I was a big netflix fan. But when all of this started, I terminated my service and sent customer service an e-mail explaining why. I had hoped netflix was a decent company, but these tactics to monopolize are pissing longtime customers off.

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?

Re:

[HoboMaster]

Unfortunately, not everyone's as cool as Ben Franklin. Especially with his use of 'd instead of ed. I love that.

Re:

[Tony]

I have lov'd his style. Surthermore, I admire the use of 'S' in place of 'f'. It just Looks Cool.

Also, he's the guy who wrote, "Fart Proudly." He is a man to be admired, and emulated. Live lustily and long, that's my motto.

Sit in front of a computer eating Cheetos, that's my life.

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:

[Red Flayer]

I use Netflix, love the service (6 at a time, one day turnaround and haven't noticed any throttling yet ~35-40 movies month)

Holy crap, your slashnick is appropriate, ConsumerOfMany.

You're a marketer's wet dream!

Re:

[soft_guy]

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.

Re:

[pdhenry]

How can anyone possibly watch 35+ movies a month?

Who said anything about watching them?

Re:

[ConsumerOfMany]

I er, loan them to people, each person in the fam watches a different one, I commute in NYC on the subway which is 2 hours a day with a portable DVD player and I like to let my dog use them as toys which is why they all look like they do when you get them...

Classic...

[MudButt]

It was only a matter of time. Porter's model proven again. Blockbuster (like Microsoft) let its guard down and let a critical external force overtake its market-share: Substitutes.

Go ahead Netflix, kick 'em while they're down! You're the new guerrilla in the DVD rental business, and rightly so. On behalf of every poor college kid that ever got a collections notice for $4.38 for late fees that weren't paid in 4 weeks or less, I say thank you. Bury the bastards.

Re:Classic...

[truthsearch]

I'd rather see them buried by the market than the legal system.

Re:Classic...

[Zenaku]

Yes, they do. They just renamed them "restocking fees" and made them flat instead of scaled to the amount of time by which the return was late.

Counter-suit?

[RyoShin]

If you can patent business models, and Netflix can sue Blockbuster for renting movies by mail/internet, can't Blockbuster sue Netflix for renting movies period? (I suppose if they had a business model patent that expressly stated brick & mortar businesses, they couldn't.)

Re:

[Anonymous Coward]

Can't Blockbuster sue Netflix for renting movies period?

No, because Video Station was the first rental chain in America, not Blockbuster. They started in 1977, 8 years before Blockbuster existed. Prior art, my friend...

Why are people surprised by this?

[rsilvergun]

businesses have been using the gov't to give them an edge for hundreds of years. Agribuisness corps were founded by gov't irrigation, car companies by gov't road projects, Pharmaceuticals get the gov't to do all the difficult/expensive research, etc, etc. There is a long and illustrious history of using your tax dollars to screw you over. It's like Gore Vidal said: capitalism for the poor and socialism for the rich.

Patenting business models?

[Niten]

If we're lucky, this might be the case to finally set a precedent against the old formula

traditional business model + online = patent

If Blockbuster doesn't settle out of court, that is...

Im sorry I cant hold this any longer.

[ihatewinXP]

Fuck Blockbuster.

I know that has been a popular sentiment ont his board for some time and that im not in particularly new....... But, I still have a bad taste in my mouth from YEARS of Blockbuster / Viacom screwing me (and everyone else) royally.

The late fees. The bad selection. The late fees. Changing the rental system to somehow appease a lawsuit they lost and at the same time still trick people into paying more late fees.....

And then Netflix came along, and the first few times you saw it in print

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[gstoddart]

So to recap, screw Blockbuster, but only because in their hubris they screwed (and are actively screwing) themselves.

This, unforunately has to be a case where you come down on the side of 'right', not fuck 'em. And, if Blockbuster loses this, it's a horribly bad precedent.

I don't like Blockbuster either. I don't give them my business. But I would hope that a patent for renting a movie on the internet gets shot down. But, similarly I've rooted for Microsoft in past cases because, by fluke, they were on a

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[Red Flayer]

Yeah I know thats expensive, but the real estate they built those stores on would have recouped most of the money, and firing everyone else would have them squarely in the black, a place they havent been for a hot minute now...

Speaking of business models, maybe you're unaware of Blockbuster's? It's a franchise model. The parent company didn't lay out the cash for those b&m shops -- they may have helped the franchisees obtain financing, but that's a different story. Yes, the parent corporation has its

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[idobi]

You know Viacom hasn't owned blockbuster since 2004, right?

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[Just Some Guy]

The late fees. The bad selection. The late fees. Changing the rental system to somehow appease a lawsuit they lost and at the same time still trick people into paying more late fees.....

You forgot the enormous advantage Blockbuster's brick-and-mortar stores have over Netflix: there's no charge when you don't use them. I rent a movie maybe 2, 3 times a year. As Netflix doesn't have a $15/year plan, they can't compete for my business on price.

Injunction

[necro81]

FTFA:

If Netflix is able to obtain an injunction, then that means that people who rent through Blockbuster's online service have to find some other way or go down to the local store to rent their movies.

If the judge in the case grants an injunction against Blockbuster's online service, there will indeed be many pissed customers out there. Thankfully, Blockbuster has at least one way to mollify them in the meantime: give their customers the same X-rentals-at-a-time access to their brick and mortar stores as they do through online rental queues. Blockbuster's online rental service already includes vouchers for a fixed number of store rentals per month (in parallel with the online queue rentals). This would just make it entirely brick-and-mortar based. The store on the corner doesn't have nearly the selection, but it might hold over some customers that would otherwise quit Blockbuster. There should be some way to craft it that doesn't encroach on the patents in question.

Note to self

[Anon-Admin]

Note to self,

Time to patent new business model that increases customer satisfaction through the extension of services at prices the customer can afford while providing support and an extended "Customer is right" attitude.

Then I can sue all the companies that have happy customers, hmmm It may be hard to find them now.

Just in Time for my Meeting

[DeanFox]

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]-

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[Sabaki]

Tell them to call me -- I want that deal.

Short of that, I'd like them to stock more rare videos. I have a long queue, and I've noticed and increasingly long list of movies that are getting pulled from my main queue and put in an Unavailable list. Can that many movies really be out of print and completely unavailable? Also, I wonder if they ever do a qulaity check on their DVDs before sending them out -- I've received several that were too damaged to fully watch. (Granted, this is a problem with rental i

Patent infringement

[rice_burners_suck]

The process of trolling for karma on /. is original, innovative, not obvious to an expert in the field, and has no prior art. Therefore, this process deserves patent protection.

This post is patent pending. All rights reserved. Do not make illegal copies of this post.

Good luck to Netflix on this one....

[Churla]

I have an ex who worked for Blockbuster for quite some time.

They were developing methods for on-line rentals and even on-demend video distribution back in about 1999 IIRC. Netflix was actually copying Blockbusters model , only doing it on line, until then. (Having late fees, etc, making people pay for postage).

They will be deperately hard pressed to prove they innovated many , if any, of these business practices, and I believe some of their patents could actually be thrown out because of being brought to the light of day like this.

I despise with a passion "business model patents" which basically say "we figured out how to do business, don't you dare try to compete with us!"

needs more patents

[srchestnut]

Blockbuster should just patent the business of renting videos and dvd's then sue netflix and everyone else while they're at it. Then RIM could patent a 'Method and system for patenting overreaching and obvious patents' and sue both of them. First to concieve baby!

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[Overzeetop]

First to concieve baby!

So...wouldn't that just result in everyone screwing everyone else as often as possible?

Oh, right. Sorry.

Family Video is a nice alternative!

[gozar]

For those complaining about Blockbuster, if you have a Family Video [familyvideo.com] 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).

Patent needed for incentive to develop

[Sloppy]

It's a good thing that the founders decided to write something into the constitution to promote the progress of science and useful arts. Otherwise, there would be no incentive for Netflix to have a business model! ;-)

Patent Nonsense Business

[Doc Ruby]

Business patents are by definition monopolies. No patent should be awarded on anything that isn't a working mechanical device, at least a prototype. Descriptions of ideas, whether human readable or machine readable, are subject only to copyright. Identifying marks, like logos and slogans, are only trademarks.

These principles are obvious. Not only are they politically obvious to anyone who understands that artificial government monopolies must merely balance freedom of expression against investment protection. They are obvious to anyone in business. It's obvious to people patenting how much advantage they gain. And it's obvious to people excluded how much competition it prohibits.

Maybe now that American business is becoming at least as much a consumer of IP as a producer, these corporations will battle away the IP law imbalances that crimp their economy. Then we'll also see how obvious it is that corporations are the only "persons" which matter to the government.

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[happyfrogcow]

except for the extrememly important internet part?

If the patents say "network" or "electronically", there are ways to look at it yet. The mail system is a network. The phone system is a network and electronic.