Friday, September 08, 2006

Ugh....

You know, I really like Netflix and all (I was a very early subscriber, but have since moved from the Netflix model to the Tony V "buy them used and keep them forever" model of DVD renting), but I can't get behind their move to sue Blockbuster for infringing their (dubious) patents. From law.com:
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.
In response, Blockbuster has filed an anti-trust counterclaim, alleging that Netflix obtained their patents fraudulently and is exploiting them to create market power.

For the interested, here are the Netflix patents:
  • 7,024,381 - "Approach for renting items to customers"
  • 6,966,484 - "Mailing and response envelope"
Now, I can believe that the mailing envelope patent might be valid. It's unlikely that anyone else bothered to design a packaging solution for shipping DVDs (without cases) in the mail in a reusable envelope that can be used for returns; it's a unique requirement of a new business and Netflix was first. But the othe patent is a little more suspect as it seems to be patenting a business plan. And that just doesn't seem like something that should be patentable to me.

The law.com article indictates that Netflix feels that its patent covers the unlimited rental period feature that they started:
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.
This, then, is essentially patenting a pricing strategy: pay a fixed fee, keep the discs as long as you want. That shouldn't be patentable. I haven't read through the '381 patent, but on its face, it seems like something that should be outside the realm of patent law. It's not that it's obvious or anything, just that if we allow people to patent business plans, then we'll have nothing but monopolies running around, and that's a bad idea.

(h/t to /.)

1 Comments:

Anonymous dave said...

I agree with you on all counts. Having said that, we recently switched from Netflix to Blockbuster, and I was surprised at just how similar the two websites and systems are. Of course, it's probably not interesting to Netflix to sue over the webpage design because the business plan and the efficient shipping are likely to be where the money is.

9/08/2006 3:34 PM  

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