Netflix Sued For Violating Antitrust Law With Its Patents
from the who-to-root-for? dept
I'm pretty skeptical of most class-action lawsuits. They're often filed over bizarre claims, and the settlements almost always seem to enrich the lawyers a lot more than the "class." Sometimes, we've even seen the settlements seem more like marketing for the company being sued. That's not to say all class-action lawsuits are bad. In some cases, they can do a great deal for consumer protection. I'm a little bit torn over this latest class-action lawsuit in figuring out which side of the line it falls under. This morning, a lawyer involved in the case sent us a filing his firm recently made to initiate a class-action lawsuit against Netflix, claiming that the company has violated antitrust law by fraudulently concealing prior art related to the patents it's currently using to sue Blockbuster. We were surprised that Netflix went this route, after it seemed as the company was winning in the marketplace (easily) against Blockbuster and others -- and it seemed like the patent wasn't needed for Netflix to remain competitive. The filing, however, suggests that there may be more to this story, and that Netflix carefully used the threat of patent litigation over these two patents to push others out of the market. That may be difficult to prove, but what's more interesting is that the filing highlights prior art that Netflix clearly knew about, but which the company did not include on its patent applications. Patent law requires that you disclose any prior art in a patent application, and the lawsuit alleges that Netflix committed antitrust fraud by concealing the prior art.Certainly, it makes for an interesting argument. Patents grant a government-backed monopoly -- which should get you around any antitrust violations. However, if that patent is obtained fraudulently, then I can see a pretty compelling claim that you've abused antitrust law. It would be interesting if other such cases start popping up (and, indeed, the lawyer who sent it to us said his firm is looking for additional patents to go after in this manner). It certainly is an interesting way to go about defeating dangerous and harmful patents, but really, if the patent system were working properly, this type of class-action lawsuit shouldn't even be needed. Either way, given the state of the patent system today, having one more weapon to go against dangerous, innovation-stalling, competition-blocking patents might just be a necessary evil.
Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.
Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.
While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.
–The Techdirt Team
Reader Comments
Subscribe: RSS
View by: Time | Thread
Patent Madness!
[ link to this | view in chronology ]
Re: Patent Madness!
[ link to this | view in chronology ]
Re: Patent Madness!
[ link to this | view in chronology ]
Also, I've been a member of Netflix' and Blockbuster's programs, and I far and away prefer Blockbuster.
(When you add an apostrophe to represent a possessive to a word ending in 'x', do you treat it the same as a word ending in s?)
[ link to this | view in chronology ]
Re:
I'm actually surprised that this legal approach hasn't been used before on cases like Vonage, where, if I'm properly informed, there are people saying that the art in the Verizon patents was published by others as seminar notes at a conference some months prior to the patent filing and that those filing the patent were in attendance at the conference. I would love to see an outbreak of patent fraud suits.
[ link to this | view in chronology ]
Re: Re:
[ link to this | view in chronology ]
J
[ link to this | view in chronology ]
Finally, Something The Lawyers Will Like
So this backwards approach (even submitted to Techdirt by a lawyer) is finally something that those of us here in favor of innovation, and those at some law firms in favor of more lawsuits, can both agree on.
We have a system where people are rewarded for gaming the rules, and playing the system. We should change it such that there are penalties for trying to game the system.
[ link to this | view in chronology ]
Patents do not grant monopolies
[ link to this | view in chronology ]
This is a queue. Nothing more, nothing less. How the heck is this innovation? It is something that has been used for hundreds of years.
So now, thanks to Netflix, you can use a queue for anything but DVD's.
[ link to this | view in chronology ]
Re: #8
[ link to this | view in chronology ]
Re:
[ link to this | view in chronology ]
Re: Re:
[ link to this | view in chronology ]
Re: Re: sanguine
[ link to this | view in chronology ]
Re: Re:
[ link to this | view in chronology ]
Netflix exposed
This is a bogus suit based on bogus patents, and ultimately they will pay, if in nothing else, in reputation and market share.
I find it hard to believe that there isn't a hiearchical relational database that actually encompasses the patent system. Is it really that broken? (...with respect to prior art investigation)
Where the hell is all of our tax money really going...to the "patent" court lawyers?
Sad. Public interest, indeed.
[ link to this | view in chronology ]
For those of you with a TiVo
http://movierentals.sourceforge.net
[ link to this | view in chronology ]
Prescient
[ link to this | view in chronology ]
Re: Prescient
[ link to this | view in chronology ]
[ link to this | view in chronology ]
#11
[ link to this | view in chronology ]
no innovation here
That would rather suggest that this kind of thing is very, very common.
The other included actual innovation, but maybe not such unobvious innovation.
[ link to this | view in chronology ]
[ link to this | view in chronology ]
Microsofts monopoly patents
[ link to this | view in chronology ]
NTP
[ link to this | view in chronology ]
[ link to this | view in chronology ]
[ link to this | view in chronology ]
Oh, the possibilities!
[ link to this | view in chronology ]
The business model dates from the 1700s!
Hatchard's would mail books to customers and when the book came back, ship the next one. You had a list of the books you wanted on file with them. They even offered different plans, with expats in the colonies signing up for plans that dumped a hundred books or so every time a boat arrived, and those in London settling for the one book at a time plans.
The first implementation of this plan in the New world was done by Ben Franklin, who was also the first supervisor of the Patent Office.
[ link to this | view in chronology ]
The basic business model Netfilix is using is older than the US constitution. Computers or no computers and the queue system Netfix has patented has been used by public libraries around the world for over 30 years for books, 20 years for CD's and probably more than 10 years for DvD's.
The really inovative thing Netfix has done is charging people for the service. :-)
[ link to this | view in chronology ]
Throw them all out
Until the entire concept of a software patent is discarded, this sort of anti-competitve behavior will continue. It is the core of why the software companies are are all trying to become SCO, instead of actually making something useful and then doing it better than any of their competitors.
Copyrights yes, patent no.
[ link to this | view in chronology ]