Blockbuster, which says the Netflix patents are unenforceable,
filed antitrust counterclaims in federal court in San
Francisco.
"There is nothing original about renting movies or subscription
rental programs," said Marshall Grossman, of Alschuler Grossman,
Stein & Kahan, the firm representing Blockbuster in the
litigation. "Both were widely practiced long before any purported
invention by Netflix."
Grossman said that Netflix claiming exclusive rights over
subscription movie rentals "is like a fast-food restaurant trying
to patent selling hamburgers through a drive-through window."
"As for Netflix's so-called 'dynamic' queue, we are convinced it
is not legally patentable," he added. "We think it is obvious that
if you are going to provide subscription rentals over the internet,
you have to let your customers list the items they want to receive
and enable them to periodically update their lists."
The claims filed by Blockbuster against Netflix also allege that
Netflix failed to inform the Patent Office of previous patents and
previous business methods of other companies, despite the legal
duty to make these disclosures.
According to Blockbuster, Netflix has admitted that it was aware
of the prior patents of another company, which had already put
Netflix on notice about possible patent infringement. Blockbuster
says Netflix failed to disclose those prior patents to the Patent
Office.
"The court has the final say on whether a patent is valid and
whether a company was honest in pursuing its patent," said
Grossman. "We state in our counterclaims that Netflix's conduct at
the Patent Office was deliberately deceptive and that Netflix's
goal all along has been to ultimately monopolise the online rental
business."
Blockbuster also points out that Netflix appears to have singled
out Blockbuster and no other online service for litigation, waited
nearly three years after receiving its first patent and 19 months
since the launch of Blockbuster Online before filing the
action.
"We believe consumers are best served when companies compete in
the marketplace instead of in the courtroom," said John Antioco,
Blockbuster chairman and CEO. "However, since Netflix has filed
what we believe is a needless lawsuit, we will aggressively defend
ourselves and vigorously pursue our counterclaims."
