Netflix is already pursuing a patent infringement case against
Blockbuster and had objected to the antitrust case and to the
prospect of the two actions being heard together. The two will
proceed together, ruled US District Judge William Alsup.
Netflix sued Blockbuster in April for the alleged infringement
of two patents, one of which it had been granted just days earlier.
Its case alleged that Blockbuster's internet film rental arm
violated patents it holds in systems for operating an online film
rental business.
In June, Blockbuster counterclaimed with an antitrust case
alleging that Netflix used deceptive practices to obtain its
patents and to monopolise the online rental business.
Netflix filed a motion to dismiss Blockbuster's suit, and it is
this motion which has just been defeated, meaning not only that the
antitrust case will be heard, but that it will be heard in tandem
with the patent infringement case.
"As a result of Netflix's purported monopolistic conduct,
Blockbuster may be forced out of the market, which would cede to
Netflix virtually complete control of the online DVD market," wrote
Alsup in his judgment. He also said that Netflix can attempt to
have the antitrust case dismissed later in proceedings.
Blockbuster argues that Netflix's patents are unenforceable in
its antitrust claims. "There is nothing original about renting
movies or subscription rental programs," said Marshall Grossman at
the time of the filing of the suit. Grossman works for Alschuler
Grossman, Stein & Kahan, the firm representing Blockbuster in
the litigation. "Both were widely practiced long before any
purported invention by Netflix."
"As for Netflix's so-called 'dynamic' queue, we are convinced it
is not legally patentable," said Grossman. "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."
Alsup's judgment is procedural and is not a ruling on the
substance of the case, said legal experts following the case. It
means only that Blockbuster will be allowed to present evidence
that demonstrates antitrust liability, they said.
"We remain intent on aggressively pursuing our antitrust
counter-claims," Blockbuster spokesman Randy Hargrove told news
agency Reuters.
Netfix spokesman Steve Swasey told the agency that the firm
would "continue to defend our patents and business methods."
