With the issuing of a patent for its business model on Tuesday, Netflix immediately sued their rival Blockbuster for infringing upon it.
Netflix is claiming in their suit that Blockbuster stole their technology and the very concept of providing DVD-by-mail in its rental form from Netflix for the purpose of offering its own online version.
They are going to go through a jury trial where they will ask them to shut down Blockbuster Online and receive compensation for royalties and damages.
The patent that was issued to Netflix according to the lawsuit which is file in District Court in San Francisco "covers a method for subscription-based online DVD rental that allows subscribers to keep DVDs they rent for as long as they wish without incurring late fees."
Hollywood Reporter adds that "The process Netflix patented also stipulates that customers desirous of new DVDs simply return those already watched. Even the ability to allow users to prioritize their list of desired DVDs, what Netflix calls "a dynamic queue," is a patented concept that Blockbuster has duplicated, according to the suit."
Netflix spokesman Steve Swasey says that "From top to bottom, Blockbuster has willfully copied Netflix's business."
I'm wondering if this suit will becoming anti-climatic in the sense that the business model is changing again toward video-on-demand and downloadable offerings. If Netflix wins, they will receive compensation, but will that windfall do anything for the bottom line and future of the company and its business model? What are your ideas?
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