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Blockbuster Files Antitrust Lawsuit Against Netflix

13 Jun, 2006 By: Erik Gruenwedel

Blockbuster Inc. Tuesday filed an antitrust lawsuit against online video rental pioneer Netflix alleging that the Los Gatos, Calif.-based service had attempted “to monopolize the DVD rental market through fraudulent patenting and sham litigation.”

The Dallas-based No. 1 video rental company filed the complaint in U.S. District Court in San Francisco seeking a jury trial in addition to unspecified financial damages, including compensatory and legal costs.

The suit is in response to an April 4 patent-infringement suit Netflix filed against Big Blue seeking a jury trial to shutter Blockbuster Online. The complaint alleged that Blockbuster's 19-month-old Web rental service violated two Netflix patents, “Approach for renting items to customers,” (US 7,024,381 B1) and “Method and apparatus for renting items” (US 6,584,450 B1).

In addition to allegations that Netflix “fraudulently and materially deceived” the U.S. Patent Office when applying for patents 381 and 450, Blockbuster contends the technology used to rent movies online was already known and in general use.

“The business of renting movies, as well as renting other items, was widely known long before any purported invention by Netflix,” said the complaint. “So was renting on a subscription basis.”

A Netflix spokesperson was not immediately available for comment.

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