Blockbuster And Netflix Settle Patent Dispute

from the and-they're-keeping-the-results-secret dept

Last year, we were surprised to see Netflix announce that it owned a patent on its business model and was suing Blockbuster. This was surprising for a company like Netflix that had shown its ability to compete with the big players in the marketplace -- in effect showing how you could succeed against much bigger players without resorting to government-backed monopoly protections. However, Netflix decided that, even as it was killing Blockbuster in the market, it was going to sue for copying its business model. After a year of fighting, however, the two companies have settled the lawsuit, with neither side admitting to what that settlement means. If you read between the lines, however, it certainly sounds like Blockbuster paid up to get the suit out of the way. If true, that would be unfortunate. It's also unclear how (or if) this will impact that separate class action lawsuit against Netflix that claims these patents were used to violate antitrust law by not declaring known prior art.
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  1. identicon
    Mike4, 28 Jun 2007 @ 5:57am

    Netflix is winning?

    However, Netflix decided that, even as it was killing Blockbuster in the market I have know knowledge of who is "winning" between the two, but I find it very hard to believe that Netflix is doing better, considering that they have no way of offering the same features as Blockbuster. Blockbuster allows you to bring your movies back to the store instead of dropping them in the mail and when they are scanned in, they are considered returned, so your next set of movies can be sent to you. In addition, you can go grab some movies in the actual store (equal to how many you brought in) and they don't count against the movies being sent. For a 3-at-a-time plan, you could technically have 6 discs at once. I do belong to Blockbuster (although I don't take advantage of it enough) because of these features. I have no interest in who is doing better financially, so I hope I'm not giving the impression that I'm touting Blockbuster as the better company. If Netflix magically sprouted up a few stores in my area and provided better features, I would probably switch to them. I just have a hard time believing that more people would be using Netflix then Blockbuster when they are getting less... unless it's just name recognition and people don't really know about Blockbuster providing the same service.

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