Netflix sued Blockbuster in April, seeking an injunction, accusing Blockbuster of willful infringement by starting its online rental service in 2004 despite knowing that Netflix had a patent covering the process Blockbuster allegedly uses.

Netflix asserted two patents against Blockbuster: 6,584,450 & 7,024,381.  Though '450 isssued in 2003, Netflix waited to assert against Blockbuster until the broader '381 was granted, which just happened in April.

'450 claims a method for renting videos based upon customer selection criteria while limiting the number of rentals. '381, a continuation of '450, claims a method for dynamic queuing of movies that a customer requests. Claim 36 of '450 and claim 44 of '381 are dead as a doornail, as they are apparatus claims with method steps; case law invalidates mixed-type claims as indefinite. Whether those mixed-type claims were asserted is not known.

Blockbuster is accusing Netflix of inequitable conduct for failing to disclose prior art Netflix knew of: patents that NCR had put Netflix on notice of possible infringement. NCR patents 6,397,199 & 6,842,115 are related to video rentals, but don't appear particularly germane to Netflix's patent claims. Wisely taking the plaintiff role, Netflix proactively sued NCR in March over the NCR patents, seeking declaratory judgment.

With regard to Netflix failing to disclose the NCR patents during prosecution of its own, Blockbuster lawyer & mouthpiece Marshall Grossman, after watching one too many action flicks, declared, "Netflix, with an Uzi to its forehead, doesn't disclose anything to the Patent Office."

On top of the NCR accusation, Blockbuster accuses Netflix of not disclosing to the patent office TV subscription models, such as those from HBO, Showtime, and TiVo. Claim construction does not appear to be the strong suit of the Blockbuster legal team.

Netflix has more than 4.9 million subscribers, dwarfing online-rental latecomer Blockbluster with its 1.3 million subscribers. Blockbuster got into the online rental business because it was losing its shirt in movie rentals at its stores. Blockbuster has shuttered many of its retail outlets.

"Netflix's goal all along has been to ultimately monopolize the online rental business," Grossman theorized. Blockbuster's counterclaim includes an antitrust rant. As a patent attorney, Grossman should have some awareness that the nature of patent ownership is to be able to preclude others from practicing a claimed invention.

As to the Netflix patents, Grossman mused, "There is nothing original about renting movies or subscription rental programs. [That is] like a fast-food restaurant trying to patent selling hamburgers through a drive-through window." Grossman did not answer when asked whether he wanted fries with that.