Judge William Alsup, District Court for Northern California, ruled Tuesday that Blockbuster has "pled enough facts to overcome dismissal" of the counterclaim, and refused Netflix' request to split the infringement suit from the antitrust counterclaim.

Alsup noted that when Netflix applied for its first patent, it cited "absolutely no prior art." But then, shortly after the patent, 6,584,450, was granted, Netflix flooded the patent office with over a hundred pieces of prior art for the continuation, 7,024,381. As the judge observed, "This is so even though the same law firm prosecuted both patent applications, and even though the same named inventors were responsible for both applications."

There is no legal requirement for an applicant to search the prior art, but under 37 CFR 1.56, an applicant has "a duty to disclose to the Office all information known to that individual to be material to patentability."