Netflix v. Blockbuster (PDF) Judge Alsup I would have been willing to bet this lawsuit was bound to happen, judging solely on the aggressive commercials Iââ?¬â?¢ve seen on TV – the ones where Blockbuster is stating how much better they are because you can use the mail or drive to the store.

On the day that the ‘381 patent issued, Netflix filed the instant lawsuit alleging that Blockbuster infringed the two patents. On June 13, 2006, Blockbuster filed its answer and counterclaims. Defendant pleaded the affirmative defenses of inequitable conduct and patent misuse. Blockbuster counterclaimed that Netflix violated Section 2 of the Sherman Antitrust Act by committing knowing and willful fraud on the Patent and Trademark Office when applying for the two patents and by asserting these patents in bad faith in sham litigation. An order dated August 22, 2006, denied Netflix’s motion to dismiss the antitrust counterclaims.

Judge Alsup points out, almost comically, the usual contention in patent cases and states the terms in dispute:

In the fashion in style among patent lawyers, counsel have been unable to agree on any definitions for any term and appear to dispute every term in the patents. Seven phrases have been selected for this proceeding. (All other terms in dispute will be considered before the case goes to the jury.) Those seven terms are: (1) “item rental queue” and “movie rental queue;” (2) “ordered list;” (3) “based upon the order of the list,” “in the desired order,” and “based on the desired order;” (4) “electronically updating;” (5) “computer-implemented method/steps; ” (6) “periodic fee;” (7) “item selection criteria,” “movie selection criteria,” and “game selection criteria.”

After discussing the proper construction of these terms, Judge Alsup ends with a possibly unsettling remark about subsequent altercation to the construction:

This claim-construction ruling will govern subsequent proceedings. The Court has learned the hard way that nuances will emerge in the proper definitions of the foregoing terms that may require slight adjustments as the case progresses into summary judgment and trial. This is not an invitation to re-argue. Please don’t. The Court, however, on its own may adjust its constructions to eliminate unintended distortion or to impose subtle refinements that can only be appreciated in the context of further proceedings.

Although potentially frightening, Judge Alsup does indeed have the power to alter his current claim construction. The case of Jack Guttman v. Kopykake Enter., 302 F.3d 1352 (Fed. Cir. 2002), said ââ?¬Å?District courts may engage in a rolling claim construction, in which the court revisits and alters its interpretation of the claim terms as its understanding of the technology evolves.

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