Netflix Sued Over Fradulently Obtained Patents 193
An anonymous reader writes "Techdirt has a story about a new class action lawsuit against Netflix, claiming that the patents the company is using to sue Blockbuster were obtained fraudulently. Specifically, the lawsuit claims that Netflix was well aware of prior art, but did not include it in its patent filing, as required by law. The lawsuit also claims that Netflix then used these fraudulently obtained patents to scare others out of the market, in violation of antitrust law. 'Certainly, it makes for an interesting argument. Patents grant a government-backed monopoly -- which should get you around any antitrust violations. However, if that patent is obtained fraudulently, then I can see a pretty compelling claim that you've abused antitrust law. It would be interesting if other such cases start popping up (and, indeed, the lawyer who sent it to us said his firm is looking for additional patents to go after in this manner).'"
Re:Class action? (Score:3, Informative)
Probably because the lawyer filing the case is going to claim a wide range of potential victims constituting a valid "class" through the antitrust allegations.
No, when people band together, you get a big direct action suit with lots of plaintiffs (like the one depicted in Erin Brockovich). A class action suit is when a lawyer and a small number of plaintiffs allege the existence of a vast number of victims that are similarly situated, and seek to claim the right to represent all of them.
Its related to the patent issues in Blockbuster v. Netflix, but separate.
Re:IANAL (Score:3, Informative)
Actually it's "knew or should reasonably have known". That second part is the kicker. When applying for a patent an applicant's required by law to do certain due-diligence research (including the prior-art search) first and include the results in the application. If a reasonable person doing the research required by law would've discovered the prior art, then whether Netflix actually knew about it doesn't matter.
Or that's the theory, anyway. In practice you get into extended argument about what's reasonable, and things go downhill from there.
Re:IANAL (Score:1, Informative)
No. actually it's "disclose to the Office all information known to that individual to be material to patentability". There is no second, 'reasonableness' standard.
Invalidating a patent on the grounds alleged in this suit is a much higher hurdle than you suggest, as the standard for the duty of disclosure is that "no patent will be granted on an application in connection with which fraud on the Office was practiced or attempted or the duty of disclosure was violated through bad faith or intentional misconduct". In other words, the plantiff must show that not only did the patentee know about the prior art, but also that the patentee intentionally withheld it from the Patent Office (or acted in some other fraudulent manner). Additionally, the prior art must be "material" to patentability (i.e., the patent examiner would have rejected the claim(s) had the missing prior art been submitted). In sum, the plaintiff must prove both "materiality" and "intent".
When applying for a patent an applicant's required by law to do certain due-diligence research (including the prior-art search) first and include the results in the application.
The patent applicant is not "required by law" to perform any due diligence research concerning the prior art. However, if the patent applicant has performed a prior art search, he must then disclose any findings that are "material" to patentability in order to comply with the law.
And yes, IAAPA.
Article has no concept of antitrust law (Score:3, Informative)
I continue to be amazed at how technology people are so astonishly bad with understanding Anti-trust law.
Patents grant you a type of monopoly over the technology you are using, but they do not automatically grant you a monopoly over the marketspace you are in. Therefore you are not in violation of anti-trust laws if you lose a patent. You simply lose the ability to sue someone if they come along and copy your technology. How can you be abusing power you no longer have?
Is netflix in hot water over abusing patent laws? You betcha, but anti-trust laws are not their problem.