It’s hard to
believe that Netflix is already eleven years old. The company that Reed Hastings started after
paying a $40 late fee to Blockbuster now stocks over 55 million DVDs that it
rents to 10 million subscribers. I’m
sure that if my wife and I ever find some of that time that seems to have evaporated
once we had kids, we’ll join up. (Not that we're complaining...we do love our kids. Really.)
Surprisingly,
until today Netflix only had four patents to its name. One of them, U.S. Patent No. 7,024,381, was
famously asserted against Blockbuster the day it issued, April 4, 2006. That case settled a year later while
Blockbuster’s summary judgment motion was pending.
But today Mr.
Hastings and Netflix received their fifth patent. And no, they don’t need to send back a patent to the USPTO
in the supplied pre-paid envelope before receiving number six.
U.S. Patent No. 7.546,252 Approach for managing rental items across a plurality of distribution locations
Assignee: Netflix, Inc.
1. A method
for managing digital versatile discs (DVDs) carrying movies in distribution
locations, the method comprising the machine-implemented steps of:
identifying a
first set of one or more DVDs located at a first distribution location, wherein
the first set of one or more DVDs carry a first set of movies that has not been
requested for rent by rental customers associated with the first distribution
location;
causing the
first set of one or more DVDs to be sent from the first distribution location
to a designated distribution location;
identifying a
second set of one or more DVDs located at a second distribution location,
wherein the second set of DVDs carry a second set of movies that has not been
requested for rent by rental customers associated with the second distribution
location; and
causing the
second set of one or more DVDs to be sent from the second distribution location
to the designated distribution location, wherein the first, second and
designated distribution locations are distinct distribution locations..
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Commentary: First, the obvious question. Is there a Bilski problem? (And even though the Supreme Court has
granted cert, it’s still the law, at least for now…) For now, I'll posit that this claim sails clear: The DVDs here are apparatuses that
are probably “particular” enough to satisfy the machine or transformation test. It helps that the claimed method makes active
use of the movies contained on the DVDs, too.
In that way, the DVDs aren’t just any ol’ object to be distributed – it matters
that the DVDs carry unrequested movies. This
“ties” the DVDs to the method through the identifying step. So perhaps this claim is a good example of how
Bilski might not have killed all business methods. (Of course, obviousness may be a different
story, right?)
Or perhaps not…
Compare
claim 4:
4. A method
for managing rental items in
distribution locations, the method comprising the machine-implemented steps of:
a computer identifying a first set of one or
more rental items at a first distribution location that is not needed by
customers associated with the first distribution location;
the computer causing the first set of one or more
rental items to be sent from the first distribution location to a designated
distribution location;
the computer identifying a second set of one or
more rental items at a second distribution location that is not needed by
customers associated with the second distribution location; and
the computer causing the second set of one or more
rental items to be sent from the second distribution location to the designated
distribution location, wherein the first, second and designated distribution
locations are distinct distribution locations.
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The claims
are nearly identical, but with two key differences. Think subject-object. Claim 1 is a “general” method, where the
subject is anything or anyone, but the object is “particular” apparatus (DVDs
containing movies). (Yes, the preamble says "machine-implemented steps"...but is that really limiting?)
Claim 4 is reversed:
the subject is a computer, which performs the method on a “general” object (rental
items). It seems clear from recent cases
that the CAFC intended to kill the Claim 4-type scenario where the subject “computer”
isn’t particularized. And it isn't even close here. (The “computer”
terms were added in an Examiner’s Amendment, by the way, with no explanation
given, in April 2009. In re Bilski had been fully digested by this time.)
But what about Claim 1? Should it fall by Bilski's sword, as well? I’ll leave the discussion open.
Some other
interesting prosecution notes:
- Priority
disclaimed. The app was originally submitted
as a C-I-P claiming priority back to Netflix’s first patent, 6,966,484, which
was filed in September 2002. During
prosecution, Netflix amended their specification by deleting the priority claim
language. PAIR does not indicate any
parent application. So by doing this,
Netflix may have gained over a year of patent term (this app was filed in
December 2003), but at the risk of potentially exposing itself to some
intervening art or earlier on-sale activity. I suspect this
disclaimer, which occurred in September 2007, was provoked by the
then-looming rule change for continuation applications. Those rules, to have taken effect Nov. 1,
2007 but for the Tafas injunction, would have limited continuation practice and
the number of claims.
- Term Extended? You'd think that because of the disclaimed priority, the claims would be hit with a 103 rejection over the '484 patent, or at least an obviousness-type double patenting rejection leading to a terminal disclaimer. Not so. Instead, Netflix actually had term extended by over 800 days for PTE. Go figure.
- Weaker
presumption? What do we make of the
Examiner’s statement in the Notice of Allowability:
“Applicant’s voluminous IDS
received August 28, 2008 has been given a cursory review.”
Should an accused infringer need to present clear
& convincing evidence to show invalidity in this situation where the Examiner essentially admits he did not read the references?
- Undue
Multiplicity. The only claim rejections
were under 112 for indefiniteness under the “undue multiplicity” rule. See 37 CFR 1.75(b) and MPEP 2173.05(n). The examiner found that the 126 claims
originally presented “would tend to obfuscate, confuse, and becloud the claimed
invention.”
Undue
multiplicity rejections are not so common anymore, in part because they are
almost always reversed by the BPAI when challenged. The conventional wisdom is that they were
historically used by examiners to trim workload, requiring applicants to pick some subset of representative claims for examination. (Indeed, the doctrine was cited in Tafas for the proposition that it is possible to place at least some limits on number of claims in an application.)
It has
been a recent curiosity of mine whether an alleged infringer could challenge a
patent’s validity in a civil litigation under this Rule. After all, if “the net result” of the
repetitious claims tends “to confuse rather than to clarify” the subject matter
of the invention, then it should not matter if this challenge is made by an examiner during
prosecution, or if it is made by a lawsuit defendant after issuance -- either the claims are indefinite or they are not, and the statute applies equally regardless of timing.
In a similar style to the successful argument reviving prosecution laches with Lemelson, I suspect
there is some case out there with a patent having a ton of claims where it could be argued, “If undue multiplicity doesn’t apply
here, then it doesn’t apply anywhere.” It's a longshot, but the right district court judge just might bite...
Any takers?
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