Patent trolls are trying to kill Netflix's new feature

IT WAS the feature that Netflix users had been waiting for, but it could prove to be a costly headache for the streaming giant.

Late last year, Netflix introduced a feature that allowed users to download content and watch it while they're offline. It's a fairly standard concept but Netflix took its time in rolling out the feature, perhaps because it was preparing its defences.

A company known solely for its work as a "patent troll" has now filed a lawsuit against the streaming giant claiming it owns the patent over the basic idea of downloading video from the internet for offline consumption.

A patent troll is a company who's business model is based primarily, if not entirely, on buying up patents and suing other companies for potential infringements in an effort to gouge money out of large businesses.

And that is exactly what Blackbird Technologies hopes to achieve at the expense of Netflix.

The company was founded by two former corporate patent lawyers, Wendy Verlander and Chris Freeman, and last week they filed a complaint against Netflix, as well as separate suits against Soundcloud, Vimeo and a few other online services for breaching their patent.

Blackbird Technologies owns the US Patent No. 7,174,362. And according to Ars Technica, previous owners of the patent have had success in using it to leverage money from other companies.

The patent is actually from an earlier era of technology. It was filed in 2000 and as such the imagination of the patent largely applies to a technological system that is a little dated.

The patent pertains to a system that allows website content to be downloaded and burned to a writeable CD and automatically sent to someone, without any human interaction.

The patent was originally awarded to Californian entrepreneur Sungil Lee but the new owners will be relying on the broadness of the language in the original patent to shakedown their targets.

As Ars Technica points out, they will argue that the US patent office granted the patent which describes various "modules" that form a "computer-implemented method of data duplication."

The irony, of course, is that Netflix has been around since 1997 and started out as an online DVD delivery service - a business it continues today.

So when Mr Lee filed the patent, he was surely aware of the Netflix operation but even though Netflix could claim to be the originators of the broader concept, it might not help when it comes to a legal battle.

In 2011, Mr Lee sold the patent to Innovative Automation LLC, a patent troll firm which used it to file multiple lawsuits and reportedly had success in gaining settlements from companies including popular American broadcast satellite service DirectTV.

It's hugely unlikely that Blackbird Technologies will be able to shut down Netflix's download feature, but at the very least they could squeeze some money out of the streaming giant, eating up a slice of that original programming budget.

News Corp Australia

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