Process of renting DVDs online granted patent

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Netflix has been granted a wide-ranging patent encompassing its online DVD rental service, in a win that could pose a legal speed bump to Wal-Mart's entry into the business. The patent, granted by the US Patent & Trademark Office, covers Netflix's entire process of renting out movies and extends to music, video games and books, the California-based company announced on Tuesday. Netflix charges a monthly subscription fee for people to rent a specified number of movies on DVD. Subscribers choose their titles on the rental Web site, then Netflix posts the films to them. People can keep a limited number of DVDs for the length of the subscription or swap them for new titles. The patent grant comes at a critical juncture for Netflix. Though its more than 1 million subscribers mean it commands more than 90 percent of the online rental market, according to the company, rivals such as Wal-Mart and Blockbuster are circling. Earlier this month, Wal-Mart introduced its own online movie rental service that's priced a notch lower than Netflix's. The retail giant charges $15.54 (£9.34) a month to rent two movies at a time, $18.76 to rent three and $21.94 to rent four at a time. Netflix charges $19.95 a month for three movies at a time. Netflix spokeswoman Lynn Brinton pointed out the resemblance between the Arkansas-based company's DVD rental process and Netflix's own. "You can't look at (the Wal-Mart service) and not see there's a lot of similarities," she said. However, Brinton would not say whether the patent grant foreshadows a lawsuit against Wal-Mart. Nonetheless, having the US Patent & Trademark Office on its side could be a powerful weapon for Netflix in a courtroom dispute, according to legal analysts. "Issued patents are presumed valid until proven otherwise by clear and convincing evidence," said Alan Fisch, an intellectual-property lawyer and partner at Howrey Simon Arnold & White in Washington.
For the latest on everything from DVD standards and MP3s to your rights online, see the Personal Technology News Section. Let the editors know what you think in the Mailroom.

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