"Founded by Mr. Taplin and two other Hollywood entertainment executives in 1996, Intertainer developed technology to distribute movies on demand through cable and phone lines for viewing on televisions and personal computers."
Did Intertainer invent video distribution on the Internet? No way. Real Networks, and others, were doing it long before Intertainer. But the US Patent office gave them a patent and now real companies must spend time and money defending themselves and fighting against a patent that never should have been issued.
The IP Democracy blog has some excellent insights on this case;
"Despite its early-mover status, Intertainer didn’t file for a patent until 2001 — by that time, other companies, including Real Networks and Apple, were already engaging in the same kind of activity that appears to be covered by Intertainer’s patent. Intellectual property lawsuits are among the hardest to win, something lawyers for Apple, Google and Napster surely know. But they’re also among the most expensive kind of legal complaints to defend against — something lawyers for Intertainer surely know."
"The real question here is whether Apple, et. al., are willing to possibly save money by paying off Intertainer, at the risk of inviting other patent holders (and there must be hundreds of patents involving the distribution of video and audio over the Internet, right?) to file comparable suits. Google, at least, is well know for fighting mightily against lawsuits, particularly in the intellectual property arena, simply to discourage any settlement-seekers."
This is why big companies must file patents on everything, as a defense,...no matter how obvious. Big companies need to protect themselves against lawsuits from small companies with aggressive lawyers.
TechDirt says "There's been quite a trend lately of companies who had otherwise completely failed in the marketplace to suddenly reinvent themselves as "patent licensing firms" and then go and sue everyone who actually was able to successfully innovate in the market"
Apple, Google, and Napster probably wish now that they had filed patents for this stuff, or that they had made cross licensing deals with companies like Real Networks and others. You might remember the controversy last week directed at Microsoft for filing patents around functionality in Internet Explorer and Vista that deals with RSS. This situation is a perfect example for why Microsoft had to file those patents. Sad but true.