Will Lycos Settle Claims Against Tivo, Blockbuster & Netflix Out Of Court?

It looks like TiVo (TIVO), Netflix (NFLX) and Blockbuster (BBI) will be packing their bags for Massachusetts, after they won the first of many legal scrimmages in their patent defense against Lycos. Lycos has asserted that all three companies have violated patents it owns, on “information filtering technology.”

The two patents that are at the heart of the case are related to the recommendation services that the companies provide.

After Lycos filed its lawsuit against the trio, ChoiceStream (the company that created Blockbuster’s suggestion service) filed a separate lawsuit, to have the patents thrown out.

In its lawsuit against Lycos, it argues that the patents are invalid because of obviousness and prior art. Because Choicestream filed its own lawsuit in the Massachusetts’ court system, TiVo, Netflix and Blockbuster sought to have their case transferred there as well. I’m not familiar enough with the legal subtleties to know why Lycos originally opposed the motion, but with Lycos’ headquarters in MA, the judge found the request reasonable enough and granted the motion.

While this development in the case is only a minor footnote in the larger dispute, the legal filing did contain more background on the case, as well as a few interesting side details.

It turns out that Choicestream may actually end up playing a pretty important role in how this gets resolved. In the legal filing the judge writes,“ChoiceStream has employees in Massachusetts who possess information relevant to this action, and Lycos has indicated that it ‘may need to take some discovery from ChoiceStream.’”

I haven’t read ChoiceStream's lawsuit against Lycos yet, but it wouldn’t surprise me if it did end up owning some prior art. A year ago, it filed an application for its own recommendation patent, so it will be interesting to see what ends up coming out at trial.

It also appears MIT’s Media Lab could be called to give testimony. Part of their research was used to reject some of the original claims on one of Lycos’ patents. Believe it or not, they’ve actually been publishing research on “information filtering” since the late 80’s.

While it appears that this case is heading for trial, there is always the possibility of a settlement. Even though Lycos filed its lawsuit on Jan. 3, it didn’t actually serve TiVo, Netflix or Blockbuster until April 30th because it was engaged in “settlement discussions” with the companies. Since they now appear to be squabbling over who gets home court advantage, those talks have likely cooled off, but it wouldn’t surprise me to see either side at the bargaining table, especially if things start to look bad for them.