A California judge dismissed a consumer class action against online DVD rental company Netflix Inc. that accused the company of inflating prices through fraudulently obtained patents, but opened the door to future claims by allowing limited discovery and the option for an amended complaint.
In the June 14 dismissal, Judge William Alsup rejected the plaintiffs’ antitrust claims because they hadn’t demonstrated that Netflix tried to enforce its patents against rivals. The patent enforcement component is a key part of claims under the Walker Process legal theory, which is based on a 1965 U.S. Supreme Court ruling that said companies’ enforcement of fraudulently obtained patents could violate Sherman Antitrust Act anti-monopolization rules. In re Netflix Antitrust Litigation, No. 07-00643 (N.D. Calif.).
