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Blockbuster Touts Its Growth

April 07, 2006|From the Associated Press

DALLAS — If there is a bright side to being sued, movie-rental giant Blockbuster Inc. claims to have found it in its battle with Netflix Inc.

Blockbuster initially declined to comment when Los Gatos, Calif.-based Netflix sued the chain this week for patent infringement.

But the nation's largest movie-rental chain answered Thursday with a regulatory filing and a news release, which declared, "Success of Blockbuster Online draws patent claim."

"The timing of this lawsuit appears to confirm that Blockbuster Online has emerged as a real competitive force in the online rental industry," said Shane Evangelist, general manager of Blockbuster's online business. "Apparently Netflix would prefer to take us on in the courts rather than facing us in the marketplace where the consumer is the judge."

Netflix, however, has a huge lead in subscribers -- 4.2 million compared with 1.2 million for Blockbuster at the beginning of the year.

Netflix sued Blockbuster on Tuesday in U.S. District Court in San Francisco, claiming that the chain violated two patents.

Blockbuster said there was no merit to the claims and it would defend itself vigorously.

Shares of Blockbuster rose 18 cents to $3.99, while Netflix shares fell 41 cents to $28.25.

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