Netflix, Inc. v. Blockbuster, Inc.

Filing 101

Attachment 2

Declaration of Ashok Ramani in Support of 100 Brief Declaration of Ashok Ramani In Support Of Netflix's Opening Claim-Construction Brief filed byNetflix, Inc.. (Attachments: # 1 Exhibit 1# 2 Exhibit 2# 3 Exhibit 3# 4 Exhibit 4# 5 Exhibit 5# 6 Exhibit 6# 7 Exhibit 7.1# 8 Exhibit 7.2# 9 Exhibit 7.3# 10 Exhibit 8# 11 Exhibit 9# 12 Exhibit 10# 13 Exhibit 11# 14 Exhibit 12# 15 Exhibit 13)(Related document(s)100) (Ramani, Ashok) (Filed on 12/6/2006)

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Netflix, Inc. v. Blockbuster, Inc. Doc. 101 Att. 2 Case 3:06-cv-02361-WHA Document 101-3 Filed 12/06/2006 Page 1 of 20 EXHIBIT 2 Dockets.Justia.com Case 3:06-cv-02361-WHA Document 101-3 Filed 12/06/2006 Page 2 of 20 111111111111111111111111111111111111111111111111111111111111/11111111111111 US00702438IBI (12) United States Patent Hastings et aL. (54) APPROACH FOR RENTING ITEMS TO CUSTOMERS (75) Inventors: W. Reed Hastings, Santa Cniz, CA (10) Patent No.: (45) Date of Patent: 5,861,906 A . US 7,024,381 Bl Apr. 4, 2006 1/1999 DulU! et at. .................. 725/87 111999 Rohi nson 6/1999 Robinson 5,884,282 A 5,918,014 A CA (US); Neil Duncan nunt, Mountain View, CA (US) (73) Assignee: Netflix, Inc., Los Gatos, CA (US) (US); Marc B. Randolph, Santa Cruz, 5,918,213 l\ 5,945,987 A * 5,959,945 A � 6,012,052 A 6/1999 Bernard et at. 8/1999 Dunn .........................145/�18 9i1999 Kleiman ...................... 381/81 If2000 Altschuler et at. (Continued) FOREIGN PATENT DOCUMENTS JP 2001243285 A ( *) Notice: Subject to any disclaimer, the term of this patent is extended or adjusted under 35 U.S.C. 154(b) by 89 days. (21) Appl. No.: 10/438,727 9/2001 OTHER PUBLICATIONS (22) Fik�: May 14, 2003 KentonColUity Public Library, Covington, KY 41011, The Talkg Book Library at the Kenton County Public Library, ''http://web.archive.orglweb/19980130051137/www.kenton.lib.ky.us/talking.html," 3 pages. * Related U.S. Application Data (63) Continuation of (Continued) application No. 09/561,041, filed on Apr. 28, 2000, now Pat. No. 6,584,450. Primary Rxaminer-Andrew Joseph Rudy (74) Allorney, Agent, or Finn Hickman Palermo Truong & Becker, LLP (51) Int. Ci. H04N 7/173 (2006.01) (52) G06F 15/16 (200G.01) G06F 17/60 (2006.01) (57) ABSTRACT U.S. Ci. ......................... 705/26; 3LW77; 709/206; 725/60; 725/104 According to a computer-implemented approach for renting items to customers, customers specif)' what items to rent using item selection criteria separate from deciding when to reeive the specified items. According to the approach, (58) Field of Classification Search .................. 705/26; 709/206,212,219,222; 725/60, 104; 381/77, customers provide item selection criteria to a provider provides the items indicated by the item selection criteria to 381/81,86 S� applicalion Jilt for complele search his lory. customer over a delivery channeL. The provider may be either centralized or distrbuted depending upon the requirements of a particular application. A "Max Om" approach allows up to a specified number of items to be rented (56) 5,095,195 A 5,664,110 A References Cited U.S. PATENT DOCUMENTS simultaneously to customers. A "Max Turns" approach allows up to a specified iiunber of item exchanges to occur during a spefied period oftiiie. The "Max Out" and "Max Turns" approaches may be used together or separately with a varety of subscription methodologies. 3/1992 Hannan et al 9il997 Green et aI. 5,704,017 A 12/1997 Heekennan et ai. 5,752,160 A * 5/1998 Dunn ......................... 725/93 5,790.426 A 8/1998 Robinson 5,842,199 A 1l/1998 Miler et at. 51 Claims, 7 Drawing Sheets NFLlX0000911 Case 3:06-cv-02361-WHA Document 101-3 Filed 12/06/2006 Page 3 of 20 US 7,024,381 B1 Page 2 u.s. PATENT DOCUMENTS 6,016,475 A 6,029,161 A 6,041,311 A Literature for Listening Club of Audio Diversions, last updated Mar. 12, 1999 ronlincl rctricved on 6,049,777 A 6,065,042 A * 1/2000 Miller et at. 2/2000 Lang et a1. 3/2000 Chislenko et at. 4/2000 Slieena et al. 5/2000 Reimer et at. .............. 709/201 Aug. 31, 2003 from http://web.arehive.orgweb/19990908120905/www. audiodiversioll .eom! audiodiversions-egilistening. cgi?id=0508075008; 2 pages. Audiobook Search olAudio Diversions (online) relrieve� on 6,067,562 A � 6,092,049 A 6,108,493 A 6,112,186 A 6,236,985 ni 5/2000 Goldman ................... 709/206 7/2000 Chislenko et at. 8/2000 Miler et at. 8/2000 Bergh et al. 5/2001 Aggarwal et al. 9/2001 Deeinqiie Aug. 31, 2003 from htlp:l!web.archive.orglweb! 19990908104726!www.audiodiversions.comlaudiodiversions-cgileatalog.egi?id=0508075008, 2 pages. Books On Tape Home page, Apr. 22,1999 (online) retrieved 6,286,139 BI 6,289,389 HI * on Aug. 31, 2003 from http://web.archive.orglweb! 1999042406135 5!http://www.booksontape.eom/, 2 pages. 6,308,168 BI 6,321.79 BI 6,321,221 HI 9/2001 Kikinis ....................... 709/239 10/2001 Dovicli et al. 11/2001 Glance et ai. 11/00 i Hieganski More About B-O-Til & Frequenlly Asked Queslions, ( online) reirieved on Aug. 31, 2003 from http://web.archive. 6,334,127 Bl 6,389,372 BI 6,412,012 HI 12/2001 Bieganski ct al. orgweb/19990508223402/htlp:/!www.booksontape.eomli/ help.htm, 1 i pages. 5/2002 Glance et at. 6/2002 Hieganski et al. America's Online Door to Door Rental Store, 1999 copyright (online) retrieved from http://web.archive.orgl web/19990922160527/http://www.dvdovemight.conit; 2 6,484,123 BI 6,487,539 BI 6,487,541 HI 11/2002 Srivastava 1112002 Aggaral et al. 11/2002 Aggaral et al. 12/2002 Thiesson ct al. 1112001 Javed ......................... 380/217 6,496,816 BI 200110036271 AI"' 2005'0086127 Al pages. Getting Started, 1999 copyright (online) retrieved from http://web.archive.orglweb/2oooo3041 1243/www. 4/2005 Hastings et aI. dvdoveniight.eomlstared.html; 7 pages. OTHER PUBLICATIONS Top DVD Rentals, DVD Overnght store Policies & Frequently Asked Questions, 1999 copyright (Ol�ine) retrieved from http://web.archive.oiglweb! 19991 i 2301 'Ilie Lihrary of Congress, Requests Proposals on Behalf of thc National Library Scrvicc for thc Blind and Physically 4901!www.dvdovemiglit.com!service.html; R Handicapped for the Software Support Services for Librar DDOwned Software Knonw as "Reads" Reader Enrollment and Delivery System. * pages. Customer Service Questions & Anwers, 2000 copyright (online) retrieved from http://web.archive.orgweb! Library of Congress, Washinglon, DC; SulicilaLIon No. RFP 87-16; 17 (seventeen) pages; Sep. i, 1987.* Mal�liyaina, Tosliiori, Rental Video Tape Or�er Syslem, Pub. No. 09-231279 (ll' 9231279 A), Application No. 08057043 JP 9G57043)* Glenn Miller, Letter from Glen Miler, Director of Orange County Libra System, Unabashed Libraian, No. 82, p. 3, 1991.* 2oo01109071400/www.dvdovemight.eom/dvdlcustservice. Iitlll; 5 pages. DVD Cache Frequently Asked Questions, (online) retrieved from litt:�/web.archive.orgweliI200005 i 2001 209!www. dvdcache.eomlstorc/customer_scrvieclitm; 5 pages. Librares ( online) retrieved on Feb. 26, 2004 from http:// www.arehives.iicgill.ealresources/guidelvolllrg40.htm; 8 Business Wire, "Netflx.coii transforms DVD Business Eliminating Late Fees and Due Dates From Movie Rentals; NctFlix.com's Ncw Marquee Program Crcatcs Ncar DVDon-Demand," New York, Sep. 2S, 1999, 3 pgs* pages. Fastlane Video & Records-Rental Prices (online) retrieved from http://web.archive.orglweb/19990506190744! mcmbcrs.aol.comlatfastlanc!vidco/rcntal.htm; 1 pagc. 5 Day Rental (online) retrieved from littp:l/weh.areliive.org/ web! 1999021 01 01315/members.aol.comlatiastlane/video! Billboard, "NetFlix lalUlches DVd subcription club; Blockbuster set to stock up on formate" (sic) Bilboard, New York, Oct. 16, 1999, voL. ILL, lss. 42, p. 77.* Brad Dick, Editor, "The Future of Television," Broadcast Engineering, NA, Dec. 1999, 1 page. "About Us" web page from www.netfix.com. 1 page. Web page printout for http://wv.W.netfix.comlon Jan. 17, 1999, at http://web:arcliive.orgweb/19990117080920/ index.htni; 13 pages. I:astlane Video & Records (online) retrieved from http:// web.arcliive.org/web/1999020918193 7/members.aol.coiii http://www.netfix.com. 5 pages. "Facts About thc Library," a scction of book cntitlcd "Oh! Say. Can You See . . . " i 992 American Action Fund tor atfastlane!; 2 pages. Fastlane Vidoe & Records-Payment on Account (online) retreved from http://web.archive.orgweb! 199905041 02814/members.aol .conilatfustlane/video!payment.htm; 1 page. "Try Bcforc You Buy Prograni" r onlincl retrieved from htlp:/lweh.arehive.org/weh/1 9990922040420/www. Blind Children and Adults, retrieved �Ium http://web. arehive.orglweb/20001 04 i i 4940/www.actionflUld.org! saysee09.htm, 2 pages. Application for Library Services for the Kenneth Jerngan gametradersclub.comlgametradersclub/tryb.htmI; 2 pages. Tmde or Sell Your Games! (online) retreved from hltp:/! web.arehive.orglweb/I 999 101001 2624/www. gametradersclu b.conitgametradersclub/tradorselyou.htinl; 2 Librar tor Blind-Children, last updted May 27, 1999, retrieved from http://web.archive.orgweb/ 19991103190509/www.actionfund.orglkj1ib.htm. 3 pages. pages. "Try Before You Buy Program" (online) retrieved from htt://web.archive.orglweb!19991012021059/ gametradersclub.comlgametraderscliib/tryb.htmI; 2 pages. Audio Diversions Home Page, last updated Mar. 8, 1999 (online) retrieved on Feb. 26,2004 from htlp://web.archive. org/web!199905081403191\\'ww.audiodiversions.coml audiodiversions-cgi/home.cgi; 2 pages. Print Culture and English Speaking Quebec (online) retrieved on Feb. 26, 2004 from http://ww.hbic.ibrary. utoronto.ealfeonfmcnally_fr.litm; 5 pages. NFLlX0000912 Case 3:06-cv-02361-WHA Document 101-3 Filed 12/06/2006 Page 4 of 20 US 7,024,381 �1 Page 3 Welcome to I-Iome Film ( online) retrieved froiihttp://web. arcliive.org/web/19961106000542/htt://www. homefimfestival.eOlnlindex.htnil; 3 pages. E-mail posting: NewsgroiipS: alt.games.video.sony-palysta- tion from: ramon (ramon(Utheriver.com) with subject: All Membership (online) retrieved from http://web.archive.org web 19961106001 054/www.homefilniestival.conimember- sliip.hlml; 2 pages. lts Easy! Orderig info (online) retrieved from http://web. arcliive.orglweb/199611 0600 1 006/'W'ww.homefiestival. coniinfopack.htm: 2 pages. Online Video Rentals Multiple Rental Order Form (online) retrieved on Jul. 2, 2003 frm http://web.archive.orgweb/ i 9990420045928/www.homefilmfestival.cOlnll rgordr.html; 3 pages. the New Playstation Games are Yours tor Aboll a Biiek a Day; Date: Feb. 10, 1999; I page. E-mail posting: Newsgroups: all.games.video.sony-palystalion from: ramon (mmun(fUierivtlr.cum) with subjecl: Check Out the New Web Site (Best Deal I've Seen); Dattl: Jul. 11, 1999; i page. E-mail posting: Newsgroups: alt.ganies.video.sony-palystation frm: ramon (ramon(!theriver.com) with subject: How Many Games Can You Beat In A Month?; Date: Jul. 11, 1999; i page. Online Video Rentals Individual Rental Order (online) retrieved on Jiil. 2, 2003 frm http://web.archive.org/web/ 19990l27160422/www.homef�in�stival.coinlindordr.html; 3 pages. "A New Way lo Avoid EKereise",N ewsweek Mar. 15, 1999; 1 page. Additional Int�irmaTion from Sally Fry, Community Rela- Magic Disc Entertainment (online) retrieved on Feb. 27, 2004 from http://web.arehive.orglweb/19981206142316/ http://www.magicdisc.eoni; 2 pages. Rental Program (online) retrieved from http://weh.archive. orglweb/19990503073644/www.magicdisc.comlrentals! rentalprogmm.htm; 3 pages. Featured DVDs for Saturdy, Jan. 16, 1999, 1997-1999 copyright (online) retrieved 011 Jul. 3, 2003 from http://web. archive.orglweb/19990117011532111tt:!/www.netflx.coni; 5 pages. Dv'D Favorites, 1997-1999 copyright (online) retrieved on Jul. 3, 2003 from http:�!web.archive.orgweb/ tions Coordinator Unabashed Libraran, No. 82, p. 3 1991. Mailbox Access to Your Librar (MAYL), Florida Libraries, Unabashed Librarian, No. 82, p. 3 1991. Brass, Kevin, "Company Town: Rental Control; Video Distributor Takes Industr Down Controversial Path", Los Angeles TImes, Nov. 2S, 1997; 4 pages. Mary L. Daniels, 1\ Love tor Libraries; Whether Large or Small, They are Special Placl;s, Editurial; p. A19, Orlando Sentinel, Nov. 11, 1994; 2 pages. Dejong, Jennifer, "Securing Your Site for the Age of ECommerce", VAR Business Strategy Guide Supplement Nov. 16, 1998; 3 pages. "Door-to-Door Service", High Points, Feb. 1999; voL. 6, No. 19991204131346/www.netfix.cOlnlsf�favorites.asp?sid=14; 4 pages. 2, p. 50, 2 pages. Greenemeier, Larr, "Manna Rises Above Conventional", Net Marketing; Maiia Network Technologies Midrange Future Reflections, Barbara Cheadle, vol. 12, No.1 Winter, 1993 (online) retrieved on Aug. 23, 2003 froiilittp:!/www. Iilb.urgllI/lrIl93win.hlm; pp. 1-2; 70-72 Hear Ye! Hear Ye! National Federation of the Blind archived in Feb. 1999 retrieved from http://web.archive.orgweb/ Systems, Dec. 18, 1998; No. 18, vol. 11; p. 41; 2 pages. Hilda M. Hamlyn, "Eighteenth-century circulating libraries in England," The Libnuy, pp. 197-222, De. 1946. Horowitz, Alan, S., "PC Leasing Gains Ground-Shorter Efe spans poularize practice", Inormation Week, May 25, 1998, 3 pages. 19991112190729/www.ntb.orgfr98ws20.htm. 7 pages. E-mail posting: Newgroups: alt.games.video.sony-playstation from:David Esposito (cooldej0�home.com) with Ingram. Bob, "Boston Bear Watchig" Supermarket Business Mar. i, 1999;5 pages. subject: Nee Cheep Games; Date: Feb. 7, 1999; 1 page. E-mail posting: Newgroups: alt.games.video.sony-playstation from:ramon (ranon(ltheriver.com) with subject: Need Cheep ('nlmes; Date: Fen. 8, 1999; 1 page (saiie page as Kim, Nancy J., "Nordstrom seen Net gains with Streamline", Piiget Sound Business Journal Oct. 30, 1998; 2 pages. Alan Donald McKilop, "English circulating lihraries, 172550" The Librar, pp. 477:-485, Mar. 1934. Esposito posting). E-mail posting: Newgroups: alt.gaiies.video.sony-playstation from:raiion (ramon(�theriver.com) with subject: 100' S of Games for about a Buck a Day . . . (Incredible Deal); Date: Feb. 6, 1999; 1 page. Memmott, Carol, "Web Site Streamlines Your Errands", U SA Today Nov. 16, li)i)H; 2 pages. "News Briefs", Video Store Mar. 21, 1999; 1 page. "Nordstrom Anounces Partership Wiil Streamline", PR NewsWire Oct. 8, 1998; 2 pages. Said, Carolyn, "Chps and Flicks On Your Doorstep", Busi- E-mail posting: Newsgroups: alt.games.video.sony-palystation from: ranon (ramonQ!theriver.com) with subject: Best Deal Around 100's of games for about a buck a day; Date; Feb. 8, 1999; 1 page. ness, p. B1, The San Francisco Chronicle, Oct. 18, 1999,4 pages. Shreves, Linda, "Now Librar Books Just Show Up at Your E-mail posting: Newsgroups: a1t.games.video.sony-palystation trom: ramon (ramon(ftheriver.com) with subject: Resl Deal I've Ever Seen. . . lOO's of games for about a buck a day; Dale: Feb. 8 1999; 1 page. J)oor", Orlando Sentinel, J)ee. 7, 1990; 2 pages. "Streamline" DSN SuperCenter Club Business Mar. 29, 1999; 1 page. E-mail posting: Newsgroups: alt.games.video.sony-palystation from: ramon (ramon(gtheriver.com) with subject: Best Deal Ever!! Choose from 100's of games for about.a buck a day. . . Plus a Free Playstation; Date: Feb. 9, 1999; i page. E-mail po stings of 6 messages in a thead from the following message: Newsgrups: alt.games.video.sony-palystation Hal R. Varian, "Buying, renting, and sharing int�rmation goods," Techncal report, School of Inonnation Management and Systems, UC Berkeley, Dee. 1994; 20 pages. Hal R. Varian, "Circulating Librares and Video Rental Stores," Dec. 1996, retreved from htt://web.archive.org; pp. 1-14. from: ramon (raon((theriver.com) wiil subject: Best Deal Ever..i\J1 the N-64 Ganes You Want for About a Buck a Day; Date: Feb. 10, 1999; :1 pages. Hal R. Varian, et al., "Circulating Librares and Video Rental Stores," University of Michigan, Dearborn, University of California, Berkeley, htt://www.sims.herkeley.edu/-hal! NFLlX0000913 Case 3:06-cv-02361-WHA Document 101-3 Filed 12/06/2006 Page 5 of 20 US 7,024,381 B1 Page 4 Papers�history/lustory.html, Mar. 2000; pp. 1-13. Griest, Guinevere L.: Mudie's Circulating Library and the Victorian NoveL. B1oominglon and London, Indiana, Univ. & Tom, Dick, & Harry and Chapter 13 The Rental Wars, pp. 168-202 (1987). Prcss, 1970, 282 pages. Books by Mail, a handbookj�r libraries (1977) by Choong H. Kim. In the Quebec section at p. 394, the McLennan 1raveling Libraries of McGil University were reviewed, 2 pages. James Lardncr, Past Fonvard: Hollywood, the Japanese and the VCR by, Chapter 12 Wilbur & Orvile the Onslaught of Abigail A. r ,oomis, "Subscription librai'�cs," in Wayne A. Wiegand and Jr. Donald G. Davis, editors. Encyclopedia of Library History, pp. 608-610. Garland Publishing, Inc., New York & London, 1994. Glenn Miler Customer Service & Innovation in Libraries pp. 73-90, Highsmith Press 1996. ("Book"). * ciic� hy examiner NFLlX0000914 Case 3:06-cv-02361-WHA Document 101-3 Filed 12/06/2006 Page 6 of 20 u.s. Patent Apr. 4, 2006 Sheet 1 of 7 US 7,024,381 Bl FIG. 1 100 \ 106 104 108 NFLlX0000915 Case 3:06-cv-02361-WHA Document 101-3 Filed 12/06/2006 Page 7 of 20 u.s. Patent Apr. 4, 2006 Sheet 2 of 7 US 7,024,381 Bl FIG. 2 200 \ 202 CUSTOMER CREATES ITEM SELECTION CRITERIA 204 CUSTOMER PROVIDES ITEM SELECTION CRITERIA TO PROVIDER 206 PROVIDER PROVIDES ITEMS INDICATED BY THE ITEM SELECTION CRITERIA TO CUSTOMER NFLlX0000916 Case 3:06-cv-02361-WHA Document 101-3 Filed 12/06/2006 Page 8 of 20 u.s. Patent Apr. 4, 2006 Sheet 3 of 7 US 7,024,381 Bl FIG. 3 300 \ DELIVER INITIAUNEX ITEMS TO CUSTOMER NO NO YES NFLlX0000917 Case 3:06-cv-02361-WHA Document 101-3 Filed 12/06/2006 Page 9 of 20 U.S. Patent Apr. 4, 2006 Sheet 4 of 7 US 7,024,381 Bl FIG. 4 400 \ 402 CUSTOMER AND PROVIDER NEGOTIATE TERMS OF "MA TURNS" AGREEMENT 404 INITIAUNEX ITEMS DELIVERED TO CUSTOMER YES CHANGE AGREEMENT TERMS AND/OR APPLY SURCHARGE 412 NFLlX0000918 Case 3:06-cv-02361-WHA Document 101-3 Filed 12/06/2006 Page 10 of 20 u.s. Patent Apr. 4, 2006 Sheet 5 of 7 US 7,024,381 Bl FIG. 5 500 \ -' --I I AN ITEMS (512 I '- , , .J 514 " " \ 504 J I / / AN ITEMS . ,/ r512 : .' c'I 514 502 NFLlXOOOQ919 Case 3:06-cv-02361-WHA Document 101-3 Filed 12/06/2006 Page 11 of 20 U.s. Patent Apr. 4, 2006 Sheet 6 of 7 US 7,024,381 Bl FIG. 6 600 \ 602 CUSTOMER ENTERS INTO MOVIE RENTAL AGREEMENT WITH PROVIDER CUSTOMER PROVIDES MOVIE SELECTION CRITERIA TO PROVIDER NO 616 NFLlX0000920 . -r . e FIG. 7 MAIN ~. . ~ ROM ~ DISPLAY STORAGE DEVICE SERVER =. . Case 3:06-cv-02361-WHA 712 7 D. MEMORY 7.3 728 7M 7.1 '0 :- ~ ~, f N Q Q ~ BUS INPUT DEVICE 71. 4Q2 Document 101-3 �/ CURSOR IT PROCESSOR COMMUNICATION ~ ~. . -J ~i -J Q" CONTROL 716 7.Q INTERFACE 72. Filed 12/06/2006 cj r. HOST 724 ~ ~ 'N 0 -i QO .. Cd .. Page 12 of 20 z " X o r o o o (� N .. Case 3:06-cv-02361-WHA Document 101-3 Filed 12/06/2006 Page 13 of 20 US 7,024,381 B1 i APPROACH FOR RE~TING ITEMS TO CUSTOMERS RELATED APPLICATION AND PRlORlTY 2 FIG.3 is a flow diagram depicting a ":'lax Out" approach for renting items To customers according to ffl embodiment. FIG. 4 is a flow diagram depicting a "Max Tunis" approach for rcnting itcms to customcrs according to an INFORMION This application is a continuation of and claims benefit of embodiment . FIG. 5 is a diagram depicting an approach for renting audio/video items to customcrs over the Inteniet according reference in its entirety for all purposes. U.S. Non Provisional application entitled "Method and to an embodiment. Apparatus for Renting Items", Ser. No. 09i561,041, fied FIG. 6 is a flow diagram illustrating an approach tor Apr. 2g, 2000 now U.S. Pat. No. 6,Sg4,450. "lhe entire to renting audio/video items to customers over the Inteniet contents ofthis prior application are hereby incorporated by using ooth "Max Out" and "Max Tunis" according to an embodimenT; and FIG. 7 is a hlock diagram of a computer system upon which embodiments of the invention FlELD OF THE INVENTION 15 may be implemented. The present invention relates to inventory rental, and more specifcally, to an approach for renting movies to customers. DETAILED DESCRlPTION OF THE INVENTION In the following descriptioll for the purposes of expla- BACKGROUN OF THE INENTION 20 nation, specific details are set forth in order to provide a thorough understanding ollhe invention. However, it will be apparent that the invention may be practiced without these specific details. In other instmiees, well-known structures and devices are �epicled in block diagram fonii in order to avoid unnecessarily obscuring the invention. Conventional inventory rental models are typically based upon renting items for fixed rental periods and charging late fees for keeping rented items beyond a specified rellim date. These types of inventory models sutler I�om several signifi- 25 cant linitations. First, conventional rental models require customcrs to makc thc dccision of what itcms to rcnt at substantially ihe same time as the decision of when to rent Various aspects and feaTures of example embodiments of the invention are described in more detail hereinafter in the following seciions: (I) funcLIonal overview; (2) ilem selec- the items. Aii example that illustrates this limitation is a tion criteria; (3) item delivery; (4) "Max Out"; (S) "Max video rental business. Cuslomers go lo a video rental store' 30 Turns"; (r.) inventory management; and (7) implementation and select particular movies to rent at that time. 111e cusmechanisms. 1. Functional Overview tomers take the movies home and must retlU11 them by a paricular due date or be charged a late fee. In this silliation, J7G.l is a block diagram 100 thal illustrates an approach the customers cannot decide what movies to rent before actually renting them. The customers may have a parici.lar 35 for renting items to customers according to various embodiments described herein. As used herein, the tcrm "itcms" movie in inind, but there is no guarantee that the video rental store has the particular movie in stock. Moreover, due dates reters to aiiy commercial goods that can he rented to arc inconvcnicnt for customcrs, particularly for "ncw release" movies that are generally due hack the next day. customers. Examples of items include movies, music and games stored on a non-volatile memory such as a tape, other Given the cim-ent demand for inventory rental and the 40 magnetic medium, optical medium, 'read-only memory or the like, and the invention is not limited to aiiy particular limitations in the prior approaches, an approach for renting type of item. In general, the decision of what items to rent items to customers that does not suffer from limtations associated with conventional inventory rental models is highly desirable. In paricular, an approach for renting inventory items to customers that allows separation of 45 customers' decisions of is separated from the decision of when to rent the items. Customers may specifY what items to rent using one or more item selection criteria separate frm deciding when to receive the specified items. Furthermore, customers are not constrained by conventional rental "windows" and instead can have continuoll, serialized rental of items. According to one embodiment, a ciistomer 102 provides to cmtomers on a continuous basis that avoids The use of one or more item selection criteria to a provider 104 over a fixed due dates or rental "windows" appmtenffit to conven- 50 link 106. Link 106 may he any medium tor transterrng data iional renlal models. what items to rent trom when to rent the �lems is highy desimbk. lliere is a further need for an approach for renting items lliere is yet a further need for an approach for renting movies, games and music to customers that is more convenicnt and flcxiblc to customers than conventional 55 belweencustuiier 102 andprovi�er 104 and the inveniion is not limited to any paricular mediiuu. Examples oflin 106 include, without limitation, a network such as a LAN, WAN or the Inteniet, a telecommunications link, a wire or optical link or a wireless connection. The item selection criteria indicate items that customer 102 desires lo renl from provider 104. In response to reeiving the item selection criteria from customer 102, approaches. BRIEF DESCRIPTION OF THE DRAWINGS Embodiments of The invention are ilUSTrated by way of example, and not by way of limitation, in the figures of the accompanying drawings and in which like reference numerals reter to similar elements and in which: FIG. 1 is a diagram depicting an approach for renting 60 provider 104 provides the items indicated by the item selection criteria to customer 102 over a delivery channel 108. Delivery chaiiel 108 may be implemented by any mechanism or medimn that provides for the transfer of items items to customers according to an embodiment. 65 limited to any particular type of delivery channeL. Examples FIG. 2 is a flow diagram depicting an approach for renting of delivery channel 108 include, without limitation, mail items to customers according to an emhodimenL delivery, courier delivery or delivery using a delivery agent. from provider 104 to customer 102 and the invention is not NFLlX0000922 Case 3:06-cv-02361-WHA Document 101-3 Filed 12/06/2006 Page 14 of 20 us 7,024,381 Bl 3 4 Provider 104 may be centralized or distributed depending According to one embodiment, a "Max Out" approach is upon the requirements of a paricular application. used to manage tlie iiuiiber of items that may be simultaAccording to an embodiment, a "Max Out" approach neously rented to customers. According to the "Max Out" allows up to a specified nuiiber of items to be rented approach, up to a specified number of items may be rented simultaneously to customer 102 by provider 104. According to another embodient, a "Max Turns" approach allows up to a specified number of item exchanges to occur during a simultaneously to a customer. "lhus, the "Max �ut" approach establishes the size of an invcntory of items that may be maintaincd by customers. The spccified numbcr of items may be specific to each customer or may be common specified period oftine. The "Max Out" and "Max Turn" creates item selection criteria. In step 206, customer 102 the delivery of one or more additional items, then those provides the item selection criteria to provider 104. In step 15 items are not delivered imtil one or more items are retiimed 208, in rcsponsc to providcr 104 rccciving the item selcction by customer 102 to provider 104. criteria from customer 102, provider 1 04 provides one or According to one embodiment, in sitiiations where the more items indicated by the item selection criteria to cusspecified number of items are currently rented to customer tomer 102. The process is complete in step 210. 20 102 and ihe specified item delivery criteria triggers the delivery of one or more additional items, then the one or 2. Item Selection Criteria more additional items are delivered to customer 102 and The one or more item selection criteria provided by customer 102 and a surcharge is applied customer I02. The customer 102 to provider 104 indicate the particular items specified number of items may then be increased thereafter 11lat ciislomer 102 desires 10 renl from pruvider 104. "l1ius, the item selection criteria defie a customer-specific order 25 to reflect the additional items d�livered to customer 102 and increase the size of the inventory maintained by customer queue that is fulfilled by provider 104. According to one 102. Alternatively, the specified number of items may embodinient, the item selection criteria specify attributes of rcmain tho same and number of items maintained by cusitems to be provided by provider 104 to customer 102. Item tomer 1 02 retunied to the prior level after items are retunied selection criteria may specify any type of item attributes and the invention is not limited to particular item aiiributes. 30 to provider 104 by customer 102. When used in conjunction with ibe "Max. Turns" approach described hereinafter, ihe Examples of item attributes include, without limitation, identifier attributes, type attributes and cost attrbutes. Item approaches may be used together or separately with a variety 10 toeone1or more customers. Inthee,present example, if the the then up to three items of subscription methodologies. sp cil ed number of items is The approach just described for renting items to custommay be r�nted sirm�taneously by provider 104 to customer ers is now described with reference to a flow diagram 200 of 102. If the specified number of items are currently rented to FIG. 2. After starting in step 202, in step 204, customer 102 customer 102 and the specified item delivery criteria trggers specified mUliber of items may be unlimited. selection criteria may be changed at any tinie to reflect changes in items tliat customers desire to rent from a provider. 3. Item Delivery The "Max Out" approach for managing the iiuiiber of items that may be simultaneously rented to customers is now 35 described with refere\lCe to a flow diagram 300 of FIG. 3. After starting in step 302, in step 304, one or more initial items are delivered to customer 102 to establish the inven- According to one embodiment, items are delivered by provider 104 to customer 102 over delivery channel 108 tory maintaincd by customcr 102. Note that an i,�tial delivery of item.s is not required and accordi ng to one em hodi40 ment, the inventory of customer 102 is incrementally established over time. based upon item delivery criteria. More specifically, the delivery of items �rom provider 104 to customer 102 is \ triggerc� by item deli very criteria being saiisfied. TIie item In slep 306, a determination is made whether ihe item delivery crileria may include a wide range of criteria and the delivery criteria have been satisfied. If not, then the deterinvention is not limited to any pai1iculm' item deliver mination continues to be made until the item delivery criteria. Examples of item delivery criteria include, without 45 criteria are satisfied. As describe� previo�sly herein, the limitation, customer request/notification, customer notificadelivery criteria may include customer notification genertion that an item is being retimied, customer retuni of an ally, customer notification that an item is being returned, the item, the occurrence of a specified date, the elapsing of a actual retiim of an item, the occurrence of a specific dare, or specified period of time or a customer payment. that a specified amount of time has elapsed. The item delivery criteria may be specified by customer 50 Once the item delivery criteria are satisfied, then in step 102 to provider 104 or negotiated by customer 102 and 308, a deteniiination is made whether the specified lUinber provider 104 as parI of a subscription service. For ex.ample, of ilems have been deliverc�. Ifnol, then conlrol relurns to a paricular subscription service may include item delivery step 304 mid one or more additional items are delivered by criteria that specifies that a partcular number of items are to provider 104 to customer 102. Ifhowever, in step 308, the be delivered monthly. As another example, item delivery 55 specified number of items have been delivered, then in step criteria may specify that an initial set of items is to be 310, a deterniination is made whether the specified inUliber delivered by provider 104 to customer 102 upon initiation of of items, i.e., ihe "Max Out" lint, is to be overrdden. As a subscription service and that additional items are to be previously descri bed, the specified number of items may be delivered to customer 102 upon return of items to provider overridden by increasing the specified minber of items, i.e., 104. Item delivery criteria may be applied uniformly to all 60 the "Max Out" limit, to allow additional items to be delivitems to be delivered to a customer, or may be item specific. ered to customer 102 and charging a fee to customer 102. For example, item delivery criteria may specifY a particular Alternatively, the specified number of items is not changed date, i.e., ihe ihird We�nesday of every iionih, for all ilem and a surcharge applitX lo cuslomer 102. Ths process deliveries. Alternatively, separate item delivery dates iiay be assigned to each item. 65 complete in step 312. 5. "Max Tums" continues for the duration of the subscription and is then 4. "Max Out" NFLlX0000923 Case 3:06-cv-02361-WHA Document 101-3 Filed 12/06/2006 Page 15 of 20 us 7,024,381 B1 5 According to one embodiment, a "Max Turns" approach is used to rent items to customers. According to the "Max 6 tion payment made by customer 102 to provider 104, the iiiitiation of a specified subscription period, or by request of Turns" approach, np to a specified 1l1l1her of item exchanges may be pedOTIied during a specil�ed period of iime. Fort:xample, rel�rring lo FIG. 1, suppose thal provider I04 agrees to rent items to customer 102 with a "Max '1 i.rns" customer 102 for the initial rental items. The number of iiiitial one or more items must not exceed the terms of the "Max Turns" agreement. In step 408, in response to onc or more delivery criteria being satisfied, a determination is made whether additional lim� of three items per month. This means that customer 102 items can be provided to customer 102 within the terms of tiie Ilunber of the "Max Turns" agreement. For example, if the number of items that a customer may have rented at any given time lO items rented to customer in the current subscription period under the "Max Out" approach. The approach is also indeis less than the agreed-upon "Max Turns," then additional pendent of the parcular item delivery criteria used. items can be rented to customer 102 within the terms of the According to one embodiment, the "Max Turns" approach "Max Turns" agreement. ln this sihiation, tliis determination may be made in response to cuslomer 102 retuniing one or is imp1emenled in combinaiion with ile "Max Out" approach to rent items to customers. In tliis situation, up to 15 more items to provider 104, or by customer 102 requestiiig a specified number of total items are simultaneously reuted additional items. to customer 102 and up to a specified number of item If, in step 408, a detemiination-is made that additional exchanges may be made during a specified period of tinie. items can be rented to customer 102 witliin the tenns of the Thus, using the "Max Out" and the "Max Turns" approaches "Max Tunis" agreement, then control retiirns to step 406 together essentially establishes a personal item inventory for 20 where one or more additional items are rented to customer cuslomer 102 based upon the "Max Out" liniit that may be 102. Ifhowever, in step 408, a determnation is made that pcriodically rcfrcshcd bascd upon thc "Max Turns" limit additional items cannot be rented to customer 102 Withiii the selected. terns of the "Max Tunis" agreement, then in step 410, a In some situations, customer 102 may wish to exchange determination is made whether to override ihe current agreemore than the specified number of �lems during a speciJied 25 menllerms. If so, (hen in step 412, the agreement lerms are period. According to one embodiment, in this situation, changed to allow for a larger number of teniis and customer provider 104 agrees to rent additional items above the 102 is charged accordingly, or the terms are left unchanged specified number to customer 102 and to charge customer and a surcharge is applied for the additional items - to be approach may be implemented independent of may make up to three item exchanges per month. This 102 for thc .additional items. For examplc, suppose that delivered. Control then retiirns to step 406, where one or provider 104 agrees to rent items to customer 102 with up to 30 more additional items are delivered to customer 102. three item hirs (exchanges) per month. If. in a paricular month, customer 102 requires two additional turns, then the If in step 410. a determination is made that the current agreement is not to be overridden, theJl in step 414, no items two additional itcms arc providcd lo customcr I02 and a arc delivcred to customcr 102 until the ncxt subscription surcharge is applied to customer 102 for the additional two period, Fpr example, the request for additional items may be items. 35 reeived at the end of a subscription poriod and instead of In oiher siluaLIons, customer 102 may nol ust: all of its renting ihe additiunal items immedialely, they are ins lead allotted turns during a specified 'period. Accordiug to one delivered during the subsequent subscription period. Control embodinient, customers lose unused turns during a subscripthen rehirns to step. 406 where one or more additional items tion period. For example, if customer 102 has a "Max Turns" are rented to customer or the process is complete in step 416. limit of four item exchanges per month and only makes two 40 The approach for renting items described herein is now item exchanges in a particular month, then the two unused described in the context of renting to customers audio/video exchanges are lost and canuot be used. At tiie' start of the (NV) items, such as movies, games and music, stored on next month, customer 102 would be entitled to I�ii new varous media. FIG. 5 is a diagram 500 that depicts a set of itcm cxchangcs. customers 502 that dcsire to A!' items from a provider 504. According to �nother'e,iibodiment, customers are allowed 45 Customers 502 communicate with provider 504 over links to carry over unused hims to subsequent subscription peri506, the global packet-switched network referred to as the ods. For example, if customer 102 has a "Max Turns" limit "Internet," and a link 510. of four item exchanges per month and OlDy makes two item Links 506 and 5IO may be any medilUll for transferring exchanges in a partioular month,. then the two miised next month, customer 102 would be entitled to six new item data between customers 502 and the Internet 508 and the invention is not limited to any particular medi�.in. In the present example, lins 506 and 510 may be connections exchanges are lost and callUot be used. At the start of the 50 between the Internet 508 and provider 504, respectively, and exchanges, two from the prior montli and four for the current month. The "Max Turns" approach I�r renting items to customers provided by one or more Internet Service Providers (ISPs) and customers 502 are confgured with generic Internet web is now dcscribcd with rcfcrencc to a flow diagram 400 of 55 browscrs. Lins 506 and 510 may be secure or unsecured FIG. 4. f\tter starting in step 402, in step 404, customer 102 depending upon the requirements of a particular application. and provider 104 agree upon the teniis of the "Max Turns" In accordance with an embodiment, customers 502 enter agreement. Specifically, customer 102 and provider 104 inio a rental agreemenl wiil provider 504 La renl audio/video agree at least upon the maximum number of tiirs that are (AlV) items 512 from provider 504 according to the "Max allowed in a specified period of time. 60 Out" and/or "Max Turns" approaches described herein. The In step 406, in response to one or more item delivery invention is not limted to any particular approach for criteria being satisfied, provider 104 provides one or more entering into the rental agreement. For example, customers items to customer 102 over delivery channel 108. Any type 502 and provider 504 may enter into a rental agreement by of item delivery criteria may be used with the "Max Turns" mail, telephone or over the Internet. by customers 502 approach and the invention is not limited to any particular 65 logging into a web site associated with provider 504. delivery criteria. For example, the initial one or more items Customers 502 create and provide item selection criteria may be delivered to customer 1 02 in response to a subscripto provider 504 over links 506 and 51 0 and the Internet 508. NFLlX0000924 Case 3:06-cv-02361-WHA Document 101-3 Filed 12/06/2006 Page 16 of 20 us 7,024,381 B1 7 The invention is not limited to aiiy paricular approach tor specifying and providing item selection criteria to provider 504. For example, according to one embodiment, Cl1Sl0mer~ 8 four movies and rent four new movies per month. TInis, the paricular customer 502 can completely "replace" his per~onal inventory once per month. If The particiiiar cii~tomer 502 provide item seleciion criteria to provider 504 in one or more data fies. According lo anoiher embodimenl, custom- 502 agreed to a maxinnim ol up to eight turm per month, then the particular cuslomer 502 would be able lo completely replace his personal inventory twice per month. ers 502 log onto a web site of provider 504 and use a graphical user interfaced (GUll to specifY attributes of the movies and music that customers desire to rent from provider 504. Provider 504 is illustrated as a single entity for purposes of explanation only. Provider 504 may be centralized or distributed depending upon the requirements of a particular The item selection attributes may include any attributes lO application. For example, provider 504 may be a central that describe, at least in par, movies, games or music that warehouse from which all NV items 512 are provided. customers 502 desire to rent. For movies, example attributes Alteratively, provider 504 may be �1npleinented by a net- include, without limitation, title, caleg�ry, director name, actor name and year of release. For games, example .work of-distributed warehouses. FIG. 6 is a llow diagram thal illustrales aii approach for attributes include, without limtation, title and category. For 15 music, example attributes include, without limitation, title, category, artist/group name and year of release. Customers .' . 502 may identify specific movies or music by the item renting NV items 512, e.g., movies, to customers over a coniiunucations network such as the Inteniet using both "Max Out" and "Max TuTIs" according to an embodiment. selection criteria, or may provide varous attributes and allow provider 504 to automatically select paricular movies 20 and music thal satisl'y the attrbutes specified. For example, Referrg also to FIG. 5; after staring in step 602, in step 604, a customer 502 enters into a rental agreement with provider. 504. In the present example, customer 502 uses a generic web browser to access an liternet web site associcustomers 502 may specify item selection criteria that ated with provider 504 and enter into a rental agreemcnt that include horror movie~ released in 1999 and let provider 504 specifies that ciistomer 502 may maintain a personal invenautomatically select horror movies that were release in 1999. tory of lour movies ("Max Out" of four) and receive up to As another example, cuslomers 502 may i;pecify ilem selec- 25 rour fi:w movies per monll ("Max Turns" or four). Furihertion criteria that include adventure movies starng Harrison Ford. Customers 502 may also specit'an order or priority for the specified item selection criteria. For example, customcrs 502 may specifY specific movie titles and the order in which they want to receive them. As another example, 30 more, the rental agreement specifies that new movies will be delivered upon return of a rented movie from customer 502, i.e., the delivery criteria is a reniTI of a movie. by the customer. customers 502 may specify that they want to receive a particular munber of movies of different tyes. In step 606, ciistomer 502 creates and provides movie selection criteria to provider 504 that indicates movies that Oncc customcrs 502 and provider 504 have entered into a rental agreement and customers 502 have provided item selection criteria to provider 504, then AN items 512 are 35 rented lu cuslomers 502 over deli very channels 514 in accordance with the tenns of the rental agreement. Specifi- cusTomer 502 desires. to rent. For example, the movie selection criteria may specify particular movie titles that Clistomer 502 desires to rent. The movie selection criteria may also specify an order or priority in which customer 502 wishes lo renl the .movies. Inslead of ideniil'ying particular movie tilles, the movie selection criteria may specifY movie cally, according to the "Max Out" approach described herein, an initial set of iVV items 512, such as movies, the return of one or more A/V items 512 to provider, a 45 movies to customer 502 that best satisi) the preterences request from customers 502, the arrival of a parcular date, e.g., a specific day of the month, or the expiration of a specified period of tinie, e.g., fifteen days. no additional preferences for ciistomer 502, e.g., types of movies, diec. tors, actors, or any other movie prelerences or attrbutes. hi games and music, are delivered to .customers 502 over 40 tlus situation, provider 504 automatically selects paricular delivery channels 514 according to the tenns of the rental titles that satisfy the movie selection criteria. For example, agreement. Subsequent A/V items 512 are delivered whenthe movie selection criteria may specify a preference for ever the specified item delivery criteria are satisfied. For action movies starg a particular actor, with a preference example, additional A/V items 512 may be delivered upon for "new release" movies. Provider 504 attempt to providc indicated by the movie selection criteria. In step 608, one or more initial movies 512 are delivered to ciistomer 502 over delivery channe15I4. 'lIie one or more In accordance with the'''Max Out" approach described iiutial movies 512 may be delivered to customer 502 via herein, once the maximlUll number of A/V items 512 have 50 mail, courier, delivery agent or any other suitable means been rented to a partcular customer 502, then negotiated between. customer 502 and provider and the invention is not limited to any paricular type of delivery AI items 512 are rented until one or more rented A/V items '512 are returned to. provider 504, or lUiless a surcharge is applied to the paricular customer 502. Alternatively, the provider 504 may he modified to increase the m'axinium muuber of mechaiusm. For purposes of explanation only, is presumed in the present example that movies are mailed between rental agreement between the particular customer 502 and 55 customcr 502 and providcr 504. The one or more initial movies 512 establi~h the personal AN items 512 that may be rented simultaneously Lu ihe particular customer 502. movie inventory of customer 502. Customer 502 may choose lo receive any number or movies up lo the "Max Out" limit of four movies. Typically, customer 502 will The rental agreement between customers 502 and provider 504 may also specify a maximum number ofturns in 60 combination with the "Max Turns" approach. li ths siniation, a maximum munber of turns restricts how quickly customers 502 may refresh their AI item 512 inventories. For example, suppose that a particular customer 502 agrees with provider 504 to rent up to four movies with a maximum 65 offour tirrns per month. Under this agreement, the paricular customer 502 may maintain a personal inventory of up to choose to iiutially receive four movies in the initial deliver. Once the one or more intial movies 512 have been mailed to customer 502, then in step 610, a determation is made whether any movies 512 have been retued by customer 502 to trigger another movie delivery. In the present example, the delivery of additional movies is triggered by the reeipt, e.g., via mail, of one or more movies from cusiomer 502. 1n the ~iniation where customer 502 elect~ to NFLlX0000925 Case 3:06-cv-02361-WHA Document 101-3 Filed 12/06/2006 Page 17 of 20 US 7,024,381 B1 9 not receive the maximum number of movies 512 in the initial delivery, then the delivery of additional movies 512 may also be trggered by a request from customer 502 for 10 while ensuring that customers 502 are able to rent the highest priority items that they requested. According to another embodiment, as yet lUlknown items additional movies 512. 1'01' example, customer 502 may notify provider 504 via telephone, email or by accessing the web site astociated witb provider 504. the exaci name is unknown to the particular ciislomer. As If, in step 610, a determination is made that one or more another example, the particular customer 502 may request to movies 512 were received from customer 502, then in step rent the next albiiii of a paricular group that is currently in 612, a �etemiination is made whether the maximum number to process and does not yet have a title. of turns ("Max Turns") limit has been reached for the current cycle. In the present example, a determination is made 7. Implementation Mechanisms whether four or more movies have been mailed in the current The approach described herein for renting items to cusmonth. If not, then control retl1TIS to step 608, where one or delivery channel may also be rcntcd by specifying attributes of the unknown items. For example, the particular customer 502 may request to rent the next new movie of a paricular director, for which tomers is applicable to any type of rental applicatiun and more additional movies 512 are mailed to customer 502 via 514 up to the "Max Oiit" limit of fo�r. IS It~ iii step 612, a determnation is made that the "Max Turns" limit has heen met for the current cycle, i.e., in the present example, four movies 512 have been mailed to. custumt:r 502 in the cummt munUI, then in step 614 a 20 detemiination is made whether to overrde the current "Max Turns" limit. If so, then in step 616, a surcharge is applied lu customer 502 and cuntrol retur to step 608 where the additional (without lintation) is particularly well suited for Intemet- . based rental applications for renting movies and music to customers. The invention iiay be implemented in hardware circuitry, in computer softare, or a combination of hardware circuitry and computer softare and is not linited to a particular hardware or software implementatiun. FIG. 7 is a block diagrm that ilustrates a computer system 700 upon which an embodiment of the invention may be implemented. Computer system 700 includes a bus 702 o.r otliercommunieatjon mechanism for communicating ii1I�rmation, and a processor 704 coupled with bus 702 tor processing information. Compiiter system 700 also includes movies 514 are mailed to customer 502. If not, then in step 618, a detemiination is made whether to 25 contim\e the subscription service. If so, then no additional movies are mailed to customer 502 during the current cycle, a main memory 706,. such as a radom access memory e.g., the current month and thc control returns to step 610. (RAM) or other dynamic storage device, coupled to bus 702 lt~ in step 618, a determination is made that service.is not to for storig information and instnictions to be executed by be continued, then the process is complete in step 620. 30 processor 704. Main memory 706 also may be used for storing tempora variables or other intermediate infoiinaln some situations, customer 502 may desire to increase tion during execution of instnictions to be exccuted by or decrease the size of customer's 502 personal movie processor 704. Computer system 700 n.rther includes a read inventory by changing the current "Max Out" 1int. Accord" only memory (ROM) 708 or other static storage device ing to one embodiment, customer 502 notifies provider 504, e.g., by telephone, mail, email or by accessing the web site 35 coupled 10 bus 702 for storing static information and instnictions for processor 704. A storage device 710, such as a associated with provider 504, that customer 502 wishes to change the "Max Out" limit. The movie rental agreement magnetic disk or optical disk, is provided and coupled to bus 702 for storing infomiation and instnictions. bctwecn customcr 502 and providcr 504 is then modificd to reflect the change of the "Max Out" limit. In the situation Computer system 700 may be coupled via bus 702 to a where the "Max Out" limit is increased, then additional 40 display 712, such as a cathode ray tube (CRT), tor displaying movies 512 may be immediately mailed to customer 502. intormation to a computer user. An input device 714, including alphaillUlerie and other keys, is coupled to bus 702 for 6. Inventory Management conullUliicating information and command selections to TIie approach described herein for renting items to CLLSprocessor 704. Another type of user input device is cursor tamers provides superior inventory im.migement to prior 45 control 716, such as a mouse, a trckball, or cursor direction appruacht:s. Specifically, the use or item selection criteria provides tor effcient inventory management by allowing the keys for communicating direction in�rmation and com- mand selections to processor 704 and for controllng cursor movement on display 712. TIiis input device typically has Moreover, the greatest number of customers are provided two dcgrees of frccdom in two axes, a first axis (e.g., x) and with their most preferred items. For example, customers 50 a second axis (e.g., y), that allows the device to specify may specify priorities for the items indicated by the item positions in a plane. . selection criteria. Thus, if a paricular customer's fist choice The invention is related to the use of computer system 700 is not available, or already rented, then the item having the for renting items to customers. According to one embodinext highest priority can bc rented to the particular customcr. ment of the invention, the renting of items to �uston�ers is According to one embodimei~t, customers may indicate 55 provided by computer systcm 700 in rcsponse to processor items that are not yet available for rent. Then, the items are 704 exec.uting one or .more sequence of one or more delivere to customers when they become available. instnictions contained in main memory 706. Such inStniC- greatest nuiiber uf �lt:lllS tu be rente� at any given time. Fur example, referrng again to FIG. 5, suppuse Uiat a particular customer 502 desires to rent an as-yet-unreleased tiuns may be read into main memory 706 from another computer-readable medium, siich as storage device 710. movie entitled "ABC." The paricular customer 502 indi- 60 Execution of the sequences of instructions contained in main cates this movie to provider 504 by the item selection memory 706 causes processor 704 to perform the process criteria. Since the movie ABC is not yet available, it cannot steps described herein. One or more processors in a multibe delivered to the paricular customer 502. However, when processing arrangement may also be employed to. execute the movie ABC does become available. it can be shipped the sequences of instrctions contained in main memory immedialely to the particular customer 502, as well as other 65 706. In alternative embodiments, hard-wired circnitry may customers 502 who may have also requested the movie. Ths be used in place of or in combination with softar instmcallows provider 504 to maximi7.e tbe number of items rented tions to implement tbe invention. Thus, embodiments of the NFLlX0000926 Case 3:06-cv-02361-WHA Document 101-3 Filed 12/06/2006 Page 18 of 20 US 7,024,381 B1 11 invention ar not limited to any specific combination of 12 which carry the digital data to and from computer system 700, are exemplar forms of carrer waves transporting the infi)rniation. hardware circuitry and software. TIie term "computer-readable medium" as used herein refers 10 any medium ihal participates in providing inslrlctions to processor 704 I�r execution. Such a medium may take many forms, including but not limited to, non-volatile media, volatile media, and tramission media. Non-volatile media includes, for example, optical or magnetic disks, such as stornge device 710. Volatile media includes dynamic Computer system 700 can send messages and receive dala, including program code. ihrough the nelwurk(s), nel- work link 720 and cOliiuunication intert�ce 718. ln the Internet example, a server 730 might transmit a requested code for an application progrm though Internet 728, ISP 726, local network 722 and communication interface 718. In memory, such as main memory 706. Transmission media 10 accordance with the invention, one such downloaded application provides for the renting of items, to customers as includes coaxial cables, copper wire and fiber optics, includdescribed herein. ing thc wircs that comprisc bus 702. Transmission mcdia can also take the fonn of acoustic or light waves, such as those generated during radio wave and infrared data co=unicaiions. The received code may be executed by processor 704 as it is received, andlor slored in storage device 710, or oiher 15 non-volatile storage I�r later execution. In ths maller, Common forms of computer-readable media include, for example, a floppy disk, a flexible disk, hard disk, magnctic tape, ot any other magnetic medium, a CD-ROM, any other optical medium, punch cards, paper tape, any other physical EPROM, a FLASH-EPROM, any other memory chip or caridgc, a carrcr wavc as dcscribcd hcrcinaftcr, or any computer system 700 may obtaiu application code in the fonn of a carrer wave. The novel approach described herein for renting items to . customers provides several advantages over prior of what items to rent may be separated from the decision of whcn to rcnt thc itcms. Customcrs may spccify what itcms to rent iising the item selection criteria and receive the items at a future point in time, without having to go to the provider medium with patterns of holes, a RAM, a PROM, and 20 approaches for renting items to customers. I'irst, the decision other medium from which a compiier can read, Various forms of cumpuler readable media may b�: 25' lo pick up ihe ilems: The seleciion criteria may be user involved in carring one or more sequences of one or more specific and may indicate a desired fulfillment sequence. instnictions to processor 704 for execution. For example, the Furermore, customers are not constrained by conventional instnictions may initially be carried on a magnetic disk of a due dates and instead Inay establish continuous, serialized remote computer. The remote computer can load the instnicrental streams of items. The approach also allows more tions into its dynamc memory and send the instnictions over 30 e�lcient inventory management. a telephone line using a modem. A modem local to computer The "Max Out" approach for inventory management system 700 can receive the data on the telephone line and allows users to maintain their own inventory of items that usc an infrarcd transmittcr to convcrt thc data to an infrarcd signaL. An infared detector coupled to biiS 702 can receive arc pcriodically rcplaced by othcr items according to o'Pcci- the data carried in the infrared signal and place the data on bus 702. Bus 702 cares the data to main memory 706, from fied eveii criteria. The event' criteria that trigger sending which processor 704 retrieves and executes the instnictions. The instnictions received by main memory 706 may optionally be stored on storage device 710 either before or after execution by processor 704. 35 another'itcm to a customer arc very t1exiblc and may be lailored tu ih" Ieljuirenienls uf � particular application. Fur example, as described herein, the event criteria may include a return of any of the items cU1Tently in use by the customer or merely customer notification. TIiis is very convenient in 40 the context of movie rentals since a the return of a movie to the provider automatically triggers thc sending of another movie to the customer. TIie "Max Turns" approach for inventory management. when used alone or in combination network link 720 that is coniiected to a local network 722. with "Max Oiit," providcs cvcn grcatcr flcxibilty for cusComputer syst�m 700 also includes a comnninication interlace 718 cuupled to bus 702. Communicatiun interlace 718 provides a two-way data communication coupling to a Integmled services digitaLneiwork (ISDN) card ur a mudem selected individually for particular customers depending to provide a data communication cOlUiection to a correupon their particular needs. spoiiding Iype of ielephune line. As anuller example, comThe "Max Out" and "Max Turns" approaches provide munication interface 718 may be a local area network great flexibility in establishing subscription models to sat(LAN) card to provide a data comimu�cation connection to 50 isfY the nees ofa particular application. Specifically, the a compatible LAN. Wireless links may also be implemented. size and replacement frequency of customer inventories can In any such implementation, communication interface 718 be tailored to each customer with individualized subscripsends and receives electrical, electromagnetic or optical tion plans. For example, co=uncaiion interface 718 may be an 45 tomers and providers. The Ilax number of turns can be signals that carry digital data strcams rcprcscnting various Network link 720 typically provides dala commnnication In the foregoing specification, the invention has been' types of information. 55 dcscribcd as applicablc to an implcmcntation anticipating Internet based ordering and mail or other long-distance through one or more networks to other data devices. For example, nelwork lin 720 may pruvide a cunneciiun delivery of the items, where the special advantages of the meihod are very altraciive. However the same inveniion may thruugh local network 722 to a host computer 724 or to data be applied in a more conventional video, games, or music 60 rental-store setting, where subscription customers may be 726. ISP 726 in turn provides data co=unication services allowed rentals of a specified number of movies, games, or equipmeut operated by an Intemet Serice Prvider (ISP) through the world wide packet data.co=unication network music selections at any tine, and/or in one subscription now cOllonly referred to as the "Internet" 7Jl. Local ,network 722 and Internet 728 both use electricaL. electromagnetic or optical signals that carr digital data streams. 65 The signals through the various networks and the signals on network link 720 and through communication interface 718, period, without rental return due dates, in exchange for a periodic rental subscription fee. In the foregoing specification, the invention has been described with reference to specific embodiments thereof. However, various modifications and changes may be made NFLlX0000927 Case 3:06-cv-02361-WHA Document 101-3 Filed 12/06/2006 Page 19 of 20 US 7,024,381 B1 13 thereto without deparing from the broader spirit and scope of the invention. TIie specification and drawings are, accordingly, to he regarded in an illiistrative sense mther than a restrictive sense. 14 establishing, in electronic digital torm, from electroiuc digital infonnation received over die Internet, a movie rental queue associated with a customer comprising an ordered list indicating two or more movies lor renling to the customer; causing to be delivered to the customer up to a specified TIie inventiun claimed is: I. A CCHiiputer-implemented method tor renting movies to customers, the method comp�sing: providing electronic digital information that causes one or more attributes of movies to be displayed; establishing, in electronic digital form, from electroiuc 10 digital infomiation received over the Intemet, a movie rental queue associated with a customer comprising an ordered list indicating"two or more movies for renting to ihe ciislomer; number of movies based upon the order of the list, wherein the customer is not required to return the movies withiu a speified time associated with delivery; in response to one or more delivery criteria being satis- causing to be delivered to the customer up to a specified t5 nlUiber of movies based upon the order of the list; in response to one or more delivery criteria being satis- ficd, selccting anothcr movic based upon the ordcr of the list and causing the selected movie to be delivered to the customer; and in response to other electronic digital infomiation reecivcd from the customcr over the Intemct, clcctronical1y updating the movie rental queue. 15. A computer-implemented method as recited in claim 14, wherein updating the movie rental queue comprises fied, selecting another movie based upon the order of the list and causing the selected movie to be delivered to the customer; and 20 changing the order of the two or more movies for renting to in response to oUier electronic digital information the customer. rc�cived fromthc customcr ovcr thc Internet, elcctroni16. A computer-implemented method as recited in elaim cally updating the movie rental queue. 2. A cumputer-implemented meihod as recited in claim 1, 14, wherein updating the movie rental queue comprises wherein updaiing ihe movie rental queiie comprisb charg~ 25 indicating an additional movie in the ordered list. I7. A computer-implemented method as recited in claim ing the order of the two or more movies for renting to the customer. 3. A computer-implemented method as recited in claim 1, whercin updating the movie rental qucue comprises indicat14, wherein updating the movie rental queue comprises removing an indication of one or more of Uie movies from the ordered list. 30 ing an additional movie in the ordered list. 4. A computer-implemented method as recited in claim 1, 18. A

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