Netflix has launched a counteroffensive in its long-running patent battle with Broadcom, submitting a lawsuit over virtualisation applied sciences towards the corporate’s VMware subsidiary. Filed [PDF] on December 23, 2024, within the Northern District of California, the streaming firm’s criticism asserts 5 patents (initially developed by HP), marking an aggressive shift in Netflix’s usually defensive IP technique.
Netflix has endured almost 5 years of patent litigation by Broadcom, starting in March 2020 through the early phases of the COVID-19 pandemic. Broadcom’s preliminary lawsuit claimed that Netflix’s streaming companies had irreparably broken its semiconductor enterprise for set-top packing containers, a market phase that continues to say no as streaming companies achieve prominence.
Strategic patent arsenal
The Netflix lawsuit centres on 5 virtualisation patents that made their method by means of the secondary market earlier than touchdown in Netflix’s portfolio. The patents, which beforehand handed by means of Regional Assets Ltd., concern core virtualisation applied sciences allegedly utilized by VMware:
- US Patent No. 7,779,424 and its household patent 7,797,707, each addressing programs for attributing CPU utilization in digital machine environments,
- US Patent No. 8,799,891, overlaying CPU utilization attribution for digital machine screens,
- US Patent No. 8,185,893, detailing digital machine startup and cargo balancing,
- US Patent No. 8,863,122 describing distant management of a number of digital machines by means of a graphical interface.
The criticism alleges willful infringement, suggesting that Broadcom and VMware demonstrated not less than deliberate blindness of their use of the patented applied sciences. If confirmed, the allegation might result in enhanced damages.
A yr of authorized setbacks for Broadcom
The countersuit caps off a difficult yr for Broadcom’s patent enforcement efforts. A pivotal second got here in July 2024 when the German Federal Patent Courtroom (Bundespatentgericht) invalidated Broadcom’s streaming patent EP2575366. The ruling successfully nullified a €7.05 million contempt high-quality beforehand imposed on Netflix by the Munich I Regional Courtroom.
One other setback rapidly adopted within the US. The Courtroom of Appeals for the Federal Circuit revived two Netflix challenges to a Broadcom patent that the Patent Trial & Attraction Board had beforehand upheld, additional weakening Broadcom’s place.
Broadcom’s authorized difficulties weren’t restricted to its dispute with Netflix. In August 2024, the corporate suffered two consecutive defeats towards Tesla within the Unified Patent Courtroom (UPC) inside 4 days. The Hamburg and Munich Native Divisions dominated towards Broadcom, including to its enforcement failures.
Jurisdiction and authorized technique
Whereas the Northern District of California isn’t recognized for fast proceedings or displaying specific favouritism towards patent holders, Netflix’s alternative of venue was primarily predetermined by the events’ substantial enterprise presence within the district. Broadcom maintains places of work in Palo Alto, Petaluma, and San Jose, whereas Netflix is headquartered in Los Gatos.
Led by Baker Botts’s famend patent litigator Rachael Lamkin, the lawsuit represents an uncommon transfer for Netflix, which has traditionally prevented asserting patents. Authorized analysts counsel the method could speed up settlement negotiations relatively than point out a basic shift in Netflix’s mental property technique.
Worldwide implications and prospects
Regardless of potential curiosity in increasing its authorized stress by means of the Unified Patent Courtroom (UPC) or German nationwide courts, Netflix’s present patent portfolio within the dispute consists solely of US belongings. This limitation might limit worldwide litigation choices.
This newest improvement follows Broadcom’s earlier success towards Volkswagen/Audi. Trade sources counsel a settlement of roughly one billion Euros was reached over a patent that was later invalidated following a problem by Nvidia, performing in help of its buyer Nintendo. This historical past of high-stakes patent litigation has made Broadcom’s enforcement campaigns a closely-watched phenomenon within the tech trade.
The countersuit represents extra than simply one other chapter within the ongoing Netflix-Broadcom dispute; it highlights the evolving dynamics of patent litigation within the tech sector. As conventional {hardware} corporations like Broadcom face market pressures from streaming companies and software program corporations like Netflix construct defensive patent portfolios, the trade may even see extra circumstances the place patents initially developed for one know-how sector are deployed in fields unenvisaged on the time of submitting.
The success of Netflix’s technique will probably rely on the technical deserves of the virtualisation patents and the way its offensive transfer impacts the broader dynamics of the continuing multi-jurisdictional dispute between the tech giants. Because the case progresses, it might set necessary precedents for the way streaming corporations and rising sector gamers defend towards and counter patent assertions from conventional know-how suppliers.
(Photograph by Venti Views )
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