Netflix has launched a counteroffensive in its long-running patent battle with Broadcom, submitting a virtualization applied sciences lawsuit in opposition to the corporate’s VMware subsidiary. Archived (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 sometimes defensive mental property technique.
Netflix has endured almost 5 years of patent litigation by Broadcom, which started in March 2020 in the course of the early phases of the COVID-19 pandemic. Broadcom’s preliminary lawsuit claimed that Netflix’s streaming companies had irreparably broken its set-top field semiconductor enterprise, a market phase that continues to say no as streaming companies acquire prominence.
Strategic patent arsenal
Netflix’s lawsuit facilities on 5 virtualization patents that made their means into the secondary market earlier than touchdown in Netflix’s portfolio. The patents, which have been beforehand held by Regional Assets Ltd., concern core virtualization applied sciences allegedly utilized by VMware:
- US patent quantity 7,779,424 and its household patent 7,797,707, each directed at techniques for attributing CPU utilization in digital machine environments,
- US Patent No. 8,799,891, protecting CPU utilization attribution for digital machine screens,
- US Patent No. 8,185,893, which particulars digital machine startup and cargo balancing.
- US Patent No. 8,863,122 describes distant management of a number of digital machines by way of a graphical interface.
The criticism alleges willful infringement, suggesting that Broadcom and VMware demonstrated no less than willful blindness of their use of the patented applied sciences. If confirmed, the allegation may result in additional damages.
A 12 months of authorized setbacks for Broadcom
The countersuit caps a difficult 12 months for Broadcom’s patent enforcement efforts. A pivotal second got here in July 2024, when the German Federal Patent Court docket (Bundespatentgericht) invalidated Broadcom’s streaming patent EP2575366. The ruling successfully overturned a €7.05 million contempt tremendous beforehand imposed on Netflix by the Munich Regional Court docket I.
One other setback shortly occurred in america. The Court docket of Appeals for the Federal Circuit revived two Netflix challenges to a Broadcom patent that the Patent Trial and 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 in opposition to Tesla within the Unified Patent Court docket (UPC) in 4 days. The native divisions in Hamburg and Munich dominated in opposition to Broadcom, including to its failures in regulation enforcement.
Jurisdiction and authorized technique
Whereas the Northern District of California is just not identified for its speedy proceedings or for displaying explicit favoritism towards patent holders, Netflix’s selection of venue was primarily predetermined by the events’ vital business presence within the district. Broadcom has places of work in Palo Alto, Petaluma and San Jose, whereas Netflix is headquartered in Los Gatos.
Led by famend Baker Botts patent litigator Rachael Lamkin, the lawsuit represents an uncommon transfer for Netflix, which has traditionally averted implementing patents. Authorized analysts counsel the method may velocity up settlement negotiations relatively than sign a basic change in Netflix’s mental property technique.
Worldwide implications and views
Regardless of potential curiosity in increasing its authorized strain by way of the Unified Patent Court docket (UPC) or German nationwide courts, Netflix’s present patent portfolio within the dispute consists completely of US belongings. This limitation may limit worldwide litigation choices.
This newest growth follows Broadcom’s earlier success in opposition to Volkswagen/Audi. Business sources counsel {that a} settlement of roughly one billion euros was reached on a patent that was later invalidated following a problem by Nvidia, performing in help of its shopper Nintendo. This historical past of high-stakes patent litigation has made Broadcom’s enforcement campaigns a carefully watched phenomenon within the tech trade.
The countersuit represents extra than simply one other chapter within the present dispute between Netflix and Broadcom; Highlights the altering dynamics of patent litigation within the expertise sector. As conventional {hardware} firms like Broadcom face market pressures from streaming companies and software program firms like Netflix construct defensive patent portfolios, the trade may even see extra circumstances the place patents initially developed for one sector technological are applied in fields not foreseen on the time of presentation.
The success of Netflix’s technique will seemingly rely upon the technical deserves of the virtualization patents and the way its offensive transfer impacts the broader dynamics of the present multi-jurisdictional dispute between the tech giants. Because the case progresses, it could set essential precedents for the way streaming firms and rising sector gamers defend themselves and counter patent claims by conventional expertise suppliers.
(Picture by Views of Venti )
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