“Broadcom alleges that the patent claims at issue in this lawsuit cover crucial aspects of the Netflix streaming service, including systems for reliable content delivery with minimal interruptions, efficient server resource use and encoding content in formats compatible with client devices accessing the Netflix service.”
On March 13, American semiconductor developer Broadcom Corporation filed a lawsuit in the Central District of California alleging claims of patent infringement against streaming media producer and provider Netflix, Inc. At a moment in history when streaming services are going to be in higher demand than ever for some time due to social distancing mandates, the complaint marks the first chapter in what could become an interesting legal battle involving dynamic networking and video encoding patent claims. If Netflix is found to infringe, the streaming video giant could ultimately be facing a large verdict.
Broadcom is asserting claims from nine U.S. patents and accuses Netflix of directly infringing the patent claims through its Internet video streaming technology and indirectly infringing by inducing end users to infringe through their use of the Netflix software application:
- U.S. Patent No. 7266079, Dynamic Network Load Balancing Over Heterogeneous Link Speed. It claims a method for balancing transmission unit traffic over network links to improve the speed and efficiency of data transmission within a network.
- U.S. Patent No. 8259121, System and Method for Processing Data Using a Network. It claims an improved network for processing audio and visual (A/V) data among a plurality of nodes which are dynamically selected.
- U.S. Patent No. 8959245, Multiple Pathway Session Setup to Support QoS Services. It claims a communication method for delivering content through a network with the use of a network management server that determines multiple routes for content delivery based on a provision profile for a user device.
- U.S. Patent No. 8270992, Automatic Quality of Service Based Resource Allocation. It claims a method of providing a digital media service to a user in a portable system in a way that manages network resources to provide the service at a higher quality.
- U.S. Patent No. 6341375, Video on Demand DVD System. It claims an apparatus with a drive server, a control server and decoder devices which are used to distribute multiple compressed video streams in response to multiple user requests.
- U.S. Patent No. 8572138, Distributed Computing System Having Autonomic Deployment of Virtual Machine Disk Images. It claims a distributed computing system using a multi-level, hierarchical organization model capable of administering thousands of virtual computing resources and processing millions of simultaneous operations.
- U.S. Patent No. 6744387, Method and System for Symbol Binarization. It claims a method of binarization of data in an MPEG data stream that incorporates various strengths from several symbol binarization techniques used to encode and compress such data streams.
- U.S. Patent No. 6982663, same title as the ‘387 patent. It claims a method for generating an index value from a codeword for digital video recording utilizing a combination binarization technique for encoding and decoding digital video data.
- U.S. Patent No. 9332283, Signaling of Prediction Size Unit in Accordance With Video Coding. It claims a video processing device utilizing a binarization process to improve the encoding of video content for more efficient data transmissions.
Broadcom alleges that the patent claims at issue in this lawsuit cover crucial aspects of the Netflix streaming service, including systems for reliable content delivery with minimal interruptions, efficient server resource use and encoding content in formats compatible with client devices accessing the Netflix service. Broadcom further alleges that Netflix’s infringing use of the patented technologies has helped the company draw consumers away from the traditional cable television services market, resulting in a substantial reduction to Broadcom’s set top box business.
According to the complaint, Broadcom had informed Netflix of its infringement allegations by late September of last year for all the patents asserted except for the ‘283 patent. Although in-person licensing discussions, in which Netflix didn’t dispute Broadcom’s infringement contentions, took place by late October, Broadcom filed suit after those licensing talks broke down.
Broadcom’s infringement allegations focus on various aspects of Netflix’s networking infrastructure used to respond to user requests for streaming video content. Netflix allegedly infringes the ‘079 patent claims, for example, through operation of a content delivery network utilizing a global network of thousands of Open Connect Appliances (OCAs) that serve segments of requested media files to client devices in a way that “balanc[es] transmission unit traffic over network links” as claimed by the patent. Similarly, Netflix allegedly infringes the ‘121 patent claims through its content delivery network’s dynamic selection of OCA nodes to improve the quality of video playback in response to changing network conditions.
In its claims for relief, Broadcom notes that both the ‘387 patent and the ‘663 patent have been upheld as claiming patent-eligible subject matter under 35 U.S.C. § 101 by U.S. District Judge James Selna in a previous patent case filed by Broadcom against Sony Corporation in Central California. That case ended in June 2017 after a joint motion to dismiss was filed by both parties. In upholding the ‘387 patent, Judge Selna found that the patent’s claims attempt to improve the functioning of video compression and decompression techniques and “do not simply use general computers to perform abstract ideas.” Judge Selna also upheld the ‘663 patent’s validity after finding its claims to be directed to improving digital video decoding and not abstract ideas.
Three of the patents asserted by Broadcom have been challenged through a total of five petitions for inter partes review (IPR) proceedings at the Patent Trial and Appeal Board (PTAB). Both the ‘663 patent and the ‘387 patent have been challenged twice at the PTAB. In the cases for both of these patents, IPRs brought by Advanced Micro Devices were settled prior to the institution phase while the PTAB denied institution to the IPRs brought by Amazon. Amazon also challenged the ‘375 patent with an IPR petition but that petition was also denied at the institution phase. While Advanced Micro Devices has not been named as a defendant in any of the district court cases brought by Broadcom asserting either the ‘663 or ‘387 patents, all three patents challenged by Amazon were asserted against it by Broadcom in a Central California suit dismissed by Judge Selna in October 2017 after Broadcom and Amazon settled their litigation.