ITC clears Netflix of Rovi patent infringement
The International Trade Commission (ITC) has cleared video-streaming site Netflix of infringing four patents owned by digital entertainment company Rovi.
In a preliminary order on June 7, administrative law judge David Shaw rejected Rovi’s infringement claims covering interactive television programme guides. One patent was found invalid.
The complaint was filed in April 2010, targeting Netflix and consumer electronics companies Roku, LG Electronics, Mitsubishi and Vizio. Roku, which is the only one of those not to strike a licensing deal with Rovi, was cleared by the ITC on June 7 of infringing one patent.
A final decision by the six-person ITC commission is expected in October this year, as long as Rovi requests a review of the initial determination within 14 days. A review assesses the decision for erroneous findings of material fact, erroneous legal conclusions or findings that contradict commission policy.
In a statement, Rovi, which has more than 5,000 patents and pending applications, said while it is disappointed by the ruling, it expects to “exercise our right to petition the full commission of the ITC for a review of this decision”.
Netflix did not respond to a request for comment.
The asserted patents mainly cover the ability to customise the display of TV programmes, such as recommending shows based on customer preferences. Several claims within one patent – “Interactive computer system for providing television schedule information” – were found invalid on the grounds of anticipation and obviousness.
There is pending litigation between Netflix and Rovi in the US, “in which certain issues required in the ITC are not part of Rovi’s case”, the Rovi statement said.
Most likely, said Bob Kenney, partner at Birch, Stewart, Kolasch & Birch LLP, these “certain issues” include the ITC requirement that an established domestic industry is being protected when ruling on infringement claims. This standard, which is not applied by federal district courts, usually requires evidence of a US headquarters or domestic manufacturing capabilities, which may be harmed by the accused importation.
Kenney added: “The ITC is a popular destination [for patent cases]. Quite often, if a party really wants to go after its competitors in an industry for claims of infringement, they go to the ITC and district court at the same time.”
Asked whether companies such as LG and Mitsubishi, which have already settled over some of the patents found non-infringed by Netflix, will be disappointed by the development, Kenney said: “That’s always the risk you take when settling: it’s a trade-off.”
