Online video services from the likes of Netflix and Apple may represent the future of the TV business because of their popularity with consumers intent on watching video on a variety of screens beyond the large console in the living room, but today OTT video is proving fertile ground for another kind of enterprise: IP litigation.
Netflix has been served with another patent suit by OpenTV and sister company Nagra in the U.S. District Court for the Northern District of California, this one covering four patents related to digital TV services.
The news comes less than a week after the same two plaintiffs, both owned by Swiss company Kudelski, also filed a patent case against Apple. That latter case concerns five different patents. As with the Netflix suits, they are in connection with Apple’s digital media content services, covering both video and music as well as other services.
The most recent Netflix suit, and the Apple suit from last week, are both embedded below.
This latest case appears to be at least the third patent case filed by Kudelski against Netflix, with the first dating back to December 2012, and another from October 2013 in the Netherlands (where Netflix launched services last year). Given Netflix has operations in other countries, this could point to Netflix seeing legal heat from Kudelski elsewhere, too.
A spokesperson for the Swiss company has declined to comment. It’s not clear how much in damages it is seeking, but Kudelski itself is valued at around $770 million.
The patents in question in this latest case are as follows:
- 7,305,691: “System and Method for Providing Target Programming Outside of the Home”
- 7,644,429: “Broadcast and Reception, and Conditional Access System Therefor”
- 8,332,268: “Method and System for Scheduling Online Content Delivery”
- 8,621,541: “Enhanced Video Programming System and Method Utilizing User- Profile Information”
As with many patent suits, it looks like the case against Netflix, at least in part, is being used as a stick to get Netflix closer to cutting a licensing deal with Kudelski.
“On December 15, 2011, OpenTV wrote to Reed Hastings, CEO of Netflix, and notified him of the existence of The Kudelski Group patent portfolio generally. OpenTV explained that its technology may be relevant to several aspects of Netflix’s services, and invited Mr. Hastings to contact OpenTV to discuss the matter further,” the suit notes. “Hastings did not contact OpenTV to discuss the matter further.” After some discussions around licensing, the suit notes, no conclusions were ever reached.
Much of Kudelski’s activity appears to be directed by Joe Chernesky, SVP, Intellectual Property, at Kudelski, who Reuters notes company hired away from well-known patent holder/litigator/licensee Intellectual Ventures in May 2012.
But while many patent cases are described in the context of “patent trolls” who serve no purpose beyond collecting licensing fees for IP that they own, this appears to be more of a directly competitive case for OpenTV. The company is considered an early mover in the world of digital television and collectively Kudelski holds over 3,000 related patents, with 800 of them at OpenTV itself (which was spun out of tech originally at Thomson Mulitmedia and Sun Microsystems).
The company says it has some 120 pay-TV customers worldwide taking a combination of content protection, digital TV and advertising solutions.