OpenTV Sues Netflix Over Patents

Interactive TV Vendor Claims Netflix Infringes Seven U.S. Patents

Interactive TV vendor OpenTV, a subsidiary of Switzerland-based Kudelski Group, filed a patent-infringement lawsuit Wednesday against Netflix, alleging that Netflix infringes seven U.S. patents owned by OpenTV that cover Internet video delivery.

Netflix declined to comment on the lawsuit.

OpenTV said it sued Netflix after a year of unsuccessfully trying to negotiate a business deal for its patent portfolio. The lawsuit seeks unspecified monetary damages -- including increased damages for willful infringement -- and a permanent injunction barring Netflix from using the patents.

OpenTV filed the lawsuit Dec. 19 in the U.S. District Court for the District of Delaware. The company is represented by Kirkland & Ellis LLP.

"Over the past 20 years, OpenTV and other sister companies within the Kudelski Group have developed many of the underlying technologies that [over-the-top] entrants, such as Netflix, are building on top of their networks to provide their services," the company said in its 23-page complaint. "Companies like Netflix have, in essence, stood on the shoulders of giants, largely focusing their R&D efforts on aggregating these previously patented technologies and using them to provide a rich customer experience."

According to OpenTV's lawsuit, the company first contacted Netflix CEO Reed Hastings via a Dec. 15, 2011, letter outlining OpenTV's patent holdings and informing him that they may apply to Netflix services -- and received no reply.

Eventually OpenTV representatives met with Netflix attorneys in Los Gatos, Calif., on Sept. 12, 2012, to discuss the patents and a potential licensing agreement, according to the complaint. However, after a brief follow-up call in early November, Netflix stopped responding to OpenTV's emails, according to OpenTV.

The seven patents OpenTV asserts Netflix infringes are U.S. Patent Nos.:

  • 6,018,768, "Enhanced Video Programming System and Method for Incorporating and Displaying Retrieved Integrated Internet Information Segments";
  • 6,233,736, "Media Online Service Access System and Method";
  • 7,055,169, "Supporting Common Interactive Television Functionality Through Presentation Engine Syntax";
  • 7,409,437, "Enhanced Video Programming System and Method for Incorporating and Displaying Retrieved Integrated Internet Information Segments";
  • 7,490,346, "Digital Television Application Protocol for Interactive Television";
  • 7,949,722, "Enhanced Video Programming System and Method Utilizing User-Profile Information"; and
  • 8,107,786, "Systems and Methods to Modify Playout or Playback."

Kudelski, whose holdings include conditional-access vendor Nagra, acquired the shares of San Francisco-based OpenTV it did not already own in 2010.

OpenTV says its software is integrated in more than 200 million set-tops and digital TVs worldwide, enabling video-on-demand, digital video recording, advanced advertising and enhanced TV applications for more than 80 customers. Customers have included Time Warner Cable, Comcast Spotlight, Dish Network, Charter Communications, NBCUniversal and Suddenlink Communications.