Rovi: Court Has Not Ruled On Netflix Suit

Stock Settles Down Day After Getting Hammered On ‘Speculative Report’
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A day after Rovi’s stock dipped almost 12% following a court hearing on its pending patent case with Netflix, the provider of interactive program guides and metadata services issued a statement Thursday stressing that no decision in the case is expected for a couple of months.

Rovi, whose stock was up 1.5% in late-day trading today, said the Northern District Court in Oakland held a hearing on the ongoing Netflix case and that a “speculative report” caused some to jump the gun on the case’s result.

“No decision was made and we remain confident in our arguments and look forward to the judge’s decision, which is expected sometime in the next couple months,” Rovi said. "We remain committed to continuing to enforce our IP against Netflix until the necessary licenses are in place. Only five patents are at issue in this case, and Rovi’s licensable IP portfolio includes more than 5,000 issued patents and pending applications. Rovi has licensed this extensive patent portfolio to other leading OTT providers and is confident that Netflix also requires a license under Rovi’s patents.”

Rovi and Netflix have continued the battle in the district court even though the U.S. International Trade Commission, in November 2013, affirmed an earlier ruling that Netflix’s streaming software did not infringe on Rovi patents tied to IPG technology. Rovi argued that the ITC matter was confined solely to the limited functionality of the Netflix app embedded on certain device models made offshore, rather than the full Netflix offering that is added when they are imported and the OTT service is activated.

Rovi said no matter the outcome of its case with Netflix, it “remains well-positioned to favorably renew our big-four license agreements,” a reference to Comcast, Time Warner Cable, DirecTV and Dish Network. Rovi further claimed that there is “substantial overlap” of its patents as it looks to map its portfolio of intellectual property against their deployments in areas covering search and recommendations, DVR, VOD and second screen applications.

Amid all of this, Rovi is also in a proxy fight with Engaged Capital, which holds a small piece of Rovi and just filed preliminary proxy materials for the election of three individuals to the Rovi board at the company’s May 13 annual meeting.  Engaged Capital has suggested four candidates, but will reduce that to three when it files its final proxy materials, an official said.