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Ashok Ramani Leads Netflix to Victory in Groundbreaking ITC Patent Case


A U.S. International Trade Commission judge on Friday ruled that Netflix Inc. didn't infringe on digital entertainment technology company Rovi Corp.'s patented parental control and program guide technology with its streaming software and also said multiple claims of one of Rovi's patents are invalid.

Administrative Law Judge David P. Shaw said Netflix's products, which Rovi accused the online video service of selling and importing in violation of U.S. trade law, didn't infringe on five Rovi patents. Moreover, though he decided that three of the patents are valid, he determined that one of them — for an interactive, computerized television schedule — was invalid.

Judge Shaw's ruling came two months after he sided with Rovi, denying summary determination motions made by Netflix. LG Corp. and Mitsubishi Corp. previously settled in the Rovi patent litigation, and Vizio Inc. settled a similar suit in February.

Santa Clara, Calif.-based Rovi filed its ITC complaint in May 2012. Rovi accused the companies of running afoul of Section 337 of the Tariff Act of 1930 through the importation and sale of LG, Mitsubishi and Vizio televisions; a Netflix app available on televisions; and a Vizio tablet.

Rovi asserted seven patents-in-suit covering interactive program guide systems and methods for providing personalized viewing recommendations and restricting access to television programs, and a program guide with video-on-demand browsing capabilities.

All seven of the patents-in-suit have been involved in separate suits involving Rovi, Netflix, Hulu LLC and other companies in various district courts and at the ITC.

Rovi owns all the patents through its subsidiaries and tried to reach licensing deals with a number of the respondents on previous occasions, according to the current suit. Rovi asked the court for a permanent limited exclusion order barring the allegedly infringing products from entering the U.S.

Netflix responded to some of the claims by saying that Rovi's licensing of its patents expanded the scope of the patents, thus causing competitive harm. Netflix went to trial Mar. 5 through Mar. 11 before Judge Shaw, according to Netflix.

Rovi said that Netflix providing software for free to its partners, who would likely incorporate the software into imported products, qualified as breaking trade laws, according to Netflix. The streaming service said the argument was novel and that the ITC had never adopted the reasoning before.

Netflix also accused Rovi of using its patents illegally by forcing licensees to accept contract terms to which they otherwise wouldn't agree.

In April, Judge Shaw said Netflix wasn't entitled to summary determination with respect to U.S. Patent Numbers 7,103,906; 8,112,776; 6,989,762; and 7,065,709. He held that genuine issues of material fact remained in dispute over whether the company had specific intent or willful blindness in allegedly violating the patents and whether the patents are valid.

However, he also denied a summary determination motion by Rovi, finding that while the company included 118 supposedly "undisputed" material facts in support of its motion, Netflix responded to the motion by disputing the veracity of dozens of those material facts.

But Judge Shaw said on Friday that he found no violation of Section 337. He also determined that though Netflix hadn't proven that any asserted claims in '709 and '762 were invalid, it had shown that eight claims in '776 were anticipated and obvious.

Rovi alleged that the companies infringed on '776, which was issued in February 2012, with TVs and tablets.

The judge's ruling amounts to a recommendation as to whether the ITC should ban the accused products from being imported, according to Netflix.

A spokesperson and an attorney for Rovi didn't immediately respond requests for comment Friday.

The patents-in-suit are U.S. Patent Numbers 6,701,523; 6,989,762; 7,065,709; 7,103,906; 7,225,455; 7,493,643; and 8,112,776.

Netflix is represented by Ashok Ramani of Keker & Van Nest LLP.

Rovi is represented by McDermott Will & Emery LLP.

The case is In the Matter of Certain Products Containing Interactive Program Guide and Parental Control Technology, case number 337-TA-845, in the U.S. International Trade Commission.