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ITC Confirms Groundbreaking Patent Victory on Behalf of Netflix


The U.S. International Trade Commission on Friday largely affirmed an ITC judge's ruling that Netflix Inc. didn't infringe digital entertainment technology company Rovi Corp.'s patented parental control and program guide technology with its streaming software.

In a brief notice, the ITC said it agreed with Administrative Law Judge David P. Shaw's June decision that Netflix's products, which Rovi had accused the online video service of selling and importing in violation of U.S. trade law, didn't infringe four Rovi patents.

The ITC also supported Judge Shaw's determination that, while three of the patents were valid, one of them — for an interactive, computerized television schedule — was invalid.

Santa Clara, Calif.-based Rovi filed its ITC complaint in May 2012, accusing multiple 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. The patents-in-suit cover interactive program guide systems and methods for providing personalized viewing recommendations and restricting access to television programs, as well as a program guide with video-on-demand browsing capabilities.

LG Corp. and Mitsubishi Corp. settled, while Vizio Inc. settled a similar suit in February.

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 has tried to reach licensing deals with a number of the respondents on previous occasions, according to the current suit. The company 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 arguing that Rovi's licensing of its patents expanded the scope of the patents, thus causing competitive harm.

Rovi also claimed Netflix was providing software for free to its partners, which would likely incorporate the software into imported products in violation of trade laws, but the streaming service said the argument was novel and that the ITC had never adopted that reasoning before.

Judge Shaw said in June that Netflix hadn't violated Section 337 with respect to U.S. Patent Numbers 7,103,906; 8,112,776; 6,989,762; and 7,065,709. He also determined that although Netflix hadn't proven that any asserted claims in the '709, '762 and ‘906 patents were invalid, it had shown that eight claims in the '776 patent were anticipated and obvious.

The ITC on Friday affirmed most of Judge Shaw's decision, with modified reasoning that has yet to be disclosed.

The commission also altered the judge's claims construction regarding the order of steps in asserted claims of the '709 patent. Due to that difference of opinion, the ITC reversed the finding that Rovi had proved that part of a domestic industry requirement had been met for the '709 patent.

The ITC said it would issue an opinion soon and that its investigation of the matter had ended.

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

Rovi is represented by McDermott Will & Emery LLP.

The ITC 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.

The federal case is Netflix Inc. v. Rovi Corp. et al., case number 4:11-cv-06591, in the U.S. District Court for the California Northern District, Oakland.