VideoLabs Inc. and VL Collective IP LLC (together VL) have sued Netflix Inc. over its purported refusal to pay to license VL’s digital video technology patents. Thursday’s complaint, filed in the Northern District of California, asserts that Netflix wilfully infringes three patents, evidenced by its alleged refusal to negotiate with VL over licensing rights.
The complaint explains that “VL was founded in 2018 as part of an industry-sponsored and -funded effort to reduce the cost and risk of technological gridlock associated with diverse patent ownership.” In 2019, Palo Alto, Calif.-based VL reportedly launched a platform to solve this problem within the digital video market.
For low-cost membership or licensing fees, VL allegedly “provides access to its patent portfolio and a commitment to seek out the most important patents in the video industry and clear them.” The complaint states that many high-profile companies offering digital video content have signed on, but Netflix, operator of the world’s most popular streaming service with over 213 million subscribers, is not one of them.
The lawsuit describes failed negotiations with Netflix, ending with a “Hobson’s choice,” whereby VL could either agree not to enforce its patent rights against Netflix for an indefinite period of time or file suit.
The asserted patents all relate to digital video content. For example, one describes “breakthrough techniques for encoding and decoding audiovisual content so that it can be transmitted and stored with fewer resources.” It dramatically improves upon existing methods, and its core technology has been used industry-wide for years as the “gold standard” for coding video, the complaint notes.
The 70-page lawsuit states three claims for patent infringement and argues that Netflix has either directly or indirectly infringed the asserted intellectual property. The filing seeks damages for wilful infringement, injunctive relief barring further infringement and various damages.
VideoLabs is represented by Farnan LLP and Reichman Jorgensen Lehman & Feldberg LLP.
