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Rovi Remains Upbeat on Netflix Litigation

2 Apr, 2015 By: Erik Gruenwedel

Rovi Corp. remains confident it will prevail in an ongoing 3-year-old patent litigation against Netflix, a company executive said April 1 on a conference call.

Samir Armaly, EVP of intellectual property and licensing with Rovi, reiterated company comments made March 26, the day after a Northern District Court in Oakland, Calif., held a hearing on the Netflix case, which involves alleged infringement of five IP patent licenses held by Rovi.

Rovi in May 2012 filed complaints against Netflix and Roku, in addition to previously filed lawsuits against Mitsubishi Electric U.S., LG and Vizio, alleging infringement on up to seven patents regarding digital entertainment guides made popular by subscription video-on-demand services. Rovi in March reached settlements (i.e. license agreements) with the three consumer electronics manufacturers.

At the March 25 hearing Netflix filed for summary judgment — a common tactic in such litigation, according to Armaly. No decision on the judgment request was made by the court.

“The fact Netflix filed a summary judgment motion was not surprising. The court did not say anything in the hearing that gave us cause for concern,” Armaly said.

The executive said he expects the court to issue a ruling in about two months despite the lack of a precise timetable in the case. He downplayed a third-party investor advisory suggesting victory for Netflix.

“We don’t believe it is appropriate to speculate on the outcome,” Armaly said. “We remain committed continuing to enforce our intellectual property against Netflix and others until the necessary licenses are in place.”

Eric Wold, analyst with B. Riley & Co., said the conference call helped alleviate “increased uncertainty” surrounding the case. Wold added that ongoing negotiations involving IP license renewals with Comcast, Time Warner Cable, Dish Network and DirecTV have greater significance than the Netflix case.

“In addition, we are comforted by the fact that Rovi has already successfully entered into licenses covering its OTT and TV Everywhere patents with other service providers,” Wold wrote in an April 2 note.

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