Amsterdam court denies DivX injunction against Netflix over video coding patent

In its dispute with video streaming giant Netflix, video coding developer DivX has stumbled in the Dutch arm of proceedings. The District Court of Amsterdam has ruled that it is not obligated to align its decision with a previous infringement decision made by Mannheim Regional Court (Case ID: C/13/724642).

In April 2022, the German court found Netflix infringed two of DivX’s patents through its High Efficiency Video Coding (HEVC) as part of its platform (case ID: 7 O 88/21). It ordered two injunctions against Netflix as a result.

In Dutch procedural law, this so-called alignment rule covers an interim relief judge being, in principle, obliged to align their judgment with a parallel Dutch decision on the merits and/or a European Patent Office decision. However, the Amsterdam court has ruled that this does not automatically apply to a foreign judgment. As a result, it rejected DivX’s claim of infringement in the Netherlands. The court also ruled that the company must pay €80,676 in court costs to Netflix.

DivX turns to the Netherlands

EP 34 67 666 protects streaming technology that allows computers to interpret data and display data visually as a video. It also covers two other aspects of online video streaming, such as the ability to skip forward and backwards within a video, as well as a way of changing the video quality to cope with changing bandwidth.

Following the two injunctions in Germany, DivX turned to the Dutch court for an injunction against members of the Netflix group. According to DivX, Netflix had changed the contracting party of its services in Germany from Netflix NL to Netflix Services GmbH; thus, DivX turned to the Dutch courts for an injunction against members of the Netflix group to prevent infringement in Germany. Here, DivX argued that Netflix acted unlawfully by inciting its daughter company, Netflix Services Germany, to infringe or to facilitate infringing acts. Since Netflix GmbH is an affiliate of Netflix NL, DivX requested the Dutch courts comply with the Mannheim court’s finding of infringement.

However, the deputy judge rejected the claim. Furthermore, the judgment also notes that DivX failed to address the Germany preliminary injunction proceedings during the Dutch hearing, which had taken place in Mannheim a week prior to the Dutch hearing. Netflix argued that the German judges had scrutinised the patent’s validity, with the company arguing the patent’s invalidity on the basis of lack of novelty, inventive step and added matter.

As such, according to the Dutch court, DivX did not meet its obligation to put forward evidence in the present preliminary relief proceedings and has not sufficiently refuted Netflix’s invalidity attack. The Dutch court stated it could not form an opinion on either the infringement or validity of EP 666. JUVE Patent is not yet aware whether DivX will appeal the decision.

At the EPO and in Germany

Netflix International also filed an EPO opposition to EP 666 in October 2021, with the Opposition Division issuing a preliminary opinion in June 2022. The main hearing will take place on 24 January 2023; if the division invalidates the patent, proceedings over EP 666 in the Netherlands and Germany could be over.

In German preliminary injunction proceedings, Netflix appealed the infringement judgment from the Regional Court Mannheim. Netflix also asked the Higher Regional Court Karlsruhe to increase the security bond to be paid by DivX in the event of the enforcement of the judgments. DivX, on the other hand, asked the court to reduce the security bond.

In a ruling handed down on 26 October 2022, the court rejected the requests of both parties (case ID 6 U 131/22). Due to its general importance, the court has published the ruling in German on its website. Previously, in August 2022, it had also denied Netflix’s request to stay the enforcement of the injunction. Now DivX is looking to enforce the injunction in Germany.

Bart van den Broek

Netflix casts the net wide

In the Netherlands, Hoyng ROKH Monegier is acting for DivX, in a team led by partner Bart van den Broek. The litigation team was supported by its in-house patent attorneys, namely Peter Lin. This is the first public representation by Hoyng ROKH Monegier for Netflix in the Netherlands, although the German team has represented the company in previous disputes.

Now, however, Quinn Emanuel Urquhart & Sullivan, led by managing partner Marcus Grosch, is representing Netflix in Germany. This is not the first time that the US firm has represented the streaming platform, with Quinn Emanuel working for Netflix in previous litigation against Broadcom.

A new instruction

Simmons & Simmons represents DivX in the Netherlands, with partner Oscar Lamme leading the team. The firm had first worked with DivX almost 20 years ago, in 2004, but the recent case is its first instruction for the team since. In current proceedings, Simmons and DivX have worked together since September 2022.

Oscar Lamme

DivX also instructs Simmons & Simmons in Germany, with partner Thomas Gniadek leading the case. A team led by Volkmar Henke and Sönke Scheltz from German mixed IP firm Eisenführ Speiser is also representing DivX in the proceedings. The latter team has worked with DivX on this case for the last two years.

In the current Dutch proceedings, Eisenführ Speiser patent attorneys Jochen Ehlers and Karin Rosahl gave technical assistance. In the US, DivX is working with Tensegrity Law Group as part of its action against Netflix.

While the District Court of The Hague is the usual forum for patent actions in the Netherlands, in this instance the District Court of Amsterdam heard the pleadings. This is because the case is based on an alleged unlawful act by Netflix, which is domiciled in the capital city.

For Netflix
Hoyng ROKH Monegier (Amsterdam): Bart van den Broek (partner); associates: Roeland Grijpink, Robin van Kleeff, Andrew Lin (patent attorney)

For DivX
Simmons & Simmons (Amsterdam): Oscar Lamme (partner); associates: Daisy Termeulen, Ruben Verweij, Diptanil Debbarma (patent attorney)

District Court of Amsterdam, Amsterdam
Hans van Walderveen (deputy judge), Karla Verwijmeren-van Teeffelen (deputy registrar)