Netflix and Quinn Emanuel invalidate important DivX patent at EPO

The EPO Opposition Division has revoked EP 34 67 666 for having been subject to impermissible extension, which contravenes European Patent Convention Articles 123 (2) and (3). The patent 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.

DivX set to appeal

The EPO released the decision at the end of March, following a two-day hearing at the end of January. Although it has not yet released the reasons behind the decision, DivX can now appeal to the EPO’s Technical Boards of Appeal. This is considered likely, given the importance of the patent in two ongoing proceedings in Germany and the Netherlands, as well as for DivX’s licensing program. Disney Plus and Roku TV, among others, have accepted a DivX licence.

The European dispute began in 2021, when DivX filed its first lawsuits at Mannheim Regional Court. Initially, the San Diego-based company enjoyed some success; in April 2022, the Mannheim 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). In this instance, EP 666 is one of the patents-in-suit. The Mannheim court ordered two injunctions against Netflix as a result.

Meanwhile, Netflix appealed both judgments, requesting that the Higher Regional Court Karlsruhe stay the enforcement of the injunctions. In summer 2022, the court initially rejected Netflix’s request. However, now that the EPO has cancelled EP 666, the court has stopped the enforcement of both actions, for which Netflix had to deposit a security bond.

Dutch tide turning 

In January 2023, the District Court of Amsterdam declined a request by DivX to align a preliminary judgment with a finding of infringement made by the Mannheim court. This meant the court would not make the same injunction declaration against Netflix in the Netherlands (case ID: C/13/724642).

Thomas Gniadek

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 an EPO decision. However, the Amsterdam court ruled that this does not automatically apply to a foreign judgment.

As a result, it rejected DivX’s claim of infringement in the Netherlands. This claim was also based on EP 666 and, following the EPO decision, DivX has withdrawn its claim in the Netherlands.

The dispute is also ongoing in the US and Brazil. According to JUVE Patent information, DivX also filed a lawsuit based on EP 666 against Amazon at the Regional Court in Munich at the end of 2022 (case ID: 7 O 16478/22).

Change of counsel at DivX

Netflix relied on Quinn Emanuel in the opposition proceedings at the EPO. The firm already represents the streaming service in the German case. In parallel, an Amsterdam team led by partner Oscar Lamme took on the Dutch case for DivX. The latter 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.

Netflix dispensed with the participation of patent attorneys in the EPO proceedings and relied entirely on the legal team of Quinn Emanuel.

Marcus Grosch

DivX saw a change of counsel on the lawyer side. Initially, lawyers from Eisenführ Speiser handled the German lawsuits. However, partner Volkmar Henke recently moved to Bardehle Pagenberg. JUVE Patent is not aware whether this influenced DivX’s decision to switch to Simmons & Simmons in Munich. Now Thomas Gniadek leads the case for the video coding company.

Eisenführ Speiser patent attorneys continue to be involved in the German proceedings against Netflix and in the EPO proceedings through Jochen Ehlers.

Hoyng ROKH Monegier partner Bart van den Broek led the litigation team for Netflix in the Netherlands. Austrian patent attorney firm Matschnig & Forsthuber also represented DivX in the EPO proceedings, having filed the original patent application.

For DivX
Eisenführ Speiser (Hamburg): Jochen Ehlers (partner, lead); associate: Karin Rosahl (both patent attorneys)
Matschnig & Forsthuber (Vienna) Martin Forsthuber, Christian Hofstetter (both partners, both patent attorneys)
Simmons & Simmons (Munich): Thomas Gniadek (partner, lead); associates Sebastian Kratzer, Julia Mroz, Charlotte Weschler
In-house (San Diego): David Bailey

For Netflix
Quinn Emanuel Urquhart & Sullivan (Munich): Marcus Grosch (partner, lead); of counsel: Julia Nobbe; counsel: Jan Axtmann; associate: Timo Merle, Nikos Yiannopoulos
In-house (Los Angeles): Laurie Charrington (Director of Patent Litigation)

European Patent Office, Opposition Division
Agreda Labrador (chairman)