Hulu Seeks Order It Doesn’t Infringe Rovi Video Patent

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By Malathi Nayak

Online video service Hulu LLC asked a U.S. district court to rule that it does not infringe technology licensor Rovi Corp.'s patent for searching online video. ( Hulu LLC v. Rovi Corporation , N.D. Cal., 5:17-cv-02942, complaint filed 5/23/17 )

In a complaint filed in the U.S. District Court for the Northern District of California, Hulu said it does not infringe Rovi’s U.S. Patent No. 7,769,775 that it had licensed for four years after the two companies settled a patent dispute in 2013. Rovi had sued the video steaming service in 2011 alleging that Hulu had infringed three of its patents covering technology related to programming guides.

TV programming guide company Rovi bought digital video recording device company TiVo in 2016 for $1.1 billion and added patents for cable set-top boxes to its intellectual property portfolio. Hulu received a “notice of expiration” dated March 14 from Rovi, now called TiVo Corp., asking it to renew its licensing agreement, according to the complaint.

TiVo depends on revenue from patent licensing deals from Hulu and other companies. If Hulu succeeds in court, it won’t need to sign a new licensing deal with TiVo.

The rebranded company TiVo posted intellectual property licensing revenue of $347 million, comprising 54 percent of its total revenue, in 2016, according to regulatory filings. The company warned investors in its February annual report that some of its licensing agreements will expire next year.

Moreover, TiVo’s patents are vulnerable to legal challenges after U.S. Supreme Court’s June 2014 decision in Alice Corp. v. CLS Bank Int’l, which led to the invalidation of hundreds of software patents for covering ineligible abstract ideas, it told investors.

Hulu argued that only one of the three patents originally at issue is still standing.

“Of the three patents that were asserted against Hulu in the earlier litigation, one of the patents has expired, another was held invalid as unpatentable, and the final patent was alleged by Rovi to be infringed by a service that Hulu no longer offers,” Hulu said in its complaint.

Hulu Alleges Licensing Agreement Breach

Hulu also alleged in its complaint that Rovi breached its licensing agreement by entering into an over-the-top video streaming patent licensing partnership with patent licensing company Intellectual Ventures Management LLC. Rovi and Intellectual Ventures agreed to combine their video streaming technology patents and jointly license them to third parties, including Hulu’s competitors such as Netflix Inc. and HBO, Hulu said in its complaint.

TiVo’s intellectual property licensees include AT&T Inc., Dish Network Corp. and Verizon Communications Inc. Its patent licensing agreements with AT&T, Dish and Verizon are set to expire in 2018, TiVo said in regulatory filings.

Rovi sued Comcast Corp. in the U.S. District Court for the Eastern District of Texas in April last year alleging that the pay-TV provider infringes six patents related to program guide technology. The case, which was transferred to U.S. District Court for the Southern District of New York in December, is ongoing. Comcast filed petitions at the Patent and Trial Appeal Board this year in an effort to invalidate the six patents in Rovi’s lawsuit.

Rovi also sued Netflix in 2011 alleging infringement of five program guide technology patents, including one of the three patents that it asserted against Hulu. A 2015 ruling of the U.S. District Court for the Northern District of California held that those five patents were invalid. That decision was upheld by the U.S. Court of Appeals for the Federal Circuit in 2016.

Hulu and TiVo did not immediately respond to request for comment.

Hulu is owned by Comcast, 21st Century Fox Inc., Walt Disney Co. and Time Warner Inc.

To contact the reporter on this story: Malathi Nayak in Washington at mnayak@bna.com

To contact the editor responsible for this story: Mike Wilczek at mwilczek@bna.com

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