While Netflix may be having continuing success through the years, competition and problems still plague the company. This time it's over patent infringement, something we're getting used to hearing a lot about lately. Interactive TV solutions provider, OpenTV, has hit Netflix with a big lawsuit over seven patents that involve over-the-top TV technology. This directly affects Netflix and its digital rights and data management, as the parents in question regard things like video playback and how the company makes title recommendations to its users.
Kudelski SA, which is OpenTV's parent company based out of Switzerland, issues the lawsuit on Wednesday with the US District Court for Delaware but we've yet to see a copy hit the net. Kudelski deals primarily in technologies that relate to digital media platforms and distribution, and the company's reps said in the complaint that Netflix has used Kudelski's patented works to boost their growth. They've also said that Netflix has refused to pay for licenses on these infringements.
Companies like Netflix have, in essence, stood on the shoulders of giants, largely focusing their R&D efforts on aggregating these previously patented technologies and using them to provide a rich customer experience.
Considering that Netflix has been in a couple of legal battles before, this one is quite note-worthy, because if Kudelski were to win, it's possible Netflix will have to shut some of its services down completely (very unlikely), redesign its interface and selection algorithms (also unlikely) or pay Kudelski a licensing fee to use the technologies in question (most likely). As expected, we're going to see more and more lawsuits like this as the digital video space expands and grows, leaving just one or two companies standing when the dust settles. I just hope that these lawsuits don't end up taking down the big companies simply because they'd be too stubborn to pay some fees. Netflix has yet to comment on the matter but they will have to issue a response to the suit soon, before the hearing. We'll let you know what route they decide to take and if they will simply settle out of court.