- Netflix alleges VMware patent infringement over five virtualisation technologies.
- Lawsuit comes after Broadcom’s five-year patent offensive against Netflix.
VMware’s virtualisation technologies have become the target of Netflix’s latest patent infringement lawsuit [PDF] against Broadcom, marking a change in the streaming giant’s ongoing legal battle. The December 23 filing in California’s Northern District cites five former HP patents, challenging VMware’s core virtualisation implementations.
The counteroffensive follows Broadcom’s sustained patent campaign that began in March 2020, when the semiconductor company claimed Netflix’s streaming platform had undermined its set-top box business. Now, Netflix has shifted from defence to offence, wielding a patent portfolio it claims Broadcom’s VMware is infringing.
Behind Netflix’s patent strategy
The lawsuit centres on virtualisataion technologies that have made quite a journey through secondary markets. Initially developed by HP, the patents passed through Regional Resources Ltd. before Netflix acquired them. The portfolio includes patents covering essential virtualisation functions:
- Two related patents (7,779,424 and 7,797,707) addressing CPU usage attribution in virtual environments,
- Patent 8,799,891 focusing on virtual machine monitor CPU usage,
- Patent 8,185,893 covering load-balanced VM startup procedures,
- Patent 8,863,122 describing GUI-based virtual machine management.
Netflix’s complaint goes beyond straightforward infringement claims, alleging ‘willful violations,’ assertions that could trigger enhanced damages. Baker Botts partner Rachael Lamkin leads the litigation team in an unusually aggressive stance for Netflix.
Broadcom’s year of setbacks
The timing of Netflix’s countersuit follows a series of legal defeats for Broadcom in 2024. A critical blow came in July when Germany’s Federal Patent Court invalidated Broadcom’s streaming patent EP2575366, negating a €7.05 million contempt dictate against Netflix imposed by Munich’s Regional Court.
The US legal landscape proved equally challenging for Broadcom when the Federal Circuit Court of Appeals revived two Netflix challenges to a Broadcom patent previously upheld by the Patent Trial & Appeal Board.
The setbacks to Broadcom extended beyond the Netflix dispute. In August, it lost two consecutive cases against Tesla in the Unified Patent Court’s Hamburg and Munich divisions within four days.
Jurisdictional considerations
While Netflix’s choice of the Northern District of California reflects the practical reality of both companies’ substantial Bay Area presence rather than strategic advantage, it sets the stage for a domestic battle that could influence international proceedings. Broadcom maintains facilities across Silicon Valley, including Palo Alto, Petaluma, and San Jose, while Netflix operates from its Los Gatos headquarters.
International ramifications
Despite potential interest in pursuing action through the Unified Patent Court or German courts, Netflix’s current arsenal consists solely of US patents. This limitation could affect the dispute’s international scope, though it doesn’t preclude future expansion through additional patent acquisitions by the company.
The dispute follows Broadcom’s earlier patent enforcement success against Volkswagen/Audi, which reportedly resulted in a billion-Euro settlement over a patent, later invalidated through an Nvidia challenge. That precedent has kept industry observers focused on Broadcom’s aggressive patent strategy.
The case highlights shifting dynamics in tech sector patent disputes as streaming platforms build defensive portfolios against traditional hardware companies. Netflix’s strategic deployment of virtualisation patent claims against VMware suggests a broader trend where patents crossing technology sectors become the subject of legal proceedings.
The success of Netflix’s VMware patent infringement claims will hinge on technical merit but could potentially open new battle lines in the multi-jurisdictional conflict between the companies.
