Netflix Sued by Chipmaker Broadcom

Broadcom, a leading chipmaker for pay TV set-tops and other telecom CPE, is suing Netflix, alleging that the streaming service is violating eight of its patents related to data transfer and video playback.

“Netflix has built its familiar video streaming business, in part, on Broadcom’s patented technology,” claims the suit, which was filed in a Los Angeles federal court on Friday. The suit was originally obtained and reported on by Variety.

“Netflix relies on this technology for crucial aspects of the Netflix streaming service. This includes, for example, the Netflix systems used to ensure effective and reliable delivery of streaming content with minimal interruptions, to ensure the efficient use of Netflix server resources, and to encode Netflix streaming content in a format compatible with a large percentage of the client devices used to access Netflix service.”

Here’s the kicker. San Jose-based Broadcom is alleging that its own pay TV set-top business has been ruined by a cord cutting trend induced by Netflix.

“As a direct result of the on-demand streaming services provided by Netflix, the market for traditional cable services that require set top boxes has declined, and continues to decline, thereby substantially reducing Broadcom’s set top box business,” the suit adds.

As Variety noted, Broadcom has been somewhat unsuccessful in the realm of patent litigation in recent years, losing International Trade Commission decisions to smart TV maker Vizio and chipmaker Sigma Designs.

In fact, in January, a jury awarded Cal Tech $270.2 million after ruling that Broadcom infringed on its technology licenses in chips used in iPhones and other Apple devices. Apple was ordered to pay $837.8 million in that verdict. 

Daniel Frankel

Daniel Frankel is the managing editor of Next TV, an internet publishing vertical focused on the business of video streaming. A Los Angeles-based writer and editor who has covered the media and technology industries for more than two decades, Daniel has worked on staff for publications including E! Online, Electronic Media, Mediaweek, Variety, paidContent and GigaOm. You can start living a healthier life with greater wealth and prosperity by following Daniel on Twitter today!