Roku shares have tumbled more than 12% as of midday trading on the Nasdaq, with remote control maker Universal Electronics trumpeting that an import ban has been slapped on the streaming company following Universal's complaint filing with the U.S. International Trade Commission (ITC) last year.
According to Santa Ana, Calif.-based Universal Electronics, once the ITC's ruling becomes finalized in January, Roku will have to check with customs and make sure it's not violating the patents in question before it imports “televisions, set top boxes, remote control devices, streaming devices and sound bars.”
Roku manufactures most of its hardware in China. And's Roku's "player" business has been hit hard by global supply chain issues, with margins edging into negative territory in the third quarter.
Updated 12/17/2021: Roku has responded with a statement dismissing Universal's claims.
“The Commission’s ban on Roku imports and sales is an important step in the process of preventing Roku from continuing its unlawful use of UEI technology," said Richard Firehammer, Universal's senior VP and general counsel, in a statement.
Even now, we believe that Roku continues to infringe the very patent it was found to infringe despite its attempts to ‘design around’ its infringement with recent software updates," Firehammer added. "These updates coincide with degraded Roku product performance, as evidenced by recent media reports and consumer outcry. We look forward to working with U.S. Customs and Border Protection to ensure the Commission’s orders banning imports of infringing Roku products are appropriately enforced.
According to Universal, Roku’s products infringe six different claims of U.S. Patent No. 10,593,196. According to a Universal filing with the U.S. Trademark Office, Patent '196 has to do with using a single device to "control all appliances in a home theater system."
In May 2020, Universal filed a complaint with the ITC, alleging Roku remotes tied to TV sets made by Chinese brands TCL and Hisense, and imported into North America, violate its patents. Universal also filed a suit against Roku in California's Central District court.
In April of this year, Roku countersued the remote maker in a California federal court, alleging violations of U.S. Patent No. 8,378,875, “Method of Programming a Universal Remote Control,” and No. 7,388,511, “System for Remote Control of Identical Devices.”
As for the most recent ruling, ITC decisions do carry some weight. For example, an ITC import ban against Comcast in 2018 ultimately propelled the cable giant to settle with TiVo in a long-running patent dispute.
Roku reps didn't immediately respond to Next TV's email inquiry for comment.
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!
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