Case 1:12-cv-01733-GMS Document 1 Filed 12/19/12 Page 1 of 23 PagelD #: 1
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`IN THE UNITED STATES DISTRICT COURT
`
`FOR THE DISTRICT OF DELAWARE
`
`C .A. No.
`
`JURY TRIAL DEMANDED
`
`) )
`
`) )
`
`) )
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`) )
`
`)
`
`OPENTV, INC .,
`
`Plaintiffi
`
`v.
`
`NETFLIX. INC,
`
`Defendant.
`
`COMPLAINT FOR PATENT INFRINGEMENT
`
`1.
`
`This patent infi‘ingement action is being filed by OpenTV, Inc. (“OpenTV”), a
`
`US. subsidiary company of Kudelski SA. Kudelski SA and its subsidiaries. including Plaintiff
`
`OpenTV, Inc., make up the various companies of The Kudelski Group. The history of The
`
`Kudelski Group is one highlighted by 60 years of innovation, award winning products, and loyal,
`
`long-term customers who entrust The Kudelski Group with their business. Today, The Kudelski
`
`Group is a major employer in the United States, Europe, Asia, and elsewhere, providing jobs in
`
`manufacturing, engineering, research and development, marketing, sales, and many other
`
`specialties.
`
`2.
`
`In 1951, Stefan Kudelski created the first company in what became The Kudelski
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`Group and launched the now legendary “Nagra” line of portable recording devices for cinema,
`
`TV and radio recording. Stefan Kudelski’s recording devices, and the inventions in them, were
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`considered revolutionary throughout the movie industry. The Nagra devices allowed precise
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`synchronization of audio tape with film, providing filmmakers with studio sound quality during
`
`on-location filming.
`
`3.
`
`Throughout his career, Stefan Kudelski received numerous awards and honors for
`
`his technological achievements. For example, Mr. Kudelski received four Oscars from the
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`Page 1 of 23
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`OPENTV EXHIBIT 2002
`OPENTV EXHIBIT 2002
`NETFLIX, INC v. OPENTV, INC
`NETFLIX, INC V. OPENTV, INC
`IPR2014-00269
`|PR2014-00269
`
`

`

`Case 1:12-cv-01733-GMS Document 1 Filed 12/19/12 Page 2 of 23 PageID #: 2
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`Academy of Motion Picture Arts and Sciences: three Scientific or Technical Awards in 1965,
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`1977, 1978, and the Gordon E. Sawyer Award in 1990. Mr. Kudelski also received two Emmy
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`Awards, as well as Gold Medals from L. Warner, Audio Engineering Society, Lyra and
`
`Eurotechnica. Mr. Kudelski also was recognized by the FBI for his technology contribution in
`
`audio recording.
`
`4.
`
`The success of the products that The Kudelski Group manufactured and sold in its
`
`early years allowed the company to grow and expand. In 1989, The Kudelski Group expanded
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`the field of its technological innovation by launching its first conditional access systems for pay
`
`TV. Over the next decade (1990-1999), The Kudelski Group continued to expand its technology
`
`development in the digital television domain, providing global, universally compatible solutions
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`to manage, organize, enhance, market, and secure digital content, regardless of whether it was
`
`transmitted over managed or unmanaged networks, broadcast linearly or on-demand.
`
`5.
`
`Today, digital television is The Kudelski Group’s core business. The Kudelski
`
`Group has become a world leader in digital security and convergent media solutions for the
`
`delivery of digital and interactive content. The Kudelski Group’s main focus is on innovating
`
`security and access control solutions that provide optimal levels of protection throughout the
`
`content distribution chain, from creation to consumption. The Kudelski Group’s innovations are
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`continuously contributing to the evolution of the digital television ecosystem, enabling operators
`
`to extend their multimedia offerings across the entire digital ecosystem to numerous client
`
`devices through traditional managed networks as well as Internet delivery.
`
`6.
`
`At the same time, The Kudelski Group has forged itself as a leader in the digital
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`television domain through acquisitions of pioneering technology companies. Throughout its
`
`history, The Kudelski Group has made numerous corporate and technology acquisitions in the
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`space, including acquiring such notable companies as Lysis, Livewire, MediaGuard, SmarDTV,
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`and Plaintiff, OpenTV, Inc. (“OpenTV”). The Kudelski Group also has other subsidiary
`
`companies and business units in other technology sectors, such as SkiData, which operates in the
`
`public access sector, NagraID, which manufactures smart cards, and the recently created
`
`Kudelski Security business offering companies a suite of personalized cyber-security services.
`
`7.
`
`OpenTV develops software that provides its customers with high quality
`
`technology, services, and end-to-end solutions enabling intuitive and personalized viewing
`
`experiences for consumers. OpenTV’s software solutions enable a variety of advanced and
`
`interactive services for
`
`television,
`
`including advanced user
`
`interfaces, video-on-demand
`
`(“VOD”), personal video recording (“PVR”), high-definition (“HD”), interactive and addressable
`
`advertising, and a variety of enhanced television applications.
`
`8.
`
`OpenTV’s success as a member of The Kudelski Group is due in large part to its
`
`worldwide emphasis on intellectual property. OpenTV benefits from one of the earliest and
`
`broadest patent portfolios in the industry. OpenTV’s patented technology has been vital in
`
`allowing OpenTV’s
`
`customers
`
`to accelerate
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`technological progress,
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`enhance market
`
`opportunities, and improve profitability.
`
`9.
`
`Several statistics vividly illustrate the quality and commercial success of
`
`OpenTV’s intellectual property as well as the significant investments that The Kudelski Group
`
`has made historically in research and development efforts. For example, there are more than:
`
`(cid:120)
`
`(cid:120)
`
`(cid:120)
`
`200 million digital set-top boxes and televisions that have been shipped to
`consumers with OpenTV software;
`
`80 worldwide customers who run OpenTV solutions, including 40 OEMs who
`have ported OpenTV software to more than 250 digital set-top box models; and
`
`815 patents owned by the OpenTV subsidiary of The Kudelski Group worldwide
`to date.
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`10.
`
`Headquartered in San Francisco, California, OpenTV has offices throughout the
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`world, including offices in the United States, France, Australia, and China. OpenTV employs
`
`approximately 450 people worldwide, including more than 200 in the United States. As a whole,
`
`nearly 400 people work for the various U.S. subsidiaries of The Kudelski Group in the United
`
`States.
`
`11.
`
`OpenTV vigorously protects its intellectual property and thus files this patent
`
`infringement complaint against Netflix, Inc. (“Netflix”) after repeated, unsuccessful attempts to
`
`prevent the unlicensed use of OpenTV’s patented technology.
`
`12.
`
`OpenTV asserts that Netflix willfully infringes the following seven U.S. Patents
`
`(the “Asserted Patents”):
`
`(cid:120)
`
`(cid:120)
`
`(cid:120)
`
`(cid:120)
`
`(cid:120)
`
`(cid:120)
`
`(cid:120)
`
`6,018,768 entitled “Enhanced Video Programming System and Method for
`Incorporating and Displaying Retrieved Integrated Internet
`Information
`Segments” (“the ’768 Patent”) (Exhibit A hereto);
`
`6,233,736 entitled “Media Online Service Access System and Method” (“the ’736
`Patent”) (Exhibit B hereto);
`
`7,055,169 entitled “Supporting Common Interactive Television Functionality
`Through Presentation Engine Syntax” (“the ’169 Patent”) (Exhibit C hereto);
`
`7,409,437 entitled “Enhanced Video Programming System and Method for
`Incorporating and Displaying Retrieved Integrated Internet
`Information
`Segments” (“the ’437 Patent”) (Exhibit D hereto);
`
`7,490,346 entitled “Digital Television Application Protocol
`Television” (“the ’346 Patent”) (Exhibit E hereto);
`
`for
`
`Interactive
`
`7,949,722 entitled “Enhanced Video Programming System and Method Utilizing
`User-Profile Information” (“the ’722 Patent”) (Exhibit F hereto); and
`
`8,107,786 entitled “Systems and Methods to Modify Playout or Playback” (“the
`’786 Patent”) (Exhibit G hereto).
`
`13.
`
`OpenTV seeks damages in an amount adequate to compensate OpenTV for
`
`Netflix’s infringement, increased damages for willful infringement, a permanent
`
`injunction
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`barring Netflix from continuing to infringe OpenTV’s patents, and OpenTV’s attorneys’ fees and
`
`costs associated with this action.
`
`BACKGROUND OF THE TECHNOLOGY
`
`14.
`
`The technology at issue in this case pertains generally to the fields of access,
`
`selection, control, securitization, and delivery of content, and specifically here, in the field of
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`Over-the-Top (“OTT”) delivery of content (such as movies, television, and other media) over the
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`Internet.
`
`15.
`
`OTT delivery is done through an ordinary Internet connection that is not tied to
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`the type of content being delivered.
`
`16.
`
`In the OTT model, an Internet service provider is responsible only for ensuring
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`that data can be received by the consumer through a provided Internet connection. Third-party
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`content providers can then utilize this connection to deliver any desired content to the consumer.
`
`Because the OTT model evolved out of the TV and Internet spaces, OTT providers, like Netflix,
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`tend to benefit heavily from the capital expenditures and investments in technology made in the
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`past by both (i) broadband network providers to develop the kind of reliable Internet service
`
`needed to support the high bandwidth usage demanded by OTT delivery, and (ii) traditional pay
`
`TV operators to develop systems to deliver their services to consumers via cable and satellite
`
`systems.
`
`17.
`
`OTT content, including OTT content delivered by Netflix, can often be viewed on
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`a myriad of connected devices, such as televisions, gaming consoles, personal computers, tablets,
`
`smartphones, and many other connected devices.
`
`18.
`
`According to Accenture research, half of all U.S. consumers now watch OTT
`
`video through broadband connections on their televisions. Among viewers between the ages of
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`eighteen and twenty-four, 82% watch OTT video. Consumers are also increasingly turning to
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`smartphones and other mobile devices to view OTT video.
`
`19.
`
`In particular, according to Netflix’s CEO, Reed Hastings, in a letter to Netflix
`
`shareholders provided on or about October 23, 2012, in Q3 2012, Netflix’s global streaming
`
`membership grew by nearly 2 million new subscribers. At that time, the 29 million subscribers
`
`of its streaming service enjoyed over 3 billion hours of television shows and movies from
`
`Netflix.
`
`20.
`
`OTT is in the midst of substantial growth. According to ABI Research, OTT
`
`revenue is expected to quadruple to $32 billion by 2017, up from an expected $8.2 billion in
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`2012.
`
`21.
`
`Despite its advantages, there are significant technological challenges associated
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`with OTT, such as the difficulty of storing and navigating through and serving millions of video
`
`programs, managing the required digital rights management (“DRM”) licensing, authenticating
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`OTT users, allowing for user-friendly playback interfaces, and targeting specified content to
`
`OTT users, among others. These challenges have created a strong need for research and
`
`innovation in the field.
`
`22.
`
`Over the past 20 years, OpenTV and other sister companies within The Kudelski
`
`Group have developed many of the underlying technologies that new OTT entrants, such as
`
`Netflix, are building on top of their networks to provide their services. 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.
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`23.
`
`OpenTV has been, and remains, an industry leader in developing the technologies
`
`required to overcome the significant technical challenges to permit the tremendous growth of
`
`OTT.
`
`A.
`
`OpenTV, Inc.
`
`THE PARTIES
`
`24.
`
`OpenTV is a Delaware corporation whose principal place of business in the
`
`United States is located in San Francisco, California.
`
`25.
`
`OpenTV was founded in 1996 as Thomson Sun Interactive, LLC.
`
`In 1997, an
`
`agreement was reached to convert Thomson Sun Interactive, LLC into a newly formed
`
`corporation—OpenTV, Inc., with the transaction completed in 1998.
`
`26.
`
`From its
`
`inception, OpenTV has been dedicated to developing and
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`commercializing cutting-edge, patented technology required for the delivery of television and
`
`other media content to consumers through cable, satellite, and terrestrial networks, and other
`
`managed and unmanaged networks, including OTT content delivery.
`
`27.
`
`In 1998, OpenTV achieved one of its first major commercial successes by
`
`launching the software used to power one of the world’s first interactive TV banking and
`
`financial services technology.
`
`28.
`
`By 1999, OpenTV’s middleware solutions for set-top boxes were incorporated in
`
`over 4.5 million devices worldwide.
`
`29.
`
`OpenTV’s commercial and technological success quickly grew.
`
`In 2000, less
`
`than four years from its creation, OpenTV became the first interactive television middleware
`
`provider to integrate its middleware technology in more than 10 million set-top boxes
`
`worldwide—more than all
`
`industry competitors combined. OpenTV also partnered with
`
`EchoStar’s DISH Network, which was the first satellite company to provide interactive
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`television services in the United States. OpenTV’s set-top box middleware technologies were
`
`key to the successful growth of DISH Network.
`
`30.
`
`OpenTV’s success in the set-top box middleware market continued throughout the
`
`early 2000’s to today. OpenTV has partnerships with companies worldwide, and OpenTV’s
`
`middleware has now been incorporated into over 200 million set-top boxes.
`
`31.
`
`Companies worldwide have acknowledged the commercial
`
`importance of
`
`OpenTV’s patent portfolio, taking licenses to OpenTV patents relevant to their businesses.
`
`Exemplary licensees to OpenTV patents include a major satellite pay TV operator and leading
`
`OTT companies.
`
`32.
`
`In addition to its industry-leading set-top box middleware solutions, OpenTV has
`
`been an innovator in web-based content delivery.
`
`33.
`
`From 2000-2004, OpenTV continued to expand its worldwide presence by
`
`acquiring other
`
`innovative
`
`content
`
`delivery technology companies,
`
`such as Wink
`
`Communications and ACTV, Inc., as well as Spyglass, Inc.,
`
`the first company to offer
`
`commercially a World Wide Web browser.
`
`34.
`
`As a result of its ongoing commitment to interactive television and web-based
`
`content delivery, by 2004-2006, OpenTV led the industry in integrating browser software into
`
`television sets, built the first interactive shopping application for DISH Network and Comcast,
`
`successfully launched real-time two-way interactive television shopping services on QVC, and
`
`provided the technology for CNN Interactive, among other notable achievements. All of these
`
`innovations helped to pave the way for the growing revolution in how media content is delivered
`
`and enjoyed, including over the Internet.
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`35.
`
`In addition to these achievements, OpenTV also developed complementary
`
`technology related, for example,
`
`to personal video recording (“PVR”), video-on-demand
`
`(“VOD”), television home networking, and tools for recommending content to viewers. The
`
`industry has long recognized OpenTV’s technology contributions, with OpenTV’s PVR named
`
`as one of the best in its field by Seagate Technology in 2009.
`
`36.
`
`OpenTV became a part of The Kudelski Group in 2007 through The Kudelski
`
`Group’s acquisition of a controlling stake in the company.
`
`In 2010, The Kudelski Group
`
`acquired the remaining shares from minority shareholders and OpenTV became a wholly-owned
`
`subsidiary of The Kudelski Group.
`
`37.
`
`OpenTV’s integration into The Kudelski Group has allowed for commercial and
`
`technological synergies between other Kudelski Group companies and continued innovation in
`
`the delivery of digital content and OTT technologies.
`
`38.
`
`Through its dedication to developing innovative technologies, OpenTV’s
`
`technology has contributed to the explosive growth of OTT companies, including Netflix.
`
`39.
`
`OpenTV and The Kudelski Group devote substantial resources to research and
`
`development. In fact, The Kudelski Group companies have invested over $3 billion in R&D in
`
`the past 20 years.
`
`40.
`
`To protect their investment in R&D, OpenTV and the other Kudelski Group
`
`companies have garnered a robust international portfolio of over 3,100 worldwide patents,
`
`including many related to the delivery of end-to-end secure media solutions for digital content,
`
`and continue to substantially grow their worldwide patent positions in this and other
`
`complementary technology areas.
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`41.
`
`These patents include key technologies related to content management and
`
`delivery systems, content recommendation engines and targeted content delivery, subscriber
`
`management systems and tools, DRM and other content access control techniques, billing and
`
`payment systems, user
`
`interfaces, digital video recorder
`
`(“DVR”) content storage and
`
`scheduling, end-to-end digital content security, including securing digital content within the
`
`home network, VOD content selection, advanced advertising techniques, and many others.
`
`42.
`
`To ensure that they will continue their tradition of innovation into the future,
`
`OpenTV and The Kudelski Group employ approximately 3,000 talented people worldwide.
`
`B.
`
`Netflix, Inc.
`
`43.
`
`Netflix is a Delaware corporation with a principal place of business in Los Gatos,
`
`California.
`
`44.
`
`Netflix is a leading OTT provider allowing subscribers to locate, access, secure,
`
`and playback content such as movies and television shows over the Internet for a subscription
`
`fee.
`
`45.
`
`Netflix originally launched its OTT content streaming service in or about 2007,
`
`long after the patents-at-issue in this case were filed.
`
`46.
`
`Streaming online content using OTT is a substantial part of Netflix’s business.
`
`Netflix predicts that it will generate over $2.4 billion in revenue alone in 2012 through its
`
`content streaming business.
`
`47.
`
`48.
`
`49.
`
`Future growth of its content streaming business is a core Netflix business strategy.
`
`Netflix relies heavily on technology to stream content.
`
`The performance of software and computer systems plays a key role in Netflix’s
`
`ability to compete effectively.
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`50.
`
`Content recommendation features also are critical to Netflix’s business. If Netflix
`
`is unable to predict and recommend titles that its subscribers will enjoy, Netflix’s ability to
`
`attract and retain subscribers may be adversely affected and its subscribers may default to
`
`choosing content that costs Netflix more to provide, causing Netflix’s profit margin to suffer.
`
`51.
`
`52.
`
`Netflix is aware that OpenTV has patents relevant to Netflix’s operations.
`
`Netflix is aware that many companies are devoting significant resources to
`
`developing patents that could potentially affect many aspects of Netflix’s business.
`
`53.
`
`Netflix has not searched patents relative to its operations.
`
`JURISDICTION AND VENUE
`
`54.
`
`This lawsuit is a civil action for patent infringement arising under the patent laws
`
`of the United States, 35 U.S.C. § 101 et seq. The Court has subject-matter jurisdiction pursuant
`
`to 28 U.S.C. §§ 1331, and 1338(a).
`
`55.
`
`This Court has personal jurisdiction over Netflix because Netflix is a Delaware
`
`corporation and has committed, contributed to, and induced acts of patent infringement and has
`
`regularly and systematically conducted and solicited business in this district by and through its
`
`OTT content streaming service.
`
`56.
`
`Venue is proper in this district under 28 U.S.C. §§ 1391(b) and 1400(b) because
`
`Netflix is subject to personal jurisdiction in this district and therefore resides in this district.
`
`THE PATENTS INFRINGED BY NETFLIX
`
`A.
`
`U.S. Patent No. 7,490,346
`
`57.
`
`OpenTV is the owner by assignment of all rights, title, and interest in the ’346
`
`Patent.
`
`58.
`
`The ’346 Patent generally relates, among other
`
`things,
`
`to communication
`
`protocols for interactive programming environments using a content delivery network (“CDN”).
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`59.
`
`Netflix infringes the ’346 Patent through at least the CDN messaging used in its
`
`on-demand video streaming service.
`
`B.
`
`U.S. Patent No. 7,055,169
`
`60.
`
`OpenTV is the owner by assignment of all rights, title, and interest in the ’169
`
`Patent.
`
`61.
`
`The ’169 Patent generally relates, among other things, to the presentation of
`
`interactive programming content using directives such as HTML, scripting languages, or other
`
`languages.
`
`62.
`
`Netflix infringes the ’169 Patent
`
`through at
`
`least
`
`the use of directives in
`
`connection with providing its on-demand video streaming service.
`
`C.
`
`U.S. Patent No. 7,949,722
`
`63.
`
`OpenTV is the owner by assignment of all rights, title, and interest in the ’722
`
`Patent.
`
`64.
`
`The ’722 Patent generally relates, among other things, to the utilization of user-
`
`profile information to provide recommendations for content to a viewer of video programming.
`
`65.
`
`Netflix infringes the ’722 Patent through at least its recommendation system for
`
`its on-demand video streaming service.
`
`D.
`
`U.S. Patent No. 6,018,768
`
`66.
`
`OpenTV is the owner by assignment of all rights, title, and interest in the ’768
`
`Patent.
`
`67.
`
`The ’768 Patent generally relates, among other things, to a system for integrating
`
`video programming and Internet information.
`
`68.
`
`Netflix infringes the ’768 Patent through at least the operation of its fast forward
`
`and fast rewind Trick Play functionality.
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`E.
`
`U.S. Patent No. 7,409,437
`
`69.
`
`OpenTV is the owner by assignment of all rights, title, and interest in the ’437
`
`Patent.
`
`70.
`
`The ’437 Patent generally relates, among other things, to presenting information
`
`retrieved from an online source in conjunction with displaying a video/audio program.
`
`71.
`
`Netflix infringes the ’437 Patent through at least the operation of its fast forward
`
`and fast rewind Trick Play functionality.
`
`F.
`
`U.S. Patent No. 8,107,786
`
`72.
`
`OpenTV is the owner by assignment of all rights, title, and interest in the ’786
`
`Patent.
`
`73.
`
`The ’786 Patent generally relates, among other things, to modifying playback of
`
`content based on a response to a fast forward or fast rewind request.
`
`74.
`
`Netflix infringes the ’786 Patent through at least the operation of its fast forward
`
`and fast rewind Trick Play functionality.
`
`G.
`
`U.S. Patent No. 6,233,736
`
`75.
`
`OpenTV is the owner by assignment of all rights, title, and interest in the ’736
`
`Patent.
`
`76.
`
`The ’736 Patent generally relates, among other
`
`things,
`
`to displaying the
`
`availability of online information during a video program and allowing a user viewing the video
`
`program to initiate retrieval of the online information.
`
`77.
`
`Netflix infringes the ’736 Patent through at least its “Next Episode” and “More
`
`Episode” navigation functionality as part of its user interface.
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`NETFLIX’S WILLFUL INFRINGEMENT
`
`78.
`
`On December 15, 2011, OpenTV wrote to Reed Hastings, CEO of Netflix, and
`
`notified him of the existence of the OpenTV patent portfolio generally, as well as several of the
`
`Asserted Patents specifically. OpenTV explained that its technology may be relevant to several
`
`aspects of Netflix’s services, and invited Mr. Hastings to contact OpenTV to discuss the matter
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`further.
`
`79. Mr. Hastings did not contact OpenTV to discuss the matter further.
`
`80.
`
`No one at Netflix responded, via telephone or in writing, to OpenTV’s December
`
`15, 2011 letter.
`
`81.
`
`On January 13, 2012, after receiving no response to its initial letter, OpenTV sent
`
`another letter to Mr. Hastings.
`
`82.
`
`OpenTV’s January 13, 2012 letter to Mr. Hastings discussed the OpenTV patents
`
`in light of Netflix’s interactive video interface.
`
`83.
`
`During the following months, OpenTV personnel attempted to contact the CEO
`
`and General Counsel of Netflix to discuss its request for a meeting but were met with silence.
`
`84.
`
`In May 2012, Joe Chernesky, Senior Vice President, Intellectual Property,
`
`contacted Netflix’s Associate General Counsel, Technology and Transactions, requesting a
`
`meeting to discuss licensing OpenTV’s patents, and other patents held by The Kudelski Group
`
`companies, as requested in the December and January letters.
`
`85.
`
`After
`
`several additional attempts, Netflix’s Associate General Counsel,
`
`Technology and Transactions, finally responded in late June 2012 via e-mail, stating that Netflix
`
`is not inclined to meet with The Kudelski Group.
`
`86.
`
`In a detailed e-mail dated June 26, 2012, Mr. Chernesky reiterated the relevance
`
`of The Kudelski Group companies’ patent portfolio to Netflix, including OpenTV’s patents, and
`
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`expressed a willingness to engage in formal, good faith, licensing discussions with Netflix about
`
`a portfolio license.
`
`87.
`
`After much delay, on July 16, 2012, Netflix finally agreed to meet in person at
`
`Netflix’s headquarters in Los Gatos, California on September 28, 2012. The Associate General
`
`Counsel, Technology and Transactions, and one other Netflix attorney were present at the
`
`meeting. The Kudelski Group was represented at the meeting by Joe Chernesky and William
`
`Goldman, Vice President, Intellectual Property. Messrs. Chernesky and Goldman presented an
`
`overview of The Kudelski Group’s history of innovation, identified a number of patents relevant
`
`to Netflix’s OTT service, including a mapping of the Asserted Patents to a representative OTT
`
`platform, such as that implemented by Netflix, and discussed the potential framework for a
`
`patent license.
`
`88.
`
`On October 19, 2012, Netflix’s Associate General Counsel, Technology and
`
`Transactions, replied by e-mail that Netflix may be interested in “going through a set of” The
`
`Kudelski Group companies’ patents. Following a brief phone call, on November 7, 2012, The
`
`Kudelski Group provided a draft non-disclosure agreement to Netflix to govern subsequent
`
`discussions between the companies.
`
`89.
`
`Netflix never responded to the November 7 e-mail or subsequent e-mails from
`
`The Kudelski Group.
`
`90.
`
`91.
`
`Netflix does not have a license to any of the Asserted Patents.
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`Despite having notice of the OpenTV patent portfolio, including specific notice of
`
`at least some of the Asserted Patents, since at least December 2011, Netflix has continued its
`
`infringement.
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`Case 1:12-cv-01733-GMS Document 1 Filed 12/19/12 Page 16 of 23 PageID #: 16
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`92.
`
`Netflix’s
`
`failure
`
`to compensate OpenTV for Netflix’s ongoing patent
`
`infringement is part of a deliberate effort by Netflix to ignore the intellectual property rights of
`
`its competitors, even when made aware of specific patents infringed by Netflix.
`
`COUNT I - INFRINGEMENT OF U.S. PATENT NO. 7,490,346
`
`OpenTV incorporates by reference into this Count I paragraphs 1 through 92.
`
`Pursuant to 35 U.S.C. § 284, the ’346 Patent is presumed valid.
`
`Pursuant to 35 U.S.C. § 271, Netflix has infringed and continues to directly
`
`93.
`
`94.
`
`95.
`
`infringe, actively induce and/or contribute to infringement of the ’346 Patent by making, using,
`
`selling, offering to sell and/or importing software to be installed and executed on one or more
`
`connected devices of its subscribers in order to deliver on-demand Internet streaming media to its
`
`subscribers with knowledge that use of that software by Netflix subscribers in conjunction with
`
`Netflix’s own computer processes and content delivery infrastructure platform and/or those of its
`
`CDN partners would infringe the ’346 patent, which software has been especially made for use
`
`in an infringement of the ’346 Patent and is not a staple article or commodity of commerce
`
`suitable for substantial noninfringing use.
`
`96.
`
`Netflix knew of the ’346 Patent prior to the filing of this action at least as a result
`
`of The Kudelski Group’s identification of the ’346 Patent to Netflix at the September 28, 2012
`
`meeting between Netflix and The Kudelski Group, and at the very least by virtue of filing this
`
`Complaint.
`
`97.
`
`98.
`
`Netflix’s infringement has been and continues to be willful.
`
`OpenTV has suffered and continues to suffer damages and irreparable harm as a
`
`result of Netflix’s past and ongoing infringement.
`
`99.
`
`Unless Netflix’s infringement is enjoined, OpenTV will continue to be damaged
`
`and irreparably harmed.
`
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`100. OpenTV meets the criteria for, and is entitled to, a permanent injunction.
`
`COUNT II - INFRINGEMENT OF U.S. PATENT NO. 7,055,169
`
`101. OpenTV incorporates by reference into this Count II paragraphs 1 through 92.
`
`102.
`
`Pursuant to 35 U.S.C. § 284, the ’169 Patent is presumed valid.
`
`103.
`
`Pursuant to 35 U.S.C. § 271, Netflix has infringed and continues to directly
`
`infringe, actively induce and/or contribute to infringement of the ’169 Patent by making, using,
`
`selling, offering to sell and/or importing software to be installed and executed on one or more
`
`connected devices of its subscribers in order to deliver on-demand Internet streaming media to its
`
`subscribers with knowledge that use of that software by Netflix subscribers in conjunction with
`
`Netflix’s own computer processes and content delivery infrastructure platform would infringe
`
`the ’169 patent, which software has been especially made for use in an infringement of the ’169
`
`Patent and is not a staple article or commodity of commerce suitable for substantial
`
`noninfringing use.
`
`104. Netflix knew of the ’169 Patent prior to the filing of this action at least as a result
`
`of The Kudelski Group’s identification of the ’169 Patent to Netflix at the September 28, 2012
`
`meeting between Netflix and The Kudelski Group, and at the very least by virtue of filing this
`
`Complaint.
`
`105. Netflix’s infringement has been and continues to be willful.
`
`106. OpenTV has suffered and continues to suffer damages and irreparable harm as a
`
`result of Netflix’s past and ongoing infringement.
`
`107. Unless Netflix’s infringement is enjoined, OpenTV will continue to be damaged
`
`and irreparably harmed.
`
`108. OpenTV meets the criteria for, and is entitled to, a permanent injunction.
`
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`Case 1:12-cv-01733-GMS Document 1 Filed 12/19/12 Page 18 of 23 PageID #: 18
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`COUNT III - INFRINGEMENT OF U.S. PATENT NO. 7,949,722
`
`109. OpenTV incorporates by reference into this Count III paragraphs 1 through 92.
`
`110.
`
`Pursuant to 35 U.S.C. § 284, the ’722 Patent is presumed valid.
`
`111.
`
`Pursuant to 35 U.S.C. § 271, Netflix has infringed and continues to directly
`
`infringe, actively induce and/or contribute to infringement of the ’722 Patent by making, using,
`
`selling, offering to sell and/or importing software to be installed and executed on one or more
`
`connected devices of its subscribers in order to recommend and deliver targeted on-demand
`
`Internet streaming media to its subscribers with knowledge that use of that software by Netflix
`
`subscribers in conjunction with Netflix’s own computer processes and content delivery
`
`infrastructure platform would infringe the ’722 patent, which software has been especially made
`
`for use in an infringement of the ’722 Patent and is not a staple article or commodity of
`
`commerce suitable for substantial noninfringing use.
`
`112. Netflix knew of the ’722 Patent prior to the filing of this action at least as a result
`
`of The Kudelski Group’s identification of the ’722 Patent to Netflix at the September 28, 2012
`
`meeting between Netflix and The Kudelski Group, and at the very least by virtue of filing this
`
`Complaint.
`
`113. Netflix’s infringement has been and continues to be willful.
`
`114. OpenTV has suffered and continues to suffer damages and irreparable harm as a
`
`result of Netflix’s past and