In October 2022, DivX, LLC filed two complaints against Amazon and VIZIO, one before the International Trade Commission (ITC) and the other in the Eastern District of Virginia. The latter was stayed in customary fashion to await the outcome of the ITC investigation, which resulted in a May 2024 finding in favor of Amazon (VIZIO having been terminated from the ITC investigation along the way), based on, among other things, noninfringement. Last week, DivX voluntarily dismissed that parallel stayed case, doing so on the same day that it filed a new complaint in the same district against Amazon (3:24-cv-00818), this one asserting six different patents.
DivX identifies a long list of products accused of infringing those patents (9,955,195; 10,412,141; 10,542,303; 10,715,806; 11,245,938; 11,611,785), bucketed as "Accused Streaming Services" (including Prime Video), Amazon Fire tablets, Amazon Fire TV/Cube devices, Amazon Echo Show devices, Amazon Fire TV sets, and "Accused Encoding Servers and Services". The patents generally relate—as did the prior asserted five (7,295,673; 8,832,297; 10,225,588; 11,050,808; 11,102,553)—to various aspects of media playback technologies, including coding, content delivery, encryption, and streaming. The '808 patent was dropped during the pendency of the ITC action, while the others were subject to the noninfringement ruling there.
Of the newly asserted patents, only the '141 patent appears to have been previously asserted, appearing in an earlier ITC complaint, filed against LG Electronics (LGE), MediaTek, Realtek, Samsung, and TCL (TCT Mobile) in 2020. Each respondent was terminated from the investigation, last among them TCL in the middle of the evidentiary hearing, based on a settlement. Realtek then filed a motion for sanctions against DivX, arguing that DivX had misled the administrative law judge (ALJ) in that action and had made "misrepresentations regarding its infringement contentions". DivX then filed a separate motion for sanctions against Realtek for Realtek's having filed its motion for sanctions. Both motions were denied. DivX voluntarily dismissed a parallel stayed case against Realtek in Delaware; Realtek asked that that dismissal be with prejudice rather than without, but District Judge Jennifer L. Hall sided with DivX. Realtek has appealed the sanctions decision from the ITC and the dismissal decision from Delaware.
Litigation against Netflix is also now active again, that 2019 case filed in the Central District of California. After a four-year stay in light of certain inter partes review (IPR) proceedings, lifted this past May, Judge George H. Wu has set a claim construction hearing for this coming January, the parties having filed a mid-October Joint Claim Construction Statement in which they dispute how many and which terms should be submitted for the court's consideration. Netflix has additionally moved to supplement its prior invalidity contentions in the case.
DivX also filed there, in August 2024, as well as in connection with its new case against Amazon in Virginia, a Supplemental Notice of Interested Parties, "to account for changed circumstances since the case was initially filed". DivX is a Fortress Investment Group LLC company, previously identifying in court disclosures DivX CF Investors LLC, its direct parent, as the only nonparty having an interest in the outcome of its litigation. In the supplemental, DivX indicates that it is a wholly owned subsidiary of DivX CF Investors, there described as a "privately held limited liability company with an interest in the outcome of the action". It also lists O'Shaugnessy Holding Company, LLC as a "limited liability company that may have an interest in the outcome of the action".
The supplemental also explains DivX's "understanding that each of the following investment fund entities indirectly owns more than 10% of DivX", in the respective amounts here indicated: FIP UST LP (44%); Fortress Intellectual Property Opportunities Fund I (A) LP (17%); Fortress Intellectual Property Opportunities Fund I (B) LP (11%); Fortress Intellectual Property Opportunities Fund I (C) LP (16%); FCOF IV UST LLC (24%); and FCOF IV CDG Investments LLC (12%). Per the document, "[i]t is DivX's understanding that FIG LLC (d/b/a Fortress Investment Group) and its wholly-owned subsidiaries serve as investment advisors to private investment funds and managed accounts that own DivX CF Investors, LLC, and may have an interest in the outcome of the action", and "[i]t is DivX's understanding that there is no individual investor (either an entity or a person) who owns more than 10% of DivX, LLC through ownership in DivX CF Investors LLC".
This more detailed disclosure seems to track the broad terms by which a separate Fortress plaintiff, Entropic Communications, LLC, was ordered to disclose ownership information by Central District of California Judge John W. Holcomb. For additional details concerning those disclosures, see "New Complaints, Multiple Counterclaims, Motions to Stay Mark Entropic Campaign over Former MaxLinear Patents" (November 2024).
Formed in 2007, New York-based Fortress Investment Group is a global investment manager reporting $48B of assets under management as of June 30, 2024. At the close of 2017, Japanese conglomerate SoftBank completed an acquisition of Fortress for $3.3B. In May of this year, Fortress and Mubadala Investment Company announced that they completed the acquisition, on undisclosed terms through Mubadala Capital, "of the 90.01% of the equity of Fortress that was held by SoftBank". According to a joint press release, Mubadala now owns 68 percent of Fortress's equity, while Fortress management owns 32 percent, the latter "in a class of equity entitling Fortress management to appoint a majority of seats on the board".
Currently available USPTO records indicate that Fortress holds—through entities in which it has invested and over which many defendants have contended that Fortress exercises control—more than 2,800 US patent assets of disparate origin and subject matter, only a small subset of which are currently in litigation. A significant portion of Fortress's US patent assets appear to have been developed at global technology companies, including 3COM (acquired by HP before the company split into the current HP Inc. and HP Enterprise), Huawei, IBM, Freescale Semiconductor (and successor NXP), Panasonic, and Philips.
Additional background for this litigation, which has hit additional defendants (e.g., Disney (Hulu) and Samsung) can be found here, here, and here. MerrittHill, PLLC filed the new complaint against Amazon for DivX, with Irell & Manella LLP and Robins Kaplan LLP listed as "of counsel" on the pleading. The case has yet to be assigned to a judge. 11/15, Eastern District of Virginia.
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