Netflix gains momentum in DivX global streaming dispute as U.S. court clears it of $400M+ in damages 

Context:

• DivX and Netflix have been embroiled in a global video codec patent spat since March 2019, when the former enforced eight of its patents against the latter in the United States District Court for the Central District of California, seeking $424 million in damages. DivX then expanded its campaign to Brazil’s State Court of Rio de Janeiro in October 2020, the Landgericht Mannheim (Mannheim Regional Court) in April 2022, and eventually the Unified Patent Court’s (UPC’s) Munich Local Division (LD) in May 2025. Netflix fought back, attacking the validity of the asserted patents – and has since gained some success in Germany and the U.S. However, in Brazil, DivX was granted a permanent injunction (the first-ever in Brazil) in January 2024, which was then upheld last year.
• In the U.S. (Case no. 2:19-cv-01602), Netflix filed seven petitions for inter partes review (IPR) before the United States Patent and Trademark Office’s (USPTO’s) Patent Trial and Appeal Board (PTAB), so the Central District of California stayed the dispute pending the outcome of those proceedings. In 2024, after the case had been remanded by the Federal Circuit, the PTAB ultimately ruled in favor of DivX, adopting a very narrow claim construction. Then, in February, the Federal Circuit sent the cases back to the PTAB, in a decision that held significance because it was made using “standard grammatical English rules” (February 13, 2026 Netflix v. DivX Federal Circuit ruling).

What’s new: In the latest turn of events, a jury last week found that Netflix did not infringe four of the patents-in-suit, rejecting DivX’s claim for $424 million in damages and upholding Netflix’s argument that it had only relied on its own innovations and open industry standards for its streaming success.

Direct impact: While DivX was successful at first in Germany and has also gained significant leverage through its permanent injunction in Brazil, this U.S. jury verdict is a massive blow to its monetization strategy. While DivX can file an appeal in the Federal Circuit, the appellate court has recently sided with Netflix twice on patent claim construction issues – so this path could prove challenging. The company will likely be hoping for a more successful outcome in the UPC’s Munich LD, which is due to hear the case on July 21, 2026.

Wider ramifications: DivX may opt to continue its litigation against Netflix in the U.S., however, as it has largely been successful in its enforcement campaigns against TV makers and streaming companies, settling large disputes with licensing agreements with Samsung, LG Electronics, Disney, Roku, and Hisense (February 11, 2025 ip fray article). It is currently still embroiled in litigation with several other streaming companies, such as Amazon, Vizio, and Hulu, too, though.