Netflix ordered by court to stop using video codec 'H.265 (HEVC)'

Video streaming service Netflix lost a patent infringement lawsuit by semiconductor manufacturer Broadcom and was ordered to stop using the video codec

https://www.nexttv.com/news/netflix-loses-another-ruling-in-german-hevc-patent-dispute-with-broadcom

Netflix and Broadcom have been in a legal battle over patents related to H.265 (HEVC) since 2018, and have filed lawsuits not only in Germany but also in the United States and the Netherlands. HEVC is a video codec that is up to 50% more efficient than Advanced Videocoding (AVC: H.264) , and data shows that 42% of video developers are using HEVC as of 2018.

In a September 2023 judgment, the German court in Munich ruled that Broadcom's HEVC patent ( EP 2 575 366 ) is valid. 'EP 2 575 366' is a patent that covers the main functions of the HEVC video codec. The ruling orders Netflix to stop using HEVC when streaming 4K resolution videos.

Achtung, Baby: Netflix Loses Patent Dispute to Broadcom in Germany, Ordered to Stop Using HEVC to Stream 4K | Next TV
https://www.nexttv.com/news/achtung-baby-netflix-loses-patent-dispute-to-broadcom-in-germany-told-to-stop-using-hevc-to-stream-4k

However, when Netflix failed to comply with the Munich court's injunction, Broadcom sought a ruling from Germany's Federal Patent Court. In this case, the Federal Patent Court has issued a preliminary judgment that Broadcom's EP 2 575 366 is valid.

Broadcom issued a statement regarding the Federal Patent Court's ruling: ``Under Article 890 of the German Civil Procedure Code, there are two penalties for violating an injunction.'' One of the following penalties will apply:

1: Netflix will be fined up to 250,000 euros (approximately 40 million yen) each time it sends video streaming using HEVC to German subscribers
2: Up to six months' imprisonment for members of the new company's board of directors

The German Federal Patent Court is scheduled to issue a final judgment on the lawsuit on July 18, 2024, following oral arguments.

Germany is Netflix's second largest market after the UK in the region that includes Europe, the Middle East, and Africa, and according to Statista , the number of paid members exceeded 10 million as of 2021.