Yes, this is an actual lawsuit, and the fact that the judge has not thrown this out, and imposed sanctions on the plaintiffs is a miscarriage of justice.
From a more pragmatic perspective, trying to convince a jury to find in favor of the cable companies’ mot egregious rip-offs is just not going to happen. Ever.
Broadcom is suing Netflix for being so successful that people have cut their cable subscriptions and ditched the set-top boxes that make the chip designer a huge profit.
In a lawsuit [PDF] filed late last week in California, the San Jose-based Broadcom – which designs and sells chipsets used in millions of set-top boxes – argued that “Netflix has caused, and continues to cause, substantial and irreparable harm to the Broadcom Entities [that] sell semiconductor chips used in the set top boxes that enable traditional cable television services.
“Upon information and belief, as a direct result of the on-demand streaming services provided by Netflix, the market for traditional cable services that require set top boxes has declined, and continues to decline, thereby substantially reducing Broadcom’s set top box business.”
It’s a ridiculous claim: that because one business changes the market that you can then sue it for the impact of the changes. But there is, of course, an underlying legal case and that is that Broadcom claims Netflix is infringing its patents.
It’s hard to have sympathy for a company claiming about a loss of business from cable set-tops: the clunky outdated boxes are notoriously overpriced. Cable companies insist that they have to be “rented” by consumers and charge dozens of times their real value. The average American pays $231 a year for their box, resulting in $20bn a year in almost pure profit for the cable industry.
Seriously, if this goes to trial, I expect the jury to beat the Broadcom’s lawyers to death with sticks.