A Munich, Germany, court last month ruled against Netflix in the long-standing dispute between the streaming giant and tech company Broadcom in a decision that could impact its customers’ experience on the service.
The court said Netflix was illegally using a Broadcom patent related to video coding, which means Netflix can no longer stream 4K video in Germany using that technology.
The two firms have been locked in disagreement over the patent since 2018. Broadcom has accused Netflix of infringing on multiple U.S., German and Dutch patents through its provision of its video streaming service, according to a release.
“Netflix has built a robust video streaming business that relies on Broadcom’s patented technology to deliver content to its users, and Broadcom is pleased to see this recognized by the German court,” Mark Terrano, vice president and general manager of Broadcom’s Intellectual Property and Licensing Division said in a statement.
Netflix declined to comment.
Although Netflix shares were reportedly “unfazed” by the injunction, if it faces more cease-and-desist orders, the side effects could worsen. The war of the streaming services has resulted in companies looking for ways to stand out from the competition. A lack of 4K streaming could be what makes or breaks Netflix for some subscribers.
In addition, streaming services have been trying to balance profitability and keeping subscribers as inflation rates climb. Streaming services are seen as the cheaper alternative to cable, but more platforms are hiking prices and users are reevaluating just how many services they need. According to data from Parks Associates, more households reported using free ad-supported services by the end of 2022 citing content and price as adoption drivers.