Netflix, Inc. v. DivX, LLC

Netflix v. DivX, decided February 13th, 2026. A precedential panel of the Federal Circuit, in an opinion by Judge Taranto, resolved a patent claim-construction dispute with a principle of grammar. Where a modifier could attach to two different terms, it is presumed to attach to the nearest one that makes sense. Applying that presumption, the court reversed the Patent Trial and Appeal Board's construction, vacated the Board's decision, and remanded. Here's the brief.

DivX owns the ’588 patent, which claims systems and methods for streaming partly encrypted media content. To conserve resources, the invention encrypts only parts of a video stream, and it supplies the playback device with information identifying which portions are encrypted.

DivX sued Netflix for infringement. Netflix then petitioned the Patent and Trademark Office for inter partes review, arguing that the patent's claims were obvious under section 103 over the prior art.

The case came down to a single claim limitation, labeled limitation L. It calls for locating encryption information that identifies encrypted portions of frames of video within the requested portions of the selected stream of protected video.

The dispute was what that closing phrase — within the requested portions — modifies. Netflix read it to fix the location of the encrypted portions of video. DivX read it to fix the location of the encryption information itself. After an earlier appeal and remand, the Board, by a divided vote, adopted DivX's reading, and on that basis rejected Netflix's obviousness challenge. Netflix appealed.

The only issue the court needed to decide was the proper construction of limitation L. Because the analysis rested entirely on the intrinsic record and on ordinary principles of language, the court reviewed the construction de novo.

The court began with the words themselves. On their own, it found, the limitation was genuinely ambiguous. The modifier — within the requested portions of the selected stream of protected video — could sensibly attach either to encrypted portions of frames of video, or to encryption information. Both readings were available, syntactically and semantically. To choose between them, the court turned to the precepts of English grammar.

The court held that the Board's construction was wrong, and it grounded the holding in a long-established interpretive canon.

This is the nearest-reasonable-referent canon — a cousin of the rule of the last antecedent — which the court traced through Black's Law Dictionary, Scalia and Garner's Reading Law, standard guides to writing, and its own precedent. Here, the nearest plausible term to the modifier was encrypted portions of frames of video, not encryption information.

The court stressed that the canon supplies only a presumption. The analysis could not stop there; it had to ask whether the claim language, the specification, or the prosecution history gave good reason to adopt the contrary reading. It found none. The surrounding limitations fit Netflix's reading without rendering limitation L superfluous. The specification described embodiments in which the encryption information sat elsewhere, such as in a top-level index file. And the prosecution history of a related patent confirmed that encryption information need not be located within the requested portions.

Because limitation L, correctly construed, was indisputably taught by the asserted prior art, the court reversed and did not reach the obviousness merits itself.

Netflix v. DivX confirms how the Federal Circuit reads a modifier that could attach to more than one term in a patent claim. Absent a comma or other textual signal, the modifier presumptively attaches to the nearest reasonable referent. That presumption is a default, not a fixed rule — it yields where the claim language, the specification, or the prosecution history points the other way. The decision situates claim construction within the ordinary grammar of legal texts, and it places the burden on the intrinsic record to displace the natural reading of the words.

Netflix v. DivX, No. 2024-1541, decided February 13th, 2026. I'm John Goodhue. Thanks for watching.