Roku claims it will have no trouble importing products, including streaming players, connected soundbars and remote controls, in the wake of a US International Trade Commission (ITC) opinion that Roku infringed on a patent held by remote control specialist Universal Electronics Inc. (UEI).

Following an initial determination made earlier in the year that Roku violated UEI's 10,593,196 ('196) patent, the ITC's newly issued opinion and limited exclusion order (LEO) bans the importation of TVs, set-tops, streaming players, soundbars and remote control devices that infringe on the patent.

Figure 1: The Roku Ultra, a streaming device that is exempt from infringement, according to ITC documentation.
(Image source: Roku)

In September, the ITC undertook a review of the final initial determination issued in July that affirmed an earlier finding that Roku did violate the '196 patent, which describes a hardware/software unit called a Universal Control Engine used to identify and select the optimal communications pathway for transmitting command signals.

But the ITC's review also affirmed the initial determination that Roku did not violate two other UEI patents: No. 7,589,642 (Relaying key code signals through a remote control device); and No. 10,600,317 (System and method for simplified setup of a universal remote control).

The limited exclusion order does note an exemption for revised Roku products, including the Roku Ultra and Roku Soundbar, that were adjudicated in the investigation and found to be non-infringing. However, the LEO declined to include an exemption for spare parts or other components, holding that Roku did not provide adequate evidence to support such an exemption.

According to UEI, the orders will become final on January 9, 2022, following the expiration of a Presidential review period.

"Now that the full Commission opinion is publicly available, UEI's clear and decisive victory is plain for all to see," Richard A. Firehammer, Jr., UEI's SVP and general counsel, said in a statement.

Roku: We're good

Roku, though, believes it is in the clear.

"There have been no new developments in this case," Joe Hollinger, VP of litigation and intellectual property at Roku, said in a statement. "On November 10, 2021, the ITC's Final Determination fully absolved Roku from liability in this proceeding by confirming the Administrative Law Judge's Initial Determination findings that two of the three patents asserted by UEI are invalid and that Roku has already successfully implemented technical design changes that eliminate any infringement of the one remaining UEI patent. Based on the ITC's ruling, we do not anticipate any disruption in Roku's ability to continue to import products."

Firehammer countered that UEI believes Roku still infringes on the '196 patent despite "attempts to 'design around' its infringement with recent software updates."

Update: Roku shares dipped $29.83 (-13.46%) to $191.72 each in mid-day trading Wednesday. Investor jumpiness and the sell-off aren't due primarily to the ITC news but rather to Morgan Stanley analyst Benjamin Swinburne cutting his price on Roku to $190 from $295 over concerns about growth and gross margins.

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— Jeff Baumgartner, Senior Editor, Light Reading