Disney hit with second EU-wide injunction over streaming patents

The Walt Disney Company ↗ 2.18% suffered another legal blow on Thursday as the Unified Patent Court issued a second pan-European injunction barring the media giant from infringing InterDigital's ↗ 0.87% video codec technology, adding to mounting pressure on a stock already trading near its 52-week low.

The Ruling

The UPC's Düsseldorf Local Division handed down the decision on July 23, confirming both that Disney infringes an InterDigital patent covering HEVC video encoding techniques and that the patent is valid. The injunction spans 11 EU countries, including France, Germany, and Italy. Disney can appeal.ipfray.com

The ruling marks the second UPC injunction InterDigital has secured against Disney, following a similar 11-country order from the Mannheim Local Division issued on June 16. InterDigital has also obtained injunctions from German national courts and a Brazilian court over the past year.ir.interdigital.com+2

"Encoding for HEVC is a key component of the high-quality, premium viewing experience that streaming companies like Disney use to justify higher subscription prices," InterDigital Chief Legal Officer Josh Schmidt said in a statement Thursday. "InterDigital has invested heavily in the development of advanced video encoding technologies, and we remain committed to receiving a fair return for Disney's ongoing use of our patented innovations."ipfray.com

Stock Pressure Mounts

Disney shares fell more than 3% on Thursday, trading near a 52-week low of $92.19. The stock has declined roughly 20% over the past 12 months amid concerns over cord-cutting in linear television, corporate layoffs, and cautious investor sentiment ahead of the company's fiscal third-quarter 2026 earnings report scheduled for August 5.TOP1 Marekets+1

What It Means for Disney's Streaming Operations

The injunction leaves Disney with limited options across the 11 affected countries: take a license from InterDigital, fall back to older H.264 encoding, or reconfigure its HEVC encoding to avoid the patented technique. Industry experts have noted that proving a new encoding configuration is safely non-infringing presents a substantial engineering and legal challenge.LinkedIn

The UPC also rejected Disney's FRAND defense in the earlier Mannheim ruling, finding that Disney had behaved as an "unwilling licensee" during negotiations. A third UPC decision involving InterDigital and Disney is expected on September 2.ipfray.com+1