Musk’s X Owes VidStream $105 Million for Patent Infringement (1)

X Corp. owes VidStream LLC $105 million for infringing content creation and distribution systems through its social media platforms including X, formerly known as Twitter.

A jury in the US District Court for the Northern District of Texas found Wednesday that X willfully infringed one claim of US Patent No. 8,464,304. However, the jury determined X didn’t infringe US Patent No. 8,601,506.

VidStream alleged the X, Periscope and Vine apps infringed the patents. Youtoo Technologies LLC, the original patent owner, sued X (then Twitter) in March 2016, alleging infringement of the ‘304 and ‘506 patents and US Patent No. 9,083,997. The patents cover systems allowing users to create video content for distribution on social media platforms, webpages, and television broadcasts.

X challenged the patents at the Patent Trial and Appeal Board, which declared the ‘997 patent as unpatentable, but upheld the validity of the ‘304 and ‘506 patents. X appealed, but the US Court of Appeals for the Federal Circuit upheld the administrative tribunal’s rulings.

Youtoo declared bankruptcy in November 2017 and the district court stayed the case a month later, according to court records. VidStream acquired Youtoo’s patents in April 2018 and Youtoo requested in March 2020 for the court to replace it with VidStream as the plaintiff in the litigation.

X argued in April 2020 that VidStream forfeited its rights to continue the case by waiting almost two years before requesting to be the plaintiff. VidStream said in a May 2020 response that without being added as a plaintiff, the litigation would exist in a “hazy netherworld” with a patent owner not recognized.

Vidstream sought an injunction banning X from distributing user-generated videos during the litigation, but Chief Judge David Godbey rejected this effort in July 2024. The Federal Circuit affirmed the judge’s ruling in November 2024.

Closings

During closing arguments Tuesday, Bradley Caldwell of Caldwell Cassady & Curry representing VidStream, told the jury that Youtoo had multiple conversations with X about a potential partnership from 2013 to 2014. Caldwell said X frequently ignored other companies’ patent rights, developing their own products if the social media company thought it would take a reasonable amount of time.

“Youtoo told them time and time again about the patents,” Caldwell argued.

Sonal Mehta of Wilmer Cutler Pickering Hale and Dorr LLP, counsel for X, countered that Youtoo never discussed the asserted patents with the social media company. Mehta noted Youtoo chose to not mention patent infringement concerns to X during the conversations in an attempt to prevent the social media company from filing a declaratory judgment action.

“They made the intentional decision to not accuse Twitter of infringement,” Mehta said.

But Caldwell argued Youtoo didn’t want the social media company to file a lawsuit seeking a noninfringement judgment because of the potential high expenses. Youtoo was financially struggling, Caldwell said.

X and VidStream didn’t immediately respond to requests for comment.

Caldwell Cassady Curry PC represents VidStream. Wilmer Cutler Pickering Hale and Dorr LLP and Haynes and Boone LLP represent X.

The case is VidStream LLC v. Twitter Inc, N.D. Tex., No. 3:16-cv-00764, verdict reached 4/16/25.