Time Warner Cable Posts Bond in DirecTV Case
$500K to Cover DirecTV Marketing Expenses if Court Rules for DBS Provider
By Todd Spangler -- Multichannel News, 5/10/2007 7:16:00 AM
Time Warner Cable posted a $500,000 bond to cover marketing expenses incurred by DirecTV payable in the event that a court or jury later finds that the direct-broadcast satellite provider was “wrongfully restrained” by an injunction granted at the cable operator’s request that barred two DirecTV commercials.
The bond is guaranteed by Travelers Casualty and Surety Co. of America, according to a document Time Warner Cable filed Wednesday with the U.S. District Court for the Southern District of New York.
In February, Judge Laura Taylor Swain ordered DirecTV to stop claiming that “for an HD picture that can’t be beat, you’ve got to get DirecTV,” the tag line for a pair of ads featuring Jessica Simpson and William Shatner. Time Warner Cable requested the injunction as part of a larger false-advertising case against DirecTV.
DirecTV requested that Time Warner Cable post a $1 million bond to cover marketing fees it incurred in complying with the injunction, including $260,000 in brochures that the DBS operator said became useless once it was barred from making the “HD picture that can’t be beat” claim.
Time Warner Cable countered that the bond should be no more than $50,000, arguing that DirecTV had already stopped airing ads with the offending tag line before the injunction was issued.
Last week Swain ordered Time Warner Cable to post a $500,000 bond, to cover the $260,000 in brochures, $80,000 in “tear-out sheets,” $4,000 for Web-site changes and other “reasonable costs associated with changes in DirecTV’s advertising campaigns that may be necessitated by compliance with the preliminary injunction order.”
The judge last month denied Time Warner Cable’s request to block DirecTV’s current ads featuring Back to the Future actor Christopher Lloyd claiming that the DBS company will “soon” have three times the HD capacity of cable.
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