Comcast, Verizon Agree To Cease-Fire On Patents

Agreement Calls For Comcast To Buy Verizon Wireless Services For Employees

By Todd Spangler -- Multichannel News, 10/6/2008 1:55:00 PM

Comcast and Verizon Communications have inked a deal under which the two companies have agreed to not sue each other over patent claims for a period of five years, according to company sources and published reports.

The pact was negotiated before Cox Communications won a key legal victory against Verizon, with a federal jury Monday finding Cox did not infringe the telco’s patents related to Internet telephony technologies.  

According to executives familiar with the Comcast-Verizon pact, the arrangement is not the equivalent of a license because there are not complete releases of damage liability. When the agreement expires, both parties reserve the right to seek historical damages, but dating back no further than the point at which the agreement was signed.

Under Comcast’s deal with Verizon, the cable company will purchase Verizon Wireless services for its employees. 

The value of the services Comcast purchases from Verizon Wireless would be in the range of $90 million over five years, according to executives familiar with the arrangement. Comcast could purchase additional services that could make the total cost closer to $280 million, The Wall Street Journal reported, citing anonymous sources.

Verizon and Comcast have the option to extend the deal another two years, if Comcast continues to purchase wireless services under the agreement. 

The deal covers thousands of voice, video and data patents held by the two companies. Under the terms of the agreement, neither party is admitting infringement or validity of any patents in the other company's portfolio.