Finance

SeaChange Claims Victory in Arris Patent Spat

Says Appeals Court Affirmed Earlier Ruling That Rejected Arris’s Allegations That SeaChange Violated Injunction 10/11/2013 7:59 AM Eastern

SeaChange International on Thursday said the U.S. Court of Appeals for the Federal Circuit has affirmed an October 2012 ruling by the U.S. District Court that rejected Arris Group’s allegations that SeaChange had violated a 2006 injunction that barred SeaChange from using a video-on-demand patent owned by Arris.

It marks the latest chapter in a dispute going back to 2001, when nCube Corp, a SeaChange competitor that eventually became part of Arris through a string of acquisitions, filed a suit claiming that SeaChange's interactive video system infringed an nCube patent.

In May 2002, a jury found that SeaChange VOD software and systems infringed nCube’s U.S. Patent No. 5,805,804, “Method and apparatus for scalable, high-bandwidth storage retrieval and transportation of multimedia data on a network.” SeaChange appealed the decision but lost the appeal in January 2006 and subsequently paid C-COR, which acquired nCube in 2004, about $8 million. SeaChange also redesigned its video system. In 2009, Arris, which bought C-COR in 2007, filed a motion alleging that SeaChange's 2002 workaround violated the injunction entered in the nCube case.

On Thursday, the Federal Circuit found that "the District Court did not err in its factual findings and, therefore, did not abuse its discretion in denying Arris's motion for contempt,” said SeaChange, a company that has been the subject of recent M&A chatter.

"We are pleased that the Court has affirmed the validity of SeaChange's diligent actions that immediately followed the 2002 ruling," said SeaChange general counsel David McEvoy, in a statement.

With affirmation of the U.S. District Court’s decision, “the two companies can go back to competing in their respective markets on the strength of their technology and service, instead of in the Courts," added SeaChange CEO Raghu Rau.

Arris has not yet commented on the latest court decision.