SeaChange May Have to Pay Arris Sanctions In 10-Year-Old VOD Patent Case

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Remember the nCube vs. SeaChange patent-infringement lawsuit, filed in January 2001?

It’s still playing out in court a decade later.

The case is now captioned Arris vs. SeaChange International, after Arris acquired C-COR (which previously bought nCube). Arris provided an update on the latest developments in its 10-Q filing last week.

Quick recap: In May 2002, a jury found that VOD software and systems sold by SeaChange infringed various claims of 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 about $8 million.

But it wasn’t over. SeaChange initiated re-examination proceedings of the patent at issue before the U.S. Patent and Trademark Office; the USPTO determined that most of the patent claims were patentable without any modification.

In July 2009, Arris filed a motion for contempt, seeking to enforce the permanent injunction ordered by the U.S. District Court for the District of Delaware and an award of sanctions for SeaChange’s continued sales of the VOD products. SeaChange responded with a declaratory-judgment suit seeking an order that its products don’t infringe the ‘804 patent, which the Delaware court stayed n June 2010 in favor of proceeding with Arris’s motion for contempt.

Now, here’s the latest: In September 2011, the Delaware court confirmed that the contempt proceedings against SeaChange were appropriate, noting its “present inclination to find no colorable difference” between SeaChange’s infringing product and the company’s current product. However, the court also said “further proceedings may be necessary before the Court will be able to make a final finding.”

The wheels of justice turn slowly, my friends.

Separately, it’s interesting to note that Arris reportedly had been sniffing around SeaChange as an acquisition target (see SeaChange Responds To Report About Arris Takeover Talks).

And in other legal news, Arris has been targeted by unhappy investors relating to its proposed $53 million takeover of BigBand Networks (see Arris To Buy BigBand For $53 Million and BigBand CEO’s E-mail to Employees About Arris Takeover).

In October 2011 five lawsuits were filed against BigBand, its directors and Arris alleging “breach of fiduciary duty claiming, among other things, the price that Arris has agreed to pay to acquire BigBand Networks is too low and seeking injunctive relief and monetary damages,” Arris said in the 10-Q filing.

Four suits were filed in California and one in Delaware. Arris said it is “premature to assess the likelihood of a favorable outcome.”

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Programming Note! Don’t miss the Multichannel News breakfast panel discussion at SCTE Cable-Tec Expo 2011 in Atlanta, Video’s Next Act: Setting the Multiscreen Stage, on Tuesday, Nov. 15, prior to the opening general session. Click here for more info: www.multichannel.com/SCTE2011

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