Judge Denies Verizon Request To Delay Payments To ActiveVideo

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A federal judge on Monday denied Verizon Communications' request for a stay on patent-royalty payments the court ordered the telco to pay interactive TV vendor ActiveVideo Networks.

Verizon spokesman Ed McFadden said the company will file a motion requesting a stay on the payments with the U.S. Court of Appeals for the Federal Circuit on Monday evening.

Last month, Judge Raymond Jackson of U.S. District Court for the Eastern District of Virginia issued a permanent injunction effective May 23, 2012, ordering Verizon to stop using two patents owned by ActiveVideo -- whose largest customer is Cablevision Systems.

Until the injunction goes into effect, Verizon must pay $2.74 per month per subscriber in royalties to ActiveVideo, according to the court order. With about 4 million FiOS TV subscribers at the end of September, Verizon is on the hook for about $11 million per month, with the first payment due to ActiveVideo by Friday, Dec. 16.

Verizon has said it is working with Cisco Systems to implement changes in its VOD system to comply with the court order. The telco may be forced to disable FiOS TV's VOD and interactive widgets if it is unable to develop a workaround that does not use the ActiveVideo patents by next May.

Verizon requested the stay on patent payments while it appeals the Virginia court's injunction ruling, as well as the damages awarded and the underlying decision of infringement, to the federal appeals court.

In August, a federal jury in Virginia found Verizon's FiOS TV violated four of five patents asserted by ActiveVideo and awarded ActiveVideo $115 million in damages. Judge Jackson subsequently added at least $24.1 million in supplemental damages and interest to the amount Verizon must pay to ActiveVideo.

San Jose, Calif.-based ActiveVideo has said it originally approached Verizon in 2005 about selling the telco its network-based interactive TV software.

In an interview, ActiveVideo president and CEO Jeff Miller said Verizon will owe his company about $250 million in total by the time the permanent injunction goes into effect in May 2012.

"For several years, we worked with Verizon and attempted to sell them something. They had access to a lot of our information and intellectual property," Miller said. "What we're seeking through the court is to stop the unlawful use of our technology. Right now, we want Verizon to stop using our technology."

Miller said Verizon has not made any payments to ActiveVideo to date.

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