Verizon To Appeal Ruling In ActiveVideo Patent Case

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Verizon Communications said it will appeal a federal district court's permanent injunction barring it from using two ActiveVideo Networks patents even as it works with Cisco Systems on changes to its video-on-demand service to avoid using the ActiveVideo patents in question.

On Nov. 23, in Judge Raymond Jackson of the U.S. District Court for the Eastern District of Virginia issued an injunction that requires Verizon to stop infringing patents held by ActiveVideo effective May 23, 2012, and to pay $2.74 per subscriber in monthly royalties to the vendor until then.

In a statement Friday, Verizon said it would appeal the injunction ruling, as well as the damages awarded and the underlying decision of infringement.

"We are confident that the finding of a patent violation will be overturned on appeal," Verizon senior vice president and deputy general counsel John Thorne said in a statement. "In the meantime we are working with the vendor of our equipment, Cisco Systems, to implement changes that will end any argument about the use of ActiveVideo's patents."

ActiveVideo, whose largest customer is Cablevision Systems, originally sued the telco in May 2010.

In a statement, ActiveVideo president and CEO Jeff Miller said, "In order for Verizon to avoid infringing our pioneering technology it will have to significantly redesign FiOS TV and likely remove much of the functionality that consumers demand. Verizon's continued refusal to accept the numerous court rulings and the jury's verdict is not in the best interests of its customers or shareholders, and ActiveVideo is confident the appellate courts will agree."

Under the terms of Judge Jackson's order, Verizon must pay damages of $2.74 per FiOS TV subscriber per month starting Dec. 1 related to the FiOS video-on-demand service. As of Sept. 30 had 3.98 million FiOS TV subscribers, so the telco would owe at least $10.9 million per month to ActiveVideo until the permanent injunction goes into effect.

In August, a jury in the U.S. District Court for the Eastern District of Virginia found Verizon's FiOS TV violated four of five patents asserted by ActiveVideo and awarded ActiveVideo $115 million in damages.

ActiveVideo subsequently filed a motion for an injunction barring Verizon from using two of the patents -- pertaining to their use in the FiOS VOD service -- and last month Judge Jackson added at least $24.1 million in supplemental damages and interest to the amount Verizon must pay to ActiveVideo.