Verizon Deploys VOD Redesign Amid Pending ActiveVideo Case

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Verizon Communications has been systematically upgrading its video-on-demand system for FiOS TV, with the help of its VOD vendors Cisco Systems and Ericsson, with a workaround designed to not infringe patents asserted in a lawsuit by ActiveVideo Networks.

"The maintenance has already been done in a few markets and will take place in all FiOS regions over the next month," Verizon spokeswoman Heather Wilner said.

The telco's VOD redesign, initiated in response to legal victories by interactive TV vendor ActiveVideo, was reported Wednesday by FierceCable.

ActiveVideo president and CEO Jeff Miller said in a statement, "It would be imprudent of us to comment until we and the court have had a chance to review Verizon's FiOS VOD redesign. We're hopeful that Verizon is indeed ceasing its infringement on our technology, and that the next step will be the payment of almost $250 million in court-ordered damages, interest and royalties due ActiveVideo for infringing of our patents."

Miller continued, "Once we gain access to the new system and evaluate it we will decide if filing a contempt motion is warranted."

Verizon has an appeal pending before the U.S. Courts of Appeals for the Federal Circuit in the patent-infringement lawsuit filed by San Jose, Calif.-based ActiveVideo, whose largest customer is Cablevision Systems.

ActiveVideo sued Verizon in May 2010 over patents covering interactive TV and VOD. In August 2011, a federal jury in Virginia found Verizon's FiOS TV violated four ActiveVideo patents and awarded ActiveVideo $115 million in damages.

Then in November, a federal district court judge issued a permanent injunction effective May 23, 2012, barring Verizon from using two of the patents, and ordered the telco to pay royalties totaling about $11.5 million per month to ActiveVideo until then.

Verizon won a stay on the payments pending its appeal. The telco has asserted that it had already selected SeaChange International -- its primary VOD systems vendor at the time -- when ActiveVideo approached it about an interactive TV gaming service in 2005. "Verizon copied nothing from AVN," the company said in a legal filing.