A federal judge ruled Wednesday that Verizon Communications must stop using two patents owned by interactive TV firm ActiveVideo Networks, issuing a permanent injunction effective May 23, 2012, and ordering the telco to pay ActiveVideo $2.74 per FiOS TV subscriber per month starting Dec. 1.
Verizon as of Sept. 30 had 3.98 million FiOS TV subscribers. That means the telco will owe at least $10.9 million per month to ActiveVideo -- whose largest customer is Cablevision Systems -- until the permanent injunction is in 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 filed a motion for an injunction barring Verizon from using two patents in August 2011, after originally suing the telco in May 2010.
Last month, Judge Raymond Jackson for the Eastern District of Virginia added at least $24.1 million in supplemental damages and interest to the amount Verizon must pay to ActiveVideo.
While Verizon had argued against ActiveVideo's claim of "irreparable harm" because the two companies are not direct competitors, "There is no doubt that ActiveVideo suffers indirect losses when Cablevision suffers direct losses from Verizon's infringement," Judge Jackson wrote in the order Wednesday.
Verizon declined to comment. The telco may appeal the decision.
"We are extremely pleased with the court's decision to enjoin Verizon's infringing activities," ActiveVideo president and CEO Jeff Miller said in a statement. "It is only right that Verizon, having been found to infringe our patents, should be prevented from competing with us... We believe it is well past time for Verizon to comply with the court's decision, and to cease its unlawful and unauthorized use of our intellectual property."
The four ActiveVideo patents that Verizon was found to have violated are U.S. Patent Nos.: 6,034,678, "Cable Television System With Remote Interactive Processor"; 5,550,578, "Interactive And Conventional Television Information System"; 6,100,883, "Home Interface Controller for Providing Interactive Cable Television"; and 6,205,582, "Interactive Cable Television System With Frame Server."
The two patents covered under the permanent injunction order are the '578 and '582 patents.
In May, Judge Jackson ruled that two of Verizon's patents asserted in a counterclaim against ActiveVideo were invalid.
Separately, Verizon had sued Cablevision and brought a complaint before the U.S. International Trade Commission, alleging the MSO violated several telco-owned patents. The ITC ultimately rejected Verizon's claims. The commission found that although Cablevision did violate one Verizon patent -- U.S. Patent No. 6,381,748 ("Apparatus and methods for network access using a set top box and television") -- the Virginia court had ruled it invalid. Verizon's lawsuit against Cablevision in the U.S. District Court in Delaware is now proceeding and the telco is appealing the judge's patent-invalidation ruling.
According to San Jose, Calif.-based ActiveVideo, it first contacted Verizon in 2005 seeking to reach an agreement to deploy its interactive TV solution on the FiOS network.
The ActiveVideo-Verizon case is docket no. 10-CV-248 in the U.S. District Court for the Eastern District of Virginia. ActiveVideo is represented in the case by law firm Morgan, Lewis & Bockius.