Bell Canada sued for $350 million by small tech companies over IPTV patent

A pair of Toronto-based technology companies, NorthVu and MediaTube, believe that Bell Canada (NYSE: BCE) and Bell Aliant infringed on their patent when they launched IPTV services. The pair have filed suit seeking at least $350 million.

According to a story in the Toronto Globe & Mail, the two companies said they collaborated with Bell Canada "over several years" on plans to commercialize the IPTV system and that the system is covered by a Canadian 477 Patent designed to deliver audio and video over telephone lines.

NorthVu owns the patent and MediaTube is a licensee and potential IPTV provider itself.

Bell Canada, in an e-mailed statement to the newspaper, dismissed the suit as "without merit" and promised it would "strongly defend our position in court." Bell Aliant, the newspaper said, issued a similar statement.

Bell Aliant's IPTV services were drawn into the court action because it "uses equipment similar to Bell Canada's" and is thus also infringing on "certain claims of the 477 Patent," the newspaper said. Bell Canada's parent company, BCE, to muddle things even further, owns 44 percent of Bell Aliant. The main point of attack, however, appears to be Bell Fibe, Bell Canada's IPTV service, which, the complaining companies contend, used the patented method to effectively deliver IPTV.

According to the claim, as reported by the newspaper, the patent covers a "cost effective system to demodulate and deliver audio/video signals to homes and businesses while taking advantage of pre-existing twisted pair telephone lines."

It stands out because it does not require the simultaneous transmission of all audio/video content to interface devices, but selects instead from available audio/video content in response to user requests.

"MediaTube continued to seek capital to commercialize its IPTV service, but this effort has been impeded severely by the fact that Bell Canada is providing the same service in Ontario and Quebec in competition with MediaTube," the court filing stated.

NorthVu and MediaTube want a minimum of $350 million royalty for "past infringement" of the patent plus "other unspecified damages and costs and an injunction to prevent Bell and Bell Aliant from providing their IPTV services in Canada by using methods to redistribute audio and video signals that they claim are covered by the patent," the newspaper story said.

Lawyers for the two complaining companies declined to provide comment on the case.

For more:
- the Toronto Globe & Mail has this story

Related articles:
IPTV expansion key to Bell Canada's future
IPTV seen cutting into cable, satellite in Canada

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