Verizon gets stay in patent suit with ActiveVideo

Verizon (NYSE: VZ)'s patent battle with ActiveVideo took yet another turn Wednesday as the U.S. Court of Appeals granted the telco's request to delay monthly royalty payments of $11 million until its appeal is heard.

A District Court judge on Monday had denied Verizon motion to stay monthly royalty payments imposed by a Nov. 23 court injunction and directed Verizon to make the first monthly payment by Friday; the payment, of $2.74 per FiOS TV subscriber, will cost Verizon about $11 million a month.

Wednesday's ruling pushes any decision until at least until Jan. 26 when ActiveVideo will need to respond to Verizon's appeal, the opening brief of which is due to the court by Dec. 22.

The ruling required Verizon to post bond monthly in lieu of payment to ActiveVideo while the case moves forward.

"Verizon has been ordered to post a bond instead of paying the royalty in cash while the Federal Circuit Court of Appeals examines the issue," ActiveVideo said in a statement. "We are confident that they will uphold the original District Court decision and Verizon will soon have to pay royalties as ordered. We are also pleased the Federal Circuit chose to expedite the appeals process and are confident that the original jury's decision will be affirmed."

Verizon has been found liable for up to $250 million in damages, supplemental damages, interest and royalties for its infringement of ActiveVideo's intellectual property in four judgments.

The court also has ordered Verizon to terminate FiOS Video-on-Demand service on May 23, 2012, if it cannot offer the service without unlawfully using ActiveVideo technology.

Verizon last month said it was working with Cisco (Nasdaq: CSCO) to change the way its video-on-demand service works, looking to put an end to its court battles with ActiveVideo. If Verizon doesn't come up with a solution, it may have to temporarily turn off its VOD service.

Judge Raymond A. Jackson, of the U.S. District Court for the Eastern District of Virginia, on Monday said staying the royalty portion of the injunction "would merely provide Verizon the freedom to continue to infringe without any recourse to the prevailing plaintiff."

After the court's ruling Monday, ActiveVideo CEO Jeff Miller said he was "mystified by Verizon's insistence on litigating this matter" and vowed to see the case through to the end.

"I want to make it clear that we will do everything necessary to continue to prevail in this case, should Verizon continue in its ongoing act of piracy," he said. "We will not hesitate to demand that FiOS VOD, widgets and any other infringing services be terminated on May 23 if our rights remain violated."

ActiveVideo filed suit against Verizon in May, 2010, alleging that the Verizon FiOS television service infringed four patents for technology created, owned and used by ActiveVideo.

For more:
- see this MCN article

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