Federal Circuit Upholds $100M Verizon Video On Demand Patent Damages

August 27, 2012, by Mandour & Associates, APC

The U.S. Court of Appeals for the Federal Circuit on Friday issued a mixed ruling upholding a $100 million damage award against Verizon Communications Inc. in a patent dispute with ActiveVideo Networks Inc. over video on demand technology.

ActiveVideo asserted U.S. Patent Numbers 5,550,578, 6,205,582, 6,034,678, and 6,100,883 against Verizon at trial, alleging that Verizon’s video on demand feature of the Verizon FiOS-TV system infringed.

The ’578, ’678, and ’883 patents share a common specification and generally disclose and claim interactive television systems and methods for delivering interactive television to subscribers, according to the Federal Circuit.

The ’582 patent generally discloses an interactive television system where the headend processing center includes a frame server component and a plurality of individually assignable processors, which communicate with assigned home interface controllers.

Verizon asserted counterclaims that ActiveVideo infringed U.S. Patent Numbers 6,169,542 and 7,561,214, as well as U.S. Patent Number 6,381,748, which was held invalid by the district court prior to trial. The three Verizon patents generally disclose systems and methods related to interactive television features, including internet access, two-dimensional channel navigation, and advertising.

After a three-week trial, the jury found that the parties infringed each others’ patents and awarded ActiveVideo $115,000,000 and Verizon $16,000 in damages.

After trial, the district court entered a permanent injunction against Verizon, established a sunset royalty for Verizon’s continued infringement until the injunction was to take effect, and denied Verizon’s motions for JMOL or new trial on infringement, damages, and invalidity. Verizon and ActiveVideo then cross appealed to the Federal Circuit.

The Federal Circuit reversed the district court’s judgment of infringement against Verizon as to the ActiveVideo ’582 patent. The appeals court vacated and remanded the district court’s grant of summary judgment of invalidity as to the Verizon ’748 patent.

The district court’s entry of a permanent injunction was reversed, while its imposition of a sunset royalty was affirmed. The district court’s judgment of infringement with respect to the ActiveVideo ’578, ’678, and ’883 patents is affirmed.

The Federal Circuit affirmed the damages award in full, saying Verizon has not argued either before the district court or on appeal that a finding of non-infringement of the ’582 patent should result in a reduction of damages.The district court’s judgment in all other respects was affirmed.