Injunction prompts Verizon to develop alternative interactive TV technology with Cisco
Verizon (NYSE: VZ) said it is working with Cisco (Nasdaq: CSCO) to develop alternative interactive TV technology for its FiOS TV platform, after a U.S. District judge issued an injunction that forces it to pay ActiveVideo nearly $11 million monthly for using technology it has patented. The telco said it is also appealing a ruling that found it infringed ActiveVideo patents.
"We are confident that the finding of a patent violation will be overturned on appeal. In the meantime we are working with the vendor of our equipment, Cisco Systems, to implement changes that will end any argument about the use of ActiveVideo patents," Verizon deputy general counsel John Thorne said in a prepared statement on Friday.
ActiveVideo supplies its CloudTV platform to Verizon rival Cablevision (NYSE: CVC) for its iO: Interactive Optimum service. Verizon didn't say how long it may take to develop a workaround for interactive TV solutions that woldn't violate ActiveVideo's patents.
According to an injunction issued Nov. 23 by U.S. District Judge Raymond Jackson, Verizon has until May 23 to develop alternative interactive TV technology for FiOS TV. Jackson also ordered Verizon to pay ActiveVideo monthly fees of $2.74 per subscriber, beginning in December. With Verizon counting about 3.8 million FiOS TV subscribers at the end of the third quarter, the telco will have to pay ActiveVideo nearly $11 million monthly to comply with Jackson's order.
It's likely that the patent infringement ruling and injunction will compel Verizon to strike a deal with ActiveVideo to license its interactive TV technology.
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