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Lawsuit Causes Verizon to Change VoD System

Jeff Baumgartner
LR Cable News Analysis
Jeff Baumgartner
4/11/2012
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Verizon Communications Inc. (NYSE: VZ) has redesigned its FiOS video-on-demand (VoD) system as the telco tries to work around two ActiveVideo Networks Inc. patents that are central to a lawsuit involving the two companies.

"FiOS customers have seen -- or will soon see -- a message on their guides regarding maintenance related to this redesign," Verizon spokeswoman Heather Wilner said, confirming a FierceCable report that installations of the redesign are underway. She said the new software's already been installed in a few markets and will be extended to all FiOS regions "over the next month."

Verizon is working with its VoD vendors -- Cisco Systems Inc. (Nasdaq: CSCO) and Ericsson AB (Nasdaq: ERIC) -- on the VoD system redesign.

ActiveVideo is hopeful, but not convinced, that Verizon's redesign will sidestep its patents. "Once we gain access to the new system and evaluate it we will decide if filing a contempt motion is warranted," said President and CEO Jeff Miller, in a statement to Light Reading Cable.

Why this matters
The redesign is an important milestone in ActiveVideo's litigation against Verizon, though the workaround remains subject to the court's review and approval. Per a permanent injunction set to take effect May 23, Verizon's been on the hook to pay ActiveVideo about $11 million in royalty payments, but a federal court granted a temporary stay last year that gave the telco time to develop the workaround.

Counting earlier judgments, ActiveVideo has estimated that Verizon owes the vendor up to $250 million, but the telco has not paid a dime to the vendor as it appeals the injunction and patent infringement judgments.

For more



— Jeff Baumgartner, Site Editor, Light Reading Cable

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Jeff Baumgartner
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Jeff Baumgartner,
User Rank: Light Beer
12/5/2012 | 5:36:39 PM
re: Lawsuit Causes Verizon to Change VoD System


Verizon's in a strange spot here... it's appealing everything yet still has to get this workaround done. If the appeals are successful it would seem that Verizon could mothball the workaround and go back to its original system. So it's like, hey, we think we're clean, but we're going to scrub up anyway. JB

Jeff Baumgartner
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Jeff Baumgartner,
User Rank: Light Beer
12/5/2012 | 5:36:36 PM
re: Lawsuit Causes Verizon to Change VoD System


Here's the rest of Jeff Miller's statement... expect them to have a bit more to say after they get a chance to review Verizon's redesign:

“It would be imprudent of us to comment until we and the court have had a chance to review Verizon’s FiOS VOD redesign.  We’re hopeful that Verizon is indeed ceasing its infringement on our technology, and that the next step will be the payment of almost $250 million in court-ordered damages, interest and royalties due ActiveVideo for infringing of our patents.  Once we gain access to the new system and evaluate it we will decide if filing a contempt motion is warranted.”


msilbey
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msilbey,
User Rank: Blogger
12/5/2012 | 5:36:35 PM
re: Lawsuit Causes Verizon to Change VoD System


I didn't notice any messages, but it's quite possible I missed one, or that my husband caught it and then deleted. 


As for the changes being cosmetic- do we know what the patents covered? Could there be further tinkering happening with how the videos are processed?

Jeff Baumgartner
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Jeff Baumgartner,
User Rank: Light Beer
12/5/2012 | 5:36:35 PM
re: Lawsuit Causes Verizon to Change VoD System


I suppose it's somewhat refreshing if this involves some cosmpetic, albeit annoying tweaks rather than a complete overhaul.  Did you receive any messages from VZ warning that the VoD system might be down for a period? Looks like Steve Donohue took a pic of the on-screen warning, but wasn't sure if that would be the case in all markets as FiOS rolls out the redesign. JB




 
msilbey
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msilbey,
User Rank: Blogger
12/5/2012 | 5:36:35 PM
re: Lawsuit Causes Verizon to Change VoD System


As a FiOS user I noticed a couple of minor changes yesterday. My VoD bookmarks disappeared, and programs that were separated into HD and SD are now listed together in a single folder. Other than that, I haven't seen anything remarkably different.


I wonder if the changes are the same on the Motorola and Cisco boxes. Since VoD gets delivered over IP, I'm guessing they're very similar. 

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