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Cablevision Still at Risk in Verizon Patent Fight

The U.S. International Trade Commission (USITC) on Thursday upheld a judge's ruling that Cablevision Systems Corp. (NYSE: CVC) did not infringe on four Verizon Communications Inc. (NYSE: VZ) set-top-box-related patents but affirmed that the MSO was violating a fifth.

Verizon filed the suit last year in an attempt to block Cablevision from importing several digital set-top boxes made by Cisco Systems Inc. (Nasdaq: CSCO). The USITC noted (PDF) that it's still considering whether to ban imports of boxes based on the patent that Cablevision was found to be violating. The Commission said it is "interested in receiving written submissions that address the form of remedy, if any, that should be ordered."

The USITC is expected to make a final decision on Sept. 20.

That keeps Cablevision at risk, but the MSO is confident that an earlier, separate judgment on the patent in question will put it in the clear for good.

"This ruling is a significant win for Cablevision," the Bethpage, N.Y.-based MSO said in a statement. "The ITC rejected four of Verizon's five claims in the case, and the underlying patent in the fifth claim had already been invalidated by a Virginia court, which late last month rejected a motion by Verizon to reconsider that decision."

That's in reference to a different civil case between Verizon and ActiveVideo , one of Cablevision's advanced video technology partners. In May, a Virginia judge invalidated two Verizon patents, including No. 6,381,748 (Apparatus and methods for network access using a set-top box and television), the one the ITC affirmed that Cablevision was violating. (See Verizon VoD Claims Challenged in Court and ActiveVideo Suit Targets Verizon.)

Verizon declined to comment.

Why this matters
The ITC's decision to let the judge's decision stand in May keeps Verizon's patent hopes alive against Cablevision. Among the worst-case scenarios, Cablevision could have its set-top box shipments seized at the border or be forced to negotiate some sort of licensing deal with Verizon.

There will be more clarity when the ITC makes its final ruling in September, but a decision against Cablevision would obviously harm the MSO's ability to compete with Verizon's FiOS service portfolio.

So far, Cablevision has held its own against FiOS using a mix of high-speed data, voice and video services. On the video end, it's been able to keep customers with a lineup of interactive TV services and a new remote-storage DVR service that currently runs on a number of Cisco and Samsung Electronics Co. Ltd. (Korea: SEC) set-top box models. (See Cablevision's Network DVR Branches Out.)

For more
Read more about the case.


— Jeff Baumgartner, Site Editor, Light Reading Cable



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