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Financial

Verizon Lawsuit Targets Cablevision Boxes, ITV

Verizon Communications Inc. (NYSE: VZ) and Cablevision Systems Corp. (NYSE: CVC), already battling for residential and business customers in New York, will soon be duking it out in the courtroom, too.

Cablevision would be blocked from importing three advanced Scientific-Atlanta -- owned by Cisco Systems Inc. (Nasdaq: CSCO) since 2006 -- digital set-top boxes that run the MSO's interactive program guide (IPG) and interactive TV programming and advertising services, if Verizon succeeds in a patent-infringement complaint it's filed against Cablevision.

In the complaint, filed Monday at the International Trade Commission, Verizon alleges that Cablevision violated several of its patents by importing the Scientific Atlanta Explorer 4250HD, Explorer 8300HD, and the 4200HD set-top box models. (See Cisco to Acquire Scientific-Atlanta.)

To support its argument, Verizon documents in the complaint attempt to show that Cablevision is using tech patented by the telco for several of its products, including its IPG, video-on-demand (VoD) interface, and interactive advertising products such as Optimum Autos.

Verizon also takes issue with the mosaic program guide that Cablevision offers its iO (Interactive Optimum) subscribers. The mosaic guides, which it built with interactive TV firm ActiveVideo , allow subscribers to view multiple news, sports, and kids channels on a single screen. (See Winter Games Go Interactive… for Some TV Viewers, Cablevision's Interactive Ads Click With Subs, and Cablevision Eyes T-Commerce Launch in 2010, and A Tale of Two Interactive Olympics.)

Cablevision was one of the first cable MSOs that Verizon targeted with its FiOS TV and FiOS Internet products, beginning in 2005. (See Cablevision Still Not Sweating FiOS .)

In the ITC complaint, Verizon alleges that Cablevision is using five of its patents without authorization to compete directly with FiOS TV. “This is causing immediate and irreparable harm to Verizon’s business,” Verizon states in the complaint.

Verizon has launched several interactive TV features, including a widget bazaar. Verizon also allows subscribers access to social networks like Facebook and Twitter Inc. through its FiOS TV set-tops. While Cablevision doesn’t yet offer its subscribers access to social networks, the company distributes an advanced interactive program guide through software running on Scientific Atlanta/Cisco boxes, and Verizon is taking issue with these functions in its ITC complaint. (See Verizon Adds Twitter, Facebook to FiOS.)

In a statement issued Tuesday, Cablevision said it plans a rigorous defense. "It is becoming increasingly clear that Verizon is having difficulty competing on the merits in the marketplace, so they are resorting to filing lawsuits and pursuing regulatory bailouts,” Cablevision states.

The patents
The five Verizon patents it's including in the complaint involve technology for delivering video over communications networks and enabling content and data services through a set-top. Its '293 patent describes a set-top box operating system, and its '979 patent describes a dynamically programmable set-top box that can be updated with software support for additional functionality.

Its '748 patent describes a set-top box that can be used to access content on the Internet, and its '078 patent covers set-top technology that “allows users to navigate available programs by channel, and through the selection of an anchor channel, by category.”

— Steve Donohue, Special to Light Reading Cable

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