VOD and interactive TV equipment and software provider, SeaChange International, says that the US Court of Appeals for the Federal Circuit has affirmed, in a 2-1 split decision, a May, 2002 jury verdict by the US District Court for the District of Delaware in one of two patent-infringement cases between itself and C-COR, the company which in December, 2004 acquired VOD technology provider, nCUBE. The jury found that SeaChange's Connection Manager software "willfully" infringed upon an nCUBE patent (US# 5,805,804) which describes an architecture that a) allows video servers to provide scaleable video services, while b) minimizing the changes that need to be made to those servers in order to ensure compatibility with operators' legacy systems. The appeals court also affirmed the damages awarded in that case: the jury decided that SeaChange must pay nCUBE over $2 million in damages, plus a 7% royalty on all sales of infringing products post February 1st, 2002. SeaChange says that, since the jury verdict, it has made an accrual on its financial statements for the damages and attorney fees; according to the company, as of October 31st, the amount of the accrual was approximately $7.8 million. The company also says that it does not expect the Federal Circuit opinion to have any additional impact on its bottom line.
According to SeaChange, since the May, 2002 verdict, it has adapted its Connection Manager software to ensure that it does not infringe on the C-COR patent: "This outcome will not impact our customers," SeaChange president and CEO, Bill Styslinger, said in a prepared statement. "Based on the District Court's decision nearly three years ago, we carefully developed a revised software module that we believe does not infringe the patent. All subsequent software shipped after the May 2002 decision included the revised software module and all of our customers were upgraded to it. We believe that the Court's decision will not impact our future products, our financial position or our overall opportunities in the worldwide on-demand market."
The other patent-infringement case between SeaChange and C-COR was filed by SeaChange in June, 2002. The company claimed that the C-COR/nCUBE MediaCube-4 product infringes upon its US patent #5,862,312, which describes a method for redundantly storing video data objects in a distributed computer system. Last summer, the US Court of Appeals for the Federal Circuit overturned an earlier decision in SeaChange's favor by the US District Court for the District of Delaware. The District Court must now decide whether the SeaChange patent in question is, in fact, valid.
(Note: this article was published in the January 18th issue of the InteractiveTV Today [itvt] email newsletter.)
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