Verizon Communications (NYSE: VZ) must pay up to $11 million a month in royalties to San Jose-based ActiveVideoNetworks for providing FiOS TV customers with video-on-demand service found to violate patents.
The royalties will be paid based on a rate of $2.74 for each subscriber to FiOS TV starting Dec.1, Judge Raymond A. Jackson in Norfolk, Va. ruled late Wednesday, according to Businessweek. Verizon has until May 23 to find a way to get around ActiveVideo's technology before it must cease to use the inventions.
We are extremely pleased with the court's decision to enjoin Verizon's infringing activities, ActiveVideo CEO Jeff Miller said in a statement. It is only right that Verizon, having been found to infringe on our patents, should be prevented from competing with us.
Throughout this process, the court has consistently upheld the rights of ActiveVideo Networks to its patented technology, Miller continued.
We believe it is well past time for Verizon to comply with the court's decision, and to cease its unlawful and unauthorized use of our intellectual property.
ActiveVideo won a $115 million verdict in August after a jury determined Verizon had infringed on ActiveVideo patents, Businessweek reported. The verdict award has since grown to $139.1 million.
Verizon plans to challenge the ruling.
We are confident that the finding of patent violation will be overturned on appeal, John Thorne, Verizon's senior vice president and deputy general counsel, said in a statement given to IBTimes. 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's patents.
The case is ActiveVideo Networks Inc. v. Verizon Communications Inc., 10cv248, U.S. District Court, Eastern District of Virginia.
This article has been updated to provide a statement from Verizon.