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Rovi is mad at Comcast

Source: Grill IP patents news

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Comcast, the largest in the world cabling company (at least in cashflow), has decided to ignore the fact that its licenses for some technologies of its former partner Rovi are expired. It is true, for some time the two titans have been friends, and they even have been thinking about collaborative projects. But year after year passed, and gradually Comcast somehow just got used to the fact that the technologies, considered revolutionary at the time of development, have been implemented on the basis of licenses obtained from Rovi. Moreover, the summer of cable networks began with the patented technologies that once had been implemented by Rovi through contracts worldwide. More than 22% of the company’s revenues come from royalties paid by licensees. Such companies as Netflix, DirectTV, and Time Warner Cable are in this list.

But something happened, and the horn of plenty, from which Rovi had been getting its money to wallow, reeled and cracked. Or rather, there was a precedent of the judgment in the case of Alice vs. CLS Bank, the first time when a software patent was declared invalid. By that time Rovi had really gotten hooked on the license revenue. They gradually had begun to buy up patents for the technologies in the field of network streaming and transmission and distribution of television signals. It is one thing to develop technology, and quite another – to sell them. In other words, newspapers featured hints that there is an odour of trolling in the Rovi’s business. And the first sign was Netflix, which stopped payments on certain licenses, and implemented a number of technologies without permission. And then something very interesting happened. Netflix filed a lawsuit against Rovi in court seeking an annulment of five Rovi’s patents. And the four of them was annuled! After the case of Alice vs CLS-Bank software patents were not that diamond wall, behind which you could hide out. Judges’ reasons were simple and logical: it is quite a routine procedure to create content directories or to bookmark favorite programs and everyone is doing it without any patents.

Now it is Comcast’s turn. Rovi, whose shares have fallen by 40% over the past year, is fighting for dear life, and, apparently, Comcast is not noticing it. 14 patent licenses have expired long ago, but Comcast continues to use these technologies to this day, not even paying commission charges which have been specified in the original agreement. But the situation seems to be changing: Rovi may well win the case, and then the cable company would have to fork out the money. But nobody knows whether the former Hollywood developers have enough strength to fight the television titan.


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Author: grill-ip

Grill IP is a non-profit project for educational and entertaining purposes only. Our aim is to provide quick and easy access to aggregated and original patent news, IP analysis, interesting business cases in IP, basic legal updates and a list of patent transactions.

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