C-COR, Concurrent Ink VOD Patent Deal

Settling a long and convoluted case of intellectual-property horse trading, Concurrent Computer and C-COR have struck an agreement giving Concurrent transferable rights to two key patents covering video-on-demand systems.

“The deal is part of a settlement that has been in the works for some time between C-COR and Concurrent,” Concurrent executive vice president Kirk Somers said. The portfolio licensed to Concurrent by C-COR comprises two patents, but the main patent in the deal is U.S. Patent No. 5,805,804

The ’804 patent has a complicated past. It was originally issued in 1998 to database-software provider Oracle and covers a method for delivering “multimedia data” over a network using a distributed-computing architecture.

Essentially, the patent describes a client-server mechanism that allows applications to be split so that client devices (e.g., set-top boxes) can focus on presenting video while an array of back-end servers manages access to particular resources.

C-COR owns rights to the ’804 patent through its 2004 acquisition of VOD systems vendor nCUBE, which was owned by Oracle CEO Larry Ellison.

Meanwhile, Concurrent had obtained a license to the ’804 patent as part of its 2002 investment in London-based Thirdspace Living, a now-defunct developer of open-standard video server systems and client software.

That license was reissued by Alcatel, which purchased the assets of Thirdspace in May 2003. (Alcatel became Alcatel-Lucent after those two companies merged last year.)

And there’s more history: nCUBE in 2002 won a patent-infringement lawsuit against VOD vendor SeaChange International, which a jury found had infringed the ’804 patent. SeaChange appealed the decision, but lost the appeal in January 2006 and subsequently paid C-COR about $8 million.

The decision in the SeaChange case “would indicate this patent is important,” said Concurrent’s Somers.

As part of the deal between Concurrent and C-COR, a separate agreement was negotiated between Thirdspace and C-COR. Under that agreement, Thirdspace agreed to drop any claims to litigation proceeds recovered by C-COR in its patent suit against SeaChange.

C-COR paid Thirdspace $3.2 million, and Thirdspace immediately paid that amount to Concurrent to pay off secured debts owed to Concurrent.

Then, Concurrent paid C-COR $1.7 million for the patent license, keeping the remaining $1.5 million.

For Concurrent, an important aspect of the deal is that the patent license is transferable.

Under the terms of the agreement, any acquirer of Concurrent or its video-streaming business will be covered under the patent portfolio previously licensed to Concurrent by telecommunications-equipment vendor Alcatel, as long as the acquirer has not been identified as an Alcatel license target.

“We are pleased to have this agreement completed,” Concurrent president and CEO Gary Trimm said, in a prepared statement. “This news should reassure the investment community and our customers that any Concurrent products sold by us or an acquiring company will be free from any and all patent claims based on the licensed patents.”

For its part, C-COR said in a statement: “This further validates the premium value of our video server architecture patent portfolio and our position as an [intellectual property] leader in the video-on-demand market.”

C-COR is in the midst of being acquired by Arris Group, which announced a cash-and-stock bid worth $730 million for C-COR last month.