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ITC Finds Cablevision Didn't Violate Verizon Set-Top Patents

The U.S. International Trade Commission officially terminated its review of Verizon Communications' complaint that Cablevision Systems set-top boxes infringe the telco's patents -- finding no violation on the part of the cable operator -- but the legal wrangling between the companies isn't over yet.

In a notice issued Tuesday, the ITC cited the Aug. 2 final judgment by the U.S. District Court for the Eastern District of Virginia in a separate patent-infringement suit filed against Verizon by ActiveVideo Networks, an interactive TV vendor whose biggest customer is Cablevision.

The judge in the Virginia case ruled that two of Verizon's patents asserted in a counterclaim against ActiveVideo were invalid, including U.S. Patent No. 6,381,748 ("Apparatus and methods for network access using a set top box and television"). Separately an ITC judge found Cablevision violated the '748 patent, while dismissing Verizon's claims on four other patents, a decision the full commission upheld.

The ITC, in its final review, said "there is no violation of section 337 [of the Tariff Act of 1930 barring the import of goods that infringe intellectual property] in this investigation based on the preclusive effects of the district court's finding of invalidity."

Cablevision and Verizon declined to comment on the latest ITC ruling.

But Verizon hasn't run out of legal options. The telco may decide to appeal the ITC decision to the federal circuit.

Verizon also is challenging the ruling by Judge Raymond Jackson of the U.S. District Court for the Eastern District of Virginia invalidating the '748 patent. If that decision were overturned, the ITC could move to ban Cablevision set-tops.

In addition, Verizon's patent-infringement suit against Cablevision filed in the U.S. District Court for the District of Delaware in March 2010 alleging violation of eight patents -- a superset of the five in the ITC claim -- was stayed during the review by the trade commission. That case will now proceed.

Verizon's ITC complaint against Cablevision, also filed in March 2010, claimed three of the MSO's set-top boxes -- Cisco Systems' Scientific Atlanta Explorer 4250HD, SA Explorer 8300HD and SA Explorer 4200HD -- violated five of the telco's patents.

Verizon has reached intellectual-property cross-licensing agreements with cable operators including Comcast, Time Warner Cable and Charter Communications.

Separately, in the ActiveVideo-Verizon case, a federal jury ordered Verizon to pay $115 million in damages to ActiveVideo after finding the telco's FiOS TV service infringed four ActiveVideo-owned patents. Verizon said it will appeal that decision.