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nCUBE Sues SeaChange Over Patent

Returning serve against SeaChange International Inc., nCUBE Corp. has filed a lawsuit that claims its video-on-demand and ad-insertion rival infringed on a patent that manages content between the client and server in a VOD configuration.

The complaint, filed on Jan. 8 in Delaware District Court in Wilmington, seeks a permanent injunction that would require SeaChange to cease shipment of all infringing products.

The latest suit revolves around a patent nCUBE obtained on Oct. 25, when Oracle Corp. transferred its interactive-television division to nCUBE and Thirdspace Living Ltd. in exchange for minority stakes in each company. Oracle chairman Larry Ellison is the majority owner of nCUBE.

According to nCUBE, the patent is fundamental to VOD and covers elements essential "to providing a commercially viable real-time multimedia VOD server that supports storage and playback of real-time audio and video data."

Michael Pohl, nCUBE's president, said his company uses technology tied to that patent in "all deployments that we have today." The company's most notable VOD deal is with Enron Corp. and Blockbuster Inc., which launched a digital subscriber line-based VOD service last month.

Germany's Bertelsmann Broadband Group, overbuilder Seren Innovations Inc., Canadian MSO Shaw Communications Inc. and U.K. operator Telewest Communications plc are also nCUBE VOD clients.

SeaChange co-founder and vice president of business development and marketing Ed Delaney countered that the "SeaChange ITV Command Center Software," which manages and runs VOD operations, doesn't perform as explained in nCUBE's patent.

"Our legal and technical teams feel strongly that we do not violate (nCUBE's) patent," Delaney said.

SeaChange's official response came in a press release in which CEO Bill Styslinger said the company believes the nCUBE complaint was "without merit."

The statement also said, "SeaChange will vigorously defend its technology, products and customers."

Last year, a Delaware civil jury upheld SeaChange's MediaCluster video server patent against a challenge from nCUBE. SeaChange filed that lawsuit last June; nCUBE responded by saying it would modify its MediaCUBE-4 to avoid future patent infringement.

Nonetheless, Pohl said the jury made "several errors" and nCUBE plans to continue to press its case when a judge is assigned for a final ruling.

Janco Partners research analyst Stacy Forbes called the timing of nCUBE's suit "curious," and speculated that nCUBE may be seeking leverage for a cross-licensing arrangement with SeaChange.