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Verizon Communications Inc. is on the hook for about $11 million in royalty payments for each of the next six months following a jury’s verdict that its FiOS television service infringed on patents held by ActiveVideo Networks Inc. Eastern District of Virginia Judge Raymond Jackson on Dec. 12 denied Verizon’s motion to stay payment of the “sunset royalties.” Jackson had ordered a permanent injunction on Nov. 23 allowing Verizon to continue using ActiveVideo’s technology during a six-month sunset period — as long as it pays $2.74 per FiOS TV subscriber per month on the first day of each month. The first payment is due on Dec. 16. On Aug. 2, the jury issued a $115 million verdict for ActiveVideo after finding that Verizon infringed four patents related to interactive television services.  The jury awarded Verizon $16,000 for ActiveVideo’s infringement of two Verizon patents. There’s been some question about the ability to secure injunctive relief in patent infringement cases since the 2006 U.S. Supreme Court ruling in eBay v. MercExchange, when the justices rejected automatic injunctive relief, said ActiveVideo’s lead counsel, Dan Johnson, a San Francisco litigation partner at Morgan, Lewis & Bockius. “Our position was that there was no requirement that they had to be direct competitors, but in fact they competed very directly with consumers of our technology. And the technology they were offering was competitive with ours,” Johnson said. “Whether you call them indirect or direct was irrelevant. The fact was we were entitled to injunctive relief.” The jury awarded $1.13 per FiOS subscriber per month, but the sunset payments will be higher because Jackson conducted a second hypothetical negotiation following the verdict, “and concluded that ActiveVideo was in a much stronger bargaining position than before the verdict,” Johnson said. Verizon struck back on Dec. 12, filing an emergency motion asking the U.S. Court of Appeals for the Federal Circuit to stay sunset royalties pending appeal. “Verizon remains confident we will prevail on appeal,” said company spokesman Bob Varettoni. Johnson also was optimistic. “An emergency stay usually is granted when someone’s right to do business is at stake,” he said. “That’s not the situation here. All Verizon is forced to do is pay.” Representing Verizon were lawyers at Hunton & Williams in Richmond, Va.; Kellogg, Huber, Hansen, Todd, Evans & Figel in Washington; and New York’s Simpson Thacher & Bartlett. Sheri Qualters can be contacted at [email protected].

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