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Media & Communications Law - Telecommunications - Provision of services

Thursday, January 26, 2017 @ 7:00 PM  

Action by MediaTube and NorthVu against Bell Canada, alleging patent infringement. The claim concerned Bell’s FibeTV IPTV service, said to infringe a NorthVu patent, licensed to MediaTube. The patent was issued in 2007 based on an application filed in 1999, for an invention described as an interactive audio/video telecommunications system integrating and redistributing signals received in multiple formats to multiple users over existing telephone wires. Bell defended, denying infringement and claiming that the patent was invalid for anticipation and/or obviousness. As the litigation advanced, the claims were narrowed and the defences limited. Bell issued changes to certain discovery answers starting on January 31, 2016. By virtue of these changes, NorthVu and MediaTube further narrowed their claims and withdrew their request for punitive damages. The Court was asked to determine the validity of the patent, and whether the Bell FibeTV service infringed the patent by virtue of the fact that it could easily modify its system to fall within the scope of the patented claims.

HELD: Action dismissed. The essential elements of the patent included a demodulated analog input signal, the use of conductors that excluded the twisted pair of wires carrying telephone signals, the control of channel selection at the server, and the use of a separate, dedicated switching device for each communications interface. The claim was not invalid by anticipation by any of the references asserted by Bell. It was not obvious, as it involved the inventive use of separate, dedicated switches between the redistributor and each communications interface. Bell’s FibeTV service did not infringe the patent. Its network encompassed the use of digital signals only, used the same twisted pair wiring used to deliver telephone service, did not involve channel selection at the modulator, and did not have separate, dedicated switches for each interface. The changes Bell made to its discovery answers did not alter information that made it clear that its FibeTV service did not involve essential elements of the patented claims. Given the lack of any evidence to suggest it intended to modify its system to incorporate the essential elements of the claim, Bell was not infringing the patent because such modifications were possible. The case for non-infringement was compelling, such that NorthVu and MediaTube could not have had a reasonable belief they had an arguable case before receiving the corrected information. As such, special costs payable to them were not appropriate. Bell’s use of the term “patent trolls” to describe the plaintiffs did not give rise to a claim for aggravated costs. The plaintiffs’ claims that Bell acted in a dishonest and/or fraudulent manner in infringing their patent were unwarranted from the outset of the case and justified solicitor-client costs of the punitive damages claim. Based on the weakness of the infringement claim itself, costs were elevated by 50 per cent for the remainder of the action.