The U.S. Court of Appeals for the Federal Circuit in Washington, D.C., had good news and bad news for Verizon late Friday, ruling that it can continue to offer its FiOS customers video-on-demand service but it needs to pay ActiveVideo Networks in California $2.74 per month per subscriber for the ability to do so. The court upheld a previous decision that found three ActiveVideo patents had been infringed by Verizon; however, it reversed the decision on a fourth patent.

In their decision, the appellate bench wrote, “The district court’s grant of summary judgment of invalidity as to the Verizon ’748 patent is vacated and remanded for further proceedings. The district court’s entry of a permanent injunction is reversed. The district court’s imposition of a sunset royalty is affirmed. The district court’s judgment of infringement with respect to the ActiveVideo ’578, ’678, and ’883 patents is affirmed. Because Verizon has not argued either before the district court or on appeal that a finding of non-infringement of the ’582 patent should result in a reduction of damages, we affirm the damages award against Verizon in full. The district court’s judgment in all other respects is affirmed.”

ActiveVideo released a statement that said, in part,  “We’re gratified that the Court of Appeals for the Federal Circuit has upheld the validity of ActiveVideo’s patents and affirmed the jury verdict and district court decisions, including nearly $260 million in damages, interest and royalties awarded to our company to date and the potential for future royalties.”

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