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Rovi Sues Comcast, Alleging Patent Infringement

Rovi, Dish and EchoStar agree to 'standstill' on litigation while licensing negotiations continue

Rovi has filed a lawsuit against Comcast, alleging the cable giant and its set-top suppliers infringe 14 of its patents.

Also Friday, Rovi announced that it has agreed to a “standstill” in litigation with Dish Network and EchoStar, while the parties continue to negotiation a possible extension of their license agreement.

Shares of Rovi fell more than 14% Friday, as investors reacted to the company’s failure to reach a new patent-licensing deal with Comcast.

In the suit against Comcast, filed in the U.S. District Court for the Eastern District of Texas, Marshall Division, Rovi asserts infringement by Comcast of 14 U.S. patents for features in the cable operator’s products. That includes the way that Comcast implements remote DVR recording, AnyRoom DVR and X1 search. Rovi is seeking an injunction barring Comcast’s continued infringement and unspecified monetary damages.

Comcast said in a statement, “We disagree with Rovi’s accusations and intend to defend the cases vigorously. Beyond that, we can’t comment on pending litigation.”

“For over a decade, Comcast built its business using Rovi’s patented technology, which it licensed for a fixed term,” Rovi president and CEO Tom Carson said in a prepared statement. “Comcast’s decision to continue using Rovi’s pioneering technology as an unlicensed infringer is simply intolerable.”

Carson said Rovi had undertaken “numerous attempts” to negotiate an extension with Comcast prior to filing the suit.

Rovi has aggressively pursued licensing deals and litigation for its patent portfolio, dating back to predecessor company Gemstar-TV Guide International. Rovi says it has more than 5,000 issued or pending patents worldwide, with intellectual-property licensing representing 54% of its total 2015 revenue.

According to Rovi, its patents are licensed by eight of the top 10 U.S. TV service providers, including AT&T, Time Warner Cable and Charter Communications.

On Thursday, Rovi said in an SEC filing that reached a deal with Time Warner Cable — which is in the process of being acquired by Charter — to extend its existing interactive program guide and patent licensing agreement. The pact, which was set to expire March 31, has been extended through Dec. 31, 2016.

Last year, Rovi suffered a rare legal defeat against Netflix, after a U.S. federal judge ruled that the five Rovi-owned patents at issue in Rovi’s lawsuit against the streaming-video company were invalid.

Rovi said it has not changed its financial estimates for 2016, which anticipated possible litigation with Comcast.

Separately, Rovi has reportedly been in talks to acquire DVR maker TiVo, which also has a sizable patent portfolio and won $1.6 billion to date from intellectual-property litigation.

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