Viasat wins $283m patent action against Loral

A federal court in San Diego has awarded £283 million in damages to satellite broadband operator ViaSat in its patent action against Space Systems/Loral which built its ViaSat-1 craft.

ViaSat had sued for double that sum. The jury took two weeks to deliberate and agree that Space Systems/Loral (SS/L) had infringed numerous ViaSat patents, and that SS/L had breached at least portions of its agreements to keep ViaSat’s intellectual property confidential.

“What we were looking for was validation and justice,” said Richard Baldridge, president of ViaSat. “The jury obviously took an incredible amount of time to deliberate, and I think they have done both. They have validated our claims. The value wasn’t the full value, but I think the value represents the view that these guys misappropriated our intellectual property.”

John Celli, president of SS/L said it would appeal the case. “Obviously we are very disappointed,” said Celli. “We were not expecting that, and we certainly will seek to overturn the verdict.”

The background to the claim is fascinating. Back in January 2008 ViaSat contracted with SS/L to incorporate ViaSat’s compression architecture and technology into a satellite that would be capable of delivering 10 times the bandwidth to consumers at less cost.

Then, some 18 months later, SS/L allegedly started building a near-identical satellite for ViaSat’s arch-rival and competitor Hughes Network Systems. Hughes launched this “copycat” satellite in 2012.

ViaSat has further actions running against SS/L, and the pending lawsuit is requesting injunctions to prevent SS/L from using ViaSat’s patents. This could affect a second satellite currently being built by SS/L for Hughes.

Mike Crawford, an analyst with B.Riley & Co. which follows ViaSat, called the verdict a “very positive result in my opinion.” It sets the stage for a second legal battle between the SS/L and ViaSat with even higher stakes.

SS/L is now owned by MacDonald, Dettwiler & Assoc (MDA) of Canada, but Loral Space & Communications (the previous owners of SS/L) had indemnified MDA in these legal actions to a maximum of $200 million.

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