ViaSat has settled its patent infringement and breach of contract lawsuit with its one-time satellite maker Space Systems Loral, and the latter’s former parent, for US$100m plus interest.
The US satellite broadband provider said it is the largest ever…
ViaSat has settled its patent infringement and breach of contract lawsuit with its one-time satellite maker Space Systems Loral, and the latter’s former parent, for US$100m plus interest.
The US satellite broadband provider said it is the largest ever settlement in a commercial satellite communications intellectual property matter.
It puts to rest a long-running dispute that is thought to have complicated the sale process for Loral Space & Communications, which sold SSL to Canada’s MDA in 2012 but had agreed to indemnify it for damages in the case.
Back in April, a jury found that SSL had infringed on certain ViaSat patents when it built high throughput satellites for other operators. The jury awarded US$283m in damages, but this was later overturned in August by a court considering the post-trial motions, although it left the original trial’s verdict intact.
ViaSat said at the time that the move freed it to argue for an even higher cash award, while it also sought to ban SSL from making and selling additional satellites that infringed on its patents.
Rick Baldridge, ViaSat’s COO, said yesterday that its settlement was a prudent solution that ends the distraction and cost of protracted litigation.
“The settlement also establishes an attractive economic value for our enabling technology that is in use among current and planned satellites, while allowing us to focus our full efforts on our next generation high-capacity satellite technologies,” he said.
The deal allows SSL to continue using the 10 patents-in-suit, as well as certain other patents and patent applications, without the threat of litigation from ViaSat or its breach of contract claims.
SSL and Loral will share their immediate payment of US$40m, while an arbitration process in October will decide how to split the remaining US$60m to be paid over the next two and half years.
Loral chairman Michael Targoff, who stepped down from ViaSat’s board following the original legal action in February 2012, said: “We are pleased with the settlement with ViaSat as it avoids further exposure to the uncertainties of jury determinations in complex patent matters at a cost to both Loral and SSL that, given the breadth of the settlement, is well within the range of reasonable settlements.
“We are also satisfied with the arrangements that we have put in place to allocate the payment between Loral and SSL. We believe these arrangements, providing for a knowledgeable, experienced attorney/arbitrator to make the determinations, will result in a fair and equitable sharing of the settlement cost acceptable to both companies.”
Quinn Emanuel Urquhart & Sullivan represented Viasat in the lawsuit, while SSL hired Susman Godfrey.
Loral’s US$875m sale of SSL means it now derives most of its value from its 63% stake in Canadian satellite operator Telesat. It also owns 56% of XTAR, a joint venture with Spanish satellite operator Hisdesat that offers X-band services to government customers.
Talks to sell Loral to the Ontario Teachers’ Pension Fund and Canada’s Public Sector Pension Investment Board (PSP) reportedly broke down recently over a US$300m consent fee to get the deal done.
Highland Capital Management, a hedge fund with nearly 10% of Loral’s voting stock, criticised the group last month for entertaining the US$80-85 per share offer. It slammed Loral for seemingly balking first at the consent free rather than the price.
