Verizon Must Pay $11 Million Each Month for FiOS Patent Infringement, Says Judge

Bad news came for Verizon today in another blow against its FiOS (News - Alert) IPTV service and rulings regarding patent infringement. U.S. District Judge Raymond Jackson has ordered Verizon to pay more than $11 million in royalties each month to a company called ActiveVideo if it wishes to continue providing customers with its popular FiOS video on demand (VOD) services.

The judge had already ruled that Verizon (News - Alert) was violating the patent holdings of the California-based ActiveVideo, which won a $115 million verdict in August in a jury trial, reports RapidTVNews.

In the latest judgment, Judge Jackson has ordered Verizon to pay about $2.74 per FiOS television subscriber on the first of December. It's understood that Verizon has until May, 2012 to find a way to operate without further infringing on ActiveVideo's technology. If it can't, Verizon must discontinue its VOD service.

Cable company Cablevision already licenses ActiveVideo technology to power its CloudTV service, muddying the competitive waters.

“ActiveVideo thinks that if Verizon ceased infringing, Cablevision’s market share would increase and its subscriber base for CloudTV would also increase,” wrote Jackson in the opinion he handed down. “It is true that both parties will suffer hardship in this case, but the greater hardships lie with ActiveVideo.”

Verizon has insisted that it does not directly compete with ActiveVideo and says it intends to appeal the decision. The company says it should be given no deadline for finding a way to work around the patent infringement (though it confirms that it has been working on it since March of this year, confirms RapidTVNews). Verizon is also trying to overturn all monetary damages awarded to ActiveVideo in the case thus far, Light Reading (News - Alert) reports.

“We are confident that the finding of a patent violation will be overturned on appeal,” said Verizon SVP and Deputy General Counsel John Thorne in a statement.

Verizon's FiOS TV has been highly successful thus far. The company added 131,000 new subscribers in the third quarter of 2011 alone. It has a total of four million FiOS TV customers to date.