Court dismisses $350M lawsuit against BCE

BCE Inc. has emerged victorious from a $350-million lawsuit after the companies that accused it of infringing an IPTV patent admitted during trial that the telecom giant did no such thing.

Mediatube Corp. and Northvu Inc. alleged in 2013 that Bell knew about their Internet-protocol television patent, discussed the invention with its creators and worked with them under a confidentiality agreement before launching Fibe TV, a competing IPTV service.

They sought punitive damages of $350 million, claiming the damages could go up to $1 billion by the time the case went to trial, given the growth of Fibe TV. Bell is now the largest TV provider in Canada.

But the Federal Court ruled this week that Bell did not infringe the patent. Bell was awarded its costs elevated by 50 per cent, some of which will be calculated on a solicitor- and- client basis. Such costs are awarded primarily in the face of “reprehensible, scandalous or outrageous conduct,” Judge George Locke wrote in his ruling.

The case morphed from what was expected to be a high- stakes fight over IPTV technology into “something of a damp squib,” Locke wrote.

A series of “unusual developments” changed the issue into a matter of costs rather than patent infringement.

First, the plaintiffs narrowed their allegations to include only four per cent of Bell’s Fibe TV subscribers, drastically reducing the amount of the claim.

Then, Bell made a series of changes to its discovery an- swers between January 2016 and the weeks leading up to the December 2016 trial. The corrected information made it clear that Bell had not infringed the patent, according to the ruling, but Mediatube and Northvu refused to drop the case before trial.

On the 14th day of trial, the plaintiffs admitted that the new evidence exonerated Bell and withdrew their claim for punitive damages. During the plaintiffs’ closing arguments, they acknowledged Bell’s service did not infringe the patent but argued it could be modified in a way that would infringe the patent.

The plaintiffs argued they should still be awarded costs since Bell failed to provide the correct information sooner, damaged their reputation by calling them “patent trolls,” and filed hundreds of prior references in its statement of defence.

The judge was not convinced. Instead, Locke awarded Bell elevated costs, namely due to the late admissions by the plaintiff that Bell had not, in fact, violated the patent. The exact costs will be determined in a later hearing.