Put it down as the second example of a small Canadian technology company taking on the big boys and the big boys doing their finest to stretch the procedure out.
A couple of years back it had been i4i Inc. versus Microsoft once the Toronto-based content development firm brought a patent infringement action against Microsoft. Microsoft lost and was ordered with a Texas court to pay for more than $290 million. But Microsoft appealed and kept appealing up to the final Court. The highest court wasn’t swayed, however, and the appeals court ruling that Microsoft wilfully infringed on i4i’s patent remained. The matter took more than four years to resolve and millions in legal fees.
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Now there is MediaTube Corp. versus Bell Canada. Based in Aurora, Ont., MediaTube, which provides IPTV services for television broadcasts, Internet, interactive games and video-on-demand and pay-per view, can also be the licensee within patent known as 477.
At issue is a patent infringement suit introduced April 2013 by MediaTube against Bell Canada. A trial, within the Federal Court, is set for September. How large could this matter get? MediaTube estimated its claim may be worth $350 million plus future royalties and penalties.
But in an affidavit prepared and filed by Doug Lloyd, MediaTube’s chief executive, on Jan. 11, reference is built to a greater number. “In April of 2014, Bell Canada’s counsel advised the government Court that damages may exceed $1 billion by the time these proceedings reach trial,” Lloyd said. In any currency $1 billion is real cash. BCE has about 865 million shares outstanding.
Lloyd’s affidavit and accompanying documentation detail some of the steps Bell, which caused MediaTube for many years on commercializing its patent before launching its FibeTV service this year, has had to stall the process. For instance:
January 2013: An email from Quebec-based PNG Management Canada to MediaTube stating that it was “prepared to finance MediaTube Corp. business plan. -but after receiving many harassing calls and emails from Bell Canada management – it was decided not to pursue the funding [as the calls] raised the risk factor.”
April 2013: Bell Canada brought a motion to remove Bereskin & Parr, (its a lawyer) in the proceedings “on the foundation of an alleged conflict of interest.” Twelve months later the government Court dismissed Bell Canada’s motion. That motion delayed the patent infringement proceedings by about a year “and substantially increased MediaTube’s attorney’s fees and expenses.”
April 2014: Following a Federal Court setting a timetable and ordering Bell to “file its defence, provide documents and conduct examinations for discovery,” Lloyd said that MediaTube “filed numerous motions to compel Bell Canada to comply with the timetable.”
Fall 2014: According to Lloyd, MediaTube’s legal counsel “were obliged to bring motions to compel Bell Canada to comply with its legal obligations included in discovery process.”
The latest example is currently playing out. In October of last year, the Ontario Superior Court awarded a $174,511.72 default judgement for Bell Canada against MediaTube. That judgement came in a claim filed by Bell Canada in February 2013 (although not served until twelve months later) alleging non payment “for services rendered pursuant to the Agreement.”
MediaTube has sought to create aside the ruling partly, due to the “asymmetric quantum of damages sought within the two proceedings.”
Calls to Bell seeking a comment weren’t returned. Lloyd couldn’t be reached for comment.