U.K. Appeals Court Dismisses Rovi Patent Suit Against Virgin Media

The England and Wales Court of Appeal, upholding a lower court ruling, said Virgin Media’s interactive program guide didn’t infringe Rovi patents because they weren’t innovative enough to be valid. The three European patents at the heart of the three-year legal battle covered the display of program lists in a grid format, the recording of content on a device and the marking of “favorite channels.” Gemstar’s method for selecting favorite channels on an IPG was “anticipated” by STV/OnSat’s SuperGuide, a guide for C-band satellite systems that was introduced in 1986 and locally stored a week’s worth of program data, it said.

"The Judge held that on his construction of the claim” Gemstar’s patent “lacked novelty over some prior art called SuperGuide,” the appeals court wrote. “Gemstar contends the Judge was wrong on construction. If he was right, it is accepted that SuperGuide anticipates.” The appeals court also backed Virgin’s definition of “channels available for viewing.” While Gemstar argued that meant all channels that could be received at the system level, Virgin maintained it meant “at least all channels available for viewing. Once one appreciates therefore that the selection of My channels is from a list of programs sent to the user’s machine and is wholly independent of whether the user’s apparatus will in fact receive them, it is evident that ‘channels available for viewing’ in the claim must mean the list sent to the apparatus,” the appeals court wrote.

The U.K. court decision won’t “materially impact the relevance” of Rovi’s patent outside the U.K. or with its licensees, Collins Stewart analyst John Vinh wrote in an note to investors. The decision was expected due to the “unfriendly patent environment” in the U.K. and could “drag out” the licensing of other European service providers, Vinh said. Rovi has licensing agreements with British Sky Broadcasting in the U.K. and Europe and separate pacts with European operators Canal Plus, KDG, Sky Deutschland, Sky Italia and UPC. It signed a licensing deal with CanalDigitaal in the Netherlands this month.

"We note that this lost appeal only invalidates three Rovi patents in the U.K. and Rovi still has 200 plus additional patents to draw upon,” Vinh said. Rovi will likely continue to take legal action against Virgin Media “until a favorable decision is reached,” Vinh said. Virgin’s launch of TiVo’s DVR technology this year will enable Rovi to “revisit” licensing patents to the company, Vinh said. TiVo is a Rovi licensee.

Rovi was “disappointed, but not surprised” by the appeals court decision, it said in a statement. The company has an “extensive portfolio” of patents outside those in the Virgin case and “we intend to protect our investments in our intellectual property,” Rovi said.

The appeals court ruling “comprehensively dismisses” Rovi’s claim and confirmed its patents weren’t valid,” said Virgin General Counsel Scott Dresser in a statement. “We have vigorously defended our assertion that Gemstar’s claim was unfounded and that they should not have brought this case and the Court agrees emphatically,” Dresser said.

Separately, Rovi was granted an injunction against unlicensed set-top box makers in Italy, Vinh said. Additional details of the case weren’t available at our deadline.