ViaSat Won’t Try To Block Loral’s Delivery of Satellite to Rival

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WASHINGTON — Satellite broadband provider ViaSat Inc., which has sued satellite builder Space Systems/Loral for patent infringement and breach of contract, will not seek a temporary injunction to stop Loral from delivering a broadband satellite in May to ViaSat’s biggest competitor.

ViaSat Chief Executive Mark D. Dankberg said the late arrival of ViaSat’s patents relating to satellite broadband systems have left the company with too little time to mount an effort to get a court order forbidding Loral from delivering the Jupiter-1/EchoStar 17 satellite to Hughes Network Systems.

The last of a series of U.S. patents protecting ViaSat’s satellite broadband ideas arrived Jan. 31. Carlsbad, Calif.-based ViaSat sued Space Systems/Loral, based in Palo Alto, Calif., the next day in the U.S. District Court for the Southern District of California.

The suit, which has been expanded to include Space Systems/Loral’s parent company, Loral Space and Communications of New York, was formally served Feb. 21.

Jupiter-1/EchoStar 17 is scheduled for launch in late June. The satellite is Exhibit A in ViaSat’s case, which alleges that Loral stole ViaSat technology and since 2008 has used it to win just about all of its contracts to build telecommunications satellites.

The Jupiter-1/EchoStar 17 contract is particularly sensitive to ViaSat because the satellite will be used by Germantown, Md.-based Hughes Network Systems to battle ViaSat for dominance of the U.S. satellite consumer broadband market.

ViaSat says Jupiter-1/EchoStar 17 looks like a near-identical copy of the ViaSat-1 satellite built by Loral. ViaSat-1 entered service in January and is ViaSat’s primary asset as it tries to build a consumer satellite broadband business in the United States.

“A temporary injunction is a special procedure that takes time to prepare,” Dankberg said in an interview here during the Satellite 2012 conference, organized by Access Intelligence LLC. “Our patents arrived too late to take any action against Jupiter. It will take longer for us to prepare, and any injunction probably wouldn’t occur for about two years.”

Asked if such an action might be directed to more recent Loral contracts, including a two-satellite deal with Australia’s NBN Co. for that country’s consumer broadband program, Dankberg said it might well be.

The ViaSat lawsuit says just about every satellite Loral has built since 2008, including those still under construction, carries some of the ViaSat technology that is now protected by patent, and should have been protected earlier by nondisclosure agreements between ViaSat and Loral. ViaSat says Loral has booked more than $1 billion in revenue by using ViaSat intellectual property.

Dankberg said that in addition to the timing issue with the Jupiter-1/EchoStar 17 launch approaching, ViaSat would have qualms about securing a court-ordered grounding of the Hughes satellite because it would muddy the reasoning behind ViaSat’s lawsuit.

“Our issue is with Loral, not with Hughes,” Dankberg said. “I don’t want people thinking that we are going to court to try to prevent a competitor from launching a satellite. That’s not our issue.”

Loral officials have strongly denied the ViaSat accusations, saying ViaSat overestimates the novelty of its satellite broadband ideas, and underestimates the ability of Loral and its other customers, notably Hughes, to arrive at the same basic network-architecture conclusions as ViaSat on their own.

 

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