PONTE VEDRA, Florida — A U.S. District Court judge on Aug. 8 rejected a jury award of $283 million in damages to ViaSat Inc. in ViaSat’s patent-infringement lawsuit against satellite builder Space Systems/Loral (SSL) but left intact the jury’s finding that Loral violated ViaSat patents and nondisclosure agreements.
In the ruling, District Judge Marilyn L. Huff of the District Court for the District of California ordered a new trial that would be limited to the amount of damages Loral should pay ViaSat. The trial is set for November.
ViaSat’s demand for an injunction to prevent SSL from working on other satellites using ViaSat-patented technologies, especially the Jupiter 2/EchoStar 19 satellite now under construction at SSL, will be heard at a hearing scheduled for Aug. 26, the court ruled.
New York-based Loral Space and Communications, which has since sold SSL to MDA Corp. of Canada but is retaining control of the ViaSat lawsuit, on Aug. 11 issued a statement saying that the court, by vacating the award, took “an important first step in rectifying the injustice resulting from the April 2014 trial,” which ended with the $283 million damages award.
Carlsbad, California-based ViaSat said the court’s Aug. 8 ruling gives ViaSat room to pursue its goal of even higher damages against Loral by fine-tuning its arguments, to a new jury, in ways that avoid the weaknesses the court found in the first trial.
“She found mostly in our favor,” ViaSat President Richard A. Baldridge said in an Aug. 11 interview, noting that the court rejected Loral’s request that the entire jury verdict be rejected and a new trial set on the core patent-infringement notion. “The new trial will start on the basis that our patents were violated. We’ll have another shot at explaining on damages, in excruciating detail, to a jury.”
ViaSat has estimated that total damages due to Loral’s use of ViaSat technology — mainly by selling a satellite to ViaSat’s principal U.S. competitor, Hughes Network Systems of Germantown, Maryland — are in excess of $1 billion.
Its estimates presented to the court made a great deal over the estimated revenue Hughes was generating with its ViaSat-1 satellite. Strip away the ViaSat technology from the EchoStar 17/Jupiter 1 satellite — now in orbit — and the satellite’s throughput would drop from 110 gigabits per second to around 32 gigabits per second, ViaSat alleged.
ViaSat, using a Hughes contract with a Canadian customer as a reference, valued each gigabit at $7.5 million. The 78 gigabits on EchoStar 17/Jupiter 1 provided by ViaSat technology alone is $585 million, ViaSat said.
The court judge ruled, however, that ViaSat did not fully explain how it arrived at its lost-revenue figure and that some of it appeared suspect. She further said the jury appeared to be adding royalty damages and patent-infringement damages to arrive at the $283 million when, as a matter of law, it should have selected one or the other.
The court order cited ViaSat’s own expert witness as saying that an award would need to be for lost royalties or patent infringement, not both.
In the interview, Baldridge and ViaSat General Counsel Kevin K. Lippert said ViaSat has identified several satellites under construction at Palo Alto, California-based SSL whose designs infringe on ViaSat technology and thus are targeted in ViaSat’s injunction request.
They declined to identify the satellites beyond EchoStar 19/Jupiter 2.
The court case highlighted several examples of emails and other documents that, according to ViaSat, clearly demonstrated SSL’s duplicity in assuring ViaSat that its secrets would be protected, while at the same time assuring Hughes that Jupiter 1 would be nearly identical to ViaSat-1. At one point, ViaSat told the court, SSL attempted to patent ViaSat technology on its own.
Michael B. Targoff, a former Loral chief executive who is now the company’s vice chairman, had a seat on ViaSat’s board of directors when the lawsuit began. He later resigned from his position on the board.
ViaSat told the court it was particularly chagrined by assurances given by Targoff — whom they considered in ViaSat’s inner circle — that SSL would not use ViaSat technology in selling satellites to other customers.
In its Aug. 11 statement, Targoff said: “Not only do we believe that the jury’s damages award was excessive, but we continue to believe that we have strong grounds for challenging the jury’s liability findings on appeal.”
