Dankberg Explains Why ViaSat Settled Its Patent Case against Loral for $100 Million

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PARIS — ViaSat Inc. Chief Executive Mark D. Dankberg on Sept. 10 defended his company’s decision to settle a two-year patent-infringement lawsuit against Loral Space and Communications, saying the $100 million settlement sends a clear enough message to the industry.

“We think that’s enough to make the point,” Dankberg said here during the World Satellite Business Week conference organized by Euroconsult. “The technology [subject to the lawsuit] is old. We would rather focus on new technology than on fighting over old technology.”

New York-based Loral and Space Systems/Loral, which is now owned by MDA Corp. of Canada, have agreed to pay $40 million immediately and then $60 million, plus interest, over two and one-half years as part of the settlement.

The $100 million is structured as a combination of damages award and license agreement, Dankberg said. Palo Alto, California-based Space Systems/Loral will be able to continue its work on Ka-band broadband high-throughput satellites that include ViaSat patents.

Dankberg said ViaSat has spent around $30 million in legal fees prosecuting its patent-infringement case, a figure that does not include most expenditures made since July.

Dankberg said Carlsbad, California-based ViaSat was optimistic that a new trial for damages, and a threatened injunction against Loral work on satellites using ViaSat intellectual property, could have led to a higher total payout for ViaSat.

But that outcome was not certain, he said, and the company decided to end the lawsuit rather than spend additional months for the new trial.

“We would rather make money by being successful in the market rather than by court action,” Dankberg said. “Loral’s argument was that none of their customers owned any of the technology on their satellites. They didn’t even have a mechanism for separating their own intellectual property from that of their customers.

“The $100 million was a meaningful amount that established our point. You could look at it by saying: How many satellites are involved here at Loral, and how does that $100 million work out per satellite?”

The license agreement includes the Jupiter 1 and Jupiter 2 satellites. The first is in orbit; the second is under construction. Their similarity to ViaSat’s ViaSat 1 satellite is what sparked the lawsuit.