Arbitrator Sets ViaSat Payments at $55M for MDA, $45M for Loral

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LUXEMBOURG — The two companies on the losing end of a $100 million satellite patent infringement lawsuit won by satellite broadband provider ViaSat Inc. on Dec. 2 announced that an independent arbitrator had determined how they will divide the payment.

Richmond, British Columbia-based MDA Corp. and its satellite manufacturing subsidiary, Space Systems/Loral (SSL) of Palo Alto, California, will pay 55 percent of the award judgment, with New York-based Loral Space and Communications paying the remaining 45 percent, the two companies announced.

Carlsbad, California-based ViaSat had sued Loral for breach of contract and patent infringement before Loral sold SSL to MDA of Canada. Loral had said at the time of the $1 billion sale that it would take responsibility for the ViaSat lawsuit.

ViaSat then filed a second lawsuit, this one attacking SSL and MDA directly. MDA had argued that ViaSat’s second lawsuit, identical to the first with only the target changed, should not be judged valid.

Under the terms of an agreement reached with ViaSat, all parties agreed to drop their legal actions, with SSL and MDA retaining rights to use certain ViaSat-patented satellite broadband technologies.

Dropping the second lawsuit removed a liability from MDA’s books and incentivized the company to come to terms with Loral on which side would pay how much of the total $100 million judgment. For Loral, which wants to sell its principal asset — satellite fleet operator Telesat of Canada — the judgment removes a risk factor that investors might have judged as material given Telesat’s multibillion-dollar value.

Loral and MDA/SSL had agreed that pending the arbitration finding, each would pay 50 percent of the award settlement. The two companies have paid a combined $46.8 million of the settlement so far.