News search on LNET and ONCO shows them to be in legal stand-off:
HEADLINE: LodgeNet Sues On Command for Infringement of Three U.S. Patents;
Patents Cover Interactive Video Game Systems and Video Switch Construction
DATELINE: SIOUX FALLS, S.D., Dec. 11
BODY:
LodgeNet Entertainment Corporation (Nasdaq: LNET), a leading provider of
video-on-demand, network based video games, digital cable and other interactive
services to the lodging industry, announced today it is suing On Command
Corporation for infringing three U.S. Patents owned by LodgeNet. One action,
filed in the United States District Court for the District of South Dakota,
alleges infringement by On Command of two LodgeNet patents, U.S. Patent Nos.
5,641,319 and 5,675,828, covering LodgeNet's proprietary method of delivering
interactive video games over a hotel entertainment system. The other suit,
filed in the United States District Court for the Northern District of
California, alleges infringement by On Command of LodgeNet's U.S. Patent No.
4,502,098 covering a circuit assembly method utilized in the construction of the
video switch found in virtually all installations of On Command equipment.
The actions seek injunctions halting On Command's infringement, an accounting
of damages trebled for intentional infringement and payment of attorneys' fees.
LodgeNet introduced network-based video games to the lodging industry
in late 1993 with Super Nintendo Entertainment System(R) video games.
LodgeNet now provides video games in more than 475,000 installed guest pay
rooms. LodgeNet's technology enables video games to be played in each
hotel guest-room utilizing the Company's proprietary b-LAN(SM) (broadband
local- area-network) system architecture without the need to provide dedicated
video game processors in each room. "We believe our patents have application
beyond their use for the delivery of video games in the lodging environment. We
also believe that our technology, which involves the high-speed processing
and routing of user key-strokes, will be critical to the effective delivery
of other interactive services, such as the Internet, over broadband
video distribution networks," said David M. Bankers, Vice President of
Corporate Technologies for LodgeNet.
"Hoteliers now demand in-room video games and guests have come to expect them
as a standard amenity. We believe On Command has been forced by LodgeNet's
leadership to deliver a video game product and that the method by which they do
so infringes our patents," said Eric R. Jacobsen, Vice President and General
Counsel for LodgeNet. "We are hopeful that the South Dakota action will
proceed to trial before the end of 1998," continued Mr. Jacobsen.
"We further allege that the physical construction of the video
switch utilized in virtually every On Command installation infringes
LodgeNet's circuit assembly patent that it acquired in 1996. If On Command
is found to infringe our patent, LodgeNet is entitled to seek damages back six
years from the filing of the complaint which we believe would capture nearly all
of On Command's installations," said Jacobsen.
LodgeNet Entertainment Corporation (http://www. lodgenet. com) is
a specialized communications company that serves more than 610,000 guest
rooms at more than 3,800 lodging properties in the United States and
selected international markets. The company's proprietary and patented
b-LAN(SM) system technology serves as a distribution system for the delivery
of video-on-demand interactive television services, network-based video
games, Internet access, PRIMESTAR(R) digital basic and premium cable
programming, and other interactive multimedia entertainment and information
services geared to the needs of travelers. LodgeNet Entertainment Corporation
is listed on Nasdaq and trades under the symbol LNET.
This news release includes statements that may constitute
forward-looking statements made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. This information may involve
risks and uncertainties that could cause actual results to differ materially
from the forward-looking statements. Factors that would cause or contribute
to such differences include, but are not limited to, those factors detailed
by LodgeNet Entertainment Corporation in its filings with the Securities
and Exchange Commission.
SOURCE LodgeNet Entertainment Corporation
CONTACT: Ann Parker, Director of Corporate Communications of
LodgeNet Entertainment Corporation, 800-257-2345
Multiple articles over the past two years quote ONCO saying that their future profitability relies on digital access, yet they appear to have stymied by LNET's patent wall.
My sense is that the ONCO lawsuit is over analog technology, while the LNET suit relates to digital communication. IMHO betting on the outcome of a single litigation is a suckers game, however these suits do offer some insight into relative strategies. It would appear that as Spectravision contracts expire, ONCO is having difficult holding the properties. (Think about it: if ONCO had a slam dunk legal position, former Spectravision hotels would be reluctant to go with LNET, and in fact LNET has been very successful signing up these properties.) ONCO is perceived as an on-demand analog company that is moving very, very slowly toward the digital future. LNET appears to be much more focused and future oriented. By the time the ONCO lawsuit gets to court, its outcome may be moot.
(For some interesting perspective on this suggest you point your search engine toward Robert Kavner's tenure at ATT. After you view his "successes" there, come back and revisit the likely outcome of his current legal venture.)
KW |
