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ViaSat Wins $283M Award in Patent Case

A federal jury in San Diego awarded ViaSat Inc. $283 million in damages in a patent infringement and breach of contract case, in which ViaSat alleged that Space Systems Loral is infringing on its patents in building satellites for other customers. Carlsbad-based ViaSat announced the damage award on April 24.

At issue was technology in the high-capacity ViaSat-1 satellite, which Palo Alto-based Space Systems Loral built for the local company. ViaSat (Nasdaq: VSAT) accused the satellite builder of infringing three of its patents, violating confidentiality and breaching the companies’ contract — assertions that Space Systems Loral denied.

ViaSat-1 is a key part of ViaSat’s consumer, government and commercial businesses, including its business offering broadband Internet service to airline passengers. ViaSat-1 is a Ka-band spot beam satellite that went into service over North America in early 2012.

ViaSat served its complaint against Space Systems Loral in 2012. It said the court may rule on additional issues, ultimately affecting the amount of the April 24 award. Both a final ruling and the final award are subject to appeal.

ViaSat alleged that Space Systems Loral is currently building satellites that infringe its patents. It is seeking a permanent injunction prohibiting the builder from manufacturing or selling infringing satellites — and satellite components.

“While litigation was a last resort for us in this case, the process ultimately confirmed that ViaSat invented the groundbreaking ViaSat-1 technology, and the extensive damages validate the significant value of this technology in creating high capacity satellites,” said Rick Baldridge, ViaSat’s president and chief operating officer, in a statement to the media. “We will continue our commitment to protect our intellectual property and innovation.”

Meanwhile, Space Systems Loral is disappointed with the verdict, John Celli, the company’s president, said in an emailed statement, adding that the company will seek to overturn the verdict in post-trial motions and through the appeal process, if necessary.

“This process is not over,” Celli said.

In its statement, Space Systems Loral refuted the validity of ViaSat’s patents, saying that “ViaSat claims to have invented basic principles of satellite design that have been broadly known for decades.”

Space Systems Loral also defended its business honor, saying that it during its more than 55 years in business, “there has never before been any claim or suggestion that SSL has breached the confidentiality of any customer’s information. We deal with confidentiality issues all the time and comply with all of our obligations. It has always been and is a core value of our business.”

ViaSat plans to launch another high-capacity, Ka-band satellite, to be called ViaSat-2. This time, the business chose the Boeing Co. (NYSE: BA) to put the satellite together. Boeing said it plans to deliver the new satellite in 2016.

In September, ViaSat filed suit against Space Systems Loral again, this time for allegedly infringing three different patents.

Quinn Emanuel Urquhart & Sullivan LLP has been representing ViaSat in court.

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