Thirdspace investment insulates Concurrent
from VOD patent war

By Jeff Baumgartner
from CED Broadband Direct, June 10, 2002

Video-on-demand vendor Concurrent Computer Corp. is sufficiently insulated from the ongoing VOD patent war being waged between nCUBE Corp. and SeaChange International, a Concurrent executive said.

That’s because Concurrent, back in March of this year, became a shareholder in London-based Thirdspace Living Ltd., a supplier of video server system software for DSL-based VOD services that is also partly owned by Alcatel and Larry Ellison’s Oracle Corp. Thirdspace launched operations a little less than two years ago.

As part of that deal, Concurrent and Alcatel together invested $16 million in Thirdspace’s second round of funding. More importantly, however, Concurrent also licensed Thirdspace’s existing patent portfolio as well as pending patents. That portfolio also is shared by nCUBE, a VOD vendor that is majority-owned by Ellison.

“All of the intellectual property around that technology was received by Thirdspace and also received by nCUBE,” said Steve Norton, Concurrent’s chief financial officer. As part of Concurrent’s investment in Thirdspace, Concurrent “received a license to all of their patents, patent portfolio and pending patent applications for the life of the patents,” he added.

Norton said Concurrent’s investment in wasn’t done only to protect the company from potential litigation, but to help the company make inroads in the international VOD-over-DSL sector.

“Our investment in Thirdspace wasn’t done primarily for that technology; it was done because of their software and their relationship with Alcatel, which has a wide market share in the DSL arena,” he said.

Still, Concurrent’s Thirdspace investment should keep the company well protected from a jury finding that nCUBE won against SeaChange late last month concerning an important VOD patent.

In that case, a Delaware District Court jury unanimously upheld nCUBE’s patent (U.S. Patent 5,805,804) for VOD delivery and ruled that SeaChange had “willfully infringed the patent.” The jury also ruled that SeaChange must pay nCUBE more than two million dollars, plus a seven percent royalty on all sales of infringing products after Feb. 1, 2002. Judge Joseph J. Farnan Jr. has yet has yet to make a final decision on the ‘804 case, but SeaChange is expected to appeal the jury ruling.

That same judge is also presiding over a lawsuit that SeaChange filed against nCUBE over U.S. Patent No. 5,862,312, which describes a method to redundantly store date, including video data objects, at the computer system level and at the processor system level. A different Delaware District Court jury ruled that SeaChange’s patent was valid on Sept. 25, 2000. No final judgment has been entered in the ‘312 case.

Norton said Concurrent is also protected from the ‘312 patent because his company uses a different VOD architecture than nCUBE and SeaChange.