Kudelski to appeal in dispute over intellectual property

Kudelski executive chairman Andre Kudelski Keystone

The Swiss digital broadcast technology company, Kudelski, is to appeal against a United States court ruling ordering it to pay millions of dollars in damages in a dispute over intellectual property rights.

Kudelski said on Monday that it would appeal the ruling but that it would make provisions for a fine anyway.

The announcement comes after a firm called EchoStar, which has a joint venture with Kudelski, was found guilty of infringing a patent. On Friday, the two companies were ordered to pay $15 million in damages by a jury in Wilmington in the US state of Delaware.

In a statement, Kudelski said the amount could yet be increased up to three-fold by the judge hearing the case.

The suit was brought by IPPV Enterprises LLC, which had originally sought $22 million (SFr38.7 million) in damages from EchoStar in 1999.

Kudelski is involved through its Nagravision unit and NagraStar, a joint venture between Kudelski and EchoStar.

IPPV had claimed that five of its patents had been infringed by EchoStar, but only one complaint was upheld by the court.

“We have to be cautious so we will have to make a provision but this will not impact our future business,” the group’s executive chairman, Andre Kudelski said, adding that the final amount of any penalty would be divided by EchoStar and Kudelski.

He said the judge would decide within ten working days on the final penalty, but this would become subject to the appeal.

Kudelski said the experts called by EchoStar and NagraStar remain convinced that the technical processes used by EchoStar did not infringe on IPPV’s intellectual property rights.

Kudelski added that the complaint upheld by the court related to a particular patent, which was due to expire in a few months’ time, and that EchoStar and Kudelski had implemented a “work around” rule to avoid using technology that IPPC claims broke its patent.

swissinfo with agencies