Roku Beats $41 Million Patent Infringement Case

A Texas jury Oct. 14 denied a $41 million patent infringement claim against Roku by MV3 Partners LLC that alleged the Los Gatos, Calif.-based manufacturer of streaming media devices and Internet-connected televisions violated its technology patents.

The seven-person jury in the Federal District Court for the Western District of Texas in Waco deliberated five hours before reaching its verdict after the five-day trial. In a statement, Roku said it was pleased with the outcome.

“We are pleased with today’s non-infringement verdict, which vindicates our position that Roku has no liability to MV3 Partners in this case,” Joe Hollinger, VP of litigation and intellectual property at Roku, said in a statement. “We appreciate the efforts of the court and jury during these challenging times.”

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In the complaint, filed last year, MV3 Partners alleged that Roku earns “hundreds of millions of dollars in revenue and profit selling streaming media players and smart TVs nationwide that incorporate MV3’s patented mobile streaming invention,” all without payment to or license from MV3.

The company’s lawyer last year, in a press release, claimed the case would be a watershed moment for the multi-billion dollar streaming content industry, encompassing giants such as Netflix, Disney, Hulu, Amazon and Apple.

Jonathan Waldrop,  the patent litigator working for MV3 Partners, said the case was the beginning of MV3’s campaign to obtain just compensation for the use of its technology by key streaming device manufacturers such as Roku, Microsoft, Samsung and Apple.

It wasn’t immediately clear if MV3 Partners would appeal the decision.

Netflix Wins Legal Battle to Stream Limited Series on ‘Bad Boy’ Indian Billionaires

Netflix India has won a legal battle to begin streaming the limited series “Bad Boy Billionaires: India,” a program depicting separate Indian tycoons convicted on charges of corruption and fraud.

An Indian court ruled that episodes in the series involving beer tycoon Vijay Mallya, jeweler Nirav Modi and financier Subrata Roy could stream. A separate episode involving software tycoon B. Ramalinga Raju, who confessed to inflating the assets of his firm by about $1 billion in 2009, remains sidelined by litigation.

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In a statement to Bloomberg News, Raju’s firm, Sahara India Pariwar, said the Netflix episode is “ill-motivated” and “contains various incorrect and misleading facts which depict only one-sided allegations.” The firm said it would file criminal charges against against Netflix, including the series’ producers, directors and reporters.

Netflix, along with Disney and other media companies, is looking to tap into the India’s massive population base — including more than 500 million consumers accustomed to accessing entertainment on mobile devices.

Despite India being world’s second most-populous country (1.35 billion people) after China, Netflix India has just 1.2 million subscribers, according to IHS Markit. That’s less than Disney-owned Disney+ Hotstar with 3 million subs and Amazon Prime Video’s 2.5 million subs.

Free Speech in a Pandemic: Fox News Fighting Misinformation Lawsuit

During the coronavirus spread there has been no shortage of politics in the media when it comes to reporting the pandemic. President Trump has used his daily COVID-19 press briefings at times as a bully pulpit to advocate his political agenda as much as advocating washing hands and wearing scarves in the absence of face masks.

Fox News, which Trump follows intently, is now facing litigation from left-leaning political groups claiming that it misled the public from the beginning on the severity of the coronavirus — a pandemic that through April 15 has generated 644,000 cases in the U.S., including 28,500 deaths.

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Fox News Media operates the Fox News Channel, among others, including direct-to-consumer subscription streaming service Fox Nation. FNC has been the most-watched television news channel for more than 18 consecutive years.

A lawsuit was filed earlier this month by the left-wing Washington League for Increased Transparency and Ethics (WASHLITE), a group in Washington state hoping to impose a judicial gag order on Fox opinion commentary regarding the coronavirus outbreak. Trump, reportedly, has generated much of his initial response to the virus, from Fox News.

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Fox lawyers April 15 argued in a court motion (and press release) that the suit is frivolous because the statements at issue are core political speech on matters of public concern. Fox contends the First Amendment does not permit censoring this type of speech.

Fox is calling on the court to dismiss as a matter of law the plaintiff’s  “misguided” attempt to use litigation to stifle Fox News commentary or the viewpoints of its hosts.

“It’s Constitutional Law 101: the First Amendment protects our right to speak openly and freely on matters of public concern,” Fox News Media General Counsel and EVP Lily Fu Claffee said in a statement. “If WASHLITE doesn’t like what we said, it can criticize us, but it can’t silence us with a lawsuit.”

Fox’s New’s motion includes a 61-page appendix listing what it calls inaccuracies in the WASHLITE complaint, with transcripts showing Fox News Channel hosts warning about the severity of the virus, while also pointing out commentary downplaying the outbreak from multiple media outlets, including CNN and the New York Times.

Networks Sue Online TV Service for Copyright Infringement

Major broadcasters Disney-owned ABC, CBS, Fox and NBC Universal have filed a lawsuit against an upstart online TV service offering free over-the-air digital TV service.

The suit — filed July 31 in U.S. District Court in New York — alleges Locast owner, New York-based non-profit advocacy group Sports Fans Coalition NY, violates broadcaster copyrights streaming content to users for free.

The suit is similar to 2013 litigation brought by studios against Aereo, the defunct OTT service that transmitted digital signals to subscribers via over-the-air antennas.

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The litigation also pits broadcasters against AT&T, which owns and operates WarnerMedia — although the telecom is not party to the lawsuit.

Aereo, unlike Locast, charged subscribers for access. The latter asks users for a $5 monthly donation. AT&T last month gave Locast a $500,000 donation.

“This donation will support SFCNY’s mission to make free broadcast content available to consumers and offer them more choice,” AT&T said in a statement.

Broadcast plaintiffs aren’t buying the charity.

“Locast is not a public service devoted to viewers whose reception is affected by tall buildings,” read the complaint. “Nor is Locast acting for the benefit of consumers who, according to Locast when promoting its purportedly free service, ‘pay too much.’ Locast is not the Robin Hood of television; instead, Locast’s founding, funding, and operations reveal its decidedly commercial purposes.”

Locast counters its service provides a free, public service retransmitting free over-the-air broadcasts permitted under the Copyright Act of 1976.

“We look forward to defending the claims — and the public’s right to receive transmissions broadcast over the airwaves — in the litigation,” Locast lawyer David Hosp told Consumer Reports.

Broadcasters disagree.

“Locast is simply Aereo 2.0, a business built on illegally using broadcaster content,” read the suit. “While it pretends to be a public service without any commercial purpose, Locast’s marketing and deep connections to AT&T and Dish make clear that it exists to serve its pay-TV patrons.”

Plaintiffs are seeking unspecified financial damages, including Locast’s profits, in addition to “maximum statutory” damages.

Law Firm Investigating AT&T for Allegedly Misleading Investors About DirecTV Now Subscriber Growth

A law firm specializing in filing litigation against publicly-held corporations, is seeking plaintiffs for a possible class action suit against AT&T regarding its standalone online TV streaming service, DirecTV Now.

The Law Offices of Howard G. Smith, in an April 2 press release, said AT&T in June 2018 issued nearly 1.2 million new shares of common stock following its $85 billion acquisition of Time Warner – which led to the formation of WarnerMedia.

At issue is AT&T’s registration statement accompanying the stock issuance that claimed DirecTV Now subscriber growth would offset ongoing subscriber declines at legacy pay-TV services DirecTV satellite service and AT&T U-verse.

Instead, after AT&T raised DirecTV Now’s monthly pricing from the promotional $39.99 fee to $49.99, subscriber growth reversed to sub losses – more than 250,000 DirecTV Now subs jettisoned in the most-recent fiscal period.

“On this news, shares of AT&T fell as low as $27.36 per share, a decline of nearly 16% from the $32.52 price per share on the exchange date for the acquisition, thereby injuring investors,” Howard G. Smith wrote in the release.

In a media statement, AT&T denounced the action.

“This is a carbon copy of a baseless suit filed in February,” said the telecom. “In both cases, the claims are wholly without merit.”

 

 

 

Barnes & Noble Reveals New Details for CEO Firing

Barnes & Noble has disclosed new details on its firing of CEO Demos Parneros in July after 16 months on the job.

The nationwide bookseller (and home entertainment retailer) in an Oct. 30 legal filing (Parneros v Barnes & Noble, 18-cv-7834, U.S. District Court, Southern District of New York), outlined further details of alleged sexual harassment by Parneros against a female employee, in addition to breach of fiduciary duty after allegedly scuttling a possible sale of the fiscally-challenged company.

Parneros, who maintains his innocence, sued Barnes & Noble in August for wrongful termination and payment of severance, claiming he was abruptly dismissed by the chain’s founder Leonard Riggio for no reason.

Barnes & Noble, in the filing, claims Parneros acted inappropriately with the female staffer he had called into his office, including pinching her neck after comparing heights.

“She also reported that just a few days after this incident, Parneros again called her into his office, inappropriately showed her pictures of what he considered to be romantic Quebec City hotels, told her that he ‘would have taken’ her to those hotels if he were her husband, pulled her towards him so that their faces touched cheek-to-cheek and, as she attempted to pull away, angrily told her that he thought she seemed like someone who ‘would put out’ if he ‘wined and dined’ her,” according to the complaint.

Barnes & Noble says it has received additional complaints about Perneros from other female employees.

In addition, the company alleged the former CEO made repeated negative comments about Barnes & Noble to an unnamed potential buyer, including questioning “Why did I come here?” to the buyer’s representative.

Parneros denies he tried to quash the transaction.

“These false allegations are nothing more than an effort to tarnish my reputation and punish me for seeking justice,” Parneros said in an email statement to Bloomberg.

Barnes & Noble in September reported a first-quarter (ended July 28) net loss of $17 million, up 70% from a net loss of $10.7 million during the previous-year period. Revenue dropped 7% to $794 million from $853 million last year.

The bookseller’s Nook business, which includes digital media such as TV shows and movies, narrowed its operating loss to $330,000 from an operating loss of $2.7 million last year. Revenue dropped 14% to $25.2 million from $29.5 million last year.

 

 

 

Facebook Sued for Fraud Over Video Ad Views

Facebook has been sued for fraud by a social media marketing firm on behalf of advertisers alleging the social media behemoth in 2016 knew for over year that it was overstating the average time users spent watching paid video ads.

The amended class-action suit – filed Oct. 16 by Crowd Siren in U.S. District Court in Oakland, Calif. – cites a Wall Street Journal story that reported Facebook overstated video viewing time from 60% to 80%. However, the new suit alleges viewership metrics were inflated from 150% to 900%.

“Because advertisers place higher value upon advertisements that are viewed for longer periods, they are willing to pay more for such advertisements,” read the complaint.

Facebook generated more than $17 billion in revenue from ads in 2015 – more than 95% of its overall revenue.

“Facebook engineers knew for over a year, and multiple advertisers had reported aberrant results caused by the miscalculation,” read the complaint. “Yet, Facebook did nothing to stop its dissemination of false metrics.”

The complaint claims Facebook employed a “no PR” campaign designed to “obfuscate the fact that [it] screwed up the math,” while continuing to generate revenue from inflated viewership numbers. Indeed, plaintiffs claim Facebook tried to smooth over the situation by using a new “average watch time” viewership data.

Extended video ad views are crucial. Plaintiffs cited third-party data that claimed when Facebook video ad viewership expands from three seconds to 10 seconds, ad recall increased to 57%, brand awareness increased more than 100%, and 64% increase in “purchase intent.”

 

Redbox Says It Will Still Sell Codes to Disney Movies — Just Not the New Ones

A federal judge on Aug. 30 granted the Walt Disney Co.’s request for a preliminary injunction against Redbox selling digital codes to Disney movies.

However, the ban only applies to newer “combo pack” releases with a revised disclaimer on the package. Redbox says this means it may continue selling digital codes to earlier Disney releases such as Frozen and “Star Wars” movies.

Judge Dean Pregerson ruled that Disney’s amended language accompanying packaged media combo retail releases (which include digital codes) sufficiently prohibits private parties from selling copyrighted content without permission.

“Because Redbox did not obtain an ownership right to any digital content when it purchased combo Packs, Disney has adequately shown that it is likely to succeed on its claim that Redbox encouraged Redbox customers to infringe Disney’s copyrights by redeeming codes in violation of the license terms set forth on the redemption sites,” Pregerson wrote.

In February, a federal court denied Disney a preliminary injunction against Redbox after the studio alleged the kiosk vendor committed copyright misuse on 19 of its most recent movies. Disney and subsidiaries Lucasfilm and Marvel Studios in April filed an amended complaint against Redbox, including changing user-guidelines on its packaged-media releases, beginning with Black Panther.

In a statement to Media Play News, Redbox said, “In a second attempt to obtain a broad injunction against Redbox regarding the sale of digital codes, Disney asked the court to retreat from its prior ruling that Disney abused its copyright on some 19 Disney, Pixar, Lucasfilm and Marvel titles. The court previously found that Disney’s copyrights for these titles were unenforceable against Redbox.

“Nothing disturbs that prior ruling in favor of Redbox. Redbox remains free to sell codes for those prior titles. This morning’s ruling is limited to digital codes for certain titles, like Black Panther, that contain new disclosures, but were distributed after the 19 titles listed in Disney’s complaint. Redbox has never attempted to sell, and had no plans to sell, digital codes for Black Panther. Disney, therefore, has not been damaged by Redbox’s business practices, and the ruling compels no change in Redbox’s business practices.

“The same isn’t true for Disney. In addition to having been forced to change misleading language on its packaging and its websites, Disney now must offer consumers the ability to return digital codes or combo packs for a refund if they disagree with digital license terms. In fact, the court’s order expires in 90 days unless Disney ‘clearly and prominently indicates’ that consumers can obtain a refund if they do not agree with Disney’s restrictions.

“The court’s decision once again maintains Redbox’s stance as an advocate for the consumer. We look forward to finalizing our victories in court.”

Disney is the only studio that won’t sell discs directly to Redbox, forcing the company to buy them at retail. Last year, Redbox also began offering for sale the digital codes that come with its purchased Disney discs, citing the First Sale Doctrine to federal copyright law, which provides that someone who lawfully acquires a copyrighted work is allowed to sell or dispose of it however they want. Video retailers in the early 1980s successfully argued that First Sale gave them the right to rent videocassettes they had legally purchased and pocket the rental fees.

MoviePass Annual Subs Now Limited to Three Movies Monthly

With its stock hovering around two cents per share, Helios and Matheson Analytics — corporate parent of MoviePass — is now restricting annual subscribers to three theatrical screenings per month — down from a daily screening.

In an email to the service’s $89.95 annual subscribers, the company said the switch would help maintain lower overhead costs, while affording subs with greater access to content.

“After experimenting with different models and options, we believe that our current monthly plan captures the need of our community — keeping prices low while continually striving to offer a wider selection of films,” said MoviePass.

In effect, MoviePass is now subjecting annual subscribers to the same three-title screening restrictions it imposed upon month-to-month subs earlier this year. Subs are also restricted to select titles and screening titles.

The company is allowing annual subs to cancel their membership for a prorated refund if they choose.

Departing annual subs is the least of MoviePass’ issues, which have dogged the once-promising service after Wall Street grew leery of a business model that enables subs to essentially watch a theatrical screening daily for free.

After cutting the monthly subscription price to $9.95 a year ago, MoviePass took off among consumers, attracting three million subs. At the same time, the service was unable to leverage its sub base with exhibitors in exchange for lower ticket prices.

With MoviePass paying exhibitors face value for every ticket consumed by subscribers, fiscal losses have mushroomed – more than $200 million through June 30.

Despite a 1-for 250 shares reverse stock split and the company buying/selling hundreds of millions of shares to boost the stock price, HMNY’s stock continues to plummet – leaving initial investors with virtually nothing except a desire for revenge.

Numerous shareholder lawsuits have been filed against HMNY, and founder/CEO Ted Farnsworth, among others.

Shareholder Lawsuits Filed Against MoviePass Owner

As expected, two shareholder class action lawsuits have been filed against Helios and Matheson Analytics, parent of ticket subscription service MoviePass, alleging officers in the company engaged in a “scheme to deceive the market and a course of conduct that artificially inflated the company’s stock price, and operated as a fraud or deceit on acquirers of the company’s common stock.”

HMNY is 92% owner of MoviePass which enables subscribers daily (now three times monthly) access to a theatrical screening for $9.95 monthly fee.

The cases include Chang v. Helios and Matheson Analytics Inc., 18-cv-06965, and Braxton v. Benson, 18-cv-07242 – both filed this month in U.S. District Court, Southern District of New York.

Defendants named include Ted Farnsworth, CEO of HMNY, and Stuart Benson, CFO.

In recent weeks as shareholders have jettisoned HMNY stock – now worth pennies despite a 1-for-250 shares reverse stock split – as financial disclosures reveal an untenable business model that borders on a pyramid scheme.

HMNY this week said its ability to continue as a “going concern” remains in doubt without additional funding.

During the same time law firms specializing in securities litigation have flooded the market soliciting potential plaintiffs against HMNY.

Plaintiff Jeffrey Chang claims the Farnsworth and Benson (Mitch Lowe, CEO of MoviePass, was not named in the suit) as officers of a publicly traded company had a responsibility to “disseminate prompt, accurate and truthful information” regarding the HMNY fiscal condition.

Instead, the complaint alleges Farnsworth, Benson (and Lowe) misrepresentations and omissions during the class period violated these specific requirements and obligations.

Specifically, the complaint alleges the executives are liable for making knowingly false statements through so-called “group-published” information. To buttress its case, the filing included every HMNY/MoviePass press release since it acquired majority control of the ticket service on Aug. 15, 2017.

Chang seeks a jury trial and unspecified compensatory damages and legal costs.

A HMNY representative was not immediately available for comment.