The lawsuit, filed in a Utah court three weeks ago, accuses Vidgo of “willful infringement” with respect to several patents that cover variable bitrate technology — the mechanism that allows the quality of a live video stream to adjust in real-time, based on a viewer’s connection speed.
The patents have been awarded to various individuals since at least 2014, some of whom worked for a company that Dish Network acquired in 2010 for $45 million. Over time, the inventors behind the patented technologies transferred their interest to Dish, and Dish has incorporated some of the technology in its cable-like streaming service Sling TV, which offers pay television channels over the Internet.
Like Sling TV, Vidgo also offers streaming access to some broadcast and cable channels, with a particular emphasis on professional and college sports. Those streams include similar variable bitrate technology that adjusts the quality of a video stream based on the connection speed of a subscriber.
Vidgo popped up on Dish’s radar earlier this year, when the company started sending notices to Vidgo’s then-CEO Derek Mattsson, urging him to get in touch. Some of the emails were attached to Dish’s initial complaint, and showed an attorney working on behalf of Dish attempting to contact Mattsson over the summer with offers to license the patents to Vidgo.
Mattsson never replied to those emails, attorneys for Dish argue. He no longer works as the CEO of Vidgo, according to multiple people familiar with the situation, though it was not clear if his departure was related to the lawsuit. A former vice president with the Walt Disney Company is expected to be announced as the new CEO of Vidgo soon, according to a source who is close to the company.
A spokesperson for Vidgo has not yet returned a request for comment about the patent lawsuit filed by Dish.
The lawsuit is the latest headache to afflict Vidgo, with the company also dealing with the effects of a multi-day outage that started last week after a vendor pulled its support of the video platform.
In a notice to customers, Vidgo said the vendor — which has not been named publicly — changed their business terms on Vidgo late Friday evening, then pulled their technology from Vidgo’s streaming apps. The move left Vidgo subscribers unable to stream live or on-demand television content from within Vidgo’s apps, though subscriber credentials still work on “TV Everywhere” apps associated with networks like ESPN, Fox Sports and Discovery.
To accommodate subscribers afflicted by the app disruptions, Vidgo says it will be offering two free weeks of service, followed by a discount of $10 per month over the course of six months. On Monday, Vidgo sent a follow-up notice to customers, saying they expected the situation with the vendor to be resolved later this week.