A federal judge has paused a civil lawsuit brought by Dish Network against rival pay TV provider Vidgo over alleged infringements of streaming video patents.
The proceeding was paused after both companies filed a joint motion requesting the judge suspend further proceedings because of Vidgo’s “economic hardships.”
In court records reviewed by The Desk, an attorney for Dish said Vidgo ran out of cash and suspended operations last September. Dish’s lawsuit was filed around the same time.
The lawsuit claims Vidgo used certain adaptive bitrate technology that is patented by Dish, without first seeking permission or a license to use it. The function improves or reduces the quality of a video stream based on a number of factors, including a viewer’s Internet connection and speed.
Dish has filed similar patent infringement lawsuits against more than a dozen companies over the last year, including Britbox, Beachbody, KiDoodle.TV and several adult websites. In each of the cases, Dish accuses the streaming video providers of violating the same adaptive bitrate patents. Dish has quietly settled two of those lawsuits, The Desk reported earlier this week.
Dish and Vidgo were discussing a similar resolution as recently as May 3, when both companies filed a joint motion seeking to modify the court’s schedule of proceedings. Records reviewed by The Desk show both companies were “engaged in productive settlement negotiations,” and asked a federal court to delay the proceedings because “the requested extensions to deadlines will better facilitate those discussions.” The request was approved a short time later.
At some point, Dish came to learn the full scope of Vidgo’s financial situation, and both companies agreed to file a request seeking to stay the matter indefinitely.
“The requested stay is likely to simplify the issues before the Court because it will afford Vidgo time to attempt to secure sufficient funding to resume its business operations and defend against the claims asserted in this action, which it otherwise will be unable to do,” attorneys for both companies wrote in the joint request.
In other words, an indefinite stay would allow Vidgo adequate time to get its financial situation in order, and secure additional funding that could potentially be used to pay Dish a licensing fee for the patents. Dish affirmed Vidgo had stopped “any alleged infringing activities” when it suspended operations last September.
The federal judge approved the request, and ordered both sides to submit updates once every four months.
Vidgo launched in 2018, offering a handful of linear content streams that were primarily targeted at soccer fans and Spanish-language viewers. Over time, the company inked programming deals with major broadcasters like Fox Corporation, the Walt Disney Company and Discovery Networks and MTV Networks, allowing channels like Fox News, Fox Sports 1, ABC, ESPN, Comedy Central, Nickelodeon and Animal Planet to join the mix.
At its peak, Vidgo offered more than 100 live channels in its base programming package. It was the first streaming cable-like service to intermingle cable networks and free, ad-supported streaming television (FAST) channels in a single service, a move that other companies like Sling TV, Fubo and DirecTV Stream have since adopted.
To draw interest to the service, Vidgo inked a lucrative endorsement deal with former National Football League (NFL) tight end Rob Gronkowski, who served as the company’s spokesperson for more than a year. Gronkowski was also interviewed by Bill O’Reilly when the former Fox News personality launched a new show called “Shock & Awe” that was distributed exclusively by Vidgo.
Problems for Vidgo began early last year when the company was unable to make payments to some of its vendors, according to people familiar with the matter who spoke with this reporter for StreamTV Insider. One of those vendors was Harmonic, a company that provided the underlying technical support to deliver Vidgo’s streaming channels to customers. Harmonic stopped rendering services to Vidgo last September, which left Vidgo subscribers unable to watch channels or on-demand shows.
