ACTV Inc. has filed a patent-infringement suit against The Walt Disney Co. units ABC Inc. and ESPN, accusing them of violating three ACTV interactive-television patents.
The complaint, filed Dec. 19 in U.S. District Court in New York, is centered on the Enhanced TV feature that runs during ESPN's Sunday Night Football
and ABC's Monday Night Football
and Who Wants to Be a Millionaire.
The ESPN and ABC Enhanced TV service-which links Internet content to television programming in real-time-has been widely considered one of the most successful ITV initiatives to date.
ACTV executives told analysts on a conference call that they had attempted to license their IP to ABC and ESPN without success. In the complaint, ACTV says it wants the court to reward it and its HyperTV Networks unit unspecified money damages for the alleged infringement, as well as other relief.
Officials at Walt Disney Internet Group (WDIG), which oversees the ABC and ESPN Enhanced TV product, insisted it doesn't infringe upon ACTV's patents.
"We unconditionally deny that our Enhanced TV technology infringes upon anyone's patents. Our in-house technical staff developed its own unique technology independently," WDIG spokesman Eric Handler said.
ACTV will likely sue other programming networks for allegedly violating its interactive-TV patents, CEO William Samuels told analysts.
The ITV provider will unleash its legal team first on those companies that are generating "material" revenue through products that link PC Internet access with television programming, he said.
"We are not focusing on little companies that have announced little demo products," Samuels added.
The litigation comes at a low point for ACTV, which has made little headway into the ITV market after more than 10 years of operations. The company has sold its PC-Internet enhanced television product to a few programmers, including The Box and Starz Encore Media Group.
But the company's One-to-One interactive TV product and its SpotOn targeted advertising service-both of which ACTV is pitching to cable operators that have deployed digital set-tops-have no commercial deployments.
Samuels, who rejected interview requests, spent much of his time on a call with analysts discussing the company's sagging stock price, rather than the litigation. ACTV closed at $4.90 on Dec. 19, the day the suit was filed. Its stock price fell about 90 percent last year.
ACTV appears to be moving toward becoming a patent-portfolio company along the lines of Gemstar-TV Guide International Inc. Samuels acknowledged the company hasn't emphasized its patent portfolio in the past, but plans to leverage its IP holdings through both licensing deals and lawsuits.
The company bulked up its legal team in recent weeks. On Nov. 30, ACTV announced it hired Scott Doyle, a partner at Dorsey & Whitney LLC, as chief intellectual property officer. Doyle was a partner in the firm's trial, regulatory and technology group, and had acted as outside counsel to ACTV.
