Bell Canada in no rush to defend $350M patent infringement law suit from MediaTube

Put it down as another example of a little Canadian technology company dealing with the big boys and the big boys doing their best to stretch the procedure out.

A couple of years back it was i4i Inc. versus Microsoft once the Toronto-based content development firm brought a patent infringement action against Microsoft.  Microsoft lost and was ordered with a Texas court to pay for more than $290 million. But Microsoft appealed and kept appealing up to the final Court. The greatest court wasn’t swayed, however, and the appeals court ruling that Microsoft wilfully infringed on i4i’s patent remained. The problem took a lot more than 4 years to solve and millions in legal fees.

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Now there’s MediaTube Corp. versus Bell Canada. Located in Aurora, Ont., MediaTube, which provides IPTV services for television broadcasts, Internet, interactive games and video-on-demand and pay-per view, is also the licensee under a patent referred to as 477.

At issue is a patent infringement suit introduced April 2013 by MediaTube against Bell Canada. A trial, within the Federal Court, is set for September. How large could this matter get? MediaTube estimated its claim is worth $350 million plus future royalties and penalties.

But in an affidavit prepared and filed by Doug Lloyd, MediaTube’s chief executive, on Jan. 11, reference is made to a higher number. “In April of 2014, Bell Canada’s counsel advised the government Court that damages may exceed $1 billion by the time these proceedings reach trial,” Lloyd said. In any currency $1 billion is real cash. BCE has about 865 million shares outstanding.



Lloyd’s affidavit and accompanying documentation detail some of the steps Bell, which worked with MediaTube for several years on commercializing its patent before launching its FibeTV service in 2010,  has taken to stall the process. For instance:

January 2013: An email from Quebec-based PNG Management Canada to MediaTube stating that it had been “prepared to fund MediaTube Corp. business plan. -but after receiving many harassing calls and emails from Bell Canada management – the decission was taken to not pursue the funding [as the calls] raised the danger factor.”

April 2013: Bell Canada brought a motion to get rid of Bereskin & Parr, (its legal counsel) from the proceedings “on the foundation of the alleged conflict of interest.” Twelve months later the Federal Court dismissed Bell Canada’s motion. That motion delayed the patent infringement proceedings by in regards to a year “and substantially increased MediaTube’s legal fees and expenses.”

April 2014: Following the Federal Court setting a timetable and ordering Bell to “file its defence, provide documents and conduct examinations for discovery,” Lloyd asserted MediaTube “filed a number of motions to compel Bell Canada to comply with the timetable.”

Fall 2014: Based on Lloyd, MediaTube’s a lawyer “were obliged to create motions to compel Bell Canada to adhere to its legal obligations as part of discovery process.”

The latest example happens to be happening. In October of this past year, the Ontario Superior Court awarded a $174,511.72 default judgement for Bell Canada against MediaTube. That judgement arrived claims filed by Bell Canada in February 2013 (although not served until one year later) alleging non payment “for services rendered pursuant to the Agreement.”

MediaTube has sought to create aside the ruling partly, due to the “asymmetric quantum of damages sought in the two proceedings.”

Calls to Bell seeking a comment weren’t returned. Lloyd couldn’t be reached for comment.

britchley@nationalpost.com