Patent litigation comes to the Interactive TV Sector


Invidi Technologies Corp, a provider of addressable television advertising solutions, filed a patent infringement complaint on May 5, 2011 against Visible World and Cablevision.    The complaint (filed in Delaware) states that Cablevision currently provides addressable advertising — using Visible World’s “Connect” product — to at least 3,000,000 cable subscribers in New York, New Jersey, Connecticut, and parts of Pennsylvania.

According to Techcrunch  Princeton NJ-based Invidi has raised approximately $117 Million since its inception in the year 2000.  The company counts among its major investors Google Ventures, Menlo Ventures, Motorola, GroupM and DirecTV.

In the complaint Invidi states that they have developed software that provides multichannel video providers with the capability to increase the efficiency and effectiveness of television advertising and reduce advertisement “waste” by making ads addressable to the household.  In other words, the interactive technology that makes sure cat food lovers should only be getting cat food TV commercials is probably at the core of the lawsuit. 

Invidi in 2010 told Advertising Age that NBC Universal had recently completed a strategic investment in Invidi, and that in a test on the Comcast Baltimore system its addressable ads  “proved to be 65% more efficient and 32% more effective”.

Invidi’s United States Patent No. 5,661,516 (the ‘516 Patent) is highlighted in the complaint as a key factor in filing the action against both Visible World and Cablevision, primarily because the commercial deployment of the Visible World “Connect” product — Invidi feels — is strikingly similar to their technology.

Invidi is slated to roll out it’s addressable advertising product to DirecTV’s DVR boxes through 2011.  According to a recent article in Multichannel News DirecTV expects to make an additional $400 Million per year in advertising revenue using the Invidi solution.  Invidi has similar deployment agreements with both Dish Network and FIOS.

Visible World, founded in 1999, is headquartered in New York City.   Warren Lee, of venture capital firm Canaan Partners reported that Visible World has raised at least $73 Million (Ad Age July 2009).  The company lists Comcast, Time Warner, and Viacom among its investors. 

Both Invidi and Visible World share at least one mutual investor and both have, or are, trialing with Google.

After close to two decades of false starts it appears a future revenue stream for interactive TV companies — especially in light of the TIVO $500 Million judgement against Echostar —  might be by way of the judicial system.  Although expectations should still be tempered as the core revenue for the interactive industry sector ,derived from licensing fees, will still take years to potentially grow into a multi-billion dollar revenue stream; solely driven by how efficient advertising actually becomes. 

With BCM, Inc. (formerly Backchannelmedia) having already rolled out its “Clickable TV” solution to WSFA, WCOV, and Knology in the Montgomery Alabama market we are presented with additional evidence that broadcasters are also involved in the interactive television sector. 

New revenue streams are needed in order defray the capital expenses related to broadcasters’ mobile DTV technology deployments.  This probably means most broadcasters will implement a collection of interactive advertising  applications all linked to the emergence of tangible footprints for mobile and EBIF. 

This Invidi complaint was eye opening for me as it frames the interactive TV sector in a favorable light by documenting  an industry (in addition to Canoe Ventures’ efforts)  that is preparing for multiple deployments, and one that has already created a growing library of intellectual property.  Setting aside the merits of this — to be determined — Invidi claim,  I bet we’ll find Visible World also might have a few important patents tucked away.

–Michael Kokernak is the president and CEO of Across Platforms.  Across Platforms, Inc. is a multiscreen technologies consulting firm. The Boston-based company focuses on providing clients with services tailored to the multiscreen viewing environment. Kokernak is also the founder of BCM, Inc. (formerly Backchannelmedia).  He welcomes your questions or comments at [email protected].  You can also follow Michael via Twitter.