ViaSat-1 in the Compact Antenna Test Range (CATR). Photo: SSL

[Via Satellite 08-11-2014] The United States District Court for the Southern District of California has vacated the $283 million in damages originally awarded to ViaSat in its dispute with Loral and former subsidiary Space Systems Loral (SSL). In a decision issued Aug. 8 on post-trial motions, the court found the award resulted in a “miscarriage of justice” against SSL. A new jury trial to reevaluate the amount of damages is tentatively scheduled for November 2014.

ViaSat initiated the breach of contract and patent infringement lawsuit over the use of technologies first used in the ViaSat 1 High Throughput Satellite (HTS). The company claims SSL breached its agreement by applying confidential information to Hughes’ Jupiter 1 satellite. Hughes and ViaSat are competitive providers of satellite broadband.

In April the jury concluded that SSL breached non-disclosure agreements with ViaSat. Following that decision, SSL President John Celli told Via Satellite the company would “seek to overturn the verdict in post-trial motions and, if necessary, through the appeal process.” SSL, disagreeing with the jury’s conclusion, filed motions on June 13 for judgment as a matter of law or for new trial regarding the breach of contract damages, reasonable royalty damages, lost profit damages, and double counting of damages. ViaSat filed an omnibus response in opposition to the motions on July 11 to which SSL filed supporting replies for its own motions.

The court’s decision to scrap the $283 million award hinged on the testimony of ViaSat’s damages expert Daniel J. Slottje, which SSL said should be excluded. The court agreed, finding “Dr. Slottje’s testimony was very abbreviated, and it was not based on sound economic and factual predicates,” according to District Judge Marilyn Huff’s order. Subsequently, SSL was granted the new trial on damages while ViaSat’s motion for prejudgment and post-judgment was denied “as moot.”

“We are pleased with the court’s decision, as it is an important first step in rectifying the injustice resulting from the April 2014 trial,” Michael B. Targoff, vice chairman of Loral said in a statement. “Not only do we believe that the jury’s damages award was excessive, but we continue to believe that we have strong grounds for challenging the jury’s liability findings on appeal.”

Andrew Spinola, senior analyst at Wells Fargo, expects ViaSat will likely have to scale back its expectations upon returning to court in November. “One would expect the new trial to result in a smaller award,” he wrote in a research note. “However, the primary goal for ViaSat is to have its patents validated through the legal process and the court did not overturn the finding that SSL violated ViaSat’s patents but that the ‘jury’s damages award resulted in a miscarriage of justice.’ A new trial will likely result in a new amount but the judgment that SSL violated ViaSat’s IP stands for now.”

ViaSat is seeking an injunction on the manufacture and sale of additional satellites by SSL that it alleges infringe on the company’s patents. The court has deferred an argument on this injunction until Aug. 26.