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Tech Firms Sue Bell Canada for $350 Million

(CN) - Two technology firms sued Bell Canada for $350 million in royalties, claiming it violated patent on Internet Protocol television technology.

MediaTube Corp. and NorthVu Inc., both based in Toronto, sued Bell Canada and Bell Aliant Regional Communications, in Federal Court.

The plaintiffs claim the defendants' "Bell Fibe TV," "Bell Aliant TV" and "FibreOp TV" services infringe upon their "Audio/Visual Signal Redistribution System."

The plaintiffs claim that Bell approached inventor Ross Jeffery in 1998 and signed a deal in 1999 while Jeffery was applying for a patent in the United States.

NorthVu, then known as Techbanc, acquired the technology and patent and began working alongside the inventor and a company called PureNet (which was acquired by MediaTube in 2009) to commercialize the technology in 2003, according to the complaint.

Over the years, the parties worked on commercializing the technology, first installing a prototype IPTV system in Ontario in 2004, which was later demonstrated to Bell. Over the next few years, PureNet worked closely with Bell and "disclosed its hardware, software, technical diagrams, equipment vendors and knowhow for its IPTV Service," according to the complaint.

By 2010, Bell and MediaTube had signed a licensing deal. Months later, Bell launched its Bell Fibe TV service in Ontario and Quebec, according to the complaint.

"Since this time, MediaTube's business Prospects diminished considerably," the complaint states. "MediaTube continued to seek capital to commercialize its IPTV service, but this effort has been impeded severely by the fact that Bell Canada is providing the same service in Ontario and Quebec (its licensed territory) in competition with MediaTube.

"MediaTube's business opportunity to commercialize the technology of (the patent) has been severely damaged and will be destroyed unless and until this Honourable Court enjoins the defendants."

The plaintiffs claim defendants have earned more than $2 billion in revenue from the infringement, and estimate that "a reasonable royalty for past infringement will be more than $350,000,000."

MediaTube Corp. is represented by Robert MacFarlane with Bereskin & Parr, NorthVu by Bruce Stratton with Dimock Stratton, all of Toronto.

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