Disney, OpenTV settle patent suit

and Pham-Duy NguyenWalt Disney Co., the second-largest U.S. mediacompany, and OpenTV Corp. settled a patent lawsuit over aninteractive TV system that Disney employs during broadcasts of showsincluding "Monday Night Football."

Disney will pay royalties to OpenTV to use the technology that theMountain View-based company got in its purchase of ACTV Corp. The twoalso are in talks for a development agreement for televisionprogramming. No financial terms were disclosed, OpenTV spokeswomanMaureen Zeljak said.

The settlement comes after the U.S. Court of Appeals for theFederal Circuit revived the OpenTV lawsuit over the patents inOctober. A federal judge in New York in May 2002 had dismissed thelawsuit initially brought by ACTV, saying Disney wasn't using theinventions. The Washington-based appeals court said the judgeincorrectly interpreted the patents.

"Disney's agreement to license these patents and our late stagediscussions with Walt Disney Internet Group to work with us todevelop enhanced TV programming provides a solid foundation" for thecompany to create new television content, OpenTV Chief Executive JimChiddix said.

Disney spokesman John Spelich didn't immediately return a phonecall seeking comment.

The technology covered by the patents allows viewers watching afootball game to "pull up player stats or information on next week'sgame," Zeljak said.

OpenTV, which paid $23.4 million for ACTV in July 2003, hasn'tmade a profit since going public in 1999, according to Bloombergdata. The company said in November it lost a contract to provide itsinteractive-television software to DirecTV, the largest U.S.satellite-TV provider.

Shares of OpenTV fell 2 cents to $1.87 in Nasdaq Stock Marketcomposite trading. Shares of Burbank-based Disney rose 3 cents to$24.73. The settlement was announced after the close of regular U.S.trading.

The case is ACTV v. Disney, 00-CV-9622 in U.S. District Court forthe Southern District of New York.