Finisar Falls After Court Ruling
Shares of fiber-optic network-equipment maker
Finisar
(FNSR) - Get Report
dropped Friday after a U.S. Court of Appeals reversed part of a patent case the company brought against
DirecTV
(DTV)
.
During a 2006 trial regarding a patent involving methods for transmitting and broadcasting digital information, Finisar was awarded $78.9 million, with an additional $25 million awarded for willful infringement by DirecTV plus back interest, as well as an ongoing royalty stream.
However, DirecTV appealed the jury's verdict, and an appeals court ruled Friday that the trial court's interpretation of certain terms in the patent was too broad. Therefore, it vacated the jury's verdict of infringement. Shares of Finisar dropped 7 cents, or 5.3%, to $1.24. DirecTV was higher by 34 cents, or 1.3%, to $25.79.
The appeals court held that one of the seven patent claims at issue is invalid, leaving the remaining six claims for reconsideration by the trial court. Finisar said it expects that the six remaining claims will be found valid.
Finisar said in a statement it was disappointed in the court's ruling. "We remain confident that the questions of infringement and validity, upon further review by the trial court, will be decided in favor of Finisar," said Finisar's primary trial counsel, Larry Laycock.