NewsCorp’s NDS Back in Court With Suit Against Hughes

24 October 2002

UK-headquartered technology firm NDS Group, majority-owned by News Corporation, is at the centre of yet more litigation. This time, however, it is NDS that is the plaintiff.

The group has launched legal action against Hughes Electronics, owner of leading US satellite television operator DirecTV, alleging misappropriation of trade secrets, conspiracy to infringe patents, unfair competition and breach of licences.

NDS is retaliating against a suit filed last month by DirecTV, which accused the technology firm of various offences, among them misappropriation of trade secrets [WAMN: 24-Sep-02].

At the centre of the who-heisted-what fracas are the NDS-manufactured smart cards that de-encrypt digital broadcasts to TV set-top boxes.

Having used the British firm as its smartcard supplier for years, DirecTV now plans to make its own. To do so, the satellite broadcaster is accused by NDS of cloning its cards in a covert operation with another technology group.

It also claims DirecTV set about “leaking confidential information related to NDS's smart card to pirate websites,” so that it would have an excuse to switch to its own security system.

The NewsCorp unit wants undisclosed damages and an injunction to prevent DirecTV making cards of its own. However, the satellite firm dismissed the suit as “a desperate attempt to shift the blame for [NDS’s] own gross misconduct and shortcomings.”

NDS is no stranger to the defendant’s table. As well as the DirecTV action, Canal Plus Group and EchoStar Communications have both filed suits alleging digital piracy this year.

Data sourced from: The Wall Street Journal Online; additional content by WARC staff