Zenith Electronics Corp. v. Wh-Tv Broadcasting Corp‪.‬

WH-TV broadcasts a digital television signal in San Juan, Puerto Rico, competing with cable and direct-broadcast satellite services. Seeking to expand its business, it purchased set-top boxes from Zenith Electronics. These boxes, which broadcasters furnish to subscribers, convert the digital input into an analog output that TV sets can display. Boxes may have other functions, such as presenting a programming grid from which subscribers can choose their favorites, and descrambling payper-view shows. WH-TV wanted boxes that use the digital video broadcasting (DVB) standard, so that it could mix equipment from different vendors and upgrade its broadcasting gear to take advantage of the latest features. Zenith assured WH-TV that its boxes conform to the DVB standard. By this Zenith meant the 1995 version of that standard --though WH-TV thought that Zenith meant the 1998 version, which had been adopted a year before the sales, and planned its operations on that assumption. A trier of fact could find that Zenith misled WH-TV or at least withheld material information and that the consequences were unhappy for WH-TV and its customers: the broadcaster lost business when customers encountered problems in using the boxes, and it was unable to substitute other vendors boxes, because they did not speak the same dialect of the DVB standard. We must assume, given the posture of the case, that serious problems existed and were Zeniths fault.