The battle being played out by media giants Vivendi Universal and News Corp through their respective television security units in a district court in San Francisco has entered a critical juncture. At issue is a $ 1 billion piracy suit filed last month by Vivendi's Canal Plus alleging that engineers at NDS Group broke Canal Plus' security systems for its digital pay-television service and made the codes available on the Web for free. NDS is 80 per cent owned by News Corp.

Both sides said the judge had agreed to an accelerated discovery period, and that their lawyers will immediately begin working out a schedule for each to review the other's documents and other relevant materials.

They said their lawyers would report back to the judge on any difficulties, and the judge would arbitrate the disputes.

Canal Plus' suit asks for damages of $1 billion, the amount it alleges it has lost from the supposed piracy. Both NDS and Canal Plus' Canal Plus Technologies unit make "conditional access" systems that allow digital television providers to restrict, usually through a special card that plugs into the set-top box, what programs a customer receives.

Last week, Canal Plus filed an affidavit with the court from an engineer whose consulting firm is partly owned by NDS and who claims to have exact details on how NDS allegedly pirated Canal Plus's codes.

In an official release, NDS said "the judge approved NDS's suggestion that the parties work out a comprehensive discovery plan."

" As NDS explained to the judge, NDS intends to show that Canal+'s claims have no basis and needs discovery from Canal+, in part to determine whether Canal+ is improperly using NDS technology. NDS and Canal+ were instructed to work out a discovery plan and report to the court if they are unable to agree," the statement says.