TiVo Gets Patent Win over Dish Network

EchoStar Communications’ Appeal of August 2006 U.S. District Court Ruling on TiVo’s Multimedia Timewarping System Software Patent Rejected

By Glen Dickson -- Broadcasting & Cable, 1/31/2008 4:30:00 PM

TiVo shares were up $2.04 each, or some 30%, in intraday trading Thursday in the wake of a major court victory for the digital-video-recorder supplier in its ongoing patent fight with satellite operator EchoStar Communications, now known as Dish Network Corp.

A federal appeals court rejected EchoStar’s appeal of an August 2006 verdict from a U.S. District Court in Texas, which found that DVRs used by EchoStar Dish Network customers infringe on TiVo’s Multimedia Timewarping System software patent, U.S. Patent No. 6,233,389.

While the appeals court found that EchoStar hadn’t infringed TiVo’s hardware patents, it upheld the district court’s decision on the software patent and its ruling that EchoStar shut down its DVR service within 30 days -- an injunction that had been stayed during EchoStar’s appeal -- and pay TiVo some $94 million in damages.

The appeals-court ruling should help to affirm the value of TiVo’s intellectual property as it seeks to license its technology to cable and satellite operators and move away from selling DVRs at retail.

"We are extremely pleased that the United States Court of Appeals for the Federal Circuit unanimously ruled in our favor in EchoStar's appeal of the district-court judgment of patent infringement, full award of damages and that the injunction, which was stayed pending appeal, was ordered to be reinstated,” TiVo said in a statement.

“Today's ruling is confirmation of the value of TiVo's IP portfolio, which is in addition to the other benefits TiVo has to offer,” the DVR vendor added. “TiVo can now continue to focus on its goal to drive greater distribution in both its stand-alone and mass-distribution efforts."

Dish Network, now a separate business from EchoStar’s set-top-manufacturing operations (which have been organized with EchoStar’s fixed-satellite assets into EchoStar Holding Corp.), said it was disappointed with the verdict but the injunction wouldn’t affect its current DVR subscribers. It added that it will appeal the damages award.

“The decision … will have no effect on our current or future customers because EchoStar’s engineers have developed and deployed ‘next-generation’ DVR software to our customers’ DVRs,” Dish said in a statement. “This improved software is fully operational, has been automatically downloaded to current customers and does not infringe the TiVo patent at issue in the Federal Circuit’s ruling.”