Court Upholds TiVo's DVR Patent Against Satellite Rivals
TiVo on Thursday won a U.S. Court of Appeals ruling against major satellite operators in a long-standing intellectual-property battle. The court ruled that Dish Network and EchoStar still infringe on TiVo's patent and should stop offering DVR services.
The appeals court upheld a lower court's ruling that the satellite broadcasters are violating TiVo's patent despite their claims that they had altered their technology sufficiently. In a 2-1 decision, the court said changes made after Dish lost the first trial were "not a major redesign of the software."
$300 Million in Damages
TiVo said it was pleased that the appeals court affirmed the district court's finding of contempt against EchoStar, including both the disablement and infringement provisions.
"This ruling paves the way for TiVo to receive the approximately $300 million in damages and contempt sanctions awarded to us for EchoStar's continued infringement through July 1, 2009," TiVo said. "We will also seek further damages and contempt sanctions for the period of continued infringement thereafter. We will continue our efforts to protect our intellectual property from further infringement."
Defending TiVo's IP in court is vital to the company, according to Rob Enderle, principal analyst at the Enderle Group. "This ruling reaffirms TiVo's market position and assures its technology, which is important for any company," he said. "Given how widespread this DVR capability is, it's particularly important to TiVo."
"Given EchoStar's refusal to disable the DVR functionality in its existing devices and the fact that its original attempts to design around TiVo's patent were wholly unsuccessful, the district court had ample justification for its determination that court preapproval of any new design-around effort was necessary to prevent future infringing activity," the appeals court said.
Another Appeal Looms
Dish and EchoStar aren't going down without a fight. The companies said they plan to ask the 12-member appeals court to rehear the case. "We also will be proposing a new design-around to the district court for approval," Dish and EchoStar said in a statement. "At this time, our DVR customers are not impacted."
As Enderle sees it, a problem still remains for TiVo: An ongoing and lengthy litigation process. Still, he noted, the ruling continues to reaffirm TiVo's intellectual property, which could be its strongest long-term asset. Enderle said the ruling is important to both TiVo's financial situation and its long-term survival.
"At long last TiVo is actually showing some potential upside," Enderle said. "TiVo's relationship with Comcast seems to be getting stronger, the new Premiere product looks very compelling, and this court ruling altogether puts TiVo in a much more solid position."