A judge ordered satellite television provider EchoStar to disable most subscribers's DVRs and pay TiVo almost $90 million in damages - but now the injunction is on hold.
In a victory for DVR pioneer TiVo, U.S. District Court Judge David Folsom has ruled that EchoStar has willfully infringed on TiVo’s patents and EchoStar must essentially disable DVR functionality in all but roughly 190,000 digital video recorders it has distributed to its satellite television customers within 30 days. The judge also denied a request that the injunction be suspended pending appeal, giving EchoStar very little time to strike up a deal with TiVo or another DVR developer in time to keep its subscribers happy.
So: EchoStar took its case to the Federal Circuit Court of Appeals in Washington D.C., which late Friday issued a temporary block on Judge Folsom’s injunction. Meaning, EchoStar can leave customers’ DVRs running while it appeals the decision.
The injunction follows the judge’s ruling in April that EchoStar pay TiVo some $74 million in damages; in addition, Judge Folsom has ordered EchoStar to pay $5.4 million in interest and another $10.3 million in supplemental damages, bringing the total due to TiVo to nearly $90 million. However, Judge Folsom denied TiVo’s request that damages be tripled, finding that EchoStar has not acted in bad faith.
The basis of TiVo’s suit against EchoStar, filed back in January 2004, is that EchoStar’s DVR functionality violated TiVo’s "Time Warp" patent for timeshifted recorded television programming, including the ability to simultaneously store and play back content, pause live television, along with fast-forward, rewind, and slow-motion.
In a statement, TiVo said "TiVo is built on a strong foundation of innovative technology and intellectual property. Beyond the U.S. Time Warp patent, we now hold more than 86 patents in our worldwide patent portfolio and have more than 138 patent applications pending. TiVo has a long list of licensees in the consumer electronics, cable and satellite markets, and we will continue to license our technology under appropriate circumstances and arrangements. We will also continue to vigorously defend our intellectual property for the benefit of our licensees and shareholders."
TiVo has also posted a message on its site for DISH Network subscribers, laying fault for any eventual shutdown of DVR service at EchoStar’s feet; TiVo also solicits contact information and receiver model numbers from DISH Network subscribers interested in knowing more about TiVo.
[Update 1: 2:40 PM, 18-Aug-2006. Including info on temporary block on injunction.]
[Updated 2: 10:02 AM, 19-Aug-2006. Title edit; pointer to TiVo's message for DISH subscribers.]
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RSS“We are pleased that this morning, the Federal Circuit Court of Appeals in Washington, D.C. temporarily blocked an injunction issued by a Texas Court, while it considers a longer-term stay of that injunction.
As a result of the stay EchoStar can continue to sell, and provide to consumers, all of its digital video recorder models. We continue to believe the Texas decision was wrong, and should be reversed on appeal. We also continue to work on modifications to our new DVRs, and to our DVRs in the field, intended to avoid future alleged infringement.”
And here is the TiVo site:
"After several years of expensive litigation, in April 2006, EchoStar's DVR products were found by a jury to be infringing one of TiVo's patents. TiVo is pleased that a federal court has recognized that TiVo's business will be irreparably harmed if EchoStar were allowed to continue to infringe TiVo's patent. Any shutdown of DVR functionality for existing DISH Network customers is entirely and directly due to EchoStar's infringement of TiVo's patent rights. It is unfortunate that DISH Network's actions have put its customers in the awkward position of potentially having DVR functionality disabled but DISH Network customers who want to ensure uninterrupted DVR service can get DVR products and services from TiVo and its partners."
Looks like TiVo is using this as a means to generate new customers - as any good business would.
My guess is that DISH will pay a fine and new licensing, but that we will continue to keep our DVR's. The impact is really too big IMO.