TiVo awarded $90M and permanent injunction aginst EchoStar

Way back in April a jury agreed with TiVo that EchoStar willfully infringed upon TiVo's patent for a "multimedia time-warping system." Then crickets for the last 4 months as the two battled it out in both the court of public opinion and at a bench trial where TiVo requested a permanent injunction against the provider of the DISH Network. Well, the ruling is in and EchoStar must pay TiVo an initial award of about $90 million and must disable all infringing DVR functionality within, oh, 30 days -- we're talking switching off the DVR functionality of four million users. Ouch! Oh, and EchoStar can't sell new boxes, either. Is it just us or does little TiVo seem to be extra smiley this morning?

[Thanks to everyone who sent this in, via Zatz Not Funny]

Update: EchoStar is definitely going to attempt to stay the injunction (they'd be fools not to) -- more on that as it develops!

Read - Reuters coverage
Read - EchoStar's response

[Justin Buck @ Aug 18th 2006 8:42AM]

I have an echostar DVR box... *FUMING LIKE HADES*

[Mark @ Aug 18th 2006 8:58AM]

No DVR = No EchoStar (for me anyway).

[Gordy @ Aug 18th 2006 8:58AM]

I see we have some hicks up there at Engadget...nothing 'aginst' that!

[r @ Aug 18th 2006 9:01AM]

Good for TiVo, i like it when the system works. Maybe they TiVo can ride on the heels of good news and hurry up and introduce the Series 3.

[E. David Zotter @ Aug 18th 2006 9:04AM]

I can't believe it took the judge so long!

Finally.

It is only a matter of time before the other DVR makers must pay up.

[E. David Zotter @ Aug 18th 2006 9:05AM]

Why is it that only Engadget is covering this?
NO WSJ article yet? No mention on CNBC?
W-T-F

[Javier Plumey @ Aug 18th 2006 9:12AM]

I love my Comcast DVR...I guess they're next! What about all of the pc-based software and hardware solutions? Ugh...

[r @ Aug 18th 2006 9:16AM]

It was only a few months, it didnt take the judge all that long. (I used to work for a judge, there are lots of things that go on behind the bench that people don't realize takes time... not to mention the parties have a certain number of days to file supplemental briefs in support of their post verdict motions... the legal process takes time)

[davidl340 @ Aug 18th 2006 9:21AM]

If they disable my DVR functionality on my dish box, words will not describe my anger, as the the Dish 625 DVR receiver is superior to any seperate DVR and sattelite receiver setup there is. TiVO doesn't even come close to the functionality, nor did the ReplayTV I had. I'll have to break out my old ReplayTV I guess. The last thing I'll do is go out and buy a TiVO at this point.

I'm not expert on the details, but if this is a case of patenting a generalistic idea like "a square plastic device that contains music" or "a video recorder that can jump or reverse time increments" then this is BS.

[Maestro @ Aug 18th 2006 9:26AM]

So is it the TiVo interface they are protecting? Or the fact that video is being stored to a hard drive? I mean, how many devices out there store video to a hard drive? Or are we just talking Television feeds?

[Fred @ Aug 18th 2006 9:51AM]

Yuo can bet your ass I'll be building my own DVR box after this. I have 3 Dish DVRs in my house!!!! I'm not gonna become a Tivo customer just because they screwed me out of my Dish DVRs.

[Jace @ Aug 18th 2006 10:05AM]

Guess who just ordered Dish DVR for their house LAST NIGHT? :-(

[Max @ Aug 18th 2006 10:06AM]

Why are you mad at Tivo, they are just protecting their patent? Don't you beleive in patents? The only advantage Tivo has on the competition is their software.

[Alex @ Aug 18th 2006 10:14AM]

Here's the real issue at hand: at what point does a patent prevent healthy competition? Although I don't know the details, preliminarily I would say that this has crossed that line. I'd rather let EchoStar keep going and force TiVo to continue to improve its software/hardware.

[Tim Lupardus @ Aug 18th 2006 10:16AM]

I can understand being upset that your dish DVR will lose functionality, but I believe your anger toward Tivo is misplaced. Echostar was found guilty not Tivo, Echostar sold you technology obtained from Tivo. Tivo is just trying to protect its intellectual property, if they fail they have nothing.

Dishnetwork, please just buy Tivo and build us the ultimate DVR dish tuner we are all waiting for.

[Jamus @ Aug 18th 2006 10:17AM]

Silly, silly patent law.

Just because caveman Joe made a wheel then 2 days later caveman Jim made a similar wheel, it should not automatically mean that Jim copied Joe. Patent law has become so twisted that it is clamping down on creativity, slowing product development, and contributing towards monopolistic corporate habits.

Patents should be protected, but sometimes the US patent office really goes overboard.

Any mention of which DVR models will be affected? My guess is the older 501, 508, and 510 models should be free and clear since they are considered "dumb" models.

[Brad Thornsberry @ Aug 18th 2006 10:21AM]

This Really Sucks!

I was a TiVo user back in the day. It was cool at first, and I still miss the BooDoop noise.
But I got DishNetwork and it's Dual-Tuner DVR is so much better than that old Tivo.

I don't have to hack/program my remote to skip 30sec.
I don't have to sit through downloaded ads.
ETC... I think I'm gonna cry now.

[Sean @ Aug 18th 2006 10:25AM]

I doubt TiVo would ultimately require Dish to disconnect 4 million users. That would be a public relations nightmare. What they want is Echostar to comeback to the table and license the technology so they have a nice reoccurring revenue stream. I think this win (and injunction) will make the other DVR manufacturers give TiVo a little call.

[d3 @ Aug 18th 2006 10:28AM]

So does this mean that ReplayTV, MythTV, EyeTV, and various other DVRs are next?

[Adrian @ Aug 18th 2006 10:42AM]

Simple Marketing Idea for Tivo Inc: How about offering Echostar DVR customers a free Tivo box and lifetime membership for $299?

(ps.. already a Tivo owner. Of all the computer kit I own, the Tivo is hands-down the most hassle free piece of kit I have)

[BobMac @ Aug 18th 2006 11:03AM]

I was really close to dumping cable for Dish, now I definitely won't. I just hope Comcast can keep its DRVs.

[r @ Aug 18th 2006 11:13AM]

The purpose of patent law is to prevent competition. We promote innovation and investment (two good things) by granting a temporary monopoly. So to those who say patents stifle competetion... well duh, it is supposed to.

Why would any company invest billions of dollars just to have some jackass reverse engineer the device and sell it cheaper (a problem with pharmaceuticals, but equally a concern with less costly software and hardware).

[ima9rd @ Aug 18th 2006 11:19AM]

"...willfully infringed TiVo patents that allow for the digital storage of TV programming."

This lawsuit, and the ruling, is complete BS. TiVo is using a blanket patent in order to monopolize the DVR market. What's next? Attacking Microsoft for creating WMCE2005? Shutting down all other DVR companies and monopolizing the market? Going after each individual owner using a PVR card to record TV to their PCs? Blanket patents like these do not help consumers in the slightest. If anything, they are harmful to the market, as they deter consumers from purchasing DVRs for fear that they might be disabled. I hope EchoStar wins this case, and TiVo loses millions in court costs.

Of course, I could be misunderstanding the lawsuit, in which case my arguement is invalid.

[Permanent4 @ Aug 18th 2006 11:21AM]

I just spoke with a Dish Network rep, who gave me some details on the situation -- which I needed, since I'm planning to get Dish Network installed on Monday. (Screw Time Warner Cable. I want my NFL Network.)

Anyway, the rep told me that Echostar has been through this sort of thing before with certain channel negotiations, and he assured me that the company isn’t going to let 4 million customers lose DVR functionality for an extended period of time. At the most, DVRs won’t be able to record for a few days in September — torrents at the ready, boys — while TiVo and Echostar hammer out a settlement that will work for everyone. (The rep mentioned some particularly nasty negotiations with Lifetime Network that caused those channels to go dark for almost a full week.)

There is an outside chance that Echostar will purchase an equity stake in TiVo, thus making them partners. There is much less of a chance, though, that future Dish Network DVRs will be TiVos.

This rep also told me that Echostar is a miserly bunch that pinches pennies wherever possible, so the negotiations with TiVo may be just as ugly as they were with Lifetime. He compared it to working for Wal-Mart, though Echostar does pay living wages and is able to offer such cheap service because it is so cheap everywhere else.

Bottom line, though, is that Echostar should get all this settled before the go-dead date of September 18, and we'll be able to keep our DVRs, though they may not work for a few days. I hope Echostar gets a deal done before 9/18, though, since two shows I usually record (CSI and Numb3rs) have season premieres that week.

Interesting factoid: ESPN gets up to $4 from your monthly TV bill. Most networks don't even get $1 per subscriber. You'd think ESPN would use that money to show something better than the World Series of Darts...

[r @ Aug 18th 2006 11:28AM]

I wouldnt trust your Echostar Rep too much... their whole job is to say whatever to retain you as a customer. Besides, they have NO IDEA what they are talking about. The TiVo Echostar discussions are held at a level way way way above the rep's head. Not to mention, it may not be Echostar's call. If TiVo wants to do something stupid to make a point, they can just tell echostar to stop. And finally, although TiVo is public... it is not very easy to buy a controlling stake in a corporation (which is what they would need to force tivo to deal with echostar, not just an equity stake). Most corporations have "poison pills" built into their corporate structures that prevent hostile take-overs.

[bgdc @ Aug 18th 2006 11:47AM]

Yay Tivo! Glad to hear they're finally busting the chops of everybody who infringed on their patents.

[bgdc @ Aug 18th 2006 11:48AM]

Priceless = the people whining that Tivo screwed them out of DVR. Uh, EchoStar violated patents knowingly - they're the ones to blame.

[Lonnie McClure @ Aug 18th 2006 12:05PM]

Per the link to an older article here at Engadget, the deal TiVo worked out with DirecTV was a licensing fee of $1 per subscriber, so I expect the ultimate outcome would be no worse than a $1 bump in the monthly DVR fee.

Dish knows if they disable the DVR features for any length of time, they tick off their customers, and start losing those not under long term contract to a competitor, so I have little fear they won't work something out.

The scenario of losing DVR functionality for a few days may seem scary, but there should be an easy way around that: On boxes like the 510 that allow it, disable automatic application of updates.

Technically, Dish should be able to "deauthorize" DVR functionality for all DVRs (much as they would do to a single box if the DVR fee was not paid), but that seems less likely, given that might disable some technology that is not infringing. I have my doubts the TiVo patent covers simple playback and record, as VCRs had that long before TiVo was an idea. It more likley applies to such items as pausing live TV, playing back a program that is still recording, etc..

[The Jeremy @ Aug 18th 2006 12:06PM]

Why are you Dish subscribers mad at TiVo? The company [Dish/Echostar] you signed up with is the guilty party that ripped off TiVo and now they are getting their just rewards. Instead of fuming and venting online over the situation, how 'bout you call up Dish and ask them to license TiVo's technology so you can get a decent DVR in the process?

[Raskawa @ Aug 18th 2006 12:10PM]

I just fired Dish and got 3 series II Tivo's at my house.

Hands down the Tivo features and interface stomp Dish's. The poster above that said the opposite has never used Tivo.. let's see Wish List, Suggestions, PC support and WMP support, scheduled recordings over the internet, a modding community, etc etc.. the rest of the players have a lot of catching up to do on the software front.

The Dish software sucks - it is worst than Time Warners. Tivo software is tons better, but it is not integrated with the provider - no sweat right now because my IR relays are working okay, but the lack of HD recording in my theater hurts.

I am on the fence over the patent protection thing. Part of me agrees that this maybe keeping competition down and hurting the consumers access to new features, but then I remember:
A) The cable and sat providers are the evil overlords that do not allow for easy third party integration into their recievers (no IR in, no serial connections, lack of true commitment to cablecards, no USB in, no network support, etc etc etc etc)
B) The cable and sat providers are not investing in their software UI/features. They friggin know they have market share and most people have limited choices of providers - so if they have no DVR competition (read - only Tivo and Windows Media Edition compete - see above posts) then they don't have to invest in DVR software development..

So in the end, in this case, I think it is justice that Tivo sticks it to them.. I hope they keep doing it until the Cable and Sat providers play nice and stop monopolizing the consumer access to media and technology.

[Nathan @ Aug 18th 2006 12:12PM]

@#%$!! I have 4 DishPVRs in my house!

[Jamus @ Aug 18th 2006 12:13PM]

I think one of the big thing that those of use with Dish do not want to see happen is to have to use TWO boxes to get DVR service. I like the one box setup I have now and going back to two just seems wrong.

However if Dish did a licensing deal of some type and offered a TIVO-blessed solution, I still don't know if I would like that. I don't like some of the TIVO tactics. They just seem a little too close to rolling over your data to anyone with the right cash.

[jeremyp @ Aug 18th 2006 12:30PM]

The patent is ridiculous.

If this results in the loss of my DVR capabilities, I will never forgive TIVO.

[d3 @ Aug 18th 2006 12:34PM]

"The purpose of patent law is to prevent competition. We promote innovation and investment (two good things) by granting a temporary monopoly. So to those who say patents stifle competetion... well duh, it is supposed to."

You must be a lawyer. Either that or you are confusing copyright with patent. Copyright is where the government gives you a temporary (ha!) monopoly over the distribution of a creative work as an incentive for "promoting the useful arts." On the contrary, the purpose of a patent is to promote the disclosure of as much technical knowledge in to the public sphere as possible. As an incentive, the government gives the patent holder a limited monoply on the financial benefits of the patent. If there were no patents, people and companies would just devise more and more secure methods for keeping their technological secrets, well, secret. It was not intended to prevent reverse engineering or "me too" products unless they are proven to exactly mimic the patented physical implementation of such products. (like the way Zworykin stole TV from Farnsworth)

Honestly, your view is not unusual because this is not the way the system is being used (or gamed) today. If it was, Farnsworth would have been sued for infringing on Zworykin's earlier patent for a completly different method of TV picture acquisition and display and we would all be using Zworykin's shitty mechanical TV system.

[Bill @ Aug 18th 2006 1:10PM]

I hate TIVO. i love DVR and i happen to have DISH so i guess i will be losing my DVR... i am mad... oh well i was looking for an exuse to cancel my DISH... without DVR it is worthless.

[Jason @ Aug 18th 2006 1:19PM]

Not going to loose any service. Engadget needs to update a bit... Echostar got a temporary stay on the injuction.

http://phx.corporate-ir.net/phoenix.zhtml?c=68854&p=irol-newsArticle&ID=897186&highlight=

[r @ Aug 18th 2006 2:19PM]

d3: i am a lawyer. and there can be more than one purpose of patent law. i like to focus more on the innovator side... patents protect initial capital investment into a new product/invention. conceptually there is not much difference between copyright and patent laws... one simply protects artistic works, the other protects inventions. some of the finer details are different, but the general gist is the same.

as far as secrets go, a lot of companies choose to forgo the public patent route (or an IP protection) and maintain a trade secret. Coke and Pepsi being the two best known examples. neither have sought any IP protection for their formula, and have instead kept a trade secret. the secret is not public, but it is also not protected (except from theft and misappropriation).

patent law does make information public so that everyone can benefit from it... but it puts a 20 year stay of execution on anyone else capitalizing on the same product... that is the temporary monopoly i was talking about that protects the original innovator.

[Matt @ Aug 18th 2006 2:29PM]

To everyone defending Tivo, have you ever used anything that violated patent law? Mplayer, maybe?

[Trisha @ Aug 18th 2006 3:54PM]

I am laughing at all of these comments. Guess this is where my having basic cable and no DVR comes in handy, huh?

[David M. Peltz @ Aug 18th 2006 5:31PM]

To the user who wrote "ask [DIsh] to license TiVo's technology so you can get a decent DVR in the process" . . . what a bunch of cr&p. I wouldn't trade my Dish DVR for a TiVo under any circumstances -- and yes, I've previously owned a TiVo. The only thing my Dish box lacks compared to TiVo is the suggestions feature, which is just silly and useless. Most importantly, no TiVo box can come close to Dish in terms of picture quality.

As for the patent iself, I have a hard time feeling sympathy when TiVo came out at or around the same time as ReplayTV and the original Dishplayer. IMHO, this is just a desperate attempt by a company which is going nowhere fast to stay afloat. This decision will be overturned on appeal, just wait and see.

[Redwood @ Aug 18th 2006 8:40PM]

I was about to order Dish's HD DVR for when I move in with my girlfriend next month. I guess not now! I currently have TimeWarner's DVR (formerly Comcast a couple weeks ago..there go my hopes of the TiVo interface...). I do feel for my friends that already have the Dish HD DVR (they love it!), especially since they haven't had them long. I think the person the be mad at is the judge that ruled that way. Instead of making Echostar pay up or pay per box, etc., he ruled AGAINST the consumer more than against the company. What an @$$munch!