DISH / EchoStar ordered to pay TiVo $190 million in patent infringement case

We're a bit hesitant to call this one done given the history involved, but a federal judge in Texas has dealt DISH / EchoStar yet another serious blow in its long-standing dispute with TiVo, and this time he's taken a number of other measures that could cause EchoStar to finally rethink its workaround-litigate strategy. The big setback for EchoStar, however, is the one-two punch of $190 million in damages it's been ordered to pay TiVo and an order to disable the "infringing function" on all but 193,000 DVRs now in the hands of subscribers. The judge also found that EchoStar's recently-implemented workaround technology still violated the patent in question and, as a result, he's ordered EchoStar to inform the court before it decides to try its hand at another "design-around" of the infringing patent. For its part, TiVo says that it is "extremely gratified by the Court's well reasoned and thorough decision," while DISH / EchoStar would only say that it plans to appeal the court's decision and file a motion to stay the order with a federal appeals court.

Read - The New York Times, "Court Awards TiVo $190 Million in EchoStar Patent Case"
Read - TiVo Statement on U.S District Court for the Eastern District of Texas Decision

[JimboJones @ Jun 2nd 2009 8:30PM]

I hate TIVO on DirectTV

[Kumar @ Jun 3rd 2009 9:36AM]

No worries, as I read recently that the DTV dvr was going to get dual line buffers soon. That's one of the few perks that Tivo had over their current dvr.

[Ryan LN @ Jun 22nd 2009 11:17PM]

Are you serious? Tivo is responsible for the ONLY dvr that is worth anything on the system- I still have my HD Tivo unit from four years ago, and it doesn't even get the MPEG-4 channels. I keep it because it is heads and shoulders above the dogshit that Directv brands as its own product line. One of the reasons that people didn't like Tivo on DirecTv was because due to licensing agreements and contractual arrangements Tivo gimped their boxes so they weren't nearly as fully featured as the ones that they manufactured for stand-alone use and for other competitors. Now, with what looks to be an pretty tight hold on the patent that makes dvrs worthwhile, I think you will see Tivo negotiating from a position of strength and forcing those companies that want to continue to offer DVR technology into letting them do things THEIR way instead of the bullshit directv/time warner/echo star way. I am hopeful that will mean unit to unit transfer of shows, Tivo to go, and a whole host of other innovations. I'm not betting my mortgage on it, but I am hopeful, which is light years ahead of where I was a year ago this time. Congrats Tivo- and DirecTv, I want my new Tivo NOW.

[Kris @ Jun 2nd 2009 8:39PM]

Thats stupid. 190 million and disabling, EchoStar should get a stay order.

[MacBandit @ Jun 3rd 2009 12:31AM]

They already did like a year or two ago.

[Jason @ Jun 2nd 2009 8:47PM]

Disabling the function on existing customers? This is crap, people payed money for a receiver with this capability and now they are going to disable it? Something is seriously dis functional here...

[B3astofthe3ast @ Jun 2nd 2009 9:04PM]

Yep, I just told my parents, and they are PISSED.

[Steve @ Jun 2nd 2009 9:19PM]

Er...did I read this wrong?

"The big setback for EchoStar, however, is the one-two punch of $190 million in damages it's been ordered to pay TiVo and an order to disable the "infringing function" on all but 193,000 DVRs now in the hands of subscribers. "

That says that they have to disable it on everything EXCEPT the ones in the hands of subscribers...are there more than 193K DVRs from Dish out there?

[brennok @ Jun 2nd 2009 9:20PM]

I read it as they only have to disable it on the DVRs not in customers homes.

"and an order to disable the "infringing function" on all but 193,000 DVRs now in the hands of subscribers."

[Mikey @ Jun 3rd 2009 1:40PM]

Echostar had a simple way to avoid the injunction and pissing off its customers... it's called not infringing the patents. Echostar took a calculated risk that they could either (1) beat the patents, or (2) avoid an injunction. It lost on both risks. This is exactly how our patent system is supposed to work.

[Jason @ Jun 3rd 2009 4:41PM]

Pretty much true, however Echostar is supposed to be the one paying for it - not the end user.

[Joshua Ochs @ Jun 2nd 2009 8:47PM]

You know, it would REALLY help to know something about the patents at the heart of this. Are they the bad-overreaching kind, or the genuine, we-did-something-cool kind?

[Peter @ Jun 2nd 2009 8:54PM]

Fuck you TiVo. Fuck you.

[scooterbaga @ Jun 3rd 2009 12:44PM]

Yes... this is TiVo's fault... Shame on them for protecting what's theirs.

[Mikey @ Jun 3rd 2009 1:42PM]

Yes, and shame on them for developing a superior product that Echostar then ripped off without compensating Tivo. How dare they let Echostar steal from them!

[christhepcguy @ Jun 2nd 2009 9:00PM]

I'm going to patent the penis, So anyone who has one will have to pay me $10.00 in damages and lost puntang.

[JimboJones @ Jun 2nd 2009 9:15PM]

there are a lot of dicks out there

[TomServo @ Jun 4th 2009 10:46PM]

You've just proven your own point.

[james cordero @ Jun 2nd 2009 9:03PM]

Congrats for Tivo getting what is rightfully theirs! Echostar gambled and lost, now pay up suckers!

[TQ @ Jun 2nd 2009 9:16PM]

James cordero how is that money rightfully tivo's? I would really love for you to tell me that.

[MacBandit @ Jun 3rd 2009 12:34AM]

Well they did patent the functionality before Echostar even developed a DVR.

[jbcaro @ Jun 2nd 2009 9:03PM]

Nice, an article and links to other articles that tell me absolutely nothing about the the infringement was.

[Puggs @ Jun 2nd 2009 9:15PM]

The infringement was over the so called "Time Warping" functionality of the DVRs (Pause, rewind live TV!). This patent belong to Tivo.

As a long time Dish customer and a big user of my HD DVR. This news is right, pure and simple.

Looks like I am gonna have to build another linux DVR.

[Puggs @ Jun 2nd 2009 9:16PM]

I meant WRONG and not RIGHT!

Doh!

[ferris209 @ Jun 2nd 2009 9:14PM]

I HATE Tivo, however, it seems that they do have Echostar by the testes, having already lost every single court case they've ventured into with Tivo. So why don't just pay Echostar royalties and put a damn little stupid smiling TV in the corner of my DVR and be done with it?

[digitallysick @ Jun 2nd 2009 9:16PM]

Dishnetwork deserves this! They screw you over on the DVR , they got rid of VROOM HD without telling anyone.

[foosebtng @ Jun 2nd 2009 9:34PM]

Wow, they dumped fifteen channels of crap years ago and you're still angry?

How sad...

[se30chris @ Jun 2nd 2009 9:29PM]

well my 2 Viper 722K's will be fine for now.

[foosebtng @ Jun 2nd 2009 9:42PM]

There are a LOT more than 193K DishDVR boxes out there. TiVo is not only angling to piss off MILLIONS of potential customers, they are ensuring that those people AVOID their own product out of spite for screwing them over with this pathetic cash grab for their own flailing business (someone remind me how profitable TiVo's been as a company)...

[t1616 @ Jun 2nd 2009 9:56PM]

It is all BUT 193,000 DVRs. From what I have been able to gather the SD DVRs are the only ones affected at this point in time. So if they had to disable the SD DVRs, like my 625, they would be replaced with 722s.

[Mikey @ Jun 3rd 2009 1:53PM]

How is this a "pathetic cash grab"? Echostar stole Tivo's technology and refused to pay for it. Nearly every other TV provider did the smart thing and paid Tivo a reasonable royalty to use its technology, but Echostar thought it was above the law. If customers are angry at anyone, they should be angry at Echostar for needlessly dragging this out in court, and thus putting customer's DVR use in jeopardy or at the very least causing it to be more expensive than it would have been if Echostar had just paid up in the first place.

Protecting IP is in the constitution... it is what allowed the U.S. to become a major player in nearly every technology (although we've blown it since then). It is not a "cash grab."

[Crazy J @ Jun 2nd 2009 9:49PM]

The number of times they can appeal should really be decreased.

How many appeals is this now? How many years has this litigation been going on?

If it is true that Echostar has lost every case and appeal, it should come to a conclusion.

I bet the only people making money are the lawyers... figures...

I'm embarrassed to have a lawyer as a brother... (just kidding bro~ heh heh)

[Jon @ Jun 2nd 2009 9:58PM]

Those who wish Dish would just throw in the towel don't know that company very well. Charlie Ergen loves himself a good court case, and since a number of cases that deal specifically with software patents are currently pending - including the Supreme Court's decision to hear the Bilski case - he might just be biding his time.

I wish the two could kiss and make up, because they both have notable features the other side is missing. You'd have a true best-of-breed system on your hands.

[Mikey @ Jun 3rd 2009 1:48PM]

It is unlikely that Bilski will have any effect on the outcome of this case. The claims in Bilski can hardly even be called software claims, since they can be performed by a human using paper and their brain. True software claims, like Tivo's, require a computer to implement them, and thus are kosher under the Supreme Court's prior "patentability" cases.

[hew33 @ Jun 2nd 2009 10:56PM]

Dish got what it deserved. Management stole TiVo's patents and delayed this thing for years on end. I am glad its finally over and am hoping that TiVo takes the 190 million in addition to the 100 million it got from the first case and invests it in R&D and new products because DVR's thanks in part to Dish and generic dull DVR's are profit less.

What could TiVo do with almost 300 million in cash? Maybe buy out Blockbuster? Or cut down on its current sub fees.

I say they look at new products like PMP's.

Either way Dish deserves this. CEO is an a hole.

[Brian @ Jun 3rd 2009 12:17AM]

DISH isn't planning on doing anything at this point in time.
I work for DISH Network, and most of the customers have no idea that this is even going on. We aren't allowed to give any details or anything about it. But as of now, anyone who has a DVR in their home isn't to be affected.

[MacBandit @ Jun 3rd 2009 12:39AM]

You know I love my Tivo but that little Tivo guy at the top of the page looks like he has a fraking smug smile and deserves to be kicked in the balls.

[Lonnie McClure @ Jun 3rd 2009 12:54AM]

Echostar should have just purchased TiVo and and been done with it. Given that the market cap for TiVo seems to be about 2.5 times the total fine at best (and not much more at worst), it might still be worth it.

[Kevin @ Jun 3rd 2009 1:36PM]

Dish didn't do this because TiVo wouldn't sell for its market cap.

[Ken F @ Jun 3rd 2009 3:40AM]

>>What about other DVR's like DirecTV, I-Guide, Passport Echo, SARA, Moxi, and all the PC software
>>(Beyond TV, WMC, etc..)? They all pretty much do the same thing... records TV to a hard drive.
>>How can you sue for that?

TiVo patented a hardware and software implementation for DVR functionality on low-cost, low-performance set-top box hardware. Most manufacturers use that implementation, because it's the cheapest way to produce a STB DVR. If cable and satellite companies used high-performance AMD and Intel CPUs in their boxes, they'd have no need for TiVo's implementation. But they all want to build a box for $200, not $800, and TiVo's patents help to make that possible with today's technology.

(Eventually, faster hardware will eliminate the need for the patents at issue in this case. The "time warp" patent mentioned in this case expires in 2018, but newer, faster hardware will probably make it unnecessary before then. Of course, newer hardware doesn't do anything for the millions of DVRs that are deployed today.)

Comcast, Cox, and DirecTV all have licensing agreements with TiVo. Dish Network, Cisco, Macrovision (Passport Echo), Moxi, Time Warner, and Verizon do not. The TiVo patents are not applicable to computer software like Beyond TV, WMC, all of which run on high-performance PC hardware.

Echostar's final bill will be significantly higher than $190 million. Last October, Dish Network paid $104 million after interest for infringement that occurred up until April, 2006. Now they'll pay another $104 million plus interest -- probably closer to $125 million after interest -- for infringement between then and now. That amount was calculated based on $1.50/mo per infringing SD DVR.

Assuming the U.S. Court of Appeals affirms this decision, Dish Network will have to license the TiVo's patents to continue service on its older DVRs. This 2004 case only pertains to Dish Network's older SD DVRs, but for any settlement, TiVo will undoubtedly demand a percentage of the HD DVR fees too. TiVo was awarded $1.50/mo per DVR for infringement on the SD DVRs, so they'll probably want something along those lines.

DirecTV struck an agreement with TiVo before the outcome of the Echostar case was known, so they got a much better deal. DirecTV won't pay TiVo a dime for DVRs running its own software, but next year, they will offer the TiVo software as an option on their DVRs. IIRC, DirecTV will pay TiVo about $2/mo for every customer that chooses the TiVo software. It shouldn't cost customers extra (i.e. DirecTV is expected to foot the bill), although we won't know that for certain until it's available.

For those that want to learn more about the case, and the justification for the decision, you can download and read the judge's 25-page opinion here (PDF):

http://www.dbstalk.com/attachment.php?attachmentid=18566&d=1243985438

[Kumar @ Jun 3rd 2009 9:42AM]

Here's the bit that I find the most interesting....
"DirecTV struck an agreement with TiVo before the outcome of the Echostar case was known, so they got a much better deal. DirecTV won't pay TiVo a dime for DVRs running its own software, but next year, they will offer the TiVo software as an option on their DVRs. IIRC, DirecTV will pay TiVo about $2/mo for every customer that chooses the TiVo software. It shouldn't cost customers extra (i.e. DirecTV is expected to foot the bill), although we won't know that for certain until it's available."

So if that's true, then there won't be a true DirecTivo box next year, just an option to turn your DirecTV dvr into a Tivo HD??

Sounds interesting if that's true.

[Frankenstein Black @ Jun 3rd 2009 3:45AM]

D-UCK F-ISH / Echostar! The Douche network got what they deserve. Lets hope it sticks all the way through the appeal! Wait, why am I being so PC. FUCK DISH! Stealing patented functionality as blatantly as they did is like walking into my living room and taking my big screen tv in the middle of the super bowl and then turning around and selling it to someone right out in front of my house! FUCK UM!

PS They bought and wrecked Sling, wanted to buy and wreck Sirius and they have the nerve to continue to fight a rightful lawsuit? This is what happens when predatory minded, low brain powered jirkoffs run big businesses!

[Mikey @ Jun 3rd 2009 1:41PM]

Yes, and shame on them for developing a superior product that Echostar then ripped off without compensating Tivo. How dare they let Echostar steal from them!

[Ken F @ Jun 3rd 2009 1:45PM]

Kumar,

Specific details are not known yet. The TiVo software may only be available to users of DirecTV's next-generation DVR hardware, which is expected to debut late this year or early next.

[George @ Jun 3rd 2009 2:28PM]

Regarding running TiVo on DTV hardware, I remember reading the opposite: there will be 2 choices, DTV's hardware or TiVo hardware, not choice of software on the same box.

[Ken F @ Jun 3rd 2009 5:16PM]

>> Regarding running TiVo on DTV hardware, I remember reading the opposite: there will be 2
>> choices, DTV's hardware or TiVo hardware, not choice of software on the same box.

TiVo has already said they will no longer be producing new hardware for DirecTV. DirecTV is responsible for all new hardware. TiVo statements imply that they are working on software for the next-generation DirecTV DVR hardware platform, not the existing HR20/HR21/HR22/HR23 platform. At this time, it is unknown whether DirecTV will sell separate versions of the same box running different software, or whether the customer will be able to choose between the two on every DVR. TiVo statements imply there will be no difference in recurring fees for DirecTV DVR customers with TiVo, although there may or may not be an added upfront cost.

>> Echostar's final bill will be significantly higher than $190 million. Last October, Dish Network
>> paid $104 million after interest for infringement that occurred up until April, 2006. Now they'll
>> pay another $104 million plus interest -- probably closer to $125 million after interest -- for
>> infringement between then and now. That amount was calculated based on $1.50/mo per
>> infringing SD DVR.

There was an error in my post above with respect to the damages. Damages were calculated based on $1.25/mo per infringing SD DVR, with the following timetable:

x - September 9, 2006 ==> $104 million, after interest, paid October 2008

September 9, 2006 - April 18, 2008 ==> $103 million PLUS back interest due

April 18, 2008 - now ==> amount to be determined in hearings In June and July

[SirronTM @ Jun 13th 2009 5:24AM]

Hopefully one day software patents will be outlawed. Patents are supposed to foster the development of new technology by reassuring the developers that their efforts will make them money - by recieving royalties from people that want to incorporate the new tech into their products.

That's all well and good when you're talking about a physical technology like a fancy new cheese grater or something, because anybody who wants to make a cheese grater without paying royalties for the patent on the fancy new one, can just make their own design.

Software's different, due to the nature of it, there are some ideas that are just common sense and there's only really one way to program them right. By patenting software, you force your competitors to either pay you just to be allowed to compete, or try to work around the patent by creating some messy, innefficient code.

In this case, Tivo is affecting EchoStar's ability to compete with them by patenting a pretty basic software feature that, crucially, EchoStar would probably have developed in the same way themselves if they'd got there first, so Tivo is hardly protecting some absolutely diamond piece of R&D here. It's not like they cured computer cancer.

[xbryan @ Jun 23rd 2009 1:42AM]

You are wrong. Perhaps you aren't old enough, or don't remember the world before TiVo. The ability to pause and rewind live TV was amazing when they first came out with it. You simply take it for granted today.

[wave111 @ Jun 23rd 2009 2:02AM]

You obviously have read a lot of “patents are bad” blogs. TiVo pioneered the DVR. Believe it or not, some patents ARE useful, and TiVo holding DVR-related patents is a prime example.