TiVo's $200m damages award in EchoStar case affirmed, EchoStar to appeal (again)
By Nilay Patel 
posted March 4th 2010 12:50PM
posted March 4th 2010 12:50PM
TiVo Statement on Decision by U.S. Court of Appeals in Lawsuit Against EchoStar
ALVISO, CA - March 4, 2010 - TiVo Inc., the creator of and a leader in television services and advertising solutions for digital video recorders (DVRs), offered the following statement today on the U.S. Court of Appeals decision in its lawsuit against EchoStar.
"We are pleased that the United States Court of Appeals for the Federal Circuit fully affirmed the district court's finding of contempt against EchoStar, including both the disablement and infringement provisions. Additionally, this ruling paves the way for TiVo to receive the approximately $300M in damages and contempt sanctions awarded to us for EchoStar's continued infringement through July 1, 2009. 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."
DISH NETWORK AND ECHOSTAR STATEMENT REGARDING TIVO
ENGLEWOOD, Colo. – March 4, 2010 – DISH Network L.L.C., a subsidiary of DISH Network Corporation (NASDAQ: DISH), and EchoStar Technologies L.L.C., a subsidiary of EchoStar Corporation (NASDAQ: SATS), issued the following statement regarding recent developments in TiVo vs. EchoStar Communications Corporation:
"We are disappointed in the Federal Circuit's split decision, but are pleased that Judge Rader agreed with our position. Therefore, we will be seeking en banc review by the full Federal Circuit. We also will be proposing a new design-around to the district court for approval. At this time, our DVR customers are not impacted."
ALVISO, CA - March 4, 2010 - TiVo Inc., the creator of and a leader in television services and advertising solutions for digital video recorders (DVRs), offered the following statement today on the U.S. Court of Appeals decision in its lawsuit against EchoStar.
"We are pleased that the United States Court of Appeals for the Federal Circuit fully affirmed the district court's finding of contempt against EchoStar, including both the disablement and infringement provisions. Additionally, this ruling paves the way for TiVo to receive the approximately $300M in damages and contempt sanctions awarded to us for EchoStar's continued infringement through July 1, 2009. 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."
DISH NETWORK AND ECHOSTAR STATEMENT REGARDING TIVO
ENGLEWOOD, Colo. – March 4, 2010 – DISH Network L.L.C., a subsidiary of DISH Network Corporation (NASDAQ: DISH), and EchoStar Technologies L.L.C., a subsidiary of EchoStar Corporation (NASDAQ: SATS), issued the following statement regarding recent developments in TiVo vs. EchoStar Communications Corporation:
"We are disappointed in the Federal Circuit's split decision, but are pleased that Judge Rader agreed with our position. Therefore, we will be seeking en banc review by the full Federal Circuit. We also will be proposing a new design-around to the district court for approval. At this time, our DVR customers are not impacted."
"Don't worry, everyone keep can keep recording Idol"
Terrible...but mostly because people watch Idol.
Am I correct in assuming this is limited to the Standard Definition version of Dishes DVRs, or does it extend to the HD ones too?
Yay for my Tivo Stock. Up 55% so far today. It's about time my investment in their patent rights started kicking in.
Tivo can screw right off. You want to stop them from selling more, fine, but don't you dare tell Dish to shut down all the DVR's out there.
@Dr Blight: Welcome to the real world. That's a tactic to get them to pay licensing fees to TiVo. Strong arm.
@Dr Blight
The courts say Tivo can have them shut off, but it's up to Dish to beg Tivo for a "deal".
If you want to get mad, get mad at Dish for allowing it to get this far. DirecTV has made deals with Tivo. Dish is defiant and would, seemingly, rather you not have a DVR than pay for the license. That's on them. Not Tivo.
@Dr Blight Agreed. Dish has lost over and over again, and has refused to pay up, to the point that now they are being held in contempt, and the consequences are ramping up. One analyst at Sanford Bernstein estimated they might have to disable as many as 8 Million DVRs... presumably all the DVRs they've sold since they lost the case the first time.
Being stupidly stubborn isn't always the best way to get on in the world.
The only people making money on this are the lawyers
@john My stock portfolio disagrees. I bet TiVo does too since it allows them to extract licensing fees from other companies.
i thought you had to have a specific reason or technicality in order to appeal - you can't just appeal forever, right?
@Hawaii Jeff They do have reason, there was dissenting opinion amongst the judges, and one completely agreed with echostar. Thats their grounds is that his opinion holds technical validity and are appealing based on his arguments.
Since Dish already appeal the judgement to the Supreme Court and they declined to hear the case, it's not eligible to be heard again. The issue that was being litigated wasn't whether or not Dish infringed, it was whether or not the court abused their discretion in issuing their injunction and contempt. At best Dish can seek a full hearing in front of the entire appeals court, but this is very very rare. Not only do they hear less cases than the Supreme Court (around 80 each year vs. 150 at the supreme court level) but only 1 out 1,000 of those cases actually ends up getting reversed. Typically, a case has to have political implications to receive a full panel hearing.
@Davis Freebeg As far as I know, Dish only petitioned the infringement ruling to the Supreme Court -- what's stopping them from petitioning the contempt issue if they lose before the en banc?
@Nilay Patel The judgement isn't eligible to be heard because when Dish originally appealed to the Supreme Court, they didn't include the argument that the judges order was too broad. That was why the panel said had you argued that we could have adjudicated it, but the time for appeals has passed. It wasn't until the Supreme Court denied to hear the case that Dish added the argument that the judge's instructions weren't clear. If people were allowed to reapply to have the Supreme Court hear a case over and over again there would be no resolution. Once the supreme court denied the hearing, TiVo effectively won their case and this appeal was only about what the damages would be for Dish refusing to comply with the verdict.
@Davis Freebeg Hey great stuff guys. May not have as many comments as the Apple v. Google post, but the quality is far higher. This type of legal analysis has been missing on most news reports thus far.
When you say en banc is rare, what does that mean-- 1 in 1000, 1 in 10? Also, looks like the Federal Court has 16 judges in the circuit, but some articles reference a hearing with the full 11-judge panel. Are they now adopting 9th circuit procedures and having en banc review with less than a full court? Would the 3 judges be included if that were the case? And in en banc, would DISH need a 9-7 decision to win?
Just trying to get a sense of what the likelihoods are going forward. I own way too much TiVo, and I want to be as well educated as possible. Seems to me right now DISH is clinging to a sliver of hope, and if en banc is denied then they will have to write a blank check to TiVo or piss off their best customers for eternity. Seems like it's crazy not to settle now before the last remaining doubt about the case is removed, but Ergen has ignored everyone urging him to settle for years, so who knows what they'll do.
Looking forward to seeing each of your complete takes on this soon. Thanks!
@Nilay Patel Any idea how this so-called submarine patent could affect the DVR industry going forward? http://www.ipwatchdog.com/2010/02/19/submarine-patents-alive-and-well-tivo-patents-dvr-scheduling/id=9168/
@jakerome My read is that since suggestions are part of Claim 1 of the patent, if your favorite DVR maker doesn't do suggestions, they're off the hook.
No amount of patent trolling is going to cause me to buy another Tivo.
Building a better Tivo may cause me to buy another Tivo.
@jedi Get your Internet idoms right. A patent troll is a company that holds only patents and makes nothing, and only live by suing other people. Tivo did in fact invent this technology, and by having a patent granted were given the exclusive right to it by the US government. Tivo is not a patent troll -- this sort of thing is the REASON patents exists.
@orev
I agree 100% with orev. Patent laws are exactly for companies like TiVo who put time and energy, and actually offer a product that uses their own patents. They are not a patent troll in any sense.
They're just trying to prolong this thing until 2018 when the patent runs out hahaha.
Anyways, TiVo should be ashamed of themselves for getting a bogus patent that patents obvious technology, and becoming a bunch of moral-lacking patent trolls instead of actually innovating, all while stifling the innovation of others.
There is no way I could buy another TiVo and have a clear conscience with this garbage. Maybe a Dish 722 will replace my Series 2. :) That would serve them right.
It's sad that our broken patent system sided with TiVo, Echostar is 100% in the right here. I hope Echostar takes any and all steps necessary to screw over TiVo as much as they possibly can.
@(Unverified) A patent troll is a company that holds only patents and makes nothing, and only lives by suing other people. Tivo did in fact invent this technology, and by having a patent granted were given the exclusive right to it by the US government. Tivo is not a patent troll -- this sort of thing is the REASON patents exist.
You may think it's obvious because you no doubt grew up with a DVR. That's the way all brilliant inventions work -- after the fact they seem obvious, but when they did it in 1998 it was a revolution.
You couldn't be more wrong on this one
@orev I said they were turning into a patent troll from a company that used to be innovative, i.e. deriving more revenue from slimy behavior like suing other companies than actually making good products.
If they were making innovative products and making good partnerships, they wouldn't need to go around suing companies in this desperate attempt to stay afloat.
This shows how completely broken the patent system is.
The functionality of recording to a hard drive was obvious, it was just that TiVo was the first company to put the pieces together.
TiVo didn't invent anything. They wrote a slick UI to go over Linux, which was already there. Their hardware was nothing new, the Series 1 is just a custom motherboard combining existing MPEG-2 encoders and decoders with an existing PowerPC processor, and an existing IDE/ATAPI hard drive interface with a standard computer hard drive. Sense a pattern? TiVo is NOTHING NEW. It was just a front-end on top of a bunch of other bits of hardware that they bought off-the-shelf.
I grew up with tape, but the concept of a DVR was quite obvious, it just took time for the hardware to get there. Much in the same way, the concept that computers will be using all SSDs in the future is obvious now, the hardware just hasn't gotten cheap enough.
TiVo should be ashamed of themselves for this garbage, and I am never going to buy another TiVo DVR because of it. It's painful to see a company I used to love engaging in slimy, unethical behavior to extort money out of a much bigger company who actually has a profitable business. Go make some innovative DVRs, TiVo, and stop whining and suing!!!
Long live Echostar! Oh yeah, and now I actually have to side with AT&T and Verizon on this one, usually I hate them, but boy are they on the good side here.
@(Unverified)
You need to look up the history of this case, man.
"If they were making innovative products and making good partnerships, they wouldn't need to go around suing companies in this desperate attempt to stay afloat."
This is EXACTLY what they did with Echostar. Seriously, you need to look this case up.
@(Unverified) Your comment makes no sense. They sued Echostar because of a lack of innovation on their own product, so they were looking for a money grab. At least it dragged out for a while.
@(Unverified)
Tivo is not a patent troll, as described above. They obtained a patent and thus are entitled to a limited monopoly, and they should protect that. You would do the same if it was your patent.
As to obviousness, you appear to be using hindsight analysis. Many very lucrative inventions, in hindsight, look obvious. The pizza protector. The coffee cup protector. The highway lane reflector. If it was so darn obvious, why had not many other companies arrived at the same technology? This is a strong secondary consideration in favor of patentability. Have you reviewed the file wrapper? Have you studied the prior art available at the time the invention was made, and cited by the examining authority? I doubt it, particularly based on your comments.
Get a law degree specializing in patent law. Then take the patent bar. Then review the file wrapper and prior art in this and related cases. Then come back and make comments based on knowledge of patent law, not ignorance.
@(Unverified)
BUZZZITT! Wrong answer Unverified. Echostar had all the TiVo IP in house to see if they wanted to use it or not, copied everything and told TiVo they didn't want to use any of it. They started using it anyway and that's why things are where they are now.
It would be like GM getting all the IP from Tesla, not licensing anything and building cars that obviously used Tesla IP.
Echostar is the bad guy here. They got caught, found guilty and still don't want to pay up.
@webdev511 TiVo's patent may very well be valid under the current law, that just proves that the current law is completely and totally broken.
The concept of a DVR is quite simple, you dump video onto a disk and suck it back out. It's just a non-linear version of a VCR.
I can just about guarantee some professional-level sports replay machine did the exact same thing before TiVo did, just because it cost hundreds of thousands of dollars doesn't make it right to patent the use of video on a hard drive in the home.
What's next, someone is going to come forward with a patent for using one file on a PC while downloading another? Should Apple have to pay royalties to Sony because Sony made the first Walkman that allowed you to listen to music and walk down the street at the same time?
Did someone in the '70s or '80s get a patent on a double-level table because you could put a VCR on each level, and play one back while the other is recording a show?
This patent is ridiculous, and SHAME ON TIVO for sneaking crap like this through the US patent system. They should innovate, instead of making overpriced, undesirable products and suing other companies. This whole thing really makes me want a 722 that much more...
Now because they have such horrible relations with Echostar, they probably have screwed themselves out of licensing SlingMedia technology, which would allow them to offer true placeshifting, and an integrated experience. Nor could they probably make a dual-room DVR using agile modulation, because Echostar would find a way to sue them for that, just to make them take their own medicine. In the most simplest sense, they screwed themselves out of possibly licensing the TiVo software to Echostar.
What proves that they are becoming patent trolls, instead of making an actual product is that their stock responds to this crap, when for a real company who actually makes good products, it would reflect what products they are making and selling...
@(Unverified)
"I can just about guarantee some professional-level sports replay machine did the exact same thing before TiVo did, just because it cost hundreds of thousands of dollars doesn't make it right to patent the use of video on a hard drive in the home."
I'm sure that Echostar's legal team would be eternally grateful if you would kindly provide them with this apparently readily available art to invalidate the TiVo patent. Strange, though, that this elusive piece of art has not been revealed, despite years of patent prosecution and even more years of patent litigation.
"What proves that they are becoming patent trolls, instead of making an actual product is that their stock responds to this crap, when for a real company who actually makes good products, it would reflect what products they are making and selling..."
Again, for your own sake, learn patent law (even just the basics?) and learn what a patent troll is. Tivo prosecuted their OWN patent and sells a product. They are not even close to a patent troll. How many times must this be said to get it through even your non-patent savvy head?
@DigDug If TiVo's patent is in fact legal, that's proof positive that the patent system is completely and totally BROKEN.
Secondly, I said that they are turning into a patent troll, not that they are one. They still sell a product, but that makes their slimy and disgusting behavior is this case only slightly less reprehensible.
@(Unverified)
You sound like you will never see any patent claim as valid, since they will all be "obvious" in hindsight and you seem to believe that it abusive for patent holders to protect their patents. In light of this, I challenge you to give a few examples of existing patents that you believe were legitimately given.
@joquarky If they actually invented something, then I might. We have waayy too much IP crap in this country, and it stifles innovative new products and services.
I don't generally follow patents, so I don't know about legitimate examples, but I am sure there are some real products out there that are patented.
I think it is abusive if a company is trying to defend a junk patent, which is the case here.
Who could defend Echostar? When TiVo presented a prototype the Echostar CEO requested the prototype be given to Echostar and then Echostar came up with their own box using technology patented by TiVo. Just because someone leaves a copy of Avatar at my house doesn't mean I can legally duplicate it and sell it for profit, or even give it away.
@thaifoodtyphoon There are many problems with the assumption that because tivo left a prototype somewhere and someone comes out with similar product it must have stolen technology. First, if you leave a product like that it is almost more work to take the code out of flash, decompile it, and decipher all that random gibberish from the decompile, than it is to just write it yourself. Tivo isnt going to just leave their source code with someone.
Second, all these products use the same broadcom processors. These processors have built in dvr functionality that lends itself to this usage. Meaning that anyone using them is drawn in to the same sort of dvr scheme that tivo has patented just from the basis of using the same built in hardware functionality, they end up designing the software the same way to suit it. Now broadcom is not liable for this, only the company that releases a product to market based on this is liable.
So just saying that 'tivo left a dvr, the code must be stolen', is leaving a huge gap in knowledge about how these boxes work, and just coding for an embedded system in general.
@ezelkow1 Hi. I didn't "just say that 'tivo left a dvr, the code must be stolen'". I never mentioned or implied code was stolen.
TiVo's patent has been reconsidered twice by the US Patent and Trademark Office and upheld each time. The facts have been determined by the courts that Echostar infringed on TiVo's patent.
@thaifoodtyphoon I took your comparison to someone leaving avatar and you making a copy to be a comparison to tivo leaving a dvr, and echostar copying the code. Mistake on my part then. However as I did say later on, its a bit more complicated than just seeing a working unit, and completely designing the underlying software to work exactly the same without seeing the code. Unless of course you are working on the same hardware, and that hardware is designed in such a way that most users end up writing software that works in the exact same way. This would be similar to say 2 companies using the exact same gamepad for a game system. You have to read the data from the gamepad in whatever format it gives it to you, yet one company patented the obvious way of reading the data, so now company 2 has to go and design some ridiculous roundabout way of getting that same information.
The reason to defend them though is the ability to design a work around the patent. As one of the judges even stated, it appears that the design workaround removed the main infringing section of tivo's patent, and thats why he dissented from the other judges, pretty much urging echostar to push forward with an appeal. Here's the article with the dissenting judges opinion:
http://www.betanews.com/article/Appeals-court-rules-redesigned-EchoStar-box-still-infringes-on-TiVos-DVR/1267725110
@ezelkow1
Did you read that article at all? The dissenting judge did NOT say the workaround removed the infringing section. He said that he thought Echostar should not be held liable for contempt simply because it was next to impossible for them to do what the court originally ordered. He went on to say that the workaround should be filed in an entirely new lawsuit at this point. Which could also mean another 200-300m for TiVo AGAIN.
BTW, that was only one out of three judges, the other two stood firm.
@(Unverified) The judge did state that they removed their 'start code detection', which was a main sticking point in the tivo claims, so if the work around did get around that, that would effectively get around the tivo patent. But I agree he did not admit that their workaround was a solution, just that it should have been brought up seperately like you said. If it does satisfy that though then that would not mean another 200-300m, it would mean tivo would lose that new lawsuit since there would not be infringing software, at least not on boxes implementing that work around.
@ezelkow1 you say: "all these products use the same broadcom processors...anyone using them is drawn in to the same sort of dvr scheme that tivo has patented just from the basis of using the same built in hardware functionality"
TiVo did not use Broadcom until Series 2, the original TiVo used 2 processors, one made by Sony for encoding, and one made by IBM for decoding.
@thaifoodtyphoon From what I remember tivo was integral in the design of those broadcom processors. So everything that tivo had patented is basically built in to the processors so that they could do it in hardware. So then anyone using them ends up using the tivo scheme of dvr pretty much by default unless they have to do a work around design like echostar.
@ezelkow1 Sorry homey, the courts determined over and over again that Echostar was not forced to use the patented technology of other companies without licensing them, incredibly, even though they share hardware.
Amazingly, even though HP and Apple each have extensive patent portfolios, they can't steal each other's patented technologies, despite the use of many of the same processors.
testy
Whatever, I just want TiVo back on Directv. Their home made DVR sucks.
@Synergi It appears that part of DirectTV's more reasonable approach to this whole thing is that they will be offering a new version of their combined DVR. Tivo's CEO has basically said its coming. When? God only knows...
Nilay,
Not sure why you think existing Dish customers have nothing to worry about. It appears that many people think Dish may in fact be forced to disable a bunch of their existing DVRs as a result of this ruling. See for example:
http://www.multichannel.com/article/449679-Analyst_Dish_May_Have_To_Shut_Down_8M_DVRs_After_TiVo_Legal_Loss.php
I'm not saying he's right, I'm just saying it ain't obvious Dish's customers are safe...
Nothing to worry about other than us subs paying for all their appeals with the newly raised equipment fees. I'm up $20 a month. $240 a year. Yup. Not much to worry about . . . right.
Jeez EchoStar... just pay TiVo and give it up already. You've lost... twice now.
Dish Network is a thief. Two losses and they still want more. Maybe the judge will give them the verdict with a fist! Seems they fist their employees too. www.EEOC-Rights.Info Another lawsuit on DISH.