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Court Sides With TiVo In Patent Dispute

The federal appellate ruling could help TiVo in patent-infringement litigation involving AT&T, Verizon Communications, and Microsoft.
A federal appellate court on Thursday affirmed contempt findings against EchoStar and its spinoff Dish Network in a patent-infringement suit filed by TiVo.

The decision is seen as a big win for the digital video recorder maker, which stands to receive at least $300 million in damages and contempt sanctions. The ruling could also help TiVo in patent-infringement litigation involving AT&T, Verizon Communications and Microsoft.

The decision by the U.S. Court of Appeals for Eastern District of Texas sparked a buying spree in TiVo shares. At the end of regular trading on the Nasdaq Thursday, TiVo stock had soared nearly 62%.

Contempt sanctions imposed by the U.S. District Court in Texas were supported by the appellate court, which found that the sister companies had violated its order to stop making and selling DVRs infringing on TiVo patents. EchoStar and Dish had argued that they had changed some of the components in their DVRs and continued to sell the devices.

TiVo said in a statement that it was pleased with the latest decision, which covers damages and contempt sanctions from continued infringement through July 1, 2009.

"We will also seek further damages and contempt sanctions for the period of continued infringement thereafter," TiVo said.

EchoStar and Dish said in a joint statement that they were "disappointed" in the decision, which the companies said would not have an impact on its DVR customers. The companies also said they would propose a "new design-around" to the District Court for approval.

A federal jury in Texas in April 2006 found that EchoStar, which spun off Dish Network in 2008, had willfully infringed on TiVo's DVR patent. TiVo had accused EchoStar of violating its patent that allows consumers to record one show while watching another.