TiVo Wins Big Patent Case Against EchoStar, Dish Network

TiVo scored a major legal victory Thursday against rival DVR maker EchoStar and its sister company Dish Network with a ruling in federal appeals court that upheld a lower court's judgment of patent infringement by EchoStar.

The U.S. Court of Appeals for the Federal Circuit ruling found that EchoStar, which lost an earlier jury-decided patent infringement case following a 2004 lawsuit by Alviso, Calif.-based TiVo, had not done enough to change its digital-video recording technology following a court-ordered permanent injunction to do so.

TiVo said it would now be able to collect some $300 million in damages and contempt sanctions it has been awarded in its case against Englewood, Colo.-based satellite service provider EchoStar and EchoStar's former subsidiary Dish Network, which was spun off in December 2007 but remains closely affiliated in a maintenance partnership.

As shares of TiVo soared following the 2-1 decision, analysts were also bullish on the prospects of the digital-video recording pioneer's success in similar legal battles with AT&T, Verizon and Microsoft, according to media reports.

At issue in the appeal that resulted in Thursday's decision was digital-video recording software in EchoStar digital set-top boxes that a lower court had ordered the TiVo rival to change or stop selling. EchoStar and Dish Network argued that significant changes had been made so as to comply with earlier patent infringement ruling, but to no avail.

The two companies on the losing side have stated that they will request that the question be put to entire 12-member appeals court, according to reports.

For now, Dish customers will be allowed to continue using the satellite television provider's digital-video recording service, pending a decision on the request for a hearing from the full court.

Dish claimed in court that it had "paid 15 engineers to spend 8,000 hours on the redesign, which took a year," according to reports, but the majority opinion for the three-judge panel found that changes made since 2006 were "not a major redesign of the software."

Changes made after Dish lost a trial in 2006 were "not a major redesign of the software," the court ruled in a 2-1 decision. Dish and EchoStar said they would ask the entire 12-member appeals court to hear the case, so for now the order to stop providing the service remains on hold.

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