Print Page 5/14/2010

WASHINGTON: Dish Network won a full-court review from a federal appeals court for its ruling in the case involving TiVo. The U.S. Court of Appeals for the Federal Circuit in Washington granted an en banc review to Dish, which it ruled against in March. Friday’s ruling vacates the one issued in March that left Dish owing TiVo damages of around $303 million.

TiVo sued the Dish Network six years ago over using digital video recording technology for which TiVo said it possessed the patents. TiVo won damages of $103 million in that round, and Dish was told to stop using the DVR technology. The satellite TV provider claimed to have created a work-around technology, but TiVo went after Dish again, saying the work-around still violated TiVo patents. A federal court agreed last year, granted TiVo another $105 million and told Dish to disable the DVR function in its set-top boxes. At the time, an estimated 4 million Dish subscribers had DVR-enabled set-tops.

Dish appealed and lost with a 2-1 split decision in March from the court that today agreed to do a full review by all 12 judges.

“This is completely unexpected,” wrote Wells Fargo analyst Marci Ryvicker. “Most people were handicapping Dish’s chance of getting an en banc review at 10 to 15 percent--we were at the lower end of this range--given the infrequency with which something like this is granted, especially as this ties up an entire court for a period of time. Clearly, we see what the market was expecting, with TiVo shares down 40 percent and Dish shares up 5 percent versus the S&P down 2 percent.”

The process could last anywhere from 30 days to six months, she said. Should Dish lose, it could file a petition of certiorari with the Supreme Court--a long shot, Ryvicker said.

“While many people believe that today’s decision may result in a faster negotiation between Dish and TiVo over a licensing deal, we do not agree,” she said. “We feel that today’s decision only emboldens [Dish chief] Charlie Ergen to run the legal proceedings to the gamut, until he gets a full victory. We believe today’s decision is a small victory for Dish; however, it does give Charlie what he needs--additional time to fine-tune the workaround of the workaround.”

Dish and sister company EchoStar issued the following statement in response to the court ruling: “Dish Network and EchoStar are pleased that the full Federal Circuit Court of Appeals has granted their petition for rehearing en banc. We believe the issues that will be considered by the full court on rehearing will have a profound impact on innovation in the United States for years to come.”

Deborah D. McAdams

See...
March 4, 2010 : “TiVo Logs Another Win Against Dish”
A federal appeals court today upheld a ruling that technology used in EchoStar’s Dish set-tops violates patents held by TiVo. The U.S. Court of Appeals for the Federal Circuit ruled 2-1 in favor of a lower court ruling that EchoStar’s work-around DVR technology didn’t meet the requirements of a previous injunction.
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