TiVo Sends Echostar Packing

Dave Zatz —  April 13, 2006 — 16 Comments

This just in… TiVo won their patent infringement case versus Echostar! Once the dust settles and more details emerge, I’ll update this post.

Update 1: The Wall Street Journal, AP, and Bloomberg are reporting the award is $74 million. I haven’t found out yet what this means for current Dish DVR units. Apparently the judge in the case owns a TiVo, though members of the jury do not.

Update 2: TiVo’s stock is up $1.55 in after hours trading to $9.80… which is more than a 100% increase over the 52 week low hit last October.

Update 3: TiVo will be seeking an injunction against Dish DVR units and perhaps others. Read TiVo’s official response to the verdict here or see below. (Thanks, Davis!)

Update 4: Echostar responds here or see their statement below. Isn’t it amazing how both sides claim victory? ;)

Update 5: The judge has the ability to adjust the award… up to tripple the $74 million presented by the jury. Deliberations took only two hours, including a cigarette break. An updated AP article can be found here.

Update 6: Some have expressed interest in reading the actual patent text. Search for patent number 6233389 here to see it.

Bloomberg says: TiVo Inc., the pioneer maker of digital video recorders, won a jury trial in a Texas lawsuit against EchoStar Communications Corp. over a patent for technology that lets a viewer record one TV program while watching another, a court official said. Details of the verdict by a federal court jury in Marshall, Texas, weren’t immediately available, said a court clerk who declined to give her name. The victory may mean TiVo, based in Alviso, California, can receive significant licensing fees for its technology, raising the cost of digital video recorders for cable and satellite companies paying for TiVo-like boxes, an analyst said.

TiVo says: TiVo is pleased that the jury found that TiVo’s pioneering time warping patent is valid and that EchoStar has been infringing on our intellectual property. TiVo is particularly gratified that the jury found that EchoStar willfully infringed on our patent and the consequences their actions had on our overall business. This decision recognizes that our intellectual property is valuable and will ensure that moving forward EchoStar and any others that want to use our patented technology will be required to provide us with compensation.

TiVo intends to seek a permanent injunction against EchoStar’s DVR products.

TiVo is built on a strong foundation of innovative technology and intellectual property. We now hold more than 87 patents in our worldwide patent portfolio and have more than 138 patent applications pending. TiVo has a long list of licensees in the consumer electronics, cable and satellite markets, and we will continue to license our technology under appropriate circumstances and arrangements. We will also continue to vigorously defend our intellectual property for the benefit of our licensees and shareholders.”

Echostar says: This is the first step in a very long process and we are confident we will ultimately prevail. Among other things, we believe the patent – as interpreted in this case – is overly broad given the technology in existence when TiVo filed its patent. We believe the decision will be reversed either through post-trial motions or on appeal. Additionally, the Patent Office is in the process of re-examining TiVo’s patent, having determined there is a substantial question concerning the validity of the patent.

DISH Network subscribers can continue to use the receivers in their homes, including their DVRs. Furthermore, TiVo dropped their claim that EchoStar’s Dishplayer 7200 DVR infringes their patent.

EchoStar looks forward to trial of its DVR patent case against TiVo in February 2007.

16 responses to TiVo Sends Echostar Packing

  1. Now the appeal and simultaneous settlement negotiations begin.

    My prediction (and hope) is that a settlement is reached that has Dish Network starting to offer integrated TiVo units. Maybe I’ll get a Series3 after all.

    The one variable I see here is Charlie Ergen, he’s a bit unpredictable and may want to “fight this” even if it’s not in his company’s best interest.

  2. If anything, the rise in their stock shows the company is definetely making marketting progressions. I had low expectations to begin with for them, but that’s changed since i’ve seen how many people actually have them.

  3. the battle of the press releases begins! i don’t miss that world at all – thanks for providing links to both releases, its always an amazing work of communication arts to see two completely different takes on the same decision – espcially when one side loses and the other wins. yet the side that loses always maintains, “this is not a loss. this a step forward in the road to victory!”

    good for TiVo for protecting what they’ve earned – they certainly are the market leading in PVR/DVR technology. Anytime you create a new verb “I TiVoed that show last night” that is used for everything (including not your stuff, kleenex, rollerblade, etc) you know you’ve got the best stuff out there.

    enter me!

  4. Patent only filed in 2001?? The ATI all-in-wonder is prior art to the majority of their claims. Everything else can be considered obvious to one “skilled in the art”. Thus this patent should not have been granted, or at least not hold up.

  5. I’m not a patent attorney (just like I’m not a stock guru) but I believe they applied for the patent in 1998 and it was granted in 2001. Not sure if that makes a difference or not… Echostar is making noise about appealing and they still have their counter suit in play, so this definitely isn’t over.

  6. In the USPO document it says “Filed: April 5, 2001″. That date makes it easy to show prior art. ‘course the ATI all-in-wonder was around before 1998 as well.

  7. BTW, I think you got the wrong document #. Patent #6,233,389 has a “Filed: 7/30/98″ designation

  8. Thanks for the tip!

    I see the problem… I didn’t realize the interface I had originally searched from only covers the last 5 years. I incorrectly assumed the oldest “time warp” entry was the right one and remembered 2001 being relevant. I should stick to things I understand. :)

    Searching here for patent number 6233389 should do the trick: http://patft1.uspto.gov/netahtml/PTO/srchnum.htm

  9. Reading through the patent is interesting. I don’t know how Dish’s PVRs work, but you would sort of expect them to capture the already-encoded MPEG-2 transport to disk, rather than decoding and then reencoding in the box. Given this most of the claims in the patent wouldn’t seem to apply. Of course the last claim doesn’t mention this, but it appears overly broad and it isn’t clear what it does cover.

    Obviously Tivo thinks this applies to such DVRs or they wouldn’t be acting like they are. Certainly MOT and SA cable DVR STBs simply capture the incoming MPEG-2. You’d think Direct TV would as well.

    Huh. Perhaps the Jury just couldn’t follow this?

  10. “capture the already-encoded MPEG-2 transport to disk, rather than decoding and then reencoding in the box”
    For the directv tivos, the mpeg2 is not decoded&reencoded. That is why directv-tivo recordings have identical quality to the live feeds. Perhaps you’re thinking about scrambling/encryption.

  11. I don’t think that the Scientific Atlanta and Motorola DVRs just record the MPEG2 stream since many (most) channels on a “Digital Cable” network are infact analog.

    It would be possible for them to record the MPEG2 stream when available and then encode to MPEG2 when it’s not.

    As for the DirecTiVos, and presumably the Dish PVRs since satellite signal is 100% digital (no analog channels) they record the MPEG2 stream directly so there is no loss of quality.

    For people who have a Standalone TiVo (like me) the signal is decoded on the satellite box and the re-encoded on the TiVo, only to be decoded for viewing on the TiVo. Of course there’s a loss of quality there but personally I can’t notice the difference even on my brand new Samsung DLP TV (using S-Video cables all around).

  12. Tivo shouldn’t win because the Dish DVR is a superior product that obviously improved so much on whatever original tivo claims that it is something new and thus not infringing. I’m getting really tired of whoever happens to file first on whatever numerous people are working on having dibs. It just keeps prices unnaturally high for the consumer.

  13. As a DISH subscriber, if my DVR gets turned off, both DISH and TiVo will pay!!!!!!!!!!!!!!!!!! I’ll go after both you motherf$#@#$$$$#s.

  14. I am both a DIRECTV and Dish Network dealer, and I easily out sell DIRECTV’s DVR (the R15) when customers see the Dish DVR (625). Personally I have the DIRECTV R10 TiVo model at home and love it. However, there are several features and functions about the Dish Network DVR that kick DIRECTV DVR’s. For example, as far as I know TiVo’s aren’t dual room receivers or do they offer the alternate option of auto-tuning or reminding you of a program your interested in. These are just 2 features that differ significantly between the 2. I don’t know what I would do if Dish had to recall all their units and/or stop selling their DVR units. Ultimately I don’t think it will come to that.

  15. Being given a Dish DVR 625; but I won’t be buying any service plans at all. Will I be able to use the device as a VCR?

  16. 3 years later… does anyone have a copy of or link to the original jury verdict? Specifically, I’d like to see which of the patents 61 claims DISH was found to be infringing upon. Much appreciated.

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