TiVo's shares soar after ruling in Dish patent dispute
WASHINGTON -- The Court of Appeals for the Federal Circuit agreed with a lower court that digital video recorders distributed by Dish, formerly known as EchoStar Communications, violated software elements of TiVo's patent.
The court overturned the lower court's ruling that Dish infringed on the hardware elements of the patent.
But the three-judge appeals court panel said violation of the software claims was sufficient to uphold the $74 million in damages the lower court awarded TiVo. That has increased to $94 million due to interest accruals, a Dish Network spokeswoman said.
TiVo sued EchoStar Communications in 2004, alleging that the Englewood, Colo.-based satellite broadcaster infringed on TiVo's patented technology that allows viewers to record one program while watching another. EchoStar Communications changed its name to Dish in late 2007.
TiVo, based in Alviso, Calif., pioneered digital video recorders that allow viewers to pause, rewind and fast forward live television shows.
The appeals court also said that once its ruling is final, Dish would be barred from using TiVo's technology, which it uses on more than 3 million DVRs.
But a Dish spokeswoman said the ruling won't interrupt service or require any action by customers, because the company already placed alternative software on its DVRs.
"This improved software is fully operational, has been automatically downloaded to current customers, and does not infringe the TiVo patent at issue in the Federal Circuit's ruling," Kathie Gonzales said.
TiVo welcomed the ruling, in a statement, as confirmation of the "value of TiVo's (intellectual property) portfolio."
In a research note, Citi analyst Tony Wible said the ruling could give TiVo "significant negotiating power" as it seeks licensing deals with cable and satellite providers that want to sell their own DVRs, using TiVo technology.
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