EchoStar says appeals court stays ruling on DVR workaround

Less than 24 hours after a federal judge found EchoStar in contempt in its long-running patent dispute with TiVo, another judge issued a temporary stay Wednesday, according to EchoStar.

"We are pleased that the Federal Appeals Court in Washington temporarily stayed the district court's order in the TiVo litigation. Dish Network customers can continue using their DVRs. We believe that we have strong grounds for appeal," the company said in a statement.

The temporary stay drags out even further a legal contest that is now five years old. It seemed like it had come close to reaching its conclusion on Tuesday evening when U.S. District Judge David Folsom found EchoStar, which is now part of Dish Network, in contempt of court for violating a permanent injunction by reprogramming millions of DVRs with a new "workaround." He then ordered EchoStar to pay $103 million to TiVo.

"The harm caused to TiVo by EchoStar's contempt is substantial," Folsom wrote. "EchoStar has gained millions of customers since this court's injunction was issued, customers that are now potentially unreachable by TiVo."

TiVo first sued EchoStar in 2004 for violating a patent on a "multimedia time-warping system," which involved recording a program on one channel while watching another.

A jury in 2006 found that Dish Network's DVRs infringed upon a patent held by TiVo and ordered it to pay TiVo $73.9 million in damages. A federal appeals court upheld the ruling in January 2008, as did a second U.S. appeals court in April 2008.

CNET News' Steven Musil contributed to this report.

[SwissJay]

I hate technology-based monopolies!

[lkrupp]

"I hate technology-based monopolies!"

What on earth do you mean by that statement? That TiVo is a monopoly? That Dish is a monopoly? Patent enforcement has nothing to do with monopoly or restraint of trade issues.

[nicmart]

Agreed. Patent is a government-issue monopoly and it ought to be abolished.

http://www.againstmonopoly.org/index.php?perm=593056000000000616

[mjconver]

And only the lawyers get richer.

[lightningrob]

As a Dish customer, I'm becoming increasingly disillusioned by their behavior. They've already lost twice on appeal and now found in contempt of court. They should finally face the music and pay Tivo for their IP. You can't just claim you have a workaround if none of the courts have agreed to it.

[pcolvin]

Problem is not paying Tivo their due. It's that if the injunction sticks, millions of Dish DVR customers will have nothing to use. Since Tivo's beginning, they have stated that they didn't support Dish, and had no intention ever doing so. If our DVRs go dark, we will have no replacements to buy and will be left with no other choice but to leave Dish if we want to time shift.

To me, this suit has always smelled similar to software oriented suites rumored to be supported by Microsoft. If Dish is forced to terminate DVR support, it stands the chance of going out of business since it appears that Tivo has no interest of taking the money and giving Dish a license. Direct and Comcast will be the big winners and consumers the losers. At least Broadcom had enough sense to settle up with Qualcomm and Nokia last year, and for monies much smaller than $103M for usage of their patents by a much wider audience.

[ikramerica--2008]

The recent ruling, if I understand it correctly, says it doesn't matter that Dish isn't using the patented technology anymore, that they stopped selling the devices in question and no longer use the software those boxes were programmed with (all true), because the judge believes that they should have stopped doing any sort of DVR business years ago after the initial injunction. In other words, the judge broadened the patent to basically encompass the concept of time shifting and not the specific method of time shifting, and also decided that once you violate a patent, you must forever stop trying to do anything related to that patent. One strike, you are out. It's evident that U.S. District Judge David Folsom doesn't understand technology that well. He can't see the difference between TiVo's patented product, the Dish product that violated that patent, and the brand new, non-patent violating product Dish has been building since then. To him, it's just a variation of the other product. But having owned both, there are many fundamental differences: software, hardware, user interface, time shifting methodology, etc.

That is basically granting TIVO a patent monopoly for an idea, not for the implementation of that idea, and punishing Dish for eternity for inadvertently violating it. It should go to the Supreme Court, because it's far reaching and could impact a lot of things beyond watching TV. Think about the implications for technology if other judges made such far reaching decisions.

But it's also pretty clear that the loosening of patent requirements in the 1990s has lead to this destruction of competition we are seeing today, and maybe this case will help convince lawmakers to revise the patent laws.

[ikramerica--2008]

One other thing: despite the claims that TiVO has no intention of licensing their patent to echostar, this ruling basically codifies TiVo as a monopoly, and anti-trust law says they at that point could not deny access to their product to certain companies, or charge them more out of spite, etc. Only protected monopolies like the NFL and MLB can deal in exclusive contracts like that. So, that is Echostar's next course of action should all else fail. An injunction would be filed against enforcement of the patent again, until the anti-trust case goes to court. Many more years...

[DailyHarold]

All I have to say is that if we are forced to give up our DVRs I better have the choice to leave DISH with no pnealties regardless if I'm in a contract with them. I use my DVR service religiously as I'm not home that much so the shows I want to watch I just record. But taking away that option is going to be a severe blow to me and I feel that I should be able to cancel my DISH service and leave with no early termination fees.

-Harold Martin
-http://www.haroldmartin.net