Digital Media

Dish Network has been ordered to pay about $200 million to TiVo in an ongoing patent dispute over DVR technology.

The lawsuit goes back to 2004, when TiVo sued EchoStar (now a part of the Dish Network) 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's digital video recorders infringed upon a patent held by TiVo and ordered it to pay TiVo $73.9 million in damages. That ruling has been upheld in two separate federal appeals. Dish has said its engineers updated its software years ago to design around TiVo's patent and that they removed the features TiVo claims infringe on its patent. But the company hasn't made much progress with that argument. Dish was ordered to pay $103 million plus interest to TiVo in June for being in contempt of court for violating a permanent injunction on selling DVRs with infringing technology.

In the latest salvo, TiVo sued for nearly $1 billion and claimed it was due all of Dish's DVR profits for the five-plus years the dispute has been ongoing, according to Bloomberg. Instead, U.S. District Judge David Folsom in Texarcana, Texas, on Friday awarded TiVo just under $200 million in total, saying the infringement wasn't willful and that Dish has made a good faith effort to design around the TiVo patent.

For their part, both companies are claiming the new ruling as a victory.

TiVo said in a statement, "We are pleased by the court's ruling to impose contempt sanctions of approximately $200 million against EchoStar for its continued violation of a court-ordered permanent injunction...We are confident that this ruling brings us closer to final resolution."

Dish Network, meanwhile, released this equally positive statement: "We are pleased that the district court rejected TiVo's request to award a billion dollars in sanctions and that it found that any violation of the injunction was not willful. While we disagree that any amount of sanctions was warranted, the decision confirms our belief that we designed around TiVo's patent in good faith. We believe that we ultimately will prevail on appeal."

TiVo said Wednesday that it is suing AT&T and Verizon over three DVR patents. The complaints seek damages and a permanent injunction.

Simply put, TiVo is pursuing the same legal playbook it followed against Dish/EchoStar. The patents in question include 6,233,389, 7,529,465 and 7,493,015.

TiVo recently won another legal victory against EchoStar, which was found in contempt of court in its legal spat. TiVo won $103 million in damages, but the case will have another hearing in November or so. EchoStar appeals continue. Meanwhile, the U.S. Patent and Trademark Office is reviewing TiVo's patents at Echostar's request.

In a statement, TiVo CEO Tom Rogers said:

We will continue to pursue enforcement where necessary to stop infringement of our intellectual property.

On a conference call, Rogers noted that TiVo was still going to generate value through partnerships and distribution deals, but wanted investors to recognized the company's intellectual property portfolio.

The lawsuits against AT&T and Verizon come as TiVo reported a fiscal second quarter net loss of $2.9 million, or 3 cents a share, compared with a profit of 3 cents a share a year ago. The company reported revenue of $57.3 million, down from $65.2 million a year ago. Wall Street was expecting a loss of 5 cents a share.

Rogers called the quarter "solid" since the company delivered adjusted EBITDA of $5.2 million. TiVo said it has been focused on distribution via the likes of RCN and Best Buy. The company also said DVR rollouts with Comcast and DirecTV are on track.

Updated August 27: to correct amount of quarterly net loss.

The Moxi DVR and its new extender (right), the Moxi Mate.

(Credit: Digeo)

When we last heard from Digeo in April, the company was adding several digital media extras to its flagship Moxi DVR. Flash forward to August, and the company is back with more updates, the biggest of which is a new hardware announcement. The Moxi Mate is an "extender" that adds multiroom capability to any household with a Moxi DVR. The box is basically a thin client (no hard drive) that can access recorded content from the main Moxi, as well as all of the system's online and home networking digital extensions (Rhapsody, PC-based media streaming, PlayOn content such as Netflix and Hulu, and so forth).

Sounds great, but there are some caveats that prospective buyers should know. Most importantly: the Moxi Mate can't currently support the streaming of live TV--only programs that you've previously recorded on the main Moxi DVR. And while you could theoretically have several Moxi Mates in a household, Digeo currently supports only one of them streaming from the main Moxi at a time. (Of course, all of these issues could possibly be addressed in future firmware updates--but those are the product's initial notable limitations.) The other big deal: the Mate doesn't have a built-in Wi-Fi connection, so you'll need to supply an Ethernet network connection.

On the plus side: the video streaming is said to be nearly instantaneous, unlike TiVo's multiroom solution, which requires the video files to be copied to the hard drive in another room first prior to viewing. Also, the Moxi Mate will automatically resume paused programs. So, if you watch half of a movie on the main Moxi, you can retire to the bedroom and easily pick up where you left off on the Moxi Mate.

In addition to the Moxi Mate announcement, Digeo also rolled out new software to existing Moxi DVR owners that adds a variety of small upgrades. Among them:

The United States Patent and Trademark Office (PTO) issued an "office action" Monday rejecting two claims in TiVo's Multimedia Timewarping System (better known as the DVR) patent, the centerpiece of its legal battle with EchoStar.

That DVR is causing some trouble again.

(Credit: TiVo)

According to the PTO, its preliminary finding rejects TiVo's patent Claims 31 and 61.

Claim 31 describes "a process for the simultaneous storage and play back of multimedia data." The claim discusses how TiVo's DVR captures video from a broadcast source, stores it in its hard drive, and allows users to play it back at their convenience.

Claim 61 is similar to Claim 31. It describes "an apparatus for the simultaneous storage and play back of multimedia data." The claim discusses how the TiVo handles stored shows and gives users the ability to control them on the device.

The patent itself, which features more than 60 claims, is a blueprint for how TiVo's DVR works. It discusses an "invention (that) allows the user to store selected television broadcast programs while the user is simultaneously watching or reviewing another program. A preferred embodiment of the invention accepts television (TV) input streams in a multitude of forms, for example, National Television Standards Committee (NTSC) or PAL broadcast, and digital forms such as Digital Satellite System (DSS), Digital Broadcast Services (DBS), or Advanced Television Standards Committee (ATSC)."

The patent goes on to explain how TiVo streams content through MPEG video. It gives users the option to put the video into "reverse, fast forward, play, pause, index, fast/slow reverse play, and fast/slow play."

The PTO's preliminary finding is important for EchoStar. It gives it some breathing room as it moves forward after a series of missteps.

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.

A federal court has awarded TiVo $103 million plus interest in its long-running patent dispute with EchoStar Communications and ordered EchoStar to disable infringing features found on its subscribers' digital video recorders.

U.S. District Judge David Folsom on Tuesday also 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."

"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."

Englewood, Colo.-based Dish, which has roughly 13.6 million subscribers, said in a statement it would appeal the contempt ruling and file a motion to stay an order that requires it to disable the disputed DVR features within 30 days.

"Our engineers spent close to a year designing around TiVo's patent and removed the very features that TiVo said infringed at trial," the company said. "Existing Dish Network customers with DVRs are not immediately impacted by these recent developments."

The Alviso, Calif.-based maker of set-top boxes applauded the decision.

"We are extremely gratified by the court's well reasoned and thorough decision, in which it rejected EchoStar's attempted workaround claim regarding the TiVo patent, found EchoStar to be in contempt of court, and ordered the permanent injunction fully enforced," TiVo said in a statement. "EchoStar may attempt to further delay this case but we are very pleased the court has made it clear that there are major ramifications for continued infringement."

In after-hours trading, shares of TiVo rose $2.53, or 36 percent, to $9.51, while shares of Dish fell $1.19, or 6.9 percent, to $16.05.

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.

(Credit: Blockbuster/TiVo)

Blockbuster will become the latest Internet video-on-demand service to appear on TiVo DVRs.

The two companies announced late Tuesday that they are working to make Blockbuster's service available on all TiVo Series2 and Series3 DVRs (including the HD and HD XL models) in the second half of 2009.

The announcement marks the first non-PC device to support both Blockbuster OnDemand and its archrival, Netflix. TiVo DVRs also support Amazon Video On Demand, YouTube, Jaman, and some Disney movies via CinemaNow.

In addition to Blockbuster's online video service being available on TiVo, Blockbuster will sell TiVo hardware at its stores. The companies will also launch a joint marketing campaign. Blockbuster, meanwhile, already offers its own movie rental set-top box, the 2Wire MediaPoint.

TiVo announced two deals Monday that will help the company better target the cable market with its next generation of high-definition digital video recorders.

Specifically TiVo said it will work with set-top software maker Alticast to make it easier to integrate TiVo's technology into advanced set-top boxes for cable operators. Alticast makes software that enables consumer electronics makers to easily create cable set-top boxes that combine functions, like DVR functionality and Blu-ray Disc players.

Using the Alticast technology, TiVo can combine more complicated and sophisticated technology into its next generation of DVR products, which will ultimately help cable operators reduce hardware costs while also increasing the number of interactive services for users.

TiVo also announced a deal with SeaChange, a video-on-demand and IPTV technology provider, to integrate its technology with TiVo's next-generation DVRs. What this means for consumers, is that they will be able to search for VOD titles through the TiVo search interface, helping extend the TiVo experience beyond recorded shows and incorporating VOD services. TiVo said TiVo-branded high-definition cable-ready set-top boxes that integrate the SeaChange VOD functionality will be available later this year.

TiVo practically invented the DVR market. And even though cable operators have launched their own competing DVR services, TiVo's software and user interface have remained top-notch, attracting a loyal following of consumers. Over the past couple of years, TiVo has been partnering with cable operators, helping provide these operators with advanced DVR services that help set them apart from TV competitors. TiVo's latest announcements will help the company move further in this direction by helping make the next generation of TiVo HD products more cable friendly.

(Credit: Domino's)

Thanks to a new agreement with pizza giant Domino's, owners of TiVo set-top boxes can now order food from the chain directly through their televisions, and even track delivery time so they know just when the pizza guy will be showing up to bring them a nice, tasty treat.

Oh, boy.

Here's the deal: when a Domino's ad or product placement shows up, TiVo users can click through with their remote controls to order pizza, or can access an on-demand ordering screen through a TiVo menu. It's similar in theory to the deals that TiVo has with Fandango for movie ticket ordering or with Amazon.com for ordering products related to TV shows, except that you get a pizza.

"This is the first time in history that the 'on-demand' generation will be able to fully experience couch commerce by ordering pizza directly through their television set," Rob Weisberg, Domino's vice president of marketing, said in a statement. "You'll see a television ad for Domino's, and you'll click, 'I want it' through your remote. In about 30 minutes, your pizza will show up at your door." And then you won't just be a couch potato, you'll be a Digital Age couch potato.

One thing you can't do: pay for the pizza through TiVo. That has to be done in cash when the pizza guy shows up.