TiVo Emerges Victorious in DVR Patent Lawsuit
TiVo Inc., a creator of television services and advertising
solutions for digital video recorders (DVRs), announced the U.S. Court of
Appeals ruled in its favor in a patent lawsuit which pitted the company against
satellite-television provider Dish Network and sister company EchoStar Corp.
The suit, which first started in 2004, concerned a patent infringement by
EchoStar on TiVo's DVR technology and paves the way to a possible payment to
TiVo of $300 in damages and penalties.
"We are pleased that the United States Court of Appeals
for the Federal Circuit fully affirmed the district court's finding of contempt
against EchoStar, including both the disablement and infringement provisions,"
a statement from the company read. "Additionally, this ruling paves the way for
TiVo to receive the approximately $300M in damages and contempt sanctions
awarded to us for EchoStar's continued infringement through July 1, 2009. We
will also seek further damages and contempt sanctions for the period of
continued infringement thereafter. We will continue our efforts to protect our
intellectual property from further infringement."
TiVo's stock price jumped more than 50 percent on the news
as financial analysts saw new markets possibly opening up for the company,
while EchoStar released a statement expressing disappointment with the court's
decision. "We are disappointed in the Federal Circuit's split decision,
but are pleased that Judge Rader agreed with our position," the statement read.
"Therefore, we will be seeking en banc review by the full Federal Circuit. We
also will be proposing a new design-around to the district court for approval.
At this time, our DVR customers are not impacted."
In a research note to investors, Janney Montgomery Scott
analyst Tony Wible said the possibility of an appeal victory for Dish was slim.
"[The review] will lead to another two-week delay, but is very likely to
go in TiVo's favor," he wrote. "After this process, we believe Dish
would have 30 days to land a commercial deal with TiVo or risk having its DVRs
Wible reviewed TiVo's win in very favorable terms, recommending investors purchase stock aggressively until the stock price tipped $15. "Today's overwhelming victory significantly improves TiVo's ability to win new business and the rates it can demand for its technology from future deals, while also improving penetration of its DVR advertising platform," he wrote.