TiVo Dishes It Out in Court Again

Do the Justices of the Supreme Court use TiVo (TIVO) or record programs on a DVR? And if they do, what do they watch? Gossip columnists stand by. There could be a story coming, probably not, almost definitely not, but it’s possible. Thursday, the DC based U.S. Court of Appeals denied Dish Network’s (DISH) appeal for a new hearing in the satellite provider’s long running battle with TiVo over digital video recorder [DVR] patents. The next stop for the case could be the Supreme Court.

The dispute underlying the appeal began in 2004 when TiVo charged DVRs offered by Dish Network (EchoStar) violated their patents. The case progressed through spring 2006, at which point the Texas jury found in TiVo’s favor. Months later, in August, an injunction was issued by a federal judge and the penalties, estimated at about $90m, were affirmed. Appeals were promptly filed.

This past January, the Federal Appeals Court again affirmed the result and ruled unanimously in TiVo’s favor. The request for a new hearing had sought to have the case presented to the entire panel of Appeals Court justices. The Court said no.

In a statement, TiVo said the company was “extremely pleased” with the result. Dish Network, needless to say, expressed the opposite and said they were “disappointed.”

Dish Network assured customers and shareholders that it is still business as usual. The ruling “will have no effect on current or future customers because EchoStar’s engineers have developed and deployed 'next-generation' DVR software” that is not infringing, they said.

But with close to $100m (plus legal fees) on the line, Dish Network is promising to give it one more go anyway. They will take their case to the Supreme Court (if the court will have them). There’s no guarantee the Supreme Court will agree to listen.

If the case does make the Court’s docket, don’t expect the TV habits of the justices to cause any real conflicts of interest. Justice Souter isn’t going to recuse himself because he might have recorded Boston Legal last night nor will Chief Justice Roberts be out if he’s been time-shifting Law and Order.

Still, the case will continue to be a small thorn in Tivo’s side until Dish Network’s last available option is exhausted, but that isn’t likely to be a date too far off. It looks like TiVo can almost start spending that jury award.

Comments

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Talk about futility. This case embraces absolutely no novel or unique points of law. If Dish wants to make a gift of another $500k to its attorneys, more power to them. Less then 2-3% of all Petitions for Certiorari are granted by the Supreme Court. If I was Dish I would be worrying about the reception I get when this case goes back to Texas. Those post-judgment damages could easily be trebled. In addition, if Dish thinks that the Texas District court is just going to take their word that their new software doesn't infringe, they better wake up and smell the coffee. Damages from the time of the "work-around"... to the time in future when the District Court decides this could be massive. There is a thing called the Doctrine of Equivalents. Dish is so screwed and they could have settled this thing for $10 million plus $.25 per box per month. Now they are risking potential staggering damages. The bigger the hit Dish takes, the larger the potential payout and licensing fees from Microsoft, Cisco and Moto (box makers). This is going to be fun to watch. My guess is that if Dish doesn't settle this, they will be looking $250 million to $350 million in damages. Sounds like a material event if I ever heard of one.