Appeals Court Upholds Software Patent Claims Of TiVo Against DISH; Backs $94 Mln Jury Verdict - Update

(RTTNews) - Thursday, shares of digital video recorder company TiVo Inc. (TIVO | news | PowerRating | PR Charts ) surged a whopping 30%, following the Appeals Court upholding the verdict in favor of TiVo on patent infringed by satellite TV firm DISH Network Corp. (DISH | news | PowerRating | PR Charts ), formerly known as Communications Corp. The Appeals Court upheld the decision on patent infringement for the software related to DVR-enabling "time warp" in favor of TiVo but ruled that DISH did not infringe on the hardware elements of the patent.

The streaming infringement suit related to DVR-enabling "time warp" patent between TiVo and Dish dates back to 2004. TiVo filed a patent infringement suit in January 2004 against EchoStar's (now known as DISH) technology alleging that EchoStar's technology violated TiVo's multimedia time warping system. The time warping technology gives viewers the ability to pause, rewind and fast forward live television shows.

In April 2006, a Texas jury, which found that several EchoStar digital video recorders or DVRs willfully infringed on TiVo patent, awarded TiVo $73.9 million in damages. A federal court judge in August 2006 upheld the jury's finding and ordered EchoStar to pay $89.6 million in damages and interest to TiVo. With interest accruals, the amount has now increased to $94 million. The judge also granted TiVo's request for a permanent injunction barring EchoStar from selling its digital video recorders.

Following EchoStar's appeal to stay the injunction, in October 2007, the U.S. Court of Appeals stayed the injunction ordered by the Texas Federal Court. But relief was short-lived for EchoStar. Barely a month after an Appeals Court blocked the injunction against EchoStar, the U.S. Patent Office, which re-examined the "Time Warp" patent on digital video recording technology at the request of EchoStar, ruled that the patent is valid.

The Appeals Court after a full review overturned its earlier verdict and ruled in TiVo's favor, reinstating full award of damages as well as impose the injunction, which was stayed.

Commenting on the ruling, TiVo in a statement said, "We are extremely pleased that the United States Court of Appeals for the Federal Circuit unanimously ruled in our favor in EchoStar's appeal of the district court judgment of patent infringement, full award of damages and that the injunction, which was stayed pending appeal, was ordered to be reinstated. Today's ruling is confirmation of the value of TiVo's IP portfolio, which is in addition to the other benefits TiVo has to offer. TiVo can now continue to focus on its goal to drive greater distribution in both its stand-alone and mass distribution efforts".

DISH, which was disappointed by the Federal Circuit's decision on the software claims, said the ruling is not going to have any effect on its current or future customers as the company has developed and deployed 'next-generation' DVR software to its customers' DVRs.

DISH said it intends to appeal the Federal Circuit's ruling affirming the $94 million jury. verdict.

TIVO is currently up 32.65% or $2.22 trading at $9.02 on a volume of 12.8 million shares.

DISH is up $0.15 trading at $28.53 on a volume of 1.82 million shares.

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