When it comes to DVR, no one can argue with the convenience of being able to record your favorite shows and watch them later. But when the case of DVR patent infringement came to court, the big lesson was that “later” just isn’t going to work. Earlier this month at the Symposium of SIPO/US Bar Liaison Council with ACPAA held at Cardozo Law School, prominent figures in intellectual property law tackled strategic and ethical issues for patent attorneys in the wake of the TiVo v Echostar case. They came to the conclusion that asserting your rights early and often is the best practice for attorneys faced with injunction cases.
In TiVo v. Echostar, Echostar lost on infringement of TiVo’s patented DVR functionality. Judge Folsom issued an injunction and ordered that Echostar stop offering the service and disable all storage to and playback from the hard disk. Unfortunately for Echostar, they did not appeal the wording of the injunction and took no action against the disablement provision. Instead they designed around it by downloading new code to get the set-top box to operate in a different way, in what appeared to be a pretty clean design-around. TiVo filed a contempt motion. Echostar was sanctioned on the grounds that there were not “colorable differences” and their design-around infringed. The dissent argued that not only were there colorable differences but moreover the differences established non-infringement. After two years of back-and-forth and one too many trips to Judge Folsom, the original 70 million that Echostar had to pay for the initial infringement rose to 300 million because of Echostar doing what they thought would get them out of infringing. (Ultimately, Echostar wound up settling for 500 million.)
Just 12 days ago the United States Court of Appeals for the Federal Circuit issued its ruling in TiVo v. EchoStar, largely handing TiVo a victory in the epic saga between the two satellite TV giants. Earlier today TiVo Inc. (NASDAQ: TIVO), DISH Network Corporation (NASDAQ: DISH), and EchoStar Corporation (NASDAQ: SATS) announced today that they have settled all of their ongoing patent litigation. Under the terms of the settlement, DISH Network and EchoStar agreed to pay TiVo $500 million, including an initial payment of $300 million with the remaining $200 million distributed in six equal annual installments between 2012 and 2017. TiVo, DISH Network and EchoStar agreed to dismiss all pending litigation between the companies with prejudice and to dissolve all injunctions against DISH Network and EchoStar.
The parties also granted certain patent licenses to each other. TiVo granted DISH Network a license under its Time Warp patent (US Patent No. 6,233,389) and certain related patents, for the remaining life of those patents. TiVo also granted EchoStar a license under the same ‘389 patent and certain related patents, for the remaining life of those patents, to design and make certain DVR-enabled products solely for DISH Network and two international customers. EchoStar granted TiVo a license under certain DVR-related patents for TiVo-branded, co-branded and ingredient-branded products.
On Tuesday, November 9, 2010, the United States Court of Appeals for the Federal Circuit heard oral arguments in TiVo, Inc. v. EchoStar Corp. The case pits TiVo versus Dish, and any ruling from the Federal Circuit will necessarily define the extent to which a district court judge can rely on contempt proceedings to enforce an injunction rather than simply order a full blown new trial. In process the en banc oral argument in this case at the Federal Circuit did not substantially differ from the oral argument held at the Supreme Court the day earlier in the Costco copyright case, where the Supreme Court was struggling with the meaning of the phrase “lawfully made under this Title.” There are two phrases that will be at the center of resolving the TiVo case. The first is “fair ground of doubt,” and the second is “merely colorably different.”
In this edition of News, Notes & Announcements, happy birthday wishes to IPWatchdog.com for celebrating our 11th year online and a heartfelt thank you to all our readers. Additionally, the TiVo patent used to sue Echostar, the litigation at question in the en banc review at the Federal Circuit, survives reexamination at the USPTO. Professor Thomas Field (UNH) publishes the 21st edition of his IP casebook, which is now online in royalty free version; the USPTO is hosting the National Trademark Expo this Friday and Saturday on campus in Alexandria; the USPTO is hosting the 15th Annual Independent Inventors Conference on November 4-5, 2010, and I will be there teaching two sessions of patent claim drafting; US Commerce Secretary Gary Locke visits the USPTO and the AIPLA will host is Annual Meeting next week.
Several weeks ago TiVo filed its brief in the matter of Tivo, Inc. v. EchoStar Corp., which will be heard en banc by the United States Court of Appeals for the Federal Circuit on Tuesday, November 9, 2010. The dispute between TiVo and EchoStar dates back to 2004 when TiVo sued EchoStar in the United States District Court for the Eastern District of Texas, alleging that its receivers infringe “hardware” claims (claims 1 and 32) and “software” claims (claims 31 and 61) of US Patent No. 6,233,389. The jury found there was willful infringement and the district court entered an injunction ordering EchoStar to cease infringing. It is this injunction that now is at the root of the dispute to be heard by the Federal Circuit. TiVo did not believe EchoStar lived up to the Order of the district court. The district court, seemingly out of an abundance of caution, decided not to utilize its summary contempt powers but held a year long proceeding to determine if infringement was ongoing. The district court found EchoStar was violating the injunction Order and acted accordingly. EchoStar appealed and argued that only a full patent infringement trial would suffice. The panel sided with TiVo over a strong dissent by Judge Rader, now Chief Judge of the Federal Circuit, who felt the summary proceedings were inadequate. For more see Looking Ahead to TiVo v. Dish at the Federal Circuit. So as the full Federal Circuit hears this case it is anticipated that the inherent powers of a district court to enforce their own Orders and administer justice will be front and center.
The United States Court of Appeals for the Federal Circuit announced back in May that they would take up the matter of Tivo, Inc. v. EchoStar Corp. en banc, and then subsequently set the oral argument date for Tuesday, November 9, 2010. November 9, 2010 will be a busy day for the Federal Circuit indeed. On this first anniversary of the Bil ski oral arguments at the United States Supreme Court the Federal Circuit has scheduled two en banc hearings. Second up on November 9, 2010 will be Tivo v. EchoStar, first up will be Therasence v. Becton, both cases of great importance. We will be following both cases closely, and I will be in attendance in the gallery and offering eyewitness accounts that afternoon. In the meantime, however, let the punditry, analysis and gossip begin. First up — TiVo v. Echostar, which will decide the limitations (if any) on a district court’s ability to use contempt proceedings to enforce a permanent injunction in a patent case when there is an alleged work-around.
The United States Court of Appeals for the Federal Circuit yesterday announced that they would take up the matter of Tivo, Inc. v. EchoStar Corp. en banc. The earlier panel decision, which was issued on March 4, 2010, is now vacated and the appeal is reinstated. For more information about the original panel decision see TiVo Stock Surges Over 50% on Patent Decision in EchoStar Case. While en banc rehearings are rare, it seems that the Federal Circuit is showing increased willingness to take high profile cases en banc. Recently the Federal Circuit agreed to hear Hyatt v. Doll en banc, which relates to whether new evidence can be submitted in an appeal of a decision of the Board of Patent Appeals and Interferences to the United States Federal District Court for the District of Columbia. See CAFC Grants En Banc Review of BPAI to District Court Appeal. Just weeks ago the Federal Circuit also agreed to hear important matters of inequitable conduct en banc, taking up Therasence, Inc. v. Becton Dickinson and Co. See Federal Circuit to Consider Inequitable Conduct En Banc. Perhaps this may show an increased willingness to settle certain fundamental areas of law, which would be a welcome occurrence after what appears to be in-fighting among CAFC Judges on a variety of important issues.
TiVo, Inc. (NASDAQ: TIVO), owner of U.S. Patent 6,233,389, titled “Multimedia Time Warping System,” was a big winner today at the United States Court of Appeals for the Federal Circuit when the CAFC handed down its decision in Tivo, Inc. v. EchoStar Corp. A majority of the 3 judge panel hearing the case agreed with the district court and ratified the contempt order against EchoStar (NASDAQ: SATS) and Dish Network (NASDAQ: DISH). EchoStar’s business focuses on digital Set-Top Boxes and and Satellite Services, and was spun-off from DISH Network on January 1, 2008. The patented technology involved allows television users to simultaneously record and play television broadcasts using what is commonly known as a digital video recorder. On news of the Federal Circuit ruling TiVo stock immediately surged ahead well over $5, up over 50%. Within less than 1 hour TiVo stock when from trading just over $10 a share, trading at $10.31 at 11:06 am EST, to trading at $16.07 at 11:42 am EST, hitting an intra-day high at 1:18pm EST at $16.36, and establishing a trading range plus or minus $15.65, where it is at as of 2:46pm EST.