Satellite : TiVo seeks contempt ruling against EchoStar

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TiVo seeks contempt ruling against EchoStar

By Sandra Cason, News Messenger

Friday, September 05, 2008

The patent infringement case of TiVo versus EchoStar was back in U.S. District Court this week with lawyers for the plaintiff seeking $220 million.

Sam Baxter of Hallsville, a member of the Dallas patent law firm of McKool Smith, said he asked U.S. District Judge David Folsom of Texarkana on Thursday to hold EchoStar in contempt for failing to honor an injunction placed against the DVR marketer.

EchoStar Communications Corporation changed its name to Dish Network Corporation in late 2007.

"We entered two motions before Judge Folsom," Baxter said. "One was that Dish Network be held in contempt of his injunction that they stop infringing on our patent, since we believe they are still doing so."

The second motion calls for Dish Network to pay TiVo $220 million for damages incurred while the jury verdict was on appeal.

Folsom took the matters under advisement, noting he will make a ruling "as fast as he can," Baxter said.

That ruling is expected before the year's end.

In a case filed Jan. 5, 2004, in the U.S. District Court for the Eastern District in Marshall, TiVo said EchoStar, operator of the Dish Satellite network, had "willfully and deliberately" infringed on "digital video recording devices, digital video recording device software and/or personal television services falling within the scope of one or more claims of the 389 Patent" granted on May 15, 2001, to TiVo's trick play television technology inventor Jim Barton.

Testimony began here on March 29, 2006, with Baxter and McKool Smith serving as the local liaison for TiVo.

On April 14, the five-man, five-woman jury returned a verdict in TiVo's favor. It called for damages amounting to more than $73.9 million.

Payment was stayed while Dish Network (EchoStar) took the matter before the Court of Appeals for the Federal Circuit, the Washington, D.C., tribunal which hears patent and trademark cases.

That three-judge panel in February of this year upheld the verdict, entitling TiVo to collect the sum of the awarded by the jury, plus interest at a rate of 3.5 percent.

A spokeswoman for Dish Network said at that time the estimated amount the company owed TiVo was $94 million.

Baxter said Folsom enjoined Dish Network from selling technology which infringed on the TiVo patent and from using DVR boxes with the infringing technology.

That sales have continued is "a direct violation" of the judge's order, Baxter added.

The day before TiVo's court appearance in Texarkana, the company announced it will launch a new high-definition DVR under an extended agreement with DirecTV Group Inc., Dish Network's competitor.

Reporting on the agreement, The Associated Press said the deal "reignites a once-cooling relationship" between the two companies.

"The new development deal extends the companies' agreement by five years to Feb. 15, 2015, and calls for satellite television provider DirecTV to market TiVo's DVR products to new customers for the first time since DirecTV began using a rival DVR," The AP said.

The move pushed TiVo shares up by 24 cents, almost 3 percent, to close at $8.75 in trading Wednesday, while shares in Dish held steady at $28.33, AP reported.

The El Segundo, Calif.-based DirecTV said it will still offer its own set-top boxes to customers, but the new TiVo box will be an additional option.

"This could boost Alviso, Calif.-based TiVo, whose subscriber base has been dropping steadily due to increased competition from generic recorders from cable and satellite operators," AP said.

"TiVo, which also has distribution deals with cable operators Comcast Corp. and Cox Communications Inc., had 3.6 million subscribers at the end of the second quarter, compared with 4.2 million a year earlier," AP added.