Scrappy Tivo, which faces extinction due to the rise of generic digital video recorders, won a major victory yesterday when U.S. District Judge David Folsom in Marshall, TX ruled that EchoStar has to disable DVRs used by millions of its customers because the DBS provider’s technology infringes on Tivo’s patents.
The judge ordered EchoStar to render useless all but 192,708 of its customers’ DVRs. The decision follows a jury verdict in April, which awarded Tivo $73 million for EchoStar’s infringement.
Althought Judge Folsom could have increased the jury verdict by a factor of two, giving Tivo treble damages, he found that EchoStar’s infringement was not in bad faith, a prerequisite for treble damages. He did order EchoStar to pay $5.4 million in interest and $10.3 million in supplemental damages, raising the total amount that EchoStar owes Tivo to almost $90 million.
In a suprisingly subdued statement, Tivo said
TiVo is pleased that Judge Folsom has granted a permanent injunction against EchoStar’s DVR products along with supplemental damages and interest. This decision recognizes that our intellectual property is valuable and will ensure that moving forward EchoStar will be unable to use our patented technology without our authorization.
Although the judge has ordered EchoStar to shut down its DVRs, it’s highly unlikely that this will happen. Without the ability to offer customers digital video recording, EchoStar, which is already growing at a slowing rate, will undoubtedly lose customers to rival DirecTV and cable operators, and will be stalled in its attempts to gain any new customers.
DirecTV, Tivo’s main customer, signed a renewed licensing pact with the DVR pioneer in April, a deal spurred in large part by DirecTV’s desire to avoid the same kind of lawsuit that EchoStar just lost. EchoStar has time enough to negotiate a deal with Tivo, and Tivo has little incentive to permanently cripple what could become a paying customer. Look for a EchoStar-Tivo deal within 30 days.
Cynthia Brumfield at 9:37 AM|Comments(0)
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