AP News, November 29th, 2007
TiVo Inc. on Thursday proclaimed itself winner of the latest round in its battle against EchoStar Communications Corp. after federal regulators validated the digital video recorder maker's patent that is central to the case.
EchoStar was disappointed in the U.S. Patent and Trademark Office decision but said the agency's conclusion won't affect its pending appeal of a court ruling in TiVo's favor. The court decision requires it to pay TiVo $89.6 million in damages for patent infringement and to stop distributing DVRs or to modify features of its products.
TiVo sued EchoStar in 2004, and the patent office launched a re-examination of TiVo's "time warp" patent after EchoStar protested the validity of it. The patent focuses on the ability to record a television program while watching another — a fundamental feature of DVRs.
Alviso-based TiVo agreed the patent office's action won't have a direct bearing on EchoStar's appeal but contended it is important.
"It eliminates any arguments EchoStar can make before the court of appeals about the patent's validity," said Matthew Zinn, TiVo's general counsel. "It also results in a much stronger patent, and it will be difficult for anyone to try to invalidate the patent again."
EchoStar said in a statement it remains hopeful of winning the appeal. The Englewood, Colo.-based satellite TV operator runs the Dish Network and was among the first, along with TiVo, to introduce DVR features in a set-top box.
The case is awaiting a ruling from the Court of Appeals for the Federal Circuit. EchoStar claims the trial court construed TiVo's patent too broadly and that it is not infringing on the patent because its DVR technology is different from TiVo's.
TiVo shares, which were also buoyed by the company's report Wednesday of a narrower third-quarter loss and an analyst upgrade, skyrocketed nearly 25 percent, gaining $1.48 to close at $7.46. Shares of EchoStar fell 14 cents to $42.70.
