Dish Faces April 30 Deadline In TiVo Case
Satellite Operator Must Settle, Win a Rehearing or Be Forced to Disable DVRs
By Todd Spangler -- Multichannel News, 3/26/2010 9:53:25 AM
Dish Network has until April 30 to settle its years-long patent litigation with TiVo, or -- barring an unlikely rehearing of an appeals court's ruling -- the satellite operator will be forced to disable millions of customer DVRs.
"Dish is now negotiating with a gun to its head," Sanford Bernstein senior analyst Craig Moffett wrote in a research note Friday.
On Thursday, U.S. District Court Judge David Folsom of the Eastern District of Texas granted Dish an extension until April 30 on a previous stay of his injunction ordering the satellite operator to shut off DVRs that infringe TiVo's "Time Warp" patent. That comes after the U.S. Court of Appeals for the Federal Circuit earlier this month denied Dish's request to overturn a lower-court ruling finding the satellite operator in contempt of an order to disable DVRs that were found to infringe the TiVo patent, which covers a system for simultaneously recording and playing back TV programming.
Dish's hopes now rest on its motion for an en banc rehearing of the appeals court decision, Moffett wrote -- a motion he calculated has less than a 3% chance of being granted based on historical averages. Moffett estimates Dish would have to disable approximately 8 million DVRs if it runs out of legal options or fails to settle with TiVo.
Separately, a rumor Thursday that Dish was interested in acquiring TiVo reportedly sent the DVR maker's share price up in early trading, according to Briefing.com, although the stock ended down 2.4% for the day to close at $16.24 per share.
Wall Street analysts estimate that a settlement between TiVo and Dish would involve a licensing fee of $2.25 to $3 per month per subscriber.
"We continue to believe there is enormous risk in Dish shares," Moffett wrote. He maintained his "market perform" rating on Dish with a target price of $18 (versus its closing price Thursday of $20.44 per share).
TiVo sued EchoStar Communications in January 2004. After a federal jury found in TiVo's favor in April 2006, Judge Folsom issued an injunction ordering Dish to disable infringing DVRs in August of that year. Dish and EchoStar have been fighting the ruling ever since.
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Update: Dish and EchoStar last Friday (May 7) filed a motion requesting an extension on the stay of the injunction. Judge Folsom has not yet ruled on the motion.
Todd Spangler - 5/10/2010 5:23:24 AM EDT -
I'm told (by someone in the TiVo camp) we will be hearing a development in this case early next week.
Todd Spangler - 4/30/2010 10:17:04 PM EDT -
Well today's April 30th 2010 and Dish Network DVR's are still operating...any update to the status of this story?
Chuck - 4/30/2010 11:23:08 AM EDT -
What model #'s will have to be disable, will the cost be passed on to its consumers
Leilani Purvine - 4/10/2010 11:40:04 AM EDT -
Great Summary of the latest TIVO v. DISH issues and developments! This case may actually be coming to an end!
Unless the CAFC sees issues that may drag it out for another year. I hope that doesn't happen, for TIVO's sake.
Robert Smith - 3/26/2010 11:27:45 AM EDT
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