Dish Sues TiVo Seeking Judgment On New DVR Software

Suit Asks District Court Judge To Find Its Technology Doesn’t Infringe On TiVo’s Patent

By Linda Moss and Todd Spangler -- Multichannel News, 5/30/2008 3:00:00 PM

In the newest chapter of their long-running legal feud, Dish Network and its spin-off EchoStar filed suit Friday asking a judge to rule that their new DVR software doesn’t infringe on one of TiVo’s patents.

The satellite provider and its set-top company EchoStar lodged the five-page lawsuit against TiVo in U.S. District Court in Delaware, and the litigation is the latest salvo in the ongoing war between Dish Network and TiVo.

“The lawsuit is in response to TiVo’s continued public statements that our new DVR software infringes,” Dish Network said in a prepared statement.

The lawsuit was filed just two days after TiVo president Tom Rogers told analysts that he believed Dish Network’s new modified DVR software still violates TiVo’s patents. A jury ruled two years ago that Dish’s old DVRs infringed on the patents.

In response to the Dish-EchoStar suit Friday, a TiVo spokesman said, “We have not seen EchoStar’s filing so we can’t comment on it.  However, these issues are in front of the District Court in Texas and we remain confident in the outcome.”

Dish Network is in the midst of appealing a $74 million verdict that TiVo obtained against it in April 2006, in which a Texas jury found that some of Dish Network’s DVRs infringed on TiVo’s patents. That award is now in the area of $94 million, with interest added in.

In late January, a federal appeals court upheld the judgment against Dish Network. Then in April, the U.S. Court of Appeals for the Federal Circuit refused the satellite provider’s request for a rehearing, a ruling that Dish said it would appeal to the U.S. Supreme Court.

In its suit Friday, Dish Network said that TiVo officials on five occasions, including Wednesday, have made public statements “raising the specter of infringement.”

For example, Rogers (right) told Wall Street analysts on the DVR maker’s quarterly call Wednesday that the company “informed the District Court that based on what we have been provided by EchoStar to date we believe that EchoStar’s modified software does not avoid infringement.”

Later in the call Rogers said, “Our preference is certainly that we enter into commercial relationships and not litigate, and our view is as this EchoStar litigation further clarifies itself that will only be helpful to us in terms of our ongoing distribution efforts.”

But in its lawsuit Friday, Dish Network denied its new DVRs infringe on TiVo’s patents, and wants the Delaware court to make that legal finding and judgment so it can “sell its DVRs without the continuing threat of litigation.”

In its suit, Dish Network said, “Shortly after the verdict of infringement was reached in April 2006, plaintiffs began to develop a new approach to the DVR. This effort was successful, leading to the development of a novel DVR with no precedent in the ‘389 patent or any other DVR patent. Among other things, the new DVR developed by plaintiffs does not process incoming broadcast data before storage in memory, writing unprocessed incoming television programming data in full to the storage device.”

During the company’s quarterly call, TiVo interim chief financial officer Cal Hoagland declined to comment when asked whether TiVo was in settlement negotiations with EchoStar. He said TiVo later this year anticipates receiving more than $100 million related to the EchoStar-Dish litigation.

At another point on the call, TiVo general counsel Matthew Zinn was asked whether the U.S. Supreme Court might hear an appeal by EchoStar.

“The chances of the Supreme Court taking a case like this are well less than 1%,” Zinn said. “Usually the Supreme Court hears a case where there is a conflict among circuits where there is some significant issue of national importance. Whether EchoStar infringes TiVo’s patent or not is hardly of national significance and I think it is unlikely that the court would hear that.”

In its statement Friday, Dish Network also said, “This action is independent of TiVo’s anticipated motion for contempt in the Eastern District of Texas. We believe any contempt motion by TiVo should be denied because we are in full compliance with the injunction."