Trial Scheduled in TiVo's Legal Spat With EchoStar

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A federal judge in Texas has scheduled additional hearings for next February to determine whether EchoStar's set-top boxes continue to infringe a key digital video recorder patent owned by TiVo.

On Thursday, Judge David Folsom of the U.S. District Court for the Eastern District of Texas issued an order that sets a bench trial for Feb. 17 and 18, 2009, regarding TiVo's request to find EchoStar in contempt for not disabling its receivers' DVR functionality as previously ordered under the court's permanent injunction. 

Folsom presided over a Sept. 4 hearing in the matter but

did not issue a decision at the time

, causing TiVo shares to plummet 16.5%.

Last month, the U.S. Supreme Court

declined to review

a lower court’s ruling that EchoStar had infringed the DVR maker’s so-called Time Warp patent. Subsequently,

EchoStar paid TiVo

$104.6 million on Oct. 8.

Dish Network and EchoStar said in a statement, "We are pleased that the district court did not find us in contempt on the face of the injunction. We look forward to the February bench trial on our software design-around. Our subscribers can continue using their award-winning DVRs from Dish Network." 

In its own statement, TiVo said: "Contrary to EchoStar's statement today, the court did not rule on TiVo's pending motion for contempt of the injunction. The court will do so after the hearing as well as rule on the amount of damages owed to TiVo beyond the nearly $105 million already paid by EchoStar. This is a positive step, particularly the accelerated discovery ordered by the court, towards the ultimate resolution of all issues in the litigation and we remain confident that we will prevail in showing that EchoStar's workaround does not avoid infringement."

The patent at issue in the case, U.S. Patent No. 6,233,389, covers a system that "allows the user to store selected television broadcast programs while the user is simultaneously watching or reviewing another program." 

In the Feb. 17-18 hearings, each side will have five hours to present their case. According to the judge's order, TiVo’s expert disclosures are due Dec. 22, and EchoStar's are due Jan. 5, 2009. The parties' proposed findings of fact and conclusions of law are due Feb. 10. The docket number of the case is 2:04-CV-01.

TiVo's contempt motion stems from the

April 2006 verdict

by a federal jury in Texas that found some of Dish Network’s DVRs infringed on the Time Warp patent.

Dish Network has maintained

it developed a workaround

for the TiVo patent by creating new software and downloading it to all its DVRs. Separately, Dish Network

filed suit

May 30 in the U.S. District Court for Delaware asking a judge to rule that its new DVR software does not infringe TiVo’s patent.

TiVo has claimed that Dish Network should pay $220 million in royalties and lost profits for the 18 months that the verdict was stayed to allow Dish to appeal. According to some analyst scenarios, if Dish Network were found in contempt of court and were ordered to immediately disable its DVRs, it would cost the satellite operator more than $1 billion. 

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