Dish wins a DVR shutdown delay


A federal appeals court has granted Dish Network a permanent injunction that permits it to continue using its DVRs until the appeals court hears the company’s appeal of a judge’s ruling that it is in contempt of court because its re-engineered DVRs still violate TiVo’s patent. Both sides claim they will be vindicated by the appeals court.

“We are pleased that the Federal Circuit has blocked the district court’s injunction pending our appeal. The Federal Circuit found that EchoStar ‘met its burden of demonstrating the requisites for a stay,’ including, at a minimum, that we have a substantial case on the merits. As a result of the stay, our customers can continue using their Dish DVRs,” said a joint statement by Dish Network and EchoStar, related companies both headed by Charlie Ergen.

“We are confident that the District Court judge’s thorough and well-reasoned decision finding EchoStar in contempt of court for violating the injunction and awarding further damages will be upheld once the Federal Circuit has the opportunity to review the merits of the case. The Court of Appeals stayed the District Court’s order the previous time this case was heard on appeal and ultimately affirmed the judgment against EchoStar. We are pleased that the court recognizes the urgency of ruling on this appeal and has ordered an expedited briefing schedule,” said a statement from TiVo.

TiVo’s stock fell Thursday on the news. At Wachovia Capital Markets, analyst Marci Ryvicker called it a “small victory” for Dish which only forestalls the inevitable, which could come before the end of this year. “At the end of the day, we still believe that Dish will be ‘forced’ to enter into a licensing agreement with TiVo,” she said.

RBR/TVBR observation: The compound interest calculator continues to tick on the $103 million the judge awarded to TiVo, in addition to the $104 million that Dish has already paid for its original patent infringement. We don’t know of any outside observer who expects Dish to come out the winner in this, so we have to wonder why Charlie Ergen continues to refuse to license the TiVo patent at a rate akin to what his competitors are paying instead of paying the maximum possible under court orders – not to mention the litigation costs.