TiVo Wins on Appeal: Permanent Injunction against EchoStar to be Reinstated

TiVo v. EchoStar (Fed. Cir. 2008)

Around the turn of the century, TiVo’s time shifting DVR television technology took the world by storm and has since become immensely popular.  In 2004, TiVo sued EchoStar and others in the Eastern District of Texas for infringement of its patent claims directed at the DVR hardware and software. EchoStar was found to infringe both the hardware and software claims. The Jury then awarded $73 million in damages and the judge ordered a permanent injunction to stop future infringement.

On appeal, the CAFC used thirty pages of dense claim construction to conclude that the hardware claims were not infringed but that the software claims were infringed.

The jury’s damage calculation did not divide out the portion of damages associated with the hardware invention and the portion associated with the software invention. Consequently, the court found that infringement of the software claims alone is still sufficient to sustain the entire $73 million judgment.

Because the damages calculation at trial was not predicated on the infringement of particular claims, and because we have upheld the jury’s verdict that all of the accused devices infringe the software claims, we affirm the damages award entered by the district court.

As reported, Chief Judge Michel stayed the permanent injunction pending resolution of this appeal. According to the court, that stay “will dissolve when this appeal becomes final.” The lower court will, however, need to add additional damages based on continued infringement during the appeal.

Notes:

• EchoStar operates the DISH Network brand of satellite television.
• TiVo has partnered with DIRECTV, DISH Network’s biggest competitor.
• Part of the claim construction dispute centered on whether the claimed element “an MPEG stream” should be limited to a single MPEG stream.  Here, the CAFC rejected the traditional rule that “a” or “an” mean one or more. Instead, the Court made an unusual ruling here because “the context clearly evidences that the usage is limited to the singular.”
• EchoStar (DISH) released the following press release, stating that the injunction is meaningless: "We are pleased the Federal Circuit found for us on Tivo’s hardware claims, but are disappointed in the Federal Circuit’s decision on the software claims. The decision, however, will have no effect on our current or future customers because EchoStar’s engineers have developed and deployed ‘next-generation’ DVR software to our customers’ DVRs. This improved software is fully operational, has been automatically downloaded to current customers, and does not infringe the Tivo patent at issue in the Federal Circuit’s ruling. All DISH Network customers can continue to use their DVRs without any interruption or changes to the award-winning DVR features and services provided by DISH Network”
• Echostar stock (NASDAQ: SATS) fell immediately upon news of the decision, but quickly rose again.

Comments

[me]

Dennis - DirectTV has now dropped Tivo as well, and their new DVR boxes are not Tivo's but simply DVRs (with bad software).

[Captain Obviousness]

For any of you "in the know," are the other non-infringing DVR's on the market inferior to Tivo? If so, is this because of avoiding Tivo's patent or for another reason?

[Jason]

Directv and Tivo have become more friendly since newscorp is out of the picture, bringing new features to series 2 directv tivos in 08. I am optimistic there will be a new HD Directv Tivo in the 09-10 time frame...

[anonymous]

"Echostar stock (NASDAQ: SATS) fell immediately upon news of the decision, but quickly rose again."

... they must have realized what a drop in the bucket this verdict is to Echostar's bottom line.

[iwasthere]

Sounds like Echostar is playing with fire on the design around. Flipping the bird to the federal courts is not a legal argument.

[Mark Nowotarski]

No real bump in the volume so I think it's unlikely that the dip was related to any surprise in the announcement.

[LawyerMan]

Why didn't the Fed Cir opinion even mention eBay? Didn't the SC instruct them to go through all four factors?

[Yet Another Anon]

More importantly, there was no mention of KSR.

It looks like the Appellant appealed the kitchen sink, except for obviousness.

[Just Visiting]

"Why didn't the Fed Cir opinion even mention eBay? Didn't the SC instruct them to go through all four factors?"

Maybe because the CAFC didn't review the decision to issue an injunction.

[Defector]

Captain, the problem is, that if you want high definition cable channels, but can't get cable, your only option is satellite, and unlike cable providers which are required to provide cable cards to those that want them, satellite companies don't provide open interfaces to their signals. For non-high definition, you can get a standard Tivo that can take an analog signal and digitize it, and control the satellite set top box with a remote dongle. The additional remote control (for the Tivo), double conversion from digital to analog (which degrades the signals) and the remote dongles (which are not 100% reliable) all combine to make this an somewhat undesirable solution. Therefore, even if the user interfaces and feature sets on the Dish and DTV DVRs blow, it doesn't impact their ability to sell (or rent) the units -- particularly for high definition, where their option is the only one.

[BabelBoy]

J. Bryson's characterization of the use of the phrase "including, but not limited to ...." in Claim 1 was "...a term of such biblical imprecision" Indeed! I have never seen that phrase used in a claim before, and I guess this is why. It resonates like a fart at a funeral. But in the end, for some reason I don't quite get, Bryson upheld it.

Why on earth didn't TiVo write the independent claim broadly with respect to the broadcast standards? I can't believe there was blocking art on this issue that they got around with listing the available standards as "including, but not limited to."

The other point is do not, never, ever, no way refer to an embodiment as "the invention." After surviving all the biblical imprecision abuse from the defendant and the judge, Claim 1 went out the door on this slip, citing Verizon v Vonex.

You might also note FN 2, which looks to me like a slight lurch toward the claim construction as fact proponents. The slightest tremor preceding a larger rattle?

This is a great opinion. It was technically difficult subject matter made clear, and a couple of tricky legal issues deftly resolved.

[big hairy rat]

The patent claims are an example of what is wrong with patent law. The hardware claims are really claims for the abstract design of a data processing device rather than the physical design ( so big, made of out of such and so material with such and so shape ) and in that respect are closer to what we think of as software than to what we traditionally think of as hardware.

What TIVO has really tried to patent here is the IDEA of recording a television data stream to a random access device. The description of how that is to be accomplished creates no innovation since they are using standard concepts (logical building blocks) in standard (obvious) ways to achieve a standard design result.

What part of the patent points to a clever or novel solution to the problem being addressed?

[phwting]

The injunction is now live. Dish will not turn off it's DVR's because it believe it have a workaround.

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