TiVo has won the latest round in its ongoing patent-infringement battle with Dish, the nation’s second-largest satellite TV provider. The decision sent the digital video recorder pioneer’s stock price soaring 62 percent on Thursday.
The U.S. Court of Appeals for the Federal Circuit on Thursday upheld a lower court’s finding that Dish Network and its parent company, EchoStar Corp., are still infringing TiVo’s patent and should stop providing DVR services.
Thursday’s decision in the 6-year-old case affirmed a Texas court’s ruling that declared Dish was violating a permanent injunction against DVRs that infringe TiVo’s patents.
In a statement, TiVo said Thursday’s ruling "paves the way for TiVo to receive the approximately $300 million in damages and contempt sanctions awarded to us for EchoStar’s continued infringement through July 1, 2009. We will also seek further damages and contempt sanctions for the period of continued infringement thereafter. We will continue our efforts to protect our intellectual property from further infringement."
Dish has already paid TiVo more than $100 million.
The news of that income for TiVo, and the idea that Dish might be forced to pay a recurring licensing fee to TiVo, sent TiVo stock through the roof on Thursday. In trading that was 40 times its usual volume, TiVo shares soared $6.32 to $16.53, a 52-week high. Dish shares dropped $1.12 to $20.59.
Changes made after Dish lost a trial in 2006 were “not a major redesign of the software,” the court ruled in its 2-1 decision.
Dish and EchoStar said they would ask the entire 12-member appeals court to hear the case, so for now the order to stop providing the service remains on hold.
"We are disappointed in the Federal Circuit’s split decision, but are pleased that Judge Rader agreed with our position," Dish and EchoStar said in a joint statement. "Therefore, we will be seeking en banc review by the full Federal Circuit. We also will be proposing a new design-around to the district court for approval. At this time, our DVR customers are not impacted."
TiVo first sued in 2004, claiming Dish infringed its patent for “time warp” technology that lets users record a TV program and play it back at the same time.
That verdict was upheld on appeal. Dish continued to provide the service, saying it made alterations to bypass TiVo’s invention.