UPDATE 1-Court awards Tivo $190 mln in EchoStar patent case

[1969pontiac]

UPDATE 1-Court awards Tivo $190 mln in EchoStar patent case
Tue Jun 2, 2009 6:41pm EDT
* EchoStar ordered to disable DVR in infringing boxes

* EchoStar found in contempt of court injunction

LOS ANGELES, June 2 (Reuters) - A federal judge in Texas awarded set-top box maker TiVo Inc (TIVO.O: Quote, Profile, Research, Stock Buzz) about $190 million in damages on Tuesday in a long-running patent infringement dispute with DISH Network Corp (DISH.O: Quote, Profile, Research, Stock Buzz) and EchoStar Corp (SATS.O: Quote, Profile, Research, Stock Buzz).

U.S. District Judge David Folsom also ordered EchoStar to disable an infringing function on all but about 193,000 digital video recorders placed with subscribers.

Folson also found that EchoStar violated an injunction he put in place after a Texas jury found the company infringed TiVo's patent with several digital video recorder models by implementing new "workaround" technology that TiVo claimed still infringed.

The court set a June 26 hearing on potential sanctions against EchoStar.

In his final order, Folsom ruled that TiVo should recover from EchoStar $73.9 million plus $15.7 million in interest on the patent infringement claims, plus $103.1 million in damages plus interest accrued during the stay of the injunction.

EchoStar also was ordered to inform the court before it attempts to implement another "design-around" of the patent it infringed.

In a statement, TiVo said it was "extremely gratified by the Court's well reasoned and thorough decision, in which it rejected EchoStar's attempted workaround claim regarding the TiVo patent, found EchoStar to be in contempt of court and ordered the permanent injunction fully enforced."

DISH and EchoStar will appeal the court's decision and file a motion to stay the order with a federal appeals court, the companies said in a statement.

DISH was formerly known as EchoStar Communications Corp. It spun off its technology assets over a year ago, including its set-top box division, to create EchoStar Corp. (Reporting by Gina Keating; Editing by Andre Grenon)

[1969pontiac]

A federal court has awarded TiVo Inc. (TIVO) another $103 million as part of a major ruling in a long-running legal patent spat with EchoStar Communications Corp., now part of Dish Network Corp. (DISH).

TiVo shares shot up 38% after-hours.

The court rejected EchoStar's attempted workaround claim regarding its patent, found EchoStar to be in contempt of court and ordered that an earlier permanent injunction EchoStar had lifted fully enforced. The court also awarded TiVo $103 million, which is in addition to the $105 million EchoStar has already paid TiVo, plus interest, through April 2008.

With the latest twist, it appears EchoStar has run out of legal options, and now must begin negotiating a licensing deal with TiVo for its technology, said David Miller, a Caris & Co. analyst. Miller estimates that 4 million of Dish's 13.6 million subscribers are DVR subscribers.

While EchoStar said it intends to appeal, Miller believes it'll have very little success. "The judge has made it clear there is likely not going to be another grant" in the company's favor, he said. "This ruling is exactly what we've been looking for."

TiVo Chief Executive Tom Rogers called the court's move "a really gratifying decision, given how much delay Echostar has thrown in. No doubt this substantially increases the perception of the value of our intellectual property."

In addition to saying it would appeal the ruling, EchoStar said it would ask the court to delay its enforcement. It has told the court an adverse ruling means it may be unable to provide DVR service, and would risk "losing a significant portion of its existing or potential customers."

"Our engineers spent close to a year designing-around TiVo's patent and removed the very features that TiVo said infringed at trial," the company said.

It added that Dish customers with digital recording devices wouldn't immediately be affected by the ruling.

TiVo, which makes DVRs that allow viewers to pause, rewind, instantly replay or play back any live broadcast by recording it onto a hard drive, has been involved in long-running litigation as it struggles to keep its competitive advantage in the rapidly changing TV set-top market.