Latest Multichannel News 8/3/09: USPTO issues preliminary rejection of the key claims in TIVO's Time Warp patent. (http://www.multichannel.com/article/326956-TiVo_Patent_May_Be_Invalid.php)

Echostar had asked the PTO to re-review TIVO's patent in light of TWO prior patents that would make TIVO's claims "obvious," which is the death knell to any patent claim. Apparently, the PTO has made that assessment.

From the linked article: "The patent office, in its Aug. 3 re-examination, was acting on a request by Dish and EchoStar. The PTO said two claims in the '389 patent related to indexing “now appear to be rendered obvious” by prior art in two patents: 6,018,612, granted to Philips for a system that simultaneously stores and plays back a TV program; and 5,949,948, granted to iMedia for a compressed video-playback system."

TIVO filed an appeal but the PTO rejected it August 21, saying in this followup Multichannel News article (http://www.multichannel.com/article/329084-TiVo_Sues_Verizon_AT_T_For_Patent_Infringement.php):
"Earlier this month, the PTO issued a preliminary finding that rejected of two claims in TiVo's "Time Warp" patent at issue in the years-long litigation filed by TiVo against EchoStar and Dish.

In a decision issued Aug. 21, PTO director of the central re-examination unit Gregory Morse denied TiVo's request to vacate the reexamination of the patent, writing that "the references of record may be used to find that a substantial new question of patentability is present, [and] the decision of the [PTO] examiner has not been shown to be in error" in granting EchoStar's re-examination petition.

TiVo declined to comment on the PTO decision."

Now, some possibilities might make this whole thing even "juicier":

Philips buys iMedia, merging the two companies whose patents preceded TIVO's, and sues TIVO for infringement?
The Texas court has to invalidate the Echostar jury award and penalties, which TIVO then has to repay to Echostar, plus interest and opportunity costs?
Those other companies who decided to pay TIVO off join forces to demand repayment with interest and opportunity costs?

I suspect the latest targets of TIVO, Verizon and AT&T, might also be revising their defense strategies? :D

Latest news 8/3/09: USPTO issues preliminary rejection of the key claims in TIVO's Time Warp patent. (http://www.multichannel.com/article/326956-TiVo_Patent_May_Be_Invalid.php)

Echostar had asked the PTO to re-review TIVO's patent in light of TWO prior patents that would make TIVO's claims "obvious," which is the death knell to any patent claim. Apparently, the PTO has made that assessment.Ehh? Nothing has changed yet.

Preliminary rejections are not uncommon. Those are decisions made primarily on the arguments of the patent challenger and they have no legal standing. In this case, the preliminary rejection was made without any input from TiVo. TiVo is scheduled to present its arguments in November. Final rejections, which take into account the arguments of the patent holder, are much less common. They occur around 1/5 the time, compared to around 3/5 of the time for preliminary rejections.

We went through the same process before a few years ago. Echostar requested a re-examination based on the same two patents, considered separately. Then, as now, the PTO made a preliminary rejection. After TiVo presented its arguments, the PTO reaffirmed the entire patent. That is the most likely outcome of this challenge as well.

Philips buys iMedia, merging the two companies whose patents preceded TIVO's, and sues TIVO for infringement?That's not at issue. The Thomason and Krause patents do not define the TiVo "invention." Echostar successfully argued that the differences between Thomason and Krause patents (considered together) and two particular claims of the TiVo patent are insubstantial, and would be obvious to a person in the field at the time the patent was filed. These are the two particular claims of the TiVo patent that Echostar's reworked software (i.e. their software to workaround the TiVo patents) was found to infringe.

Those in the CE industry now understand how to design low-cost DVRs, so of course the differences are obvious in hindsight. The question is whether the differences were really obvious back in 1998. TiVo will present its arguments on that subject next month.

There is no practical threat of "patent invalidity." That's not the way our patent system works. The threat to TiVo is that they will have to modify their patent with increased specificity so the two claims in question are no longer as broad. That opens up the potential for more patent workarounds. With the patent and court interpretations as they stand today, it is very difficult to produce a non-infringing DVR that delivers the functionality many consumers demand in a low-cost design. Higher-cost (PC-like) solutions are still a possibility, but cable and satellite providers want to build their boxes for $150-$300, not $500-$1000.

The Texas court has to invalidate the Echostar jury award and penalties, which TIVO then has to repay to Echostar, plus interest and opportunity costs?No, that's not the way our legal system works.

Once a company pays restitution for patent infringement, it cannot later recover that money if the patent is found invalid. Even if our system allowed that, it would not be relevant in this case. The $104 million already paid to TiVo was for infringement by Echostar's original DVR software.

Echostar's patent challenge focuses on two claims that their patent workaround software was found to infringe. They have not yet paid anything to TiVo for infringement on their attempted workaround; the court awarded ~$300 million plus interest for that infringement, but the money resides in mutually-agreed securities until the outcome of the Appeals Court hearing on September 12.

Amazing... getting juicier already... more details than the reporter covering this story!