E* ordered to shut down DVR's within 30 days - BLOCKED by Federal Appeals Court - AVS Forum
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post #1 of 267 Old 08-17-2006, 10:18 PM - Thread Starter
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From Reuters: Fri Aug 18, 2006 1:03am ET
http://today.reuters.com/news/articl...archived=False

Quote:
EchoStar must disable DVRs, judge rules
By Paul Bond
Fri Aug 18, 2006 1:03am ET

LOS ANGELES (Hollywood Reporter) - A judge has ordered EchoStar to disable the digital video recorders used by several million subscribers to its Dish satellite TV service because they infringe on patents held by TiVo.

Thursday's ruling from U.S. District Judge David Folsom in Marshall, Texas, demands that within 30 days EchoStar must basically render useless all but 192,708 of the DVR units it has deployed.

The decision comes four months after a jury ruled that EchoStar should pay TiVo $74.9 million because it willfully infringed TiVo patents that allow for the digital storage of TV programming.


The judge also denied EchoStar's request that the injunction be stayed pending appeal, making it difficult for EchoStar to continue offering its subscribers' DVR functionality without striking a quick licensing deal with TiVo or another DVR maker.

While the injunction battle clearly was won by TiVo, the scrappy pioneer of the DVR industry also was handed a loss Thursday when Folsom ruled against its request that the jury award be tripled. The judge, however, ordered EchoStar to pay an additional $5.4 million in interest payments and $10.3 million in supplemental damages, bringing the amount EchoStar owes TiVo to nearly $90 million.

NO BAD FAITH

In ruling against treble damages, Folsom noted that EchoStar was not allowed to present evidence that it received outside legal advice indicating that the DVRs it created did not infringe TiVo's patents. That EchoStar sought such advice before TiVo sued it "could demonstrate a lack of willfulness" on the part of EchoStar, the judge wrote in denying TiVo's request of treble damages.

"The evidence does not show the defendants acted in bad faith, nor does the jury's willfulness finding amount to a finding of bad faith," Folsom wrote.
Page2
Quote:
In asking for an injunction, TiVo argued that, while it would become extinct if unable to protect its patents and sell its DVRs, EchoStar's primary business of satellite TV transmissions does not depend on its ability to offer DVRs.

EchoStar claimed, among other arguments, that TiVo's motive in filing a lawsuit was to gain additional leverage over EchoStar and other prospective business partners in order to strike lucrative licensing deals.

The vast majority of TiVo subscribers, in fact, come by way of a licensing agreement with EchoStar competitor DirecTV. Another agreement with cable giant Comcast Corp. won't bear fruit until later this year, and TiVo has had trouble lining up other big players in the pay TV market, who mostly have been offering their customers generic DVRs.

Siding with TiVo, Folsom wrote that one thing both companies agreed on is that DVR customers are "sticky," meaning that once they obtain a DVR they stick with it, so business that TiVo has been losing to EchoStar might not be recovered without a ruling of infringement.


'CRITICAL TIME'

TiVo, the judge wrote, "is losing market share at a critical time in the market's development -- market share that it will not have the same opportunity to capture once the market matures."

EchoStar also claimed that the timing of TiVo's lawsuit -- several years after EchoStar began selling DVRs -- amounted to proof that it was not suffering irreparable injury. Folsom, though, noted that TiVo hadn't sued EchoStar sooner because it was trying to enter into a business deal with it.

EchoStar also said an injunction would unduly hurt its business, an argument Folsom was not entirely unsympathetic to -- though, again, he came down on the side of TiVo.

"Although the injunction will likely result in some degree of customer loss and will impact (EchoStar's) ability to compete in the market, (EchoStar) will not be irreparably harmed," he wrote
Page 3
Quote:
Folsom's ruling was filed after the close of regular and after-hours trading on Wall Street, so it did not affect the share prices of EchoStar and TiVo. When TiVo won its jury trial in April, its shares moved up 23 percent in after-hours trading, though the stock has since given back much of that gain.

TiVo shares closed up fractionally Thursday to $6.49, while EchoStar shares fell 1.1 percent to $32.75.

Reuters/Hollywood Reporter
Credit goes to GeorgeLV for pointing this out in our local Las Vegas thread with this link http://www.zatznotfunny.com/2006-08/...star-and-cash/

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post #2 of 267 Old 08-17-2006, 10:53 PM
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Its already being discussed at our sister boards at:

DBS Forums for Dish PVR's
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post #3 of 267 Old 08-17-2006, 11:33 PM - Thread Starter
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They already lost the original ruling 4 months ago, but they have been dragging out the proceedings very slowly. Tivo just won another ruling saying that since they have not complied with the original ruling, Echostar must cease using DVR features that infringe upon the Tivo patents. Since they have standalone reciever units, the DVR software portion can be disabled and made into a standard reciever.

Since Echostar already balked at paying Tivo for using their software, any attempts at trying to make a last minute deal will not be favorable for them.

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post #4 of 267 Old 08-17-2006, 11:42 PM
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I'm sure Dish Network will appeal tomorrow, we'll see how that goes. Chances are probably good that the ruling will stand, but it will buy them time.

They have 30 days to disable the DVR functionality on all boxes (except the 7x00 series), and hence 30 days to obtain a stay from an appeals court. The real kicker is that -- as of right now-- they can't install any new DVRs. They can't ship any new DVRs to customers. Hence, Dish Network is going to seek a stay of the decision immediately, regardless of whether they intend to settle with Tivo.

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post #5 of 267 Old 08-17-2006, 11:53 PM
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It will be interesting to see what ripples this has on the rest of the industry.

DirecTV isn't at risk, because they were indemnified by their agreement with Tivo earlier this year, so they can't be held accountable for any damages before 2010. Comcast also has an agreement with Tivo. That leaves Time Warner, Cox, Verizon (FiOS), Brighthouse, and RCN as the major providers liable for damages.

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post #6 of 267 Old 08-18-2006, 12:02 AM
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Wow. I have to say I'm surprised. I kind of thought that DVR functionality was becoming almost a generic thing, showing up on cable boxes everywhere. I wonder which specific features were covered by the patent, or if it's the whole idea of a DVR (I know E* used to not offer name-based recording, with the reason that it was covered by TiVo patents; then they later started offering it).

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post #7 of 267 Old 08-18-2006, 12:13 AM
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Dish Network just issued a response:
Quote:
ENGLEWOOD, Colo.--(BUSINESS WIRE)--Aug. 18, 2006--EchoStar Communications Corporation (Nasdaq:DISH) issued the following statement regarding recent developments in the Tivo Inc. v. EchoStar Communications Corp. lawsuit:

"This morning, EchoStar will ask the Federal Circuit Court of Appeals to block an injunction issued by a Texas Court yesterday, while EchoStar appeals that decision. The Texas judge did not grant treble damages or attorney fees to Tivo, but he did let stand the jury decision that EchoStar digital video recorders infringe a Tivo patent, and immediately enjoined continued sale of allegedly infringing DVRs. The injunction would also require that allegedly infringing DVRs in consumer homes be shut off within 30 days.

We are pleased the Court concluded EchoStar did not act in bad faith and did not copy Tivo's technology, and we intend to continue our vigorous defense of this case. We believe that, for a number of reasons, the Texas Court should be reversed in all other respects on appeal. We also continue to work on modifications to our new DVRs, and to our DVRs in the field, intended to avoid future infringement. Existing DISH Network customers with DVRs are not immediately impacted by these recent developments, and we will keep consumers informed as events develop. We hope to have additional information for our customers very soon."
That second paragraph is a fairly liberal interpretation of the ruling, I think.

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post #8 of 267 Old 08-18-2006, 12:46 AM
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Quote:
Originally Posted by Enigma
Wow. I have to say I'm surprised. I kind of thought that DVR functionality was becoming almost a generic thing, showing up on cable boxes everywhere. I wonder which specific features were covered by the patent, or if it's the whole idea of a DVR (I know E* used to not offer name-based recording, with the reason that it was covered by TiVo patents; then they later started offering it).
Tivo is DVR. You say DVR people say ???, you say Tivo they say ahh.


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post #9 of 267 Old 08-18-2006, 01:09 AM
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They lose with the original D* merger, they lose on DNS, they lose on DVR ... maybe these new merger rumors have merit.


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post #10 of 267 Old 08-18-2006, 01:23 AM
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Yeah, and if so, we all lose.
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post #11 of 267 Old 08-18-2006, 02:57 AM
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Another member posted that the judgment would prohibit installation of new DVR units. Do any of you get that from the article? This is of particular importance to me as I have a ViP622 installation set for 8/28/06.

This was a US District Court judge. So, that would be the initial trial. Who knows what my happen on appeal. I also do not know if the matter of the stay of injunction itself could be appealed to the appellate court.
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post #12 of 267 Old 08-18-2006, 04:32 AM
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I saw this bit of nonsense in the New York Times, and ran over here. After seeing this thread, I went into the menus of my Dish DVR, and disabled the "automatically download updates" function, and changed it to the "notify me of updates".

If there is a "kill signal", I don't think there is any other way for it to get in, although there are far more techinically adept folk on this board than me.

DISABLE YOUR UPDATES AT ONCE....NOW !!! :eek:

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post #13 of 267 Old 08-18-2006, 05:55 AM
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The Business of TV
EchoStar must disable DVRs, judge rules
By Paul Bond The Hollywood Reporter Aug. 18, 2006

A judge has ordered EchoStar to disable the digital video recorders used by several million subscribers to its Dish satellite TV service because they infringe on patents held by TiVo.

Thursday's ruling from U.S. District Judge David Folsom in Marshall, Texas, demands that within 30 days EchoStar must basically render useless all but 192,708 of the DVR units it has deployed.

The decision comes four months after a jury ruled that EchoStar should pay TiVo $74.9 million because it willfully infringed TiVo patents that allow for the digital storage of TV programming.

The judge also denied EchoStar's request that the injunction be stayed pending appeal, making it difficult for EchoStar to continue offering its subscribers' DVR functionality without striking a quick licensing deal with TiVo or another DVR maker.

http://www.hollywoodreporter.com/th...t_id=1003019366

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http://www.avsforum.com/avs-vb/showt...page=486&pp=30
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post #14 of 267 Old 08-18-2006, 05:56 AM
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They can bypass right by that and you cannot stop them.

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post #15 of 267 Old 08-18-2006, 06:04 AM
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Quote:
Originally Posted by TVOD
They lose with the original D* merger, they lose on DNS, they lose on DVR ... maybe these new merger rumors have merit.
Poltical? Sounds jike JR Ewing tactics in Texas to me!
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post #16 of 267 Old 08-18-2006, 06:06 AM
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Wow
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post #17 of 267 Old 08-18-2006, 06:09 AM
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Would this decision also serve as precedent for other devices that record to hard disk, with an electronic program guide, such as most DVD/HDD recorders and the (discontinued) Sony HD DVRs (DHG-HDD250/500)? Or do these devices lack enough of Tivo's features so that they don't infringe on Tivo's patents?
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post #18 of 267 Old 08-18-2006, 06:22 AM
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Excuse my ignorance, but what patent does Tivo have the Echo infringed upon?
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post #19 of 267 Old 08-18-2006, 06:30 AM
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E* had better cut a deal. No DVR service, no subscription at this house. Otherwise, what's the point of having DISH over cable?
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post #20 of 267 Old 08-18-2006, 06:47 AM
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What are the exempt 192,708 models? Vip 622, I hope.
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post #21 of 267 Old 08-18-2006, 06:48 AM
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This is taken from their website:

http://www.dishnetwork.com/content/a...ss/index.shtml

ECHOSTAR ASKS FEDERAL COURT TO STAY TEXAS INJUNCTION
ENGLEWOOD, Colo., August 18, 2006 – EchoStar Communications Corporation (NASDAQ: DISH) issued the following statement regarding recent developments in the Tivo Inc. v. EchoStar Communications Corp. lawsuit:

“This morning, EchoStar will ask the Federal Circuit Court of Appeals to block an injunction issued by a Texas Court yesterday, while EchoStar appeals that decision. The Texas judge did not grant treble damages or attorney fees to Tivo, but he did let stand the jury decision that EchoStar digital video recorders infringe a Tivo patent, and immediately enjoined continued sale of allegedly infringing DVRs. The injunction would also require that allegedly infringing DVRs in consumer homes be shut off within 30 days.

We are pleased the Court concluded EchoStar did not act in bad faith and did not copy Tivo’s technology, and we intend to continue our vigorous defense of this case. We believe that, for a number of reasons, the Texas Court should be reversed in all other respects on appeal. We also continue to work on modifications to our new DVRs, and to our DVRs in the field, intended to avoid future infringement. Existing DISH Network customers with DVRs are not immediately impacted by these recent developments, and we will keep consumers informed as events develop. We hope to have additional information for our customers very soon.â€
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post #22 of 267 Old 08-18-2006, 06:49 AM
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For years Tivo fans like myself were saying to tivo sue E*! They made for a perfect case for patent infringement.

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post #23 of 267 Old 08-18-2006, 07:04 AM
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This and the recent lowering of HDNET's bit rate are making me feel much better about staying with D* for the time being. Since D* just penned a new agreement with TiVo, they should be relatively safe.

Personally, I feel it would be in most providers' best interest to license the TiVo software for their DVRs, not just to avoid potential infringement suits, but because it's an interface that has become ubiquitous with the DVR device. The fact that people use "TiVo" as a way for saying "record a show on a DVR" regardless of the brand, shows huge name brand recognition.

Seeing as standalone TiVo units have stagnated in favor of generic service-specific DVRs, TiVo would do well to concentrate on being a software interface company, rather than a hardware company, along the lines of the likes of Sega, which has found much less success with consoles than game software.


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post #24 of 267 Old 08-18-2006, 07:16 AM
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"Back in April a jury ruled that Echostar (Dish Network) was infringing on patents held by Tivo. The judge has issued a permanent injunction instructing Dish to cease sales as well as disable most currently active DVRs out in the field within 30 days (Models 7100 & 7200 are exempt). This is in addition to nearly $90m in award money. Dish asked the judge to reconsider his decision and it was denied. Dish has said it will appeal to the Federal Circuit Court of Appeals."

Up to four million Dish users could be impacted by this decision.
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post #25 of 267 Old 08-18-2006, 07:17 AM
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Quote:
Originally Posted by audiomagnate
What are the exempt 192,708 models? Vip 622, I hope.
See above, exempt models are 7100 & 7200.
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post #26 of 267 Old 08-18-2006, 07:19 AM
 
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Quote:
Originally Posted by generalpatton78
For years Tivo fans like myself were saying to tivo sue E*! They made for a perfect case for patent infringement.
Why would Tivo 'fans' even care when they have nothing to profit from? lol...I'm a Tivo stockholder and the patent case itself, however interesting, is nothing more than a smoke and mirrors. I plan on taking my money and run...

-V
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post #27 of 267 Old 08-18-2006, 07:29 AM
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Quote:
Originally Posted by NetworkTV
This and the recent lowering of HDNET's bit rate are making me feel much better about staying with D* for the time being. Since D* just penned a new agreement with TiVo, they should be relatively safe.

Personally, I feel it would be in most providers' best interest to license the TiVo software for their DVRs, not just to avoid potential infringement suits, but because it's an interface that has become ubiquitous with the DVR device. The fact that people use "TiVo" as a way for saying "record a show on a DVR" regardless of the brand, shows huge name brand recognition.

Seeing as standalone TiVo units have stagnated in favor of generic service-specific DVRs, TiVo would do well to concentrate on being a software interface company, rather than a hardware company, along the lines of the likes of Sega, which has found much less success with consoles than game software.
I agree but most of tivo's revenue is from stand alone models. If tivo's deal with comcast works out nicely we could see the entire cable industry move in that direction. The CC standard also has allot of potential for tivo. However tivo will never be able to compete with free dvrs that the sat and cable industry give out. The thing they had to do was protect there patents and now they are doing that.

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post #28 of 267 Old 08-18-2006, 07:38 AM
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Quote:
Originally Posted by Vampz26
Why would Tivo 'fans' even care when they have nothing to profit from? lol...I'm a Tivo stockholder and the patent case itself, however interesting, is nothing more than a smoke and mirrors. I plan on taking my money and run...

-V
Because many of us have had tivo from the beginning and we've seen them pioneer one thing after another in the dvr space they created. Then to see E* come in and rip off tivo's patents use there name in advertisements and not pay tivo pissed many of us off. If you want to use tivos patents you have to pay for them like D* does. This makes Tivo fans happy because it insure us many more tivo products and innovations.

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post #29 of 267 Old 08-18-2006, 07:45 AM
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What specifically did E* copy? The fact that you can record a show? That's like a tissue manufacturer getting sued because Kleenex has the patent.
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post #30 of 267 Old 08-18-2006, 07:46 AM
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If enforced, this would obviously be a crippling blow and make me feel better for not switching to Dish. I am fairly sure that Dish will be awarded a stay....

My HD DNS days are kaput!
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