Judge rules Echostar MUST DISABLE all DVR's

[wrecker06]

Please tell me this is not going to happen.

http://news.yahoo.com/s/nm/20060818/tv_nm/echostar_dc

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.

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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.

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.

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

[Nevada_MO_Guy]

Originally Posted by wrecker06

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.

Bummer deal.

I wonder how they will figure out which 192,708 dvr's to keep active?

[aamilo]

Damn! I was just looking at getting the HD Silver package with the 622 HD DVR. I guess I'm going to have to wait and see how this plays out. I'd be VERY pissed if I had just paid $199 to lease the DVR and they disable it.

[buckeye927]

this essentially cancels out the ruling in texas for the time being

[maicaw]

http://www.redherring.com/Article.as...inmentAndMedia

...“We believe that, for a number of reasons, the Texas court should be reversed in all other respects on appeal,” the statement added.
The statement said that EchoStar’s DISH Network customers will not be immediately affected by the decision. EchoStar will inform them of any new developments as the company sorts out its legal options.
“We also continue to work on modifications to our new DVRs, and to our DVRs in the field, intended to avoid future infringement,” said the statement. “We will keep consumers informed as events develop. We hope to have additional information for our customers very soon.”...

also

EchoStar Announces Federal Circuit Blocks Tivo Injunction "We are pleased that this morning, the Federal Circuit Court ofAppeals in Washington, D.C. temporarily blocked an injunction issuedby a Texas Court, while it considers a longer-term stay of that injunction.
As a result of the stay EchoStar can continue to sell, and provideto consumers, all of its digital video recorder models. We continue tobelieve the Texas decision was wrong, and should be reversed onappeal. We also continue to work on modifications to our new DVRs, andto our DVRs in the field, intended to avoid future allegedinfringement."

Originally Posted by wal-dog

Won't cable have to disable their DVRs too?

NO!!

[wal-dog]

Won't cable have to disable their DVRs too?

[1080i Ownz]

The new Directv DVR (HR20-700) is not a Tivo, I wonder how thats going to work.

[pdxsam]

It won't happen. There's no way on this green earth that Echostar will disable over 4 million DVR's and risk a class action suit to get people out of the contracts they agreed to based on the DVR.

[pdxsam]

Originally Posted by 1080i Ownz

The new Directv DVR (HR20-700) is not a Tivo, I wonder how thats going to work.

DirectTv settled with TIVO a while ago they pay them a buck a month per dvr for patent licenses.

[rickbbb]

So I guess the DVR's I have which are 510's will only work as a receiver after the DVR part of them is disabled,right?

Maybe I'll end up getting some high def receivers for those tv's.

I think this will hurt both EchoStar and Tivo's company's reputations with the disab;le of the DVR's..it makes Both of them Look bad.

Another thought I had was..maybe Directv and Comcast warner/Warner cable who Tivo has deals with..maybe they WANT EchoStar to Fold. Conspiracy theory abounds here.
Can't we all just...GET ALONG?

[stchman]

This is TiVo's way of getting back at everybody. The TiVo unit is overpriced. How can they say that they are the only ones that have the ability to make DVRs. I guess, Charter, Comcast, TWC, Mitsu DLP sets and any other outfit that offers a DVR are next. I have never used a TiVo, but I dont think TiVo has rights on a concept. Microsoft aslo has DVR capability with Window XP Media Center. So the sueing will continue. I dont think that Echostar will disable all those DVRs.

Since DirecTV's new DVRs are non-TiVo base i am sure they are going to sue them as well.

[garys]

I heard tivo and DirectTV no longer have an agreement.

[drock912001]

Originally Posted by garys

I heard tivo and DirectTV no longer have an agreement.

They signed a new agreement back in April,read up.

The Business of Television
TiVo and DIRECTV Agree to Extend Relationship for Three Years
(TiVo Press Release)
Wednesday April 12, 8:00 am ET

Agreement Guarantees Quality Service for Existing DIRECTV TiVo Subscribers;
Also Addresses Intellectual Property

ALVISO, Calif., April 12 /PRNewswire-FirstCall/ -- TiVo Inc. (Nasdaq: TIVO - News), the creator of and a leader in television services for digital video recorders (DVR), and DIRECTV, Inc. (NYSE: DTV - News), the nation's leading digital television service provider, today announced a three-year extension to the TiVo-DIRECTV commercial agreement.

Existing DIRECTV TiVo subscribers will be able to continue to receive the award-winning TiVo® service, with TiVo providing ongoing maintenance and support. In addition, TiVo and DIRECTV agree not to assert patent rights against the other. The agreement also extends the advertising relationship between the two companies.

DIRECTV will continue to service existing DIRECTV receivers with TiVo service. While specific financial terms of the agreement were not disclosed, the recurring monthly economics of the agreement are similar to the economics for DIRECTV receivers with TiVo service activated since 2003.

"We are pleased to have reached an agreement with DIRECTV that will allow us to continue to provide our service to the more than 2 million DIRECTV TiVo households," said TiVo CEO Tom Rogers. "As the pioneer in the DVR market, we have created a service that is highly valued by consumers because of our technology, the wide range of our unique features and the unparalleled ease of our user experience. This agreement reflects TiVo's popularity among DIRECTV subscribers and importantly respects the value of our intellectual property as well."

"By extending our agreement with TiVo, we are ensuring quality support for DIRECTV customers who already own a DIRECTV TiVo unit," said Romulo Pontual, DIRECTV's chief technology officer. "We are pleased to cooperate with TiVo in a way that will best serve DIRECTV and our DIRECTV TiVo customers."

And it is possible for Echostar to disable those dvr's,they supposedly infringed on copyright laws some how here's the article.

Federal jury awards TiVo more than $73 million in patent lawsuit
Posted 4/13/2006 8:42 PM ET
E-mail | Save | Print | Subscribe to stories like this Subscribe to stories like this
By David Koenig, The Associated Press
MARSHALL, Texas — A federal jury awarded TiVo nearly $74 million in damages Thursday in a swift ending to a patent-infringement lawsuit against EchoStar Communications Corp., the parent of the Dish satellite television provider.

TiVo got most of the $87 million in damages it sought in a case that one of its lawyers called "life or death" for the company that was among the first to sell devices to pause and rewind live television.

The case in U.S. District Court in Marshall was closely watched on Wall Street, with some analysts even dropping in during the two-week trial. They said a victory would help TiVo win other royalty deals involving digital video recorders (DVRs).

News of the verdict sent TiVo shares soaring nearly 20%, or $1.60, to $9.65 in late-session electronic trading. EchoStar shares dropped 27 cents.

In a statement, EchoStar called the decision "the first step in a very long process" and said it considered TiVo's patent overly broad.

"We believe the decision will be reversed either through post-trial motions or on appeal. Additionally, the Patent Office is in the process of re-examining TiVo's patent, having determined there is a substantial question concerning the validity of the patent."

TiVo General Counsel Matthew Zinn said the verdict in U.S. District Court gives the company more leverage to negotiate royalty deals with cable companies that, like Dish, use digital video recorders that function much like a TiVo.

Those rivals have taken sales away from TiVo by offering boxes and service at lower prices. Zinn would not rule out suing cable companies that use other boxes, but he called it a last resort.

"We're just trying to build products that people use and enjoy, and this gives us more runway to do that," said James M. Barton, a TiVo co-founder whose name is listed first on the company's most important patent.

The 10-member jury deliberated just over two hours after hearing two weeks of highly technical testimony from engineering experts.

The panel agreed with TiVo's nine claims that EchoStar had used its technology without license for the satellite company's own DVRs.

"It wasn't unanimous to start with, but we were very close," said jury forewoman Cathy Lindsey, a school secretary. "We took good notes. At the end of (TiVo's rebuttal case on Tuesday), I put my notebook up and thought, I'm done."

An electrical engineer paid by TiVo said the EchoStar boxes relied on technology covered by TiVo patent, but two experts hired by EchoStar said the designs were different.

"We just looked at the evidence and tried to maintain the big picture," said juror Brenda Dotson, a third-grade teacher.

TiVo claimed EchoStar violated its patent for a "multimedia time warping system" to pause, rewind or fast-forward live TV programs by recording them on a hard drive. EchoStar's own original box "didn't work. It was a disaster," TiVo lawyer Sam Baxter said during closing arguments.

In closing arguments, EchoStar attorney Harold McElhinny said TiVo was using EchoStar as a scapegoat for its own failure to compete against other makers of set-top boxes. He said TiVo's box was overpriced at a time when Dish and cable companies were giving away recorders to new subscribers.

McElhinny highlighted TiVo's financial problems — it has lost nearly $650 million since its founding in 1997 — which he blamed on erratic decision-making.

The $87 million request was based on a financial consultant's estimate of how much TiVo would have earned if EchoStar had not sold more than 4 million of its own recorders using TiVo technology. "This is life or death for them," Baxter said of TiVo.

The jury awarded $73.99 million instead of $87 million because it was not convinced TiVo had done everything it could to promote its patent, which was approved in 2001, according to the jury forewoman. As a result, jurors based damages starting in January 2004, when TiVo filed the lawsuit.

Separately, TiVo announced Wednesday that it has extended an agreement with its largest partner, satellite TV provider DirecTV Group, for three more years. Recently it struck an agreement with Comcast Corp., the nation's largest cable operator.

TiVo sold its first box in 1999, and its ability to let viewers skip through commercials soon made it a cultural catch-phrase, spawning the verb "tivo" — to manipulate live TV programs.

But Alviso, Calif.-based TiVo was soon undercut on price by Dish and cable providers who used recorders made by other companies including Motorola, News Corp., and a unit of Cisco Systems.

Barton and fellow co-founder Michael Ramsay testified that TiVo couldn't win licensing deals, other than one with Dish rival DirecTV, because cable operators didn't respect TiVo's willingness to enforce its patents. A change in attitude led TiVo to sue much-bigger EchoStar in January 2004, they said.

Englewood, Colo.-based EchoStar had $8.4 billion in sales last year, compared to $172 million for TiVo.

EchoStar attorneys feared jurors would sympathize with TiVo in a David vs. Goliath battle. Lindsey, the jury forewoman, said she didn't see it that way.

"TiVo is a substantial company in its own right," she said.

Neither Lindsey nor any of the other jurors owns a TiVo, but U.S. District Judge David Folsom said he did.
Copyright 2006 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

[rickbbb]

I phoned DN's technical department today about the DVR situation.
Currently the DVR's that any of us have with DN will not become disabled.Atleast not in the near future.

When the DVR's DO become disabled then the DVR's you have will only work as a receiver.

Two of my sister's have 510 DVR's and love them ! I personally don't have one and I don't care to have one because there always seems to be something on Dish Network that I want to watch..they have so many channels !
I will admit that it pisses me off that the tivo company seems to just be targeting Echostar and not the other companies.I smell a conspiracy.
This mostly puts the Tivo company in a bad light..makes them look like Thugs or crooks.They don't seem willing to compomise with EchStar..they'd rather put on the boxing gloves in public and make themselves look bad.Well, It Worked.

[oldanbo]

I have had many dish dvr's. I have used my sister in laws tivo direct tv unit. IMHO, and my wife's, tivo sux, Dish dvr is superior.

Aside from that, this technology (so called) has existed since 4 track vs 8 track vs cassette, beta vs vhs, vhs vs dvsh etc. And since you could mirror one hard drive on another. Imagine being able to back up all data and OS from one hard drive to another!

Then the movie industry got involved and paid off the politicians.
And last but not least, someone called an attorney.

FOLLOW THE MONEY, who has it, who wants it.