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Dish, EchoStar Get Favorable Ruling in TiVo Case

The long-running patent dispute between digital video recorder (DVR) supplier TiVo and satellite operator Dish Network and its set-top vendor, EchoStar Technologies, took another surprising turn June 8 with Dish/EchoStar touting a decision by the U.S. Patent and Trademark that appears to render two TiVo patents invalid.

"We are pleased the Patent and Trademark Office issued a Final Office Action maintaining its rejection of the software claims of TiVo's patent," said Dish and EchoStar in a statement. "These software claims are the same claims that EchoStar was found to have infringed in the contempt ruling now pending for en banc review by the Federal Circuit. In the Final Office Action, three examiners of the PTO considered TiVo's response and, in a detailed 32-page decision, finally concluded that the software claims were unpatentable in view of two prior art references."

The two patents in question are at the heart of a 2004 lawsuit filed by TiVo against then-EchoStar Communications, claiming that its Dish DVR set-tops infringed on its "time-warp" patents for recording and storing video. Dish has lost various rulings in the lengthy legal battle, the most significant being a March decision by a federal appeals court that upheld a lower court ruling finding Dish in contempt of a prior order to disable infringing DVRs, with resulting damages to TiVo totaling over $300 million (Dish/EchoStar have already paid TiVo $104 million). Dish/EchoStar did win a temporary reprieve in May when another appeals court agreed to review the March verdict and another court decision in an "en banc review," a process that could take many months.

For its part, TiVo optimistically described the ruling of the PTO as a temporary set-back that doesn't have a direct impact on the en banc review. But the overall stakes are obviously high, as many industry analysts see the eventual outcome in the TiVo/Dish case as having a very significant impact on whether TiVo is able to win new license fees from other multichannel operators with DVR set-tops.

"While TiVo is disappointed with this recent PTO office action, this is just one of several steps in the review process," said TiVo in a statement. "We will continue to work with the PTO to explain the validity of the claims under review. It is important to note that TiVo received a ‘final action' holding several claims invalid during EchoStar's first reexamination request at this juncture only to have the PTO ultimately uphold the validity of all claims of the patent.

Moreover, the PTO proceeding is separate and apart from the ongoing litigation against EchoStar and does not impact the current United States Court of Appeals en banc review of the district court's finding of contempt against EchoStar and the related injunction."