TiVo Wins EchoStar Patent Suit

TiVo Wins EchoStar Patent Suit – Los Angeles Times In a major victory for PVR pioneer TiVo, a West Texas jury awarded the company $73.9 million from EchoStar Communications after finding that the satellite broadcaster had violated TiVo’s patent of time shifting television.

Although certainly $73.9 million is a meaningful and significant amount of money for TiVo, a small company that has struggled and has yet to become profitable, the bigger victory here is that this case sets precendence for TiVo to move to other generic PVR manufacturers and demand payment as well.

TiVo also said that they would seek to prevent EchoStar from offering PVR service going forward. EchoStar of course must have PVR service if they hope to compete with their satellite rival DirecTV as well as the cable providers so the likely outcome could be that they be forced to the negotiating table with TiVo in order to offer this technology to their customers in the future, resulting in potentially more money for TiVo.

In what I described as a win-win for DirecTV and TiVo, earlier this week TiVo and DirecTV renewed their service and support agreement which contained an important provision allowing DirecTV to avoid being sued by TiVo for the next three years.

From the Los Angeles Times: “”If you’re going to defend your patents and try to license it, this kind of win certainly makes those negotiations easier,” said Larry Gerbrandt, senior vice president and general manager of Nielsen Analytics, which specializes in emerging media technology.

The verdict sent TiVo’s shares up 22% to $9.80 in after-hours trading, after falling 7 cents to $8.05 in regular trading. EchoStar’s shares closed up 12 cents at $29.97 during regular trading. They were little changed in late trading.”

EchoStar of course will appeal this verdict but it’s impact is largely more that it gives TiVo an incredibly strong hand to negotiate with other providers looking to avoid a suit similar to EchoStars.

The decision seemed like a pretty easy one for the five-man, five-woman jury to make. The Marshall News Messenger reported that it took the jury only 14 minutes before making the award which at $79 million was close to the $87 million number estimated by TiVo. The award was broken down as “$32,663,906 in lost profit damages. It also determined TiVo lost “reasonable royalties” on 4,179,253 boxes because of EchoStar sales and was entitled to $41,328,058.” In TiVo’s closing remarks TiVo’s attorney, a Marshall local named Sam Baxter said about the trial being in East Texas, “Not only do we get good, common-sense juries, but also a judge who is very patient and knowledgeable,” adding, “if life were like TiVo, we could just fast-forward and the judge could send you to lunch.” Fortunately for that jury it looks like they’ll be able to enjoy their long Easter weekend afterall.

TiVo’s official press release on the verdict can be read here.

In other TiVo news, Orb is also now working with TiVo to provide placeshifting technology like they currently have with Media Center. Series 2 only, as always, of course.