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DVR injunction unlikely

TiVo push to stop EchoStar certain to fail, experts say

Roger Fillion, Rocky Mountain News

Published April 15, 2006 at midnight

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Having won the first round in its patent battle against EchoStar, TiVo plans to seek a court injunction to stop the Dish Network operator from selling digital video recorder products.

But legal and industry experts doubt California-based TiVo will succeed in getting EchoStar to stop shipping its DVRs while the case goes through the courts.

They point to similar patent cases in the past.

"It is extremely unlikely that EchoStar will have to shut down its DVR service," said Brad Lyerla, a patent litigator with Marshall, Gerstein & Borun in Chicago.

That assessment comes a day after a Texas jury awarded DVR maker TiVo $74 million in a patent-infringement case against EchoStar.

The jury decided Douglas County-based EchoStar infringed on TiVo's patented "time warp" technology that allows viewers to pause, rewind or fast-forward live TV. The judge in the case could triple the award because the jury found that EchoStar had "willfully" infringed on TiVo's patent.

At the same time, TiVo lawyers signaled they would seek an injunction against EchoStar's sales of DVRs.

Experts said EchoStar is likely to appeal any injunction - and succeed. A judge, they said, would be wary of interrupting service for millions of Dish subscribers.

"That's not something that a judge would do lightly," Lyerla said.

He said EchoStar probably would have to post a multimillion-dollar bond "to protect TiVo" as the case makes its way through the legal system.

And how much might the bond total?

"We're talking tens of millions of dollars. It would be a significant amount," he said.

But with more than $1 billion in cash and marketable securities at the end of 2005, EchoStar presumably could afford that.

Satellite Business News Editor Bob Scherman agreed with Lyerla that a permanent injunction is unlikely.

"TiVo will get an injunction against EchoStar. EchoStar will appeal and get a stay of the enforcement of the injunction almost immediately," Scherman said.

"That happens in almost every case like this," said Scherman, adding that he'd be "stunned" if events didn't play out that way.

For its part, EchoStar has said it plans to appeal the jury's decision on the grounds that TiVo's patent "is overly broad given the technology in existence when TiVo filed its patent."

Carmel Group analyst Jimmy Schaeffler, who previously practiced law, predicted EchoStar will face an uphill battle on appeal.

"Appellate courts don't like overturning lower court decisions," said Schaeffler, noting the judge in the case as well as the particular Texas jurisdiction "know patent law."

"You've got a jury that came back in two hours with a verdict," Schaeffler added. "What does that tell you?"

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