EchoStar wins patent case over DVR tech
Jeff Smith, Rocky Mountain News
Published August 11, 2007 at midnight
EchoStar Communications has gained some ground in defending its digital video-recording technology against patent-infringement claims, but a big case with giant Tivo is still pending.
The Douglas County-based satellite- TV provider said Friday that it prevailed in a patent-infringement case filed by Forgent Network Inc. EchoStar said it won $90,000 in court costs after a Texas appellate judge upheld a jury verdict last spring that Forgent's patent claims were invalid.
EchoStar, operator of Dish Network, also said this week that the federal patent office recently rejected all of the hardware-related claims asserted by Tivo. But the patent office affirmed Tivo's software claims related to a $90 million Texas court verdict against EchoStar last year.
EchoStar reiterated in a regulatory filing this week that it does not believe it has infringed on any of Tivo's patents and that it will prevail on appeal.
An appellate court has stayed an injunction prohibiting EchoStar from using the technology, pending appeal.
EchoStar has said that if the Texas verdict is upheld, it could be required to eliminate certain DVR features and try to implement alternative technology.
The company has recorded a reserve of $94 million for the litigation and said that amount would increase by $35 million this year if the verdict against EchoStar is upheld.
EchoStar also reported this week that revenues were up 11.9 percent to $2.76 billion in its second quarter, compared with $2.47 billion for the same period in 2006.
Profits increased from $169 million, or 38 cents a share, to $224 million, or 50 cents a share.
But the company added only 170,000 net new subscribers during the three- month period, down from 195,000 net new subscribers during the same period in 2006.
EchoStar CEO Charlie Ergen told analysts in a conference call Friday that "some of the turmoil in the housing business probably showed up in the second quarter."
Ergen also said that the television landscape is probably more competitive because of the push into video services by Verizon and AT&T.
EchoStar said it had about 13.6 million subscribers as of June 30, an increase of 9 percent year over year.
EchoStar shares were down in early trading Friday after the second-quarter results were announced but finished the day up 45 cents, or 1.2 percent, to $38.75.
On Thursday, rival DirecTV, which has 16.3 million subscribers, reported that its profits had fallen, in part, because of a rise in operating costs.
EchoStar
DISH: Nasdaq
$38.75
+45 cents
smithje@RockyMountainNews.com or 303-954-5155
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