The U.S. Court of Appeals for the Federal Circuit Thursday
(March 4) upheld a district court finding of contempt against Echostar relating
to TiVo's lawsuit against the company for patent infringement.
For TiVo, that means it will be able to collect $300 million
in past damages and will push for more, while EchoStar says it means a further
full-court press appeal and a new work-around for its DVR's.
"Given EchoStar's refusal to disable the DVR
functionality in its existing devices and the fact that its original attempts
to design around TiVo's patent were wholly unsuccessful," wrote the court
majority, "the district court had ample justification for its
determination that court pre-approval of any new design-around effort was
necessary to prevent future infringing activity. We see no reason to set this
determination aside."
EchoStar was found in contempt for not disabling its DVR
devices so that they do not infringe on the Echostar's patent for TiVo's
"time-warp" DVR technology. That came after a Texas court concluded in 2006 that
EchoStar's DVRs--supplied to DISH customers--didinfringe.
"We are pleased that the United States Court of Appeals
for the Federal Circuit fully affirmed the district court's finding of contempt
against EchoStar," said TiVo in a statement. "Additionally, this
ruling paves the way for TiVo to receive the approximately $300 million in
damages and contempt sanctions awarded to us for EchoStar's continued
infringement through July 1, 2009."
"We will also seek further damages and contempt sanctions
for the period of continued infringement thereafter," said the company.
"We will continue our efforts to protect our intellectual property from
further infringement."
EchoStar countered that while it was not happy with the
split decision--it was 2 to 1 among the three-judge panel--it took some comfort
in that dissent, and said based on that, it would seek an en banc (full court)
review. It also said it would be proposing a new "design-around" for
its DTV to the Texas
district court.
In his dissent, Judge Randall Rader said that contempt
"should not be a sword for wounding a former infringer who has made a
good-faith effort to modify a previously adjudged or admitted infringing device
to remain in the marketplace."
He took issue with the district court's statement that even
if EchoStar devised a non-infringing work-around for its DVR's it would still
be in contempt of its permanent injunction. "How can that be correct?"
he asked.
