TiVo v EchoStar: Boredom in the Courtroom

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No disrespect to the court, the judges, the attorneys, or anyone else… but, man, was that boring.

Essentially, ~80 of us gathered in the US Court of Appeals for the Federal Circuit for a little over an hour while EchoStar and TiVo provided oral argument in Echo’s appeal of TiVo’s lower court jury win in this ongoing DVR patent dispute. Echo’s position is that there were “claim construction issues” in regards to how three patent elements (2 hardware, 1 software) were presented. A whole lot of discussion (judges and lawyers from both sides) focused on the meaning and implication of the words separate (how, when, and physical versus logcial), source object/collection (in regards to software components), and an (is it both singular and plural).

The three judges posed some interesting questions during the proceedings: Why is the jury’s decision invalid? If the appeals court invalidates some of the claims but not all, do monetary awards and injunction terms change? (TiVo says no, Echo says yes.)

I have no inkling of what the outcome will be… and I suspect the case will be largely decided on the contents of the humongous documents (blue book from Echo, red book from TiVo) rather than these oral arguments, which seemed more about clarification.

So what happens next? Apparently, verdicts are put onto the web when they’re ready with no advance notice – Sadly, there won’t be any courtroom theatrics of thrown DVRs. (I’d come back for that!) Sounds like if the lower court’s ruling is simply affirmed, we should hear something in the next week or so. Otherwise, it could be a few months while the judges mull things over and render their decision.


I had a few requests to report on facial expressions and body language for clues, but the attorneys faced the judges and I’m reluctant to analyze the body language of people I don’t know. Additionally, most of the attorneys were pretty expressionless while mostly writing notes. However, I will tell you that before court was in session I overheard someone say “Knock ’em dead.” Listening in afterward, it seems like both sides felt positive with their respective showings in the courtroom.

34 thoughts on “TiVo v EchoStar: Boredom in the Courtroom”

  1. Great stuff Dave!!

    I’m not sure how judges can rule on individual claims when the USPTO rulings can still be appealed.

    If there is any infringement whatsoever in those boxes (software or otherwise) than the entire box is infringing. Hence royalties should stick.

  2. Kevin, I think the software claim may apply to all boxes but that the hardware claims are box specific. They mentioned two models & chipsets. So a percentage of boxes could infringe if one were overturned, but not the other. Something like that. Interestingly, no mention at all about overturned or appealing patents.

  4. Well, it sounds like at the very least the judges would have to rule in favor of the software claims. If that is the case, all the boxes (assuming they all use the same software) are still infringing.

    Dish cut corners to get into the marketplace, and Tivo was hurt by it. Can’t see the judges ignoring that one way or the other.

  5. The crux of the appeal isn’t the patents themselves, but how they were presented in the lower court. Echo calls this a “legal issue” not “factual” in regards to the technology. However, the the subtle details and legal jargon are lost on me – I’m just a geek blogger. :)

    By the way, I shouldn’t say it was all boring. Judge Flager had some memorable one liners. When Echo’s legal spokesperson Dunner mentioned he’s never owned a TiVo or Dish DVR, Flager said he’s just trying to win the battle of the remote control.

  6. This just goes to show how screwed up our patent process is. Patents are granted on misleading information all the time. This misleading information is a Trojan horse to destroy competition. TiVo wasn’t even the first DVR company, they came along later, but through marketing, they became the biggest player. This is just a battle of money mongers. For Dish, this is one aspect of their company versus TiVo’s main business. I believe the whole thing should just be tossed out. Tivo should focus their efforts and money elsewhere. As an inventor, I DO believe patents serve a purpose, but as evidenced here can be abused.

  7. Ron – Who was the first DVR company then? And don’t say ReplayTV, because they weren’t. TiVo and ReplayTV were in simultaneous development, and TiVo shipped first.

    Who else brought a DVR to market before those two?

  8. According to a Supreme Court Judge, only one claim need to be validated to determine infringement; or willfully infringement. Judges seems to agreed partially that Echostar is infringing on the on Tivo’s patent in dispute. Echostar claims are in regard to the lower court judge procedings, which are irrelevant to the patent in trial.
    Do that mean that TiVo won?

    Accoding to the Supreme Court Judge’s opinion the answer is: YES.
    There is not need to send this case back to Folsom. The appeal will be rejected.
    The District of Texas Federal Jury verdict is VALID.

  9. An interesting factoid I forgot to mention: TiVo primarily called the devices “machines” while EchoStar called them “DVRs” – don’t know if there’s anything to be read into it, but it did catch my attention.

  11. Ron, I would love for you to explain why you think Tivo is “abusing” the patent system. If you think they should ignore this entire case with Dish, you have no idea what they are fighting for, and what it means to them.

  13. Mark,

    I love Wikipedia, but keep the salt handy. TiVo shipped on March 31, 1999 – the last Friday in March is still a company holiday ‘Blue Moon’. So even if the April, 1999 claim for the DishPlayer is accurate, it isn’t the first.

    On top of that, as detailed in this patent case, the contention is that EchoStar had a prototype TiVo unit because they were considering working with TiVo on their DVR. In the end they decided to go off an develop their own – but only after receiving a lot of info, and the prototype hardware, from TiVo. And the unit was never returned to TiVo. So TiVo’s claim is Echostar used the knowledge obtained through their licensing discussions, and likely examination of the prototype, to develop their ‘in-house’ DVR.

    The patent I have no problem believing, a lot of interesting ideas get patented before technology makes them feasible.

  14. So what your saying is that Tivo probably infringed on Honeywell’s patent but that’s okay because they made the technology feasible? I cited a reference for the claim that the Dishplayer came first, where is your reference?

  16. Mark,

    Do you know that TiVo infringed on Honeywell’s patent? I doubt you know either way. You can have a patent on something, like a DVR, and someone else can develop a device that does basically the same thing, and it may not infringe. It depends on the specifics of the patent and the other implementation. That happens all the time.

    Also, where is Honeywell’s patent today? TiVo has purchased and/or licensed DVR related patents from other entities, such as ReplayTV and IBM. You’d have to trace the patent to see if it changed hands and if it is one of the patents TiVo has the right to use before you can say if they infringed or not.

    Just having a patent on a DVR doesn’t mean every DVR infringes on your patent. If the patent were that broad, it would be denied or thrown out as patents need to be fairly narrow in scope.

    You cited a Wiki entry – which you may notice had a ‘Citation needed’ flag on the very line you referred to. ;-) Which I just edited to fix.

    TiVo shipping on March 31, 1999 is a well known fact and is part of the oft-told Blue Moon story. Such as here: http://www.zeigen.com/blog/?p=143
    One example referring to DishPlayer going on sale in June, 1999: http://ultimateavmag.com/news/10438/

    There are more via Google.

  17. Wow, that was a nice obscure reference. It doesn’t say anything about when the Dishplayer was actually first produced. I doubt wikipedia will change their entry based on that article.

  18. “I doubt wikipedia will change their entry based on that article.”

    Anyone can (and does) edit Wiki articles. That’s why the quality is all over the map and why articles change frequently. Most folks contributing of course have a perspective and perhaps a bias. I agree with MZ, that a healthy dose of salt should accompany Wiki research.

  19. Mark,

    I read the Honeywell patent – I am almost 100% positive TiVo does not infringe, since the patent is on a system using *optical* discs for recording, not magnetic discs.

    If anything, a DVD recorder would be more likely to infringe.

  20. Mark,

    I *already* changed the Wiki entry. ;-)

    And it doesn’t matter when it was produced – there were working TiVo prototypes in January 1999 at CES, along with ReplayTV, and probably sooner than that within the companies. The Wiki entry said *deployed*, and they weren’t deployed in April.

    If you want to get into which was developed first – then TiVo was developed before the DishPlayer, according to BOTH TiVo *and* EchoStar! They admitted that *in court* during the earlier stages of the patent trial. EchoStar admitted that they made the decision to develop their own ‘in-house’ DVR *after* seeing TiVo’s working unit and discussing the technology with them. Which was a large part of TiVo winning the case in the first place.

    TiVo had working units before EchoStar/Dish – by EchoStar’s own admission. And TiVo shipped units to consumers first – as a matter of public record.

  21. I’m sure Dish Network’s lawyers would say that “We’re almost 100% sure that the Dish DVR’s don’t infringe on Tivo’s patent”. It’s just a big money grubbing game by both parties to get their profits up. I have a feeling that if Tivo does win, the consumer will lose in the end because Tivo will not only raise the price of their own product due to lack of competition, they will force all other DVR makers to raise the price of their product to pay off Tivo.

  22. Dish made that claim – and the jury sided with TiVo. TiVo already won. This is an appeal of that decision filed by Dish to attempt to over turn the finding.

    Is money involved? Of course. But I would hardly call it ‘money grubbing’. TiVo did a lot of fundamental R&D and has a large patent portfolio based on their work. The whole point of the patent system is being able to be rewarded for creative work through licensing, and protecting inventors from others appropriating their work without compensation.

    If Dish used TiVo’s patents, and a jury says they did, then they owe TiVo fair compensation – simple. Dish should not benefit from TiVo’s work without compensating TiVo. The likely outcome is that EchoStar would pay TiVo some nominal fee to license their patents. At an extreme they could even just licensing TiVo’s software platform, as DirecTV did.

    This is not new. DirecTV licenses TiVo’s patents, not just for the DirecTiVos, but for their newer NDS DVRs. Sony licenses TiVo’s patents for their Sony DVRs. TiVo and ReplayTV cross-licensed each other’s patents. And there are others who license TiVo’s patents. TiVo also pays to license other patents that they use, and they’ve purchased DVR-related patents outright when possible. The cost isn’t so high as to impact the consumer pricing, when spread across the products produced.

    If the decision against Dish is upheld, and I think it will be, then it would probably get other hold-outs to sign a licensing agreement with TiVo – Motorola, Scientific-Atlanta, Digeo, etc.

    If you invent something new and patent it, would it be fair for me to incorporate it into a competing product and not pay you for it? Most people wouldn’t be happy with that.

    Even worse, what if I spent time discussing licensing and a partnership with you, and in the process you shared all the details of your product, *then* I told you I wasn’t interested – only to launch a competing product which used your ideas?

    That’s what TiVo claimed EchoStar did – and the jury agreed with them. Furthermore, the judge decided that it was *willful* infringement – meaning EchoStar knew what they were doing and it wasn’t accidental.

  23. I guess that’s why we have an appeal system in this country. Jurys make mistakes. Judges make mistakes. I’m sure we could go round and round about this issue, but since it’s been beaten to death in the Tivo forums, I’ll just say I’m not rooting for either side to win. If you’re willing to pay $50 a month for DVR service, then you must really love your Tivo.

  24. I think it is silly to expect the cost to go to $50 a month, or to go up at all. As I said, there are lots of patent licenses involved *already* – TiVo licensing patents, others licensing TiVo’s patents – and the costs are minimal. No one is asking $10 per DVR or the like.

    This is really a non-issue, except for TiVo – since it is, in aggregate, substantial revenue. A few cents a box adds up with a few million boxes.

    Look, most things you own have patents involved – if you own a PC there are dozens, hundreds, of patents on the technology in there – the CPU, the RAM, the disk drives, etc. And companies license these patents to each other all the time. MPEG-2 involves numerous patents, as does DVD, RAM, WiFi, etc. It is just part of doing business.

    Anyone who things TiVo winning is going to hurt consumers in any way is just paranoid.

  25. Mark,

    I can’t figure out what your argument is here. You don’t want either side to win, and your argument is the consumer loses?

    If Tivo’s intellectial property is allowed to be copied at no cost to the other party, there is no way for a company like Tivo to even exist. Big money companies would always win, and you the consumer would end up losing. Why do you ask?
    What incentive would I as the big company have to give you the consumer the best product possible? I can drive the Tivo’s of the world into the ground with “similar” technology, but for 3/4’s the cost, just to get them out of the game. Then I jack up other “Fees” that you will pay, and what are you left with? A crappy product and a higher price tag.

  26. I usually mention my affiliation in posts, but just realized I failed to do so this time. I’m a TiVo customer and my employer (Sling Media) will shortly be acquired by EchoStar. The observations above are my own. :)

  27. What’s Mark’s affiliation? He’s either heavily biased, or heavily medicated.

    Kudos to Kevin for his patience and diligence in responding to Mark’s rants.

    Everyone is entitled to their own opinion (some of my best friends are paranoids), but Mark seems to want his own set of facts, too.

    ;-)

  29. I have no argument that E* did infringe to some extent on TiVo patent(s) (at least the patents as they were at the time…)

    But my shock is the nature of the damages award where TiVo gets $$ per box AND $$/month. The nature of the beast would seem to warrant only a small $$ per box award.

    I see no basis for a monthly royalty for using this type of technology in a product.

  30. Also, I think the headline:

    The Hearing Occured

    would sum up the event. I don’t see anything unusual or anything indicative of the leanings of the Court in what I’m reading.

    Perhaps I’ll hear something in the MP3

  32. Dave, thanks for posting. When listening to the mp3 above I noticed that it cut off the discussion without the TIVO lawyer having any rebuttal. Was this in fact all there was to the argument or did we miss some of the proceedings in the mp3 link above?

    Thanks,

    scott

  33. Yep, I heard that too, but I think only E* was allowed a rebuttal, which was partially cut off.

    As Dave said, all this legal jargon is lost on me. Is there a lawyer in the house, and did this entire episode really reveal anything about the judges’ future decision?

    It sounds like E* was trying to minimize a # of key issues in the trial, hoping the judges will either force a retrial or at least remove a portion of boxes from infringement.

  34. Scott, I’m not listening to it all a second time. ;) I’m not sure what the format is supposed to be. But I think the format was slightly relaxed because of the amount of time TiVo (Waxman) was given to present and answer questions of the judges. TiVo had 15 minutes on the clock, but I think went 20 minutes beyond that.

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