Court orders EchoStar to halt DVR sales: TiVo
NEW YORK (Reuters) - TiVo Inc. (TIVO) on Friday said a federal court in Texas has ordered EchoStar Communications Corp. (DISH) to halt the use and sale of several of its digital video recorders (DVRs) after a jury ruled in April that EchoStar had infringed on a TiVo patent.
EchoStar, owner of the No. 2 U.S. satellite television broadcaster Dish Network, said it planned to ask a federal appeals court to block the permanent injunction while it launched an appeal.
The injunction, issued Thursday, would require many DVRs used by Dish Network customers to be shut off within 30 days, EchoStar said in a statement. DVRs allow viewers to record dozens of hours of programming, while they watch or pause live TV.
TiVo shares rose 14 percent in premarketing trading.
U.S. District Court Judge David Folsom also on Thursday also ordered EchoStar pay $5.6 million in interest and $10.3 million in additional damages, TiVo said, on top of a jury damage award of $74 million in April.
The April ruling followed years of legal wrangling over software within the TV set-top box.
The judge also denied EchoStar's request to stay the injunction, pending appeal.
EchoStar said in a statement the judge concluded that it did not act in bad faith or copy TiVo's technology, and denied TiVo's request for damages to be tripled.
"We believe that, for a number of reasons, the Texas Court should be reversed in all other respects on appeal," EchoStar said. "We also continue to work on modifications to our new DVRs, and to our DVRs in the field, intended to avoid future infringement."
TiVo brought the case to federal court in Texas, accusing EchoStar of stealing its technology. Last year, EchoStar countersued TiVo, saying the company used technology patented by EchoStar between 1998 and 2003.
Analysts have suggested that the ruling could lead to a licensing deal between the two companies, and that TiVo may use this decision to take on other companies that make and distribute DVRs.
"This decision recognizes that our intellectual property is valuable and will ensure that moving forward EchoStar will be unable to use our patented technology without our authorization," TiVo said in a statement.
Satellite providers have used DVRs to woo customers away from cable companies. In turn, more cable TV providers have been placing DVRs in subscriber homes.
TiVo stock rose 90 cents to $7.39 on the Inet electronic brokerage system.
