DISH Network Corp (DISH)

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TiVo Shrs Plunge; No Ruling In DISH Infringement Case

Posted by Eric Savitz
http://blogs.barrons.com/techtraderdaily/2008/09/04/tivo-shrs-plunge-no-ruling-in-dish-infringement-case/?mod=yahoobarrons

TiVo (TIVO) shares are down sharply late this afternoon, apparently on investor disappointment that the judge overseeing the company’s patent infringement case against Dish Network (DISH) did not issue a ruling today in a dispute over whether DISH had violated an injunction issued earlier this year after DISH had been found to be in violation of two TiVo patents.

Dow Jones Newswires reports that the two companies were in court today for a hearing on the issue. The wire service story notes that there was no decision today; ergo, DISH can (at least for now) continue to distribute the DVRs that are at the heart of the patent suit. TiVo has been asserting that the workaround for the patents in question that DISH has developed does not cure the patent infringement.

Citigroup’s Tony Wible pointed out in a research note this afternoon that the sell off in TiVo shares “is likely driven by event-driven investors interpreting the absence of a decision as incrementally more favorable for DISH.” He says a decision could come later this month, but that “timing is still uncertain, leading to more frustration and selling pressure.”

Alan Gould, an analyst with Natixis Bleichroeder, in his own note on the situation, wrote that the bottom line is that “it could take a while before the judge issues his decision, and his decision could be that he wants to look at the [DISH] workaround, which would delay the decision even further.” Gould notes that TiVo asked for $220 million in damages. Gould adds that he does not anticipate an out-of-court settlement in the case.

Both analysts maintain Buy ratings on the stock.

TIVO today is down $1.40, or 16%, to $7.35.