Earlier this year DVR manufacturer TiVo won a significant legal action against pay-TV operator DiSH Network (Echostar) over a patent infringement held by TiVo. Dish/Echostar paid out $105m in compensation. Since then the two sides have been further squabbling over whether a “workaround” devised by Dish is in fact still a breach of TiVo’s IP.
Last Thursday an East Texas federal court judge declined to rule on
whether Dish was still violating TiVo’s patents. The judge has now
fixed a trial date between the two on Feb 17-18, with TiVo continuing
to allege that the workaround is nothing of the sort and that
Echostar/Dish must comply with the previous ruling of the court which
barred Dish from further violations of the TiVo patents.
TiVo has noted that the court did not rule on TiVo’s motion asking the
court to find EchoStar/DISH in contempt for violating the injunction.
TiVo’s statement also noted that the future hearing will address
whether to assess any damages beyond the $105m already paid. TiVo said
it is “confident” that the court will find the workaround does not
avoid infringement.
The market did not share that sentiment. TiVo’s shares have now fallen
from $6.30 at the start of last week (and $8.50 in October) to as low
as $4 on Friday (although it recovered to $4.60 later in the day). One
analyst (Kaufman Bros’ Todd Mitchell) in a note said the latest
developments would be seen as a setback fro TiVo. Not helping
confidence is that TiVo last week laid off staff, citing economic
conditions, and a "rapidly evolving retail consumer market" have
necessitated the reductions.
TiVo’s latest results are out tomorrow (Tuesday) and Mitchell admits
that its stock looks cheap. “We think TiVo will not only survive the
economic downturn, but will likely emerge in an even stronger economic
position given its efforts over the past two years to transition to a
more software-centric business model, build out new international lines
of business and become a player in emerging new forms of DVR
advertisements.”
Dish Network, in its statement, said: “We are pleased that the district
court did not find us in contempt on the face of the injunction. We
look forward to the February bench trial on our software design-around.
Our subscribers can continue using their award-winning DVRs from Dish
Network."
Earlier this year DVR manufacturer TiVo won a significant legal action against pay-TV operator DiSH Network (Echostar) over a patent infringement held by TiVo. Dish/Echostar paid out $105m in compensation. Since then the two sides have been further squabbling over whether a “workaround” devised by Dish is in fact still a breach of TiVo’s IP.