Dish vs. TiVo
12:25 PM -- The United States District Court of Texas has scheduled a bench trial to determine whether Dish Network LLC (Nasdaq: DISH)'s and EchoStar Technologies LLC's software "workarounds" sidestep a key digital video recording (DVR) patent held by TiVo Inc. (Nasdaq: TIVO).
The trial, which will determine whether Dish is in contempt of an earlier court injunction that called on the company to disable its DVR-capable satellite TV receivers, is slated to start Feb. 17, 2009. (See Dish's DVR Boat Anchors and And Now… We Wait .)
Elsewhere, the U.S. Supreme Court has already shot down Dish's request for an appeal tied to the TiVo "Time Warp" patent, putting Dish on the hook to pay TiVo about $104 million -- the amount of the original jury award in 2006, plus interest. (See High Court Denies Dish.)
Dish and its EchoStar technology spinoff said they "look forward to the February bench trial on our software design-around. Our subscribers can continue using their award-winning DVRs from Dish Network."
TiVo, meanwhile, called news of the bench hearing a "positive step," holding that the company remains "confident that we will prevail in showing that EchoStar's workaround does not avoid infringement." (See TiVo Reacts to DVR Spat .)
The February trial may resolve the protracted fight between TiVo and Dish once and for all. But at least one analyst has argued that Dish has much more to lose.
In a "worst case scenario" outlined by Sanford C. Bernstein & Co. Inc. analyst Craig Moffett, Dish would have to immediately disable as many as 4 million DVRs. In addition to subscriber churn caused by that, Dish might also be forced to replace those boxes. At roughly $400 per box plus truck roll expenses, costs could hit the neighborhood of $1.6 billion, according to the analyst's calculations.
— Jeff Baumgartner, Site Editor, Cable Digital News