Video services

High Court Denies Dish

The U.S. Supreme Court on Monday shot down Dish Network LLC (Nasdaq: DISH)'s appeal in its protracted patent case centering on TiVo Inc. (Nasdaq: TIVO)'s Time Warp.

Dish, which spun off its EchoStar set-top and technology division earlier this year, said Monday it would pay TiVo roughly $104 million -- the amount of an original jury award in 2006, plus interest. (See EchoStar Ready to Split.)

"The money is in an escrow account and will be released to TiVo in the next few days," Dish said, in a statement.

The denial marks the latest in a string of disappointments for the Colorado-based satellite TV giant.

In 2006, a Texas jury awarded TiVo $74 million in damages in the case. In late January, TiVo shares jumped after an appeals court upheld its claim that Dish infringed on the patent, with speculation running amok that the decision might force Dish to hammer out a software licensing deal with the digital video recording (DVR) pioneer. (See TiVo Digs DVR Ruling .)

In April of this year, the U.S. Court of Appeals for the Federal Circuit in Washington denied Dish's request for a rehearing. Dish countered that it would take the case to the Supreme Court, holding that Dish's engineers had devices and deployed some "next-generation" software tantamount to a patent workaround. (See The Final Chapter?.)

Despite Monday's decision, the battle is far from over. TiVo is arguing that Dish's workaround still infringes on the Time Warp patent. Meanwhile, a Dish countersuit in a Delaware court claims the new software does not infringe. (See Dish's DVR Boat Anchors.)

"We believe that the design-around does not infringe TiVo's patent and that TiVo's pending motion for contempt should be denied," Dish said in Monday's statement.

In September, investors sold off TiVo shares after a the judge presiding over that contempt of court hearing in the U.S. District Court in Texas listened to arguments but held off from making a final ruling. That decision is expected to arrive sometime next month. (See And Now… We Wait .)

TiVo said it was confident that the District Court "will enforce the injunction and award further damages from EchoStar's continued infringement of our Time Warp patent."

So far, U.S. cable MSOs have been able to avoid legal entanglements with TiVo, despite offering generic DVRs for years. Comcast Corp. (Nasdaq: CMCSA, CMCSK) and Cox Communications Inc. have ported TiVo's DVR to Motorola Inc. (NYSE: MOT) set-top boxes and have already launched or started testing services. (See Comcast Expands TiVo Footprint and Cox Tees Up TiVo Test Bed .)

Dish rival DirecTV Group Inc. (NYSE: DTV), which recently notched a deal to offer TiVo, has also managed to avoid any DVR-related lawsuits. (See DirecTV & TiVo to Play It Again .)

TiVo wants to develop DVRs that use the tru2way platform but has yet to announce product plans or release dates. (See TiVo à la Mode .)

— Jeff Baumgartner, Site Editor, Cable Digital News

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