US Patent Office Affirms TiVo Time Warp Patent
On October 6, the US Patent and Trademark Office affirmed TiVo’s patent for “Time Warp”, a DVR system that allows a user to store broadcast programs while simultaneously watching another program. The ruling runs parallel to a long-running legal battle between TiVo and Dish Network and parent company Echostar that originated in 2004 when TiVo sued both companies for patent infringement. In 2006 a jury found that Dish had infringed on the patent and assigned damages. Dish pledged to redesign its DVR system. However, in 2009 a federal judge found that Dish failed to properly redesign its system and that it was still infringing on the patent, resulting in the court finding contempt and an award of $200 million to TiVo. The most recent ruling is a result of the federal appeals court decision on May 14, 2010 to reexamine the case and determine whether the trial court judge should have granted Dish a full trial instead of a hearing on the issue of continued infringement.
During the legal battle Dish and Echostar have attempted to challenge the validity of the patent itself. In 2007, the PTO upheld the patent, after which Echostar/Dish requested a review of the decision, and in 2009 the PTO issued a preliminary statement that the patent was too similar to previous patents from other companies. TiVo has stated that the October 6th decision that the patent is valid cannot be appealed again. This decision could have grave implications for Echostar/Dish’s fortunes in the patent infringement lawsuit. It certainly struck down one of their hopes of escape. On November 9th, a US appeals court will hear arguments on the patent infringement suit to determine if Echostar/Dish is still violating the patent.
It is always remarkable to see just how long and convoluted issues of intellectual property law can become. Litigation here, in a case with only two parties, has taken up six years and two parallel suits (whether Echostar/Dish infringed the patent and whether the patent was valid in the first place). Inaction on Echostar/Dish’s part has increased their damages from $73.9 to $200 million (to say nothing of the attroneys’ fees). Then again, perhaps the profits they made were worth it? While this case does not seem poised to create any groundbreaking legal precedent, it demonstrates the confusing interaction between law and the real world of business. The Wall Street Journal article wherein I first found the story makes mention of the impact this simple step has had on stock prices; causing a nearly 10% jump in TiVo shares. It is a reminder that litigation like this is just another part of business to many non-lawyers.