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Court orders Dish to pay $103 million to TiVo

Federal court finds Dish in contempt and orders the satellite broadcaster to disable infringing features found on its subscribers' digital video recorders.

A federal court has awarded TiVo $103 million plus interest in its long-running patent dispute with EchoStar Communications and ordered EchoStar to disable infringing features found on its subscribers' digital video recorders.

U.S. District Judge David Folsom on Tuesday also found EchoStar, which is now part of Dish Network, in contempt of court for violating a permanent injunction by reprogramming millions of DVRs with a new "workaround."

"The harm caused to TiVo by EchoStar's contempt is substantial," Folsom wrote. "EchoStar has gained millions of customers since this court's injunction was issued, customers that are now potentially unreachable by TiVo."

Englewood, Colo.-based Dish, which has roughly 13.6 million subscribers, said in a statement it would appeal the contempt ruling and file a motion to stay an order that requires it to disable the disputed DVR features within 30 days.

"Our engineers spent close to a year designing around TiVo's patent and removed the very features that TiVo said infringed at trial," the company said. "Existing Dish Network customers with DVRs are not immediately impacted by these recent developments."

The Alviso, Calif.-based maker of set-top boxes applauded the decision.

"We are extremely gratified by the court's well reasoned and thorough decision, in which it rejected EchoStar's attempted workaround claim regarding the TiVo patent, found EchoStar to be in contempt of court, and ordered the permanent injunction fully enforced," TiVo said in a statement. "EchoStar may attempt to further delay this case but we are very pleased the court has made it clear that there are major ramifications for continued infringement."

In after-hours trading, shares of TiVo rose $2.53, or 36 percent, to $9.51, while shares of Dish fell $1.19, or 6.9 percent, to $16.05.

TiVo first sued EchoStar in 2004 for violating a patent on a "multimedia time-warping system," which involved recording a program on one channel while watching another.

A jury in 2006 found that Dish Network's DVRs infringed upon a patent held by TiVo and ordered it to pay TiVo $73.9 million in damages. A federal appeals court upheld the ruling in January 2008, as did a second U.S. appeals court in April 2008.