TiVo prevails (again) in court against EchoStar

[Skaggs]

UPDATE 2-TiVo prevails in long-running EchoStar patent case
Tue Jun 2, 2009 7:49pm EDT

* EchoStar ordered to disable DVR in infringing boxes

* EchoStar found in contempt of court injunction

By Gina Keating, Reuters

LOS ANGELES, June 2 (Reuters) - A federal judge in Texas awarded set-top box maker TiVo Inc (TIVO.O) an additional $103 million in damages plus interest on Tuesday in a long-running patent infringement dispute with DISH Network Corp (DISH.O) and EchoStar Corp (SATS.O).

EchoStar has already paid TiVo a total of $104 million in damages and lost profits as the result of a 2006 jury award for infringing on patents for digital video recorder technology.

The judge may impose additional damages later this summer stemming from his finding that EchoStar violated an injunction he put in place following the jury verdict by implementing new "work-around" technology that TiVo claimed still infringed.

The legal dispute dates back to 2004, when TiVo charged that satellite TV provider EchoStar's DISH network system violated TiVo's patent for "Time Warp" software, which allows users to record one TV program while watching another.

After the verdict, EchoStar continued to distribute its digital video recorders and collect subscription fees for millions of DVRs with the work-around software.

U.S. District Judge David Folsom found in TiVo's favor on the work-around issue and ordered EchoStar to disable an infringing function on all but about 193,000 digital video recorders placed with subscribers.

EchoStar also was ordered to inform the court before it attempts to implement another work-around of the patent it infringed.

DISH and EchoStar will appeal the court's decision and file a motion to stay the order with a federal appeals court, the companies said in a statement.

TiVo Chief Executive Tom Rogers told Reuters the ruling "demonstrates the value of our intellectual property" and shows there are "major ramifications for infringing."

"We think the perception of that value will help drive our business forward," Rogers said in an interview. "Our view has been that we want to enter into commercial relationships with people for the distribution of TiVo."

TiVo has licensing agreements with the top U.S. cable provider Comcast Corp (CMCSA.O) and top satellite provider DirecTV Group Inc (DTV.O). EchoStar is the No. 3 programming provider.

Alan Gould, senior media analyst for Natixis Bleichroeder, said the final judgment is "a strong positive" for TiVo that should strengthen the company's hand in licensing negotiations with the cable, telephone and satellite providers with which it does not yet have agreements.

"We have been recommending TiVo stock and said TiVo was worth $5 a share if they lost. A win in the EchoStar case would be worth at least an incremental $6 a share to TiVo," Gould said.

TiVo shares jumped more than 37 percent to $9.57 after hours compared with a $6.98 close on Nasdaq on Tuesday.
DISH was formerly known as EchoStar Communications Corp. It spun off its technology assets over a year ago, including its set-top box division, to create EchoStar Corp. (Reporting by Gina Keating; Editing by Andre Grenon)

[Skaggs]

EchoStar pauses TiVo's stop order
DVR firm's stock skyrockets despite stay
By Paul Bond, June 3, 2009, 09:28 PM ET
Hollywood Reporter

In a case that could reverberate through the pay TV industry, EchoStar on Wednesday appealed a judge's decision that its software workaround still infringes patents held by TiVo.

Also Wednesday, EchoStar bought time on an order issued a day earlier that it must, within 30 days, disable more than 4 million DVRs used by customers of Dish Network, its sister company. EchoStar asked for and received a temporary stay of the order, gaining yet another reprieve in a case that has dragged on more than five years.

On Wednesday, though, investors behaved as if TiVo finally has defended its valuable DVR patents and will use its newfound leverage to pressure Time Warner Cable, Cablevision and others into striking licensing deals -- presumably more lucrative than those TiVo has with Comcast, Cox and DirecTV.

TiVo shares soared 53% on Wednesday to $10.70, on trading volume 35 times higher than average, and Dish shares sank 10%.

The stay will allow EchoStar to keep Dish DVRs running for about two months before a court rules whether the stay should be lifted or made to run the duration of an appeal, which would tack on 18 months or so.

EchoStar also is appealing a $103 million, plus interest, penalty a judge ruled Tuesday that it must pay to TiVo. That's on top of a similar amount EchoStar already has paid TiVo.

"This outcome is very close to a best-case scenario for TiVo," Kaufman Bros. analyst Todd Mitchell said. Bernstein Research analyst Craig Moffett called the ruling "indistinguishable from a worst-case scenario" for Dish.

"Dish Network's inability to effectively design a software workaround to TiVo's DVR patents certainly raises our concern about the risk to other DVR providers," said Pali Research analyst Richard Greenfield, who mentioned Time Warner Cable, Cablevision, Verizon, AT&T, Charter Communications and Mediacomm.

TiVo CEO Tom Rogers recently said he has not been seeking new licensing arrangements -- with much enthusiasm, at least -- because he would prefer to strike such deals after a legal victory against EchoStar.

"I hate to use the word 'leverage,' but we think that the resolution here will be one that will substantially increase the perception of value of our intellectual property," Rogers told Wall Street analysts in January.

Goldman Sachs analyst Ingrid Chung said Tuesday's ruling against EchoStar "has negative ramifications for Time Warner Cable and Cablevision" because the price of licensing agreements with TiVo likely has climbed.

Cablevision and Time Warner Cable would not comment Wednesday, but Cablevision has been focusing on network DVR technology, which stores programming remotely rather than in set-top boxes in users' homes.

Cablevision intends to test the product in the summer, much to the dismay of Time Warner, News Corp., Disney, CBS and others that are seeking to legally block the rollout of a network DVR because they say it would infringe the copyrights of movies and TV programming they own.

Analysts were nearly unanimous Wednesday in the opinion that EchoStar will be inclined to strike a deal with TiVo, rather than take more chances with a legal system that overwhelmingly has sided with TiVo for five years.

Referring to Dish/EchoStar CEO Charles Ergen's penchant for poker, Moffett said Tuesday's ruling "is a reminder that, sometimes, gamblers lose."

Ergen is relentless, though, and EchoStar showed no hints Wednesday that it is throwing in the towel. "We believe we have strong grounds for appeal," the company said.

[Skaggs]

From the Gadgetress blog:

U.S. District Judge David Folsom is giving Dish 30 days to “disable the DVR functionality (i.e., disable all storage to and playback from a hard disk drive of television data) in all but 192,708 units of the Infringing products …” according to the court order. The “infringing” DVRs include these models: DP-501, DP-508, DP-510, DP-522, DP-625, DP-721, DP-921, and DP-942.

(Yikes!)

Will this really happen? The same court ordered Dish (when it was part of EchoStar) to dismantle its DVRs 3 years ago and the two companies have been stuck in court sorting things out. Of course, as TiVo continues to win cases, it also collects penalties, plus interest, from Dish. Dish has appealed and the two show up again in court on June 26.

Could this happen to your non-TiVo DVR? Possibly.

All a TiVo spokesman would tell me is that TiVo does have license agreements with Comcast, Cox and DirecTV. Some of these range from the companies rebranding TiVo’s actual software for their own customers to just a license agreement.

TiVo would love to have similar partnership with all TV companies that have DVRs, he said. Those, presumably, would include Time Warner Cable, Verizon FiOS, AT&T U-verse plus a plethora of others who offer TV service outside of Orange County. At the moment, no other patent lawsuits are pending between TiVo and other companies.

Based on the original 2006 court order for a permanent injunction against Dish, the patent in question is this one, dealing with ”Multimedia time warping systen.” I’m not a lawyer but the patent #6,233,389 does seem to cover the gist of the whole point of a DVR: to pause, rewind and record live TV.

[Skaggs]

Dish Researching Hostile TiVo Takeover?
Davis Freeberg's Digital Connection
June 9th, 2009



It’s been over 5 years since TiVo filed their patent lawsuit against Dish, but we’re finally reaching the endgame of what has been an epic chess match between the two companies. Between the he said/she said arguments that have played out in the press to the endless legal maneuvers by both camps, it has been a long and brutal battle for both. As a TiVo shareholder, I know that I’ve found the long delays especially frustrating.

In the latest development in this high stakes game though, TiVo has managed to pin Dish into a dangerous checkmate situation. With appeals quickly running out, Dish’s options are becoming increasingly limited. While things look pretty dire for Dish, I believe that they may try to play one more dangerous gambit before this game is up.

I think they might try to buy TiVo.

While looking through my traffic logs, I came across a very interesting visitor In 2006, I wrote an article referencing a poison pill TiVo implemented in 2001. Since Google loves bloggers so much, my story somehow ended up near the top of the page for the search term TiVo poison pill. Given recent analyst chatter that TiVo could be an M&A target, I’m not surprised that people would be interested in taking a closer look at the nuts and bolts behind the agreement, but I was surprised at where my visitor was coming from.

While there is no way for me to know who it was, someone at Echostar’s corporate HQ’s spent 25 minutes researching an article that I wrote on the topic. Their outclick took them to the legal document that contains all of the nitty gritty details on how the pill actually works.

Now, there could be any number of explanations for why someone at Echostar would be interested in TiVo’s anti-takeover provisions, but the most likely one is that they’re interested in making some kind of play at TiVo.

On June 4th, the Eastern District of Texas District Court announced that they were holding Dish in contempt for continuing to infringe on TiVo’s timewarp patent. (via Mainers’ Law Library) Dish may have been able to get a temporary stay on the injunction, but the eventual impact of the ruling could end up being devastating.

The order against them contains two crucial components, the first is a requirement to disable all infringing DVRs. For Dish to comply with this portion of the injunction, it will probably cost somewhere in the neighborhood of $300 - $400 million. This type of expense would hurt, but it wouldn’t necessarily put them behind the 8-ball.

The far more damaging portion of Folsom’s order is the infringement provision. This prevents Echostar from replacing these DVRs with other DVR set top boxes.

“The DVR functionality, storage to and playback from a hard disk drive, shall not be enabled in any new placements of the Infringing Products.” (bold added by me)

The inability to offer a DVR to their customers would put Dish at a severe competitive disadvantage. Furthermore, because Dish has now been caught trying to sneak a “replacement” DVR in through a redesigned back door, they now must seek court approval prior to deploying any new DVR solutions.

Now I realize that there are still a lot of people who haven’t adopted DVR technology yet, but for those who have, you know that once you get a sweet taste for time shifted entertainment, there’s no going back.

Survey after survey after survey has confirmed that people LOVE their DVRs and while I can’t speak for others, I know that if my television provider disabled my ability to record television, it would take less than a week before I found a replacement.

Dish doesn’t breakdown their current number of DVR subscribers, but during their most recent earnings call, Dish CEO Charlie Ergen acknowledged that the “majority” of their customers buy advanced DVRs and/or HD services. This would suggest that that as many as 8 million Dish subscribers could potentially lose access to DVR technology.

While the cost of replacing the set top boxes could hurt Dish’s earnings, the loss of even 10% of their subscriber base would do terrible things to their stock price. Customer defections and the inability to remain competitive could easily cost Dish shareholders, $3 - 4 billion in lost market cap.

Given the strength of TiVo’s position, several analysts have suggested that Dish may finally be ready to enter into a settlement agreement with TiVo and while forfeiting the game at this late stage would help to prevent an unmitigated disaster for Dish, I don’t believe that TiVo is willing to accept such a forfeit.

Instead I think TiVo is planning a North Korea strategy. For years, they’ve been unable to command respect in their industry and as more and more generic DVRs have hit the market, TiVo has seen their market share eaten away by larger competitors. Now that TiVo possesses a nuclear DVR patent, it opens up new avenues for “conversations” between them and their competitors.

A fat royalty check from Dish would be good for TiVo shareholders, but having the ability to strike fear into the heart of the MSO industry is worth considerably more in increased pricing power. Some may believe that a settlement is inevitable, but I believe that TiVo would have already entered into an agreement long ago, if they weren’t crazy enough to actually push the red button.

Even before TiVo’s latest legal victory, this bargaining power has enabled them to forge agreements with Cox, Comcast and DirecTV. Once companies like Time Warner and AT&T realize that TiVo is both ready and willing to put this kind of hurt on a business, it makes it a lot more palpable to swallow the carrot that TiVo offers through DVR partnerships.

If you assume that TiVo will eventually win this case and that they have no intention of settling with Dish, the only logical move left for Dish to try and make is an expensive acquisition.

After five years of litigation, I would hate to see Dish win this by seizing control of a company that they’ve done everything to squash. Fortunately for TiVo they should have a lot of leverage to negotiate. Their pill wouldn’t prevent an outright acquisition, but it would make it extremely expensive for someone to buy TiVo without the board of Director’s approval.

Based on my understanding of the complex agreement, in the event that Dish (or another acquirer) were to accumulate more than 15% of TiVo’s shares (or even announce the intention to acquire more than 15% of the shares), it would trip a provision that would entitle the other TiVo shareholders to a special $60 per share dividend This means that if Dish were to forcibly acquire TiVo, it would cost them $71 per share or close to $7.5 billion (more than Dish’s entire market cap.) If Dish tried to pay for the transaction in stock, TiVo shareholders would be entitled to $13.5 billion ($131 per share) in the buyout.

With TiVo’s stock currently trading at $1.15 billion ($11 per share), this type of premium would be too bitter of a pill for Dish to swallow.

While it’s possible that we could see Dish challenge the poison pill legally (I hear that they have an attorney or two working for them), the only other option that I can see around this restriction would be for Dish to somehow convince TiVo shareholders to get rid of the pill at next month’s annual shareholder meeting.

This would be a long shot in and of itself (and one that I’m not even sure would be allowed per TiVo’s bylaws), but this feat is made even more difficult when you consider the fact that you would have had to have been a TiVo shareholder prior to the most recent judgment, in order to be eligible to vote on this kind of initiative.

While I’m doubtful that Echostar would succeed in an attempt to acquire TiVo, at the very least it’s interesting to see them thinking about it.

[hurnik]

I'd love to see Tivo then exact royalties from TW Cable (or finally convince TW to offer a Tivo branded box).

[Skaggs]

EchoStar stumped in Tivo patent prosecution
Kill or cure four-million DVR boxes

By Austin Modine, The Register, 18th June 2009 00:18 GMT

Time is running short for EchoStar to figure out an acceptable workaround to Tivo's DVR patent.

The satellite provider said in a one-sentence court filing Monday that it's "investigating other potential design-around options, but at this stage, does not know whether a future design-around is even possible."

If the company can't arrive at a solution, Texas District Court is likely to order EchoStar to disable DVR functionality in current and future set-top boxes.

EchoStar originally lost a 2004 patent infringement lawsuit that accused the company of improperly using Tivo's DVR technology that lets users record live television while simultaneously watching another program.

The company attempted to reprogram its set-top-box software to work around the patent while appealing the decision, but earlier this month was found in contempt of court when a judge ruled the effort wasn't enough to avoid an injunction.

EchoStar, which is a spin-off of Dish Network, was also ordered to pay a $103m plus interest penalty on top of $105m awarded in the original judgement.

EchoStar appealed the decision, and was granted a 30-day stay on the order to nix DVR capabilities. It's estimated that Echo would have to kill the tech in some four million boxes if it can't figure out a suitable workaround.

[davidjr]

Jun 4, 2009 7:27:16 GMT -5 Skaggs said:

From the Gadgetress blog:

U.S. District Judge David Folsom is giving Dish 30 days to “disable the DVR functionality (i.e., disable all storage to and playback from a hard disk drive of television data) in all but 192,708 units of the Infringing products …” according to the court order. The “infringing” DVRs include these models: DP-501, DP-508, DP-510, DP-522, DP-625, DP-721, DP-921, and DP-942.

(Yikes!)

Will this really happen? The same court ordered Dish (when it was part of EchoStar) to dismantle its DVRs 3 years ago and the two companies have been stuck in court sorting things out. Of course, as TiVo continues to win cases, it also collects penalties, plus interest, from Dish. Dish has appealed and the two show up again in court on June 26.

Could this happen to your non-TiVo DVR? Possibly.

All a TiVo spokesman would tell me is that TiVo does have license agreements with Comcast, Cox and DirecTV. Some of these range from the companies rebranding TiVo’s actual software for their own customers to just a license agreement.

TiVo would love to have similar partnership with all TV companies that have DVRs, he said. Those, presumably, would include Time Warner Cable, Verizon FiOS, AT&T U-verse plus a plethora of others who offer TV service outside of Orange County. At the moment, no other patent lawsuits are pending between TiVo and other companies.

Based on the original 2006 court order for a permanent injunction against Dish, the patent in question is this one, dealing with ”Multimedia time warping systen.” I’m not a lawyer but the patent #6,233,389 does seem to cover the gist of the whole point of a DVR: to pause, rewind and record live TV.

Once Tivo is finished with Echostar you can bet good money that they will be coming after your DVR. Their position is that it is not possible to make a DVR without violating their patent.

[Skaggs]

Jun 19, 2009 2:26:37 GMT -5 davidjr said:

Once Tivo is finished with Echostar you can bet good money that they will be coming after your DVR. Their position is that it is not possible to make a DVR without violating their patent.

I hope TiVo comes after TWC and makes them throw all their DVRs in the recycle bin or run TiVo software.

The SARA software is such a piece of junk, I bought two TiVo HD's.

[xzi]

According to the article, Tivo already has license agreements with Comcast, Cox and DirecTV (obviously on DIRECTV since they had/have Tivos) but TWC seems up for grabs. Also, DIRECTV bought out ReplayTV a few years ago as well and now with mutli-room viewing over IP and TV Apps showing up in their DVRs, it's not out of the realm to think that ReplayTV influences their DVRs more than Tivo these days.

[Skaggs]

TiVo Elbows Into Living Rooms With Recording Patent, Rentals
By Andy Fixmer, Bloomberg.com, June 22, 2009

June 22 (Bloomberg) -- TiVo Inc., armed with a federal court ruling backing the company’s digital-recording patent, plans to elbow its way onto every U.S. pay-television system to attract millions of new subscribers.

The Alviso, California-based DVR pioneer is in talks with pay-TV providers to sell its recording and playback service to more of the industry’s 103 million U.S. customers or license its technology, according to two people with knowledge of the plans.

“They will leverage this to become a much bigger player,” said Anthony Shaw, a partner and intellectual property litigator at Dewey & LeBoeuf LLP in Washington. “They don’t want to be a patent-holding company.”

The June 2 ruling against Dish Network Corp., the second- largest satellite TV service, gives TiVo a chance to boost revenue by adding to its 3.2 million subscribers. The company, which has struggled to make money, may also become a buyout target for Dish or the larger DirecTV Group Inc. as the satellite companies seek an advantage over each other, said Chris Marangi, an analyst with Gabelli & Co. in Rye, New York.

For $12.95 a month, TiVo subscribers can record, pause and replay shows in progress, and access thousands of movie rentals online from Amazon.com Inc., Netflix Inc. and Blockbuster Inc., all from the living-room TV. That dwarfs the video-on-demand offerings of pay-TV. The company also sells DVRs and provides software in cable and satellite set-top boxes.

Time Warner Talks

TiVo is in talks to provide service through Time Warner Cable Inc., the second-largest U.S. cable-TV provider, Landel Hobbs, the New York-based pay-TV service’s chief operating officer, said on a June 11 conference call. TiVo already has deals with Comcast Corp. and DirecTV, the largest U.S. pay-TV companies.

TiVo declined to comment on its discussions with pay-TV companies, said Mike Boccio, an outside spokesman. Time Warner Cable, which has 13.1 million video customers, wouldn’t elaborate on Hobbs’s comments.

DirecTV declined to discuss TiVo, said Darris Gringeri, a spokesman. Dish, based in Englewood, Colorado, also declined comment, said spokeswoman Kathie Gonzalez.

A federal judge in Texas ruled that Dish and satellite- equipment provider EchoStar Corp., both controlled by Charles Ergen, violated TiVo’s patent on technology that allows viewers to record and play back video at the same time.

‘Come to Terms’

TiVo “can go around to everyone and say, ‘You have to come to terms with us, we have already taken on Dish and our patents withstood,’” said Shaw, who has represented Intel Corp. and Samsung Electronics Co. “If there was an easy way around the patent, Dish would have already adopted one.”

The court ordered Dish to disable offending players and provide notice before attempting a workaround. Dish and EchoStar were ordered to pay $103 million to cover royalties while they continued to provide their DVR product. Both are appealing and have told the court they are developing a DVR that won’t use TiVo technology.

TiVo leapt 53 percent after the ruling. The shares rose 14 cents to $11.05 on June 19 in Nasdaq Stock Market trading, giving the company a market value of $1.16 billion. DirecTV, based in El Segundo, California, rose 97 cents to $23.68 on the New York Stock Exchange. Dish rose 9 cents to $15.18.

The legal victories haven’t yet translated into sustainable profit. With about $250 million in annual sales, TiVo lacks the heft of larger pay-TV providers. The company spent more building and marketing its digital-recording devices last year than it received in hardware sales.

TiVo reported its first annual profit of $104 million in March, the result of damages paid earlier by Dish and EchoStar, also based in Englewood. In May, the company recorded a fiscal first-quarter loss of $4.13 million as sales slid 9.7 percent to $54.9 million. Subscribers fell 16 percent.

Litigation ‘Not Preferred’

In a June 8 report, Mark Argento, an analyst at Craig- Hallum Capital Group LLC in Minneapolis, also identified Amazon, Apple Inc., Cisco Systems Inc., Microsoft Corp. and Netflix as possible TiVo suitors. Officials at Seattle-based Amazon and Los Gatos, California-based Netflix declined to comment.

“We do not anticipate any changes in our current working relationship with TiVo,” Terry Alberstein, a spokesman for San Jose, California-based Cisco, said in an e-mail. The company makes set-top boxes and DVRs.

Apple, based in Cupertino, California, and Redmond, Washington-based Microsoft, which operate services that sell movies, music and video games, also declined to comment.

TiVo wants pay-TV companies to let subscribers choose between DVR services, said the people, who declined to be named because the company’s deliberations are private. Alternatively, TiVo may seek licensing or other revenue, they said.

Comcast, DirecTV

Other pay-TV operators may also be infringing, Chief Executive Officer Tom Rogers said on a May 28 conference call.

“Is it certainly possible that we will find ourselves unable, in certain cases, to establish a commercial relationship,” Rogers said. “In those cases, will we consider litigation? Obviously, but that’s not our preferred approach.”

DirecTV plans to offer high-definition TiVo in 2010. The company has more than 18 million U.S. subscribers and could gain an edge over Dish with an exclusive accord with TiVo, Craig Moffett, an analyst at Sanford C. Bernstein & Co., wrote in a June 3 report.

Dish would probably have to pay more than DirecTV or Comcast in a settlement with TiVo, said Marangi. Gabelli held 56,000 TiVo shares as of March 31, according to data compiled by Bloomberg. Philadelphia-based Comcast, with 24.1 million cable subscribers, offers DVRs with TiVo in the Boston area and is expanding the service to Chicago.

Spokesman for Verizon Communications Inc. and AT&T Inc. said their TV services don’t infringe TiVo patents. Atlanta- based Cox Communications Inc. has an agreement with TiVo. Bethpage, New York-based Cablevision Systems Corp., which is developing a remote recording system, and Charter Communications Inc., based in St. Louis, declined to comment.

“TiVo is putting a war chest together in case they have to go after other providers in court,” Shaw said. “They probably expect some other providers will put up a fight, too.”

[Skaggs]

Dish Network faces DVR shutdown if it loses court case
1Q net income falls on more promotions
By: DEBORAH YAO
Associated Press
05/10/10 3:10 PM EDT


Read more at the Washington Examiner: www.washingtonexaminer.com/

NEW YORK — Dish Network Corp. reported a 26 percent drop in first-quarter net income as the satellite TV company stepped up promotions to reel in customers. Its CEO also warned the company may shut down millions of digital video recorders in a dispute with TiVo Inc.

Dish CEO Charlie Ergen said Monday that he's prepared to shut down the DVRs if a court sides with TiVo in a patent-infringement case. The alternative is to pay TiVo, a pioneer in DVR technology, licensing fees.

"The only thing we can control is to shut down boxes, so we have to, obviously, if we were to lose in the court procedures," he told analysts during a conference call on the company's earnings.

"We're prepared to do that. That obviously will have a material negative effect on our business."

Sanford Bernstein analyst Craig Moffett said that 7.3 million DVRs could be affected and that the cost to replace and shut down the boxes could run close to $3 billion.

Moffett noted that $3 billion is significant given Dish's market value of $10 billion. He also said that Dish could lose millions of customers in weeks if the DVRs were disabled.

TiVo sued Dish in 2004 for infringement of its real-time TV pausing and rewinding features. A three-judge federal appeals panel in Washington sided with TiVo in March. Dish, the nation's second-largest satellite TV provider, has asked the full appeals court to review the case. But Dish has acknowledged that a review is unlikely.

If the appeals court doesn't grant the review, the case would return to a federal court in Texas for enforcement of an injunction on Dish's DVR boxes that infringe TiVo's patent. A federal judge would have to decide whether redesigned software for Dish's DVRs still infringe on TiVo's patents.

Moffett doesn't believe Dish will agree to pay TiVo "modest monthly fees" of $2 to $3 per subscriber to settle the case.

Meanwhile, Dish has been working on turning around operations. It has positioned itself as the low-cost option in subscription TV, and its aggressive discounting snagged 237,000 net subscribers in the quarter. That's a solid rebound from a year ago when it lost customers to DirecTV Inc. and phone companies that offer video.
But that turnaround has been costly. Dish's earnings have fallen for four quarters in a row as promotions and higher advertising costs took a big bite. Its promotions included offering one year of free service in a few cities to customers who switch from DirecTV.

In the quarter, Dish earned $230.9 million, or 52 cents per share, for the January-March period. That compares with $312.7 million, or 70 cents per share, a year ago. The cost to acquire subscribers rose by 41 percent to $412 million.

Revenue rose 5 percent to $3.06 billion from $2.91 billion.
Analysts polled by Thomson Reuters had forecast a smaller profit of 50 cents per share on revenue of $3.05 billion.

Shares of Dish, which is based in the Englewood, Colo., rose by 45 cents, or 2.1 percent, to $21.75 in afternoon trading. The stock rose as high as 6.2 percent in earlier trading Monday.

Dish Network's latest results show that it is gaining some ground on its rivals.

DirecTV, which has about 18.7 million subscribers to Dish's 14.3 million, added only 100,000 U.S. customers in the first quarter.

Cablevision Systems Corp. gained just 900 video subscribers in the period, while Comcast Corp. lost 82,000 and Time Warner Cable Inc. lost 42,000.
___
Associated Press Writers Michelle Chapman and Andrew Vanacore in New York contributed to this report.


Read more at the Washington Examiner: www.washingtonexaminer.com/economy/dish-network-1st-quarter-net-income-falls-even-as-company-brings-in-new-subscribers-93262114.html#ixzz0nZGKnGQ3

[Skaggs]

Appeals court grants Dish review of TiVo case
By The Associated Press, Friday, May 14, 2010

The San Francisco Chronicle

(05-14) 09:06 PDT PHILADELPHIA, (AP) --

A federal appeals court in Washington has granted satellite TV company Dish Network a surprise, full-court review of a ruling it had earlier lost to TiVo.

Dish CEO Charlie Ergen himself acknowledged that getting a review granted was unlikely. Dish risked having to disable millions of digital video recorders if it loses again.

DVR pioneer Tivo Inc. had sued Dish Network Inc. for patent infringement. A three-judge panel on March 4 sided with TiVo. On Friday, the U.S. Court of Appeals for the Federal Circuit granted Dish the review it wanted and set aside the March ruling.

Shares of TiVo are down by $6.60, or 38 percent, to $10.79 in midday trading. Dish shares are up $1.31, or nearly 6 percent, to $23.27.

[BenJF3]

Tivo isn't what it once was. Many companies are showing they can do it better. Dish os one, Windows Media Center is another and Moxi as well.

[Skaggs]

Will Dish Network Have to Disable Its DVRs?
By Swanni

Washington, D.C. (April 20, 2011) -- The U.S. Court of Appeals today revealed that it has affirmed a lower court ruling that Dish Network must disable an uncertain number of subscriber DVRs because they violate a patent owned by TiVo.

However, Dish immediately issued a statement saying that it plans to appeal the ruling to the U.S. Supreme Court as well as seek an injunction against the Appeals Court ruling that would allow the subscriber DVRs to continue to operate while the case is ongoing.

The satcaster added that the ruling, even if upheld by the U.S. Supreme Court, would not affect a large portion of its subscriber base.

"Existing DISH Network customers with DVRs are not immediately impacted by these recent developments," the Dish statement said. "The disablement ruling covers only certain older generation MPEG2 DVRs. We have already upgraded many of these customers and, if we are unsuccessful in obtaining a stay, we will work as quickly as possible to upgrade the remaining customers to our current generation DVRs, as these are not at issue in the ruling."

The Appeals Court also ruled that Dish Network must pay fines for ignoring previous rulings that it must disable the DVRs. But in a victory for Dish, the court vacated both a contempt charge against the satcaster and some damages that had been awarded to TiVo in a previous ruling.

Today's development is the latest chapter in a seven-year legal battle between Dish and TiVo. TiVo has argued that Dish's DVR software has violated its patents. The satcaster has been ordered to pay nearly $400 million in damages in other court rulings.

However, the issue of whether Dish must disable its DVRs could be the most costly aspect of the case if the satcaster ultimately loses. While it's unclear how many DVRs would have to be replaced, Dish would likely incur significant costs.

It's also possible that Dish could agree to pay TiVo a licensing fee for operating the DVRs found to be in violation.

TiVo today issued a statement saying that it's "pleased" with the Court of Appeals ruling.

[Skaggs]

Dish Network, TiVo Settle Patent Case For $500M
By Swanni

Washington, D.C. (May 2, 2011) -- Dish Network has agreed to pay TiVo $500 million to settle a seven-year DVR patent lawsuit that has threaten to inflict substantial damage on both companies over the years.

The companies made the disclosure this morning. The settlement calls for Dish to pay TiVo $300 million at first and then another $200 million in six annual installments between 2012 and 2017.

The announcement ends the legal dispute once and for all. TiVo originally sued Dish and its sister company, EchoStar, back in 2004, charging a patent violation for its 'Time Warp' feature which allows the recording of one show while watching another.

Dish has maintained that any patent infraction occurred on older DVRs, but the company was in danger of being ordered to disable an untold number of DVRs if it lost the case in court.

The announcement also said the parties would be granted certain patent licenses to each other. TiVo has granted Dish Network a license under its 'Time Warp' patent and other patents for the remaining life of those patents.

Swanni Sez:
Commentary:
While paying $500 million is hardly a drop in the bucket, even over several years, Dish Network would seem to be the winner today. The company has been facing the possibility of paying much more -- and being ordered to disable perhaps millions of its DVRs. To walk away from this sticky case by initially paying basically what it paid to buy the bankrupt Blockbuster is a clear victory.