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April 13, 2006
Desperate Victory
TiVo
pulled out a $74 million win from larger rival EchoStar Communications in patent-holder
heaven, the Eastern District of Texas, but the victory smacks of desperation.
Sam Baxter, attorney for TiVo, called the decision "life or death" for the company, which has been battered by competition. TiVo shares shot up nearly 20% in after-hours trading Thursday. The hope is that this trial victory will provide badly-needed leverage for TiVo to snag more patent licensing revenue. TiVo has less than 20 U.S. utility patents, all originating between 1997 and 2000.
TiVo blazed the trail of personal video recorders (PVR), but has been eclipsed by current market leader EchoStar, who's home base on the web is dish Network. TiVo is reported to have lost $650 million since its corporate start in 1997. The first TiVo box shipped in 1999.
TiVo had sought $87 million in damages, but the jury only gave damages from time of filing the lawsuit in January 2004, not the 2001 date TiVo had sought, because, it was reported, the jury was unconvinced that TiVo had done everything they could to promote their patent.
The jury deliberated only two hours before coming back with a trophy for TiVo. "We just looked at the evidence and tried to maintain the big picture," detailed juror Brenda Dotson, a third-grade teacher. None of the jurors owned a TiVo, but the judge did.
EchoStar seemed unfazed, sitting on a cash hoard of $1.25 billion. "We believe the decision will be reversed either through post-trial motions or on appeal. Additionally, the Patent Office is in the process of re-examining TiVo's patent, having determined there is a substantial question concerning the validity of the patent."
EchoStart countersued in nearby Texarkana, Texas with four of its own patents. Trial is slated for February 2007.
TiVo, meanwhile, hot on the heels of this judgment, will be seeking an injunction against EchoStar, which, if granted, is likely to be stayed pending appeal.
According to LegalMetric, a St. Louis company that tracks IP litigation, eight of nine (88%) of jury trials in the Eastern District of Texas since 1994 found in favor of the patent owner, besting the 75% rate of non-jury trials there.
Posted by Patent Hawk at April 13, 2006 8:55 PM | Damages