Federal Judiciary

Federal Circuit Affirms Contempt Finding in TiVo v. Echostar

By Michael C. Smith

This morning the Federal Circuit issued its opinion Download 09-1374 affirming Chief Judge Folsom's order finding Echostar in contempt of the court's permanent injunction order.  As readers may recall, the Federal Circuit previously affirmed the claims construction of the software claims and the jury verdict.  Importantly, the permanent injunction was not appealed.

On remand, TiVo sought to have Echostar held in contempt for violating the court's injunction.   To make a (very) long story short, Judge Folsom agreed, and assessed sanctions of $90 million.  Today the Federal Circuit wrote that "[w]e conclude that the district court did not abuse its discretion in finding that EchoStar?s modified software raised no substantial open questions of infringement. . . . EchoStar?s proposed standard would make it almost impossible for a district court to employ a contempt proceeding to enjoin infringing products. Compelling the parties to undertake a new trial every time there is a dispute over previously adjudicated infringing products would fail to serve the goals of judicial economy. We disagree with the dissent that a new trial is necessary here for the parties to reargue an issue ? the operation of the exact same PID filter ? that has now been argued multiple times to the district court."

In a nod to the district court's expertise, the court noted "The district court has presided over this case for over five years. Given its familiarity with the parties, the patent at issue, and the infringing products, in addition to the well articulated reasoning for its decision, we do not find an abuse of discretion in the court?s decision to hold contempt proceedings."

The court was also not impressed with Echostar's claim that the injunction was overbroad, noting that it did not appeal it.  "EchoStar raised a variety of issues including claim construction, infringement, and various other trial rulings in its appeal from the district court?s prior judgment. See TiVo, 516 F.3d 1290. EchoStar even moved us to stay the permanent injunction pending that appeal, and we granted a stay. EchoStar strongly protested the injunction, detailing the potential damage it would suffer from the injunction in its motion to stay. However, it failed to raise the issue on appeal. The fact that there were numerous other issues on appeal cannot excuse its failure to appeal the injunction. Had EchoStar brought an appeal on the injunction, we could have addressed its legitimacy. The time to do so has long passed. . . . . We thus agree with the district court that EchoStar waived any argument that the injunction was overbroad."

Judge Rader filed a nine-page dissent in response to the majority's 26 page opinion.

Full post as published by Eastern District of Texas Federal Court Practice on March 04, 2010 (boomark / email).