Intellectual Property Law

The action is fast and furious in the patent dispute between digital video recording developer TiVo and satellite communications giant Echostar Communications. First, last week the U.S. District Court for the Eastern District of Texas issued a permanent injunction prohibiting Echostar from ?making, using, offering to sell or selling? products that permit the recording of television programs by the method claimed in TiVo?s patent. The very next day, the Federal Circuit temporarily stayed the injunction until it can consider Echostar?s motion for a stay during the entire pendency of its appeal of the district court?s judgment.

This dispute began in January 2004 when TiVo filed suit against Echostar, alleging that Echostar?s digital recording system infringed its patent. In April of this year, a jury found that Echostar had willfully infringed TiVo?s patent and awarded TiVo almost $74 million in damages. Following the jury verdict, TiVo moved for treble damages, attorneys? fees and a permanent injunction. Judge David Folsom of the Eastern District of Texas denied TiVo?s request for treble damages and attorneys? fees, but increased the award to more than $89 million by adding $5.4 million for prejudgment interest and $10.3 million for ?supplemental damages.? Most significantly, the court also entered a broad injunction that not only barred Echostar from selling its infringing video recording feature as part of its satellite receiver products, but also directed Echostar to ?disable the DVR functionality? in substantially all of its receivers already in place.

Echostar immediately asked the Federal Circuit to stay the injunction. The Federal Circuit granted Echostar?s request by granting a ?temporary? stay and giving TiVo five days to respond. The permanent injunction issued by the district court will receive a careful review by the Federal Circuit, both in deciding Echostar?s motion for a stay and as part of Echostar?s appeal of the district court?s judgment. This case could thus be one of the first opportunities for the Federal Circuit to apply the guidelines set forth by the Supreme Court in its decision earlier this year in Ebay v. MercExchange.

Stay tuned. It should make for interesting viewing.

Today's Blogger: Bob Sloss