DISH NETWORK AND ECHOSTAR STATEMENT REGARDING TIVO

[Scott Greczkowski]

DISH NETWORK AND ECHOSTAR STATEMENT REGARDING TIVO

ENGLEWOOD, Colo. – Sept. 4, 2009 – DISH Network L.L.C., a subsidiary of DISH Network Corporation (NASDAQ: DISH), and EchoStar Technologies L.L.C., a subsidiary of EchoStar Corporation (NASDAQ: SATS), issued the following statement regarding recent developments in EchoStar Communications Corporation vs. Tivo:
“We are pleased that the district court rejected Tivo’s request to award a billion dollars in sanctions and that it found that any violation of the injunction was not willful. While we disagree that any amount of sanctions was warranted, the decision confirms our belief that we designed around Tivo’s patent in good faith. We believe that we ultimately will prevail on appeal.”

 

[Scott Greczkowski]

Got the pr from Dish before I saw what they were commenting on...

And here is what they were commenting on.

Dish Network Corp. and EchoStar Corp. were told to pay almost $200 million to San Jose-based TiVo Inc. for contempt of an order that it stop providing its DVR service after losing a patent-infringement ruling. TiVo, a pioneer of digital-video recording services, had sought $974.5 million from Dish for contempt of court in their 5 1/2-year patent battle. Dish, the second-biggest U.S. satellite-television provider, and EchoStar told a federal judge in July that the company has acted in good faith and sanctions aren't appropriate, though if they were, $138 million would be a fair total for continuing to infringe a TiVo patent.

You can read the rest at Bay Biz Buzz: Dish ordered to pay TiVo $200 million - ContraCostaTimes.com

 

[Juan]

Do they have to disable any DVR"s?

 

[Voyager6]

Do they have to disable any DVR"s?

The Judge's order to disable the DVR's has been stayed by the Appeals Court. We will have to wait for the Appeals Court to sort through the mess the Judge has made of this case and come to a resolution.

 

[Scott Greczkowski]

Here is the ruling as issued by the Judge.

 

[MikeD-C05]

Now we see why we are paying so much for DVR fees PER DVR RECEIVER. Now how much longer will DISH have to keep paying these penalty fees? I see that Charlie made sure that he was covered by charging PER DVR receiver and has made a lot more money then he will have to pay out to Tivo. But sooner or later I would think that this has to end. It would seem to me that the courts would be tired of hearing these continued charges, penalties, appeals etc. Sooner or later some Judge is going to award Tivo enough money to force Charlie's hand ; either license the software or buy Tivo. Especially since he is making over 900 million a year in DVR fees like the court order says. So 200 million isn't that much when you consider he still made 700 million this year on dvr fees. He could make so much more just licensing the software and working with TIVO to make some enhancements on DISH dvrs. Like being able to watch anything recorded on any dvr in your house. Besides DISH paying out these penalties, time and time again, just keeps Tivo going and litigating against DISH themselves.

 

[David_Levin]

So where are we ?
Is the appeal on the validity of the software work-around still in court ?

Is the 200 mil to cover the period from the 1st penality to when the work-around was installed (or through some other date of violation)?

And finally, is the patent review separate from all this. And would it only effect future violations ?

Are there any upcoming dates for the appeal or patent review process?

 

[Stargazer]

In order for it to have to be 900 million a year there would have to be 12 million subscribers at $6 per month (or half that many at $12 per month for those having two DVR's) and I seriously doubt that many people have DVR service. I know more people without DVR than with DVR service.

 

[KAB]

Now we see why we are paying so much for DVR fees PER DVR RECEIVER. Now how much longer will DISH have to keep paying these penalty fees? I see that Charlie made sure that he was covered by charging PER DVR receiver and has made a lot more money then he will have to pay out to Tivo. But sooner or later I would think that this has to end. It would seem to me that the courts would be tired of hearing these continued charges, penalties, appeals etc. Sooner or later some Judge is going to award Tivo enough money to force Charlie's hand ; either license the software or buy Tivo. Especially since he is making over 900 million a year in DVR fees like the court order says. So 200 million isn't that much when you consider he still made 700 million this year on dvr fees. He could make so much more just licensing the software and working with TIVO to make some enhancements on DISH dvrs. Like being able to watch anything recorded on any dvr in your house. Besides DISH paying out these penalties, time and time again, just keeps Tivo going and litigating against DISH themselves.

200 Million VS the 974 Million Tivo was seeking.

 

[Scott Greczkowski]

And here is Tivo's statement on the matter.

TiVo Statement on U.S District Court for the Eastern District of Texas Ruling on Contempt Sanctions Against EchoStar Communications Corporation

ALVISO, CA — September 4, 2009 — TiVo Inc. (NASDAQ: TIVO), the creator of and a leader in television products and services for digital video recorders (DVR), offered the following statement today regarding the contempt sanctions ordered by the United States District Court, Eastern District of Texas, in the lawsuit against EchoStar Communications Corporation:

"We are pleased by the Court's ruling to impose contempt sanctions of approximately $200 million against EchoStar for its continued violation of a Court-ordered permanent injunction, and to award TiVo its attorney fees and costs incurred during the contempt proceedings. This brings total damages and sanctions in this case to approximately $400 million through July 1, 2009, plus attorney fees, and is exclusive of potential further damages and sanctions.

Additionally, we are pleased that the Court 'will seriously entertain the award of enhanced sanctions' if 'EchoStar is unsuccessful on appeal and nevertheless continues to disregard this Court's orders.'

We are confident that this ruling brings us closer to final resolution."

 

[nelson61]

--------- Especially since he is making over 900 million a year in DVR fees like the court order says. So 200 million isn't that much when you consider he still made 700 million this year on dvr fees. ----------------.

One should not forget that he also has to recover the cost of the box over it's lifetime. Say the dvr and hard drive portion of the box costs $125 and has 3 year depreciation (similar to a laptop) of $3.50 per month. Add that on to the royalty and you are up to somewhere close to $6/month in actual costs. Seems to me it is not a money maker, only a way to provide better customer satisfaction and retention.

 

[Stargazer]

So is it safe to say that Tivo stock is a good buy right now?

 

[Juan]

So is it safe to say that Tivo stock is a good buy right now?

they were asking for a billion

 

[vampz26]

So is it safe to say that Tivo stock is a good buy right now?

Been hovering consistently at about 10 bucks a share and probably will for some time until there is any 'major' news...

 

[mike123abc]

The only thing that this does is guarantee that TiVo will have enough cash to go on for a few more years. With constant cash infusions from law suits, TiVo will remain in business.

I wonder if Dish will appeal this ruling too? Since they are appealing the other ruling, I wonder if they will appeal this one or just pay it?

 

[harshness]

So is it safe to say that Tivo stock is a good buy right now?

Not if you look at their financials.

 

[harshness]

http://www.nytimes.com/2009/09/05/technology/companies/05bizbriefs-DISHNETWORKA_BRF.html

 

[Claude Greiner]

I still say the Judge who ruled in this case is an idiot and doesn't understand the facts at hand. Tivo is wrong and Echostar is right!

By the direction this whole thing is going, I would almost think it would be better for Charlie to buy Tivo and then go ahead and sue all the other cable providers like Comcast and AT&T that have DVR technology and do the exact same thing to his competition that Tivo did to his company.

As far as the Royalties, its a tough call. I don't believe the DVR service fee covers the manufacturing and maintaince cost of the DVR, as eventually all hard drives will go bad and the entire DVR will need to be replaced. But if you look at a customer retention side of things, they are making well over the $5.98 per month in additional customer revenue from customers who would have otherwise cancelled if it was not for having a DVR.

Here something else thats intresting, I think just about all the FTA manufactures have a DVR type receiver that they have on the market. If Charlie bought Tivo, he wouldn't have to prove piracy to shut down the FTA manufactures, he would just have to sue them over the DVR patient and run them all out of business that way.

 

[clydesam]

I think charlie should buy tivo. Then they can continue to charge directv and other cable companies using the tivo software the fees. I thing the whole idea is stupid. These patients should not had ever been given to tivo in the first place. Contrary to what they say about being the inventor of the dvr isnt even true . The invention of the dvr a company forget the name but produced a dvr called replaytv.Which was eventually bought by directv ,which I dont understand why they dont produce directreplaytv units instead of paying tivo. I just checked the replaytv website and still shows Directv as still the owners. Tivo was just the first to get it on the retail market. I dont understand why replaytv didnt get a patent before tivo did.

 

[harshness]

I still say the Judge who ruled in this case is an idiot and doesn't understand the facts at hand.

If the judge doesn't understand the facts, it is largely the fault of Echostar for not making sure he understands.

I don't believe the DVR service fee covers the manufacturing and maintaince cost of the DVR, as eventually all hard drives will go bad and the entire DVR will need to be replaced.

If you consider the cost differential between a DVR and a non-DVR, I think you might change your tune. The gross revenue on a standard receiver over two years is $120. They're grossing 11.98/month on the named DVRs and over the course of two years, that's $288 in revenue. $168 almost surely covers the cost of a tiny hard drive and any accelerated rate of failure.