DISH NETWORK AND ECHOSTAR STATEMENT REGARDING TIVO

[Greg Bimson]

The government spends an awful lot of money trying to make sure that companies don't exert monopoly power and extract excessive profits from consumers.

But then they bless these "inventions" by giving them patents and then watch as these companies extract money from companies in the form of huge royalties or from consumers in the form of higher prices that wouldn't exist if there were more competition in a given category.

Let's reverse this, shall we?

The patent system within the United States was practically born out of the Constitution. So our founding fathers certainly believed that inventors were to be rewarded with a "monopoly" for a period of time, to allow the inventor to recoup those investment on invention dollars.

It was much later that the Sherman Anti-Trust acts were signed, thus inserting the government into monitoring abuses by companies with monopoly power.

I'm all for rewarding innovation. Everyone deserves to make money of of their TRULY innovative products. But many of these products AREN'T innovative.

That is very true. I can guarantee you that you won't find one patent that doesn't incorporate something that was either within a prior patent or out in the public domain. All one needs to do is simply look at the telephone, and the patent associated with it.

And the patent office merely gives them legitimacy, and costs all of us with higher prices, decreased competition, and decreased capabilities as the monopolist rarely has to increase the quality of his product (anyone remember cable tv before Verizon and the Satellite cos. forced them to get their act together?)

But the creation of cable TV wasn't the result of patent abuse; localities were happy to give one company the rights to dig up an entire county and run the cable system. In other words, localities were happy to allow a cable monopoly. Now they are upset they aren't getting enough tax dollars due to defections of the cable ranks.

 

[BobMurdoch]

My cable TV statement was merely for comparing monopoly power abuses. I realize there wasn't a patent issue there.

Tivo made a great product. But then overcharged for it. Then they decided to switch from catering to consumers to bludgeoning content distributors. DirecTV ditched them, and now they are fighting for their corporate life. If the courts keep handing out these huge sums of money they will survive, either independently or as part of someone like Echostar once they figure it is cheaper to own them than to keep paying them judgements. If they don't, they blow away.

 

[jacmyoung]

My cable TV statement was merely for comparing monopoly power abuses. I realize there wasn't a patent issue there.

Tivo made a great product. But then overcharged for it. Then they decided to switch from catering to consumers to bludgeoning content distributors. DirecTV ditched them, and now they are fighting for their corporate life. If the courts keep handing out these huge sums of money they will survive, either independently or as part of someone like Echostar once they figure it is cheaper to own them than to keep paying them judgements. If they don't, they blow away.

The $200M "handed out" is hardly a huge sum, it is less than even E* had conceded to which was up to $360M. And whether TiVo can even see a penny if it is entirely dependent on the outcome of the appeal.

 

[vampz26]

The $200M "handed out" is hardly a huge sum, it is less than even E* had conceded to which was up to $360M. And whether TiVo can even see a penny if it is entirely dependent on the outcome of the appeal.

Here's to Tivo going down if flames before than even has a chance to happen...

 

[Greg Bimson]

Tivo made a great product. But then overcharged for it.

That implies that someone else was charging a more reasonable price. Who? I mean, when a startup has more expenses than an established company, the established company has a better economy of scale to implement a plan cheaper. However, when that plan incorporates infringing upon a patent...

Then they decided to switch from catering to consumers to bludgeoning content distributors.

I would hardly consider filing suit (and winning) for patent infringement against one content distributor "bludgeoning content distributors". When the business plan is subverted by an illegal act, the rules (and plans) are changed.

DirecTV ditched them, and now they are fighting for their corporate life. If the courts keep handing out these huge sums of money they will survive, either independently or as part of someone like Echostar once they figure it is cheaper to own them than to keep paying them judgements. If they don't, they blow away.

I wouldn't say that. Sure, TiVo's received one $105 million payment, but they've still been slightly profitable since.

 

[vampz26]

Sure, TiVo's received one $105 million payment, but they've still been slightly profitable since.

Almost 5MM below EBITDA....

That is pretty slight...

 

[jacmyoung]

The appeals court today granted E*'s motion for judicial notice of the PTO initial action rejecting the TiVo software claims:

http://www.cafc.uscourts.gov/motions/Orders/2009/2009-1374.9-17-09.1.PDF

 

[Voyager6]

The appeals court today granted E*'s motion for judicial notice of the PTO initial action rejecting the TiVo software claims:

http://www.cafc.uscourts.gov/motions/Orders/2009/2009-1374.9-17-09.1.PDF

Tivo can't be happy about this decision.

 

[jacmyoung]

Tivo can't be happy about this decision.

Since they brought up the contempt issue, TiVo has been superficially spoiled by the TX Eastern District Court, but so far has not received a favorable ruling in the DC appeals court, nor anything good at the patent office regarding this patent.

 

[navychop]

Does this mean the lower court must reconsider, in light of PTO findings?

 

[Voyager6]

Does this mean the lower court must reconsider, in light of PTO findings?

No, I think that this decision is that the Appeals Court will use the PTO finding as part of the evidence in E*'s appeal of the contempt ruling.

 

[jacmyoung]

Does this mean the lower court must reconsider, in light of PTO findings?

This has nothing to do with the lower court on the contempt issue. This order only request that when the appeals court merits panel takes up E*'s appeal, they must look at the PTO document as an evidence, in E*'s favor of course.

However whether the merits panel will rely on such evidence to make their decision will be at their own discretion, they do not have to rely on it, but they can if they want to. Regardless they cannot ignore such evidence.

A possible relevance of this order to the lower court might be, since the sanction issue is not final yet with the lower court, if TiVo would continue to pursue maximum sanctions against E*, E* can use this appeals court order as one of the evidence to urge the lower court to keep the sanctions at a minimum. Of course any sanctions at the lower court will not be enforced until the appeals court makes its decision anyway. If the appeals court eventually rules in E*'s favor, the sanctions from the lower court will be vacated.

One interesting thing though, the remaining sanction items are award of the attorney fees and court costs. While the lower court had said it would reward TiVo those costs, now it appears TiVo is trying to delay such decision. Because E* may also ask the court to do the opposite, award E* its costs, in the event E* wins on the appeal.

It looks now a double edged sword.

 

[Poke]

Yeah sounds like TiVo is being a cry baby because their getting their butts kick by Dish! Dish just makes the best DVR out there and they cant stand it. So Tivo has to try to sue all of the other providers so they can try to stay afloat. It will be good to get this over with and maybe then Tivo will move on. Thats just my 2 cents.

 

[Curtis0620]

Yeah sounds like TiVo is being a cry baby because their getting their butts kick by Dish! Dish just makes the best DVR out there and they cant stand it. So Tivo has to try to sue all of the other providers so they can try to stay afloat. It will be good to get this over with and maybe then Tivo will move on. Thats just my 2 cents.

All started with DISH stealing TiVo technology.

 

[jacmyoung]

All started with DISH stealing TiVo technology.

But if the rejection of the TiVo's patent claims eventually stands, who actually had stolen whose money?

The current PTO's decision is basically saying TiVo had "stolen" someone elses' technology.

 

[navychop]

All started with DISH stealing TiVo technology.

You may wish to believe this, and some do. However, that is the crux of the problem.

Can Tivo genuinely claim to be first, and own the technology, when Replay, and perhaps MicroSoft, had similar products out before Tivo?

Should anyone have been awarded a patent, on what can be viewed as obvious?

The concept cannot be patented, only the implementation.

 

[Curtis0620]

You may wish to believe this, and some do. However, that is the crux of the problem.

Can Tivo genuinely claim to be first, and own the technology, when Replay, and perhaps MicroSoft, had similar products out before Tivo?

Should anyone have been awarded a patent, on what can be viewed as obvious?

The concept cannot be patented, only the implementation.

This is a fact, already proven in court.

DISH will continue to pay and the price continues to rise by the day. Options are running out for DISH.

 

[navychop]

 

[jacmyoung]

TiVo's patent at issue is a process patent, not a concept. When E* implemented its DVR functions with the old software, TiVo proved the E* old implementation infringed on the software patent claims which disclosed such process.

Now E* modified the software to avoid any infringement of that process, that of course is a debate for another 100-page chapter.

The issue here is, now the PTO has ruled the TiVo's such disclosed process should not have been patented by the PTO in the first place, and the appeals court has decided such recent PTO's decision should be included in the evidence when reviewing the E*'s appeal.

The PTO rejected the software claims not because the TiVo patent is a "concept", rather that there are two prior similar process patents that had already disclosed the same technology that the TiVo software claims try to disclose. Therefore the TiVo's patent claims are rejected.

 

[Curtis0620]

TiVo's patent at issue is a process patent, not a concept. When E* implemented its DVR functions with the old software, TiVo proved the E* old implementation infringed on the software patent claims which disclosed such process.

Now E* modified the software to avoid any infringement of that process, that of course is a debate for another 100-page chapter.

The issue here is, now the PTO has ruled the TiVo's such disclosed process should not have been patented by the PTO in the first place, and the appeals court has decided such recent PTO's decision should be included in the evidence when reviewing the E*'s appeal.

The PTO rejected the software claims not because the TiVo patent is a "concept", rather that there are two prior similar process patents that had already disclosed the same technology that the TiVo software claims try to disclose. Therefore the TiVo's patent claims are rejected.

Until TiVo educates the Patent Office.