Dish: Ready to shut down DVRs if it loses lawsuit

[Bruce]

The chief executive of satellite TV provider Dish Network says he's prepared to shut down millions of DVRs if a court sides with TiVo in a patent-infringement lawsuit.

Charlie Ergen told analysts Monday that "the only thing we can control is to shut down boxes, so we have to, obviously, if we were to lose in the court procedures."

Dish: Ready to shut down DVRs if it loses lawsuit - Yahoo! Finance

 

[Scott Greczkowski]

He still playing a hand of poker. When he was asked if he was thinking of buying Tivo he said he hasn't really thought about it...

Yeah right...

 

[allargon]

They kill me with that 7 million #.

I guess lazy analysts just assume that the ruling affects the VIP series DVR's?

 

[sundaddy]

Does this affect the VIP722k?

 

[Scott Greczkowski]

From what I am being told NO it does not, none of the ViP receivers are part of this lawsuit. However some TiVO fans and lazy reporters will tell you yes because they want you to be scared.

I will say one thing...

If my ViP DVR's were shut off over this I would be the first one calling DIRECTV to hook me up again.

These lawsuits suck when we consumers are stuck in the middle.

 

[riffjim4069]

I can see where this thread is going...all questions have been asked, answered and debated a millions times in other threads.

 

[KAB]

I can see where this thread is going...all questions have been asked, answered and debated a millions times in other threads.

Agreed. Please close to avoid the panic attacks.

 

[Hemi 6.1]

UM, this is todays News Why would you close this?
May 10,2010

 

[ekilgus]

Well, I think while it's a big problem if Dish has to turn off the DVR function for the specified receivers, it's not the disaster it would be if the VIP receivers were included. Having said that, I believe that the Tivo lawyers know this, so to rachet up the pressure on Dish I suppose they will next try to get the VIP receivers included.

 

[Voyager6]

Wonder what Judge Folsom would do if he received a couple of million "thank you " notes from E* subscribers.

 

[Kheldar]

They kill me with that 7 million #.

I guess lazy analysts just assume that the ruling affects the VIP series DVR's?

I love this one. Even DishNet, in their quarterly report, acknowledges that the VIP series DVRS would be impacted. No one in the multiple threads on this topic have been able to provide documentation that the VIP series are excluded.

From the 2010 Q1 report, page 24:

If we are unsuccessful in overturning the District Court's ruling on Tivo's motion for contempt, we are not successful in developing and deploying potential new alternative technology and we are unable to reach a license agreement with Tivo on reasonable terms, we would be required to eliminate DVR functionality in all but approximately 192,000 digital set-top boxes in the field and cease distribution of digital set-top boxes with DVR functionality.

And from page 23:

On September 4, 2009, the District Court partially granted Tivo's motion for contempt sanctions. In partially granting Tivo's motion for contempt sanctions, the District Court awarded $2.25 per DVR subscriber per month for the period from April 2008 to July 2009... . By the District Court's estimation, the total award for the period from April 2008 to July 2009 is approximately $200 million...

Let's do the math on that.
$2.25 per month per DVR
April 2008 - July 2009 = 16 months
That means total award per DVR = approx $36.

Total award approximately $200 million

To get the total number of affected DVRs, you can divide the total award by the total per DVR:
$200,000,000 / $36 = 5.555 million DVRs (approx)\
Do you think that number would not include ViP DVRs?


Also, if the VIPs weren't infringing, why would they say they would have to "cease distribution of digital set-top boxes with DVR functionality". Why wouldn't they say they would have to "cease distribution of digital set-top boxes with DVR functionality, and continue distribution only of digital set-top boxes with our non-infringing DVR functionality."


People who claim the ViP series are not involved in this are simply deluding themselves.

 

[Scott Greczkowski]

As was pointed out before, the ViP units can not be piggybacked on this lawsuit and would require a new trial.

 

[Thomas22]

From today's Dish filing with the SEC:
If we are unsuccessful in overturning the District Court's ruling on Tivo's motion for contempt, we are not successful in developing and deploying potential new alternative technology and we are unable to reach a license agreement with Tivo on reasonable terms, we would be required to eliminate DVR functionality in all but approximately 192,000 digital set-top boxes in the field and cease distribution of digital set-top boxes with DVR functionality. In that event we would be at a significant disadvantage to our competitors who could continue offering DVR functionality, which would likely result in a significant decrease in new subscriber additions as well as a substantial loss of current subscribers. Furthermore, the inability to offer DVR functionality could cause certain of our distribution channels to terminate or significantly decrease their marketing of DISH Network services. The adverse effect on our financial position and results of operations if the District Court's contempt order is upheld is likely to be significant. Additionally, the supplemental damage award of $103 million and further award of approximately $200 million does not include damages, contempt sanctions or interest for the period after June 2009. In the event that we are unsuccessful in our appeal, we could also have to pay substantial additional damages, contempt sanctions and interest. Depending on the amount of any additional damage or sanction award or any monetary settlement, we may be required to raise additional capital at a time and in circumstances in which we would normally not raise capital. Therefore, any capital we raise may be on terms that are unfavorable to us, which might adversely affect our financial position and results of operations and might also impair our ability to raise capital on acceptable terms in the future to fund our own operations and initiatives. We believe the cost of such capital and its terms and conditions may be substantially less attractive than our previous financings.

 

[Scott Greczkowski]

Well here comes Tivo's lawyers again.

 

[Kheldar]

As was pointed out before, the ViP units can not be piggybacked on this lawsuit and would require a new trial.

There have been a lot of opinions shared about that, with no proof. And in all of their legal writings, DishNet is writing like they are assuming all DVRs are affected, not just on-ViP.

Can anyone provide any legal documentation in this case that excludes the ViPs?

 

[Thomas22]

As was pointed out before, the ViP units can not be piggybacked on this lawsuit and would require a new trial.

As was pointed out before, it only takes a contempt hearing to determine whether the ViP models violate the existing injunction. Ergen knows though that they infringe. That's why he has said repeatedly that all but 192,000 DVRs would have to be shut down.

 

[dangue]

UM, this is todays News Why would you close this?
May 10,2010

Because this isn't anything new. If Dish loses the appeal and does not buy TIVO or enter into a licensing agreement with TIVO then they will need to shut down the infringing DVRs (this has always been the case- Charlie said nothing new).

Why this should be locked and or merged with another TIVO thread is because (as in all other TIVO threads) this will degenerate into a does the injunction include the VIP series of receivers argument.

It's a lose-lose argument because no one can predict what Judge Folsom will do. (Side note: It scares me that I remember this guy's name from reading so much about the proceedings thus far. It shouldn't be about the whims of the judge, but the law that determines these things.)

From a starting point, the VIP series DVRs were not included in the lawsuit and thus should not be subject to the injunction. Some throw around the "colorably different" verbiage as a means for their inclusion, but that's conflating things. The colorably different standard was used to determine whether Dish's work around of the patent was sufficient to overcome infringement by receivers that were part of the lawsuit. To use the colorably different language to subject other receivers that were not part of the lawsuit to an injunction would be a tremendous stretch.

It has been repeatedly said that the VIP line handles DVR functionality completely differently than older, already found to be infringing models (hardware versus software handling of the functionality). This means that they hasn't even been a trial to determine if the newer models in fact infringe on the patent. This would seem to indicate that a new trial would be needed before their DVR capabilities be subject to an injunction shutting them off.

For the record, this is simply my interpretation based on what I have read online about the case. I have not taken the time to read through the actual documents, so if any of my factual statements are incorrect, that would alter the analysis.

 

[Kheldar]

As was pointed out before, it only takes a contempt hearing to determine whether the ViP models violate the existing injunction. Ergen knows though that they infringe. That's why he has said repeatedly that all but 192,000 DVRs would have to be shut down.

And that 192,000 DVR number has nothing to do with ViP DVRs.

 

[nelson61]

From today's Dish filing with the SEC:
If we are unsuccessful in overturning the District Court's ruling on Tivo's motion for contempt, we are not successful in developing and deploying potential new alternative technology and we are unable to reach a license agreement with Tivo on reasonable terms, we would be required to eliminate DVR functionality in all but approximately 192,000 digital set-top boxes in the field and cease distribution of digital set-top boxes with DVR functionality. In that event we would be at a significant disadvantage to our competitors who could continue offering DVR functionality, which would likely result in a significant decrease in new subscriber additions as well as a substantial loss of current subscribers. ------

Parse the statement. They do not say when in time the the VIP series would be affected. TIVO would have to go back to court to get them included in the order and we've seen how long this thing can be extended by court filins.

 

[Voyager6]

Both Thomas22 and Kheldar know that Judge Folsom's injunction only applies to the DVR's specifically named and found to infringe in the orignal lawsuit by TIVO. The VIP series has not been added or found to infringe. They are safe, for now.