TIVO Decision with DISH delayed

[jacmyoung]

But after reading some of those Tivo investors comments, I couldn't help but decided to offer a few of my observations, based on the actual above court transcript, but also take a few of the Tivo's investors comments into consideration.

The comments below contain a lot of legal terms, I will explain them in as easy terms as possible, but don't blame me if you are bored after reading it

The first judge's question that caught my attention was:

"10:17 ct/ contempt proceedings, extent of design around;"

In a contempt proceeding, the first thing the judge must do is to look at the differrences between the accused devices (the current DVRs with the new design around), and the adjudicated devices (the same DVRs but with the old software design), and determine if the differences are only colorable or not, if the differences are only colorable, DISH is in contempt, if the differences are more than colorable, DISH is not in contempt, they can continue to use those DVRs.

So the question the judge asked above was just that, to find out the "extent of the design around", i.e. to look at the differences between the design around and the old design, and to determine if the differences are big enough to be more than colorable.

The second judge's comment of interest was:

"10:24 Chu/ don’t need to respond but Mr. Baxter has background re: case before Judge Ward;
10:24 ct/ are you conceding that this is perhaps not an issue;"

Here Tivo used a prior case by Judge Ward, it was a case in the 1960's, when several civil rights leaders including Martin Luther King Jr. was arrested for violating an order to prohibit them from protesting without getting multiple permits from several very hostile counties. Those activists knew they had no chance of be granted the permits, so they decided to ignore the requirement and protested anyway, and were cited for contempt.

First off it just showed how desparate TiVo was to cite that case, to think any judge would like to touch that case with a ten foot pole, and use that case alone to agree with TiVo?

It is no wonder the judge said: "are you conceding that this is perhaps not an issue;"

Because even if the judge cares to look at that case for guidance, the two are still different, in that case, the activists intentionally violated the order to prove a point, in this case DISH has said all along they obeyed the order.

Why? Because the court ordered them to disable "the DVR functions" not "any DVR functions", the DVR functions stated in the order must be refering to the design under the old software, and found to infringe, not any design around DVR functions, such as those DISH is using now, with the new software design around.

The third observation was after the following, which I touched on before:

"10:30 ct/ time period

10:30 Byrd/ 9/9/2006 through 4/18/08, as practical matter did receive design arounds before 4/18/08;
10:32 ct/ Echostar started implementing design around in October of ‘06;
10:32 Byrd/ responds, end of October;
10:32 ct/ damages;
10:33 Byrd/ totally unaffected;​

10:33 ct/ you feel entitled if there is a contempt order or not;"

Here after Tivo said the damages must cover 9/9/06 to 4/18/08, the entire period when the injunction was stayed on appeal, the judge said but wait a minute, DISH's design around started in 10/06, basically asking why not only to cover 9/10 to 10/06?

To which Tivo lawyer said no, it was the end of 10/06, of course just an argumentitive response.

The Tivo lawyer later tried to correct that by saying no the design around should not matter, to which the judge asked, even if DISH is not in contempt because of the design around?

Of course if DISH is not in contempt of the design around starting from the end of 10/06, the damage period will have to be just that, the period when the design around was not in place yet, not all the way to 4/18/08.

 

[jacmyoung]

Now let me get into a few Tivo investors comments a little, keep in mind they have taken things out of context, and only cited conversations which they found appeared to go Tivo's way, but if you read on you will agree it was in fact the opposite.

One of the things Tivo investors cited was when the DISH's lawyer told the judge the "colorable difference" finding would be a shame, meaning the DISH lawyer thought the judge should find DISH no longer infringing on Tivo's patent.

That was of course stupid for the DISH's lawyer to say that, and the judge laughed at that rightfully.

In a contempt proceeding, the judge is not allowed to determine if the design around is infringing on the Tivo patent or not, rather if the design around is more than colorably different compared to the old DISH design.

By questioning what the judge can or cannot do, it not only showed DISH lawyer's lack of judgment as far as what the standard is, but also disrespect for the judge.

To which later the judge tried to teach DISH lawyer a civics lesson, by asking him, did you think I could still find DISH in contempt? To which the DISH lawyer thought about it for some time and finally answered, yes you could still find DISH in contempt. But if so please stay the sanctions while we appealed. The judge said not likely if there was a contempt, but sure you could appeal.

The Tivo investors seized on that Q/A to believe it meant to say DISH will be in contempt, but it is not true.

What the judge was doing was to tell the DISH lawyer, you need to respect my power, in my court room, not to question my decision, whatever that may be in the future, rather calling any one decision "a shame."

Of course the judge can find DISH in contempt, if he decides that the design around is only colorable. The judge was also telling the DISH lawyer, if you wanted to challenge my decision do so in the future, during your appeal, but not in my court room.

The good thing was the DISH lawyer in the end gave the correct answer, he said yes your honor it was possible you could still find DISH in contempt, if the design around was only colorable.

That answer at least showed the lawyer finally understood what he could or could not tell the judge how the judge might make his decision. A good saving grace for him, even though it took him a minute to come up with that correct answer.

So in conclusion, the judge has shown his clear understanding of the rules and precedures, and what he must do and what he may not do, in a contempt proceeding. I am confident that he will rule DISH not in contempt because the DISH design around is substantial, and more than colorably different compared to the old design.

The only problem is giving DISH lawyer's misstep, I am not too sure if he himself still has the confidence, because he showed arrogance and over-confidence, to me it was actually a sign of lack of confidence.

Again my disclaimer, the above is based on the very limited court transcript, once the full version becomes avaiable, I will try to do another analysis, it is entirely possible some of my interpretations may not be accurate.

I was going to wait but since those TiVo investors and their market analysts have been busy again interpreting the judge's facial expressions, I thought to put my two cents in as well.

 

[vampz26]

You know, one needs to ask themselves something here...and in very simple terms at least...

At what point does the helpless victim, they poor guy crying that they on acting in self-defense, actually turn around and all of a sudden become the aggressor..aka...the 'Bully"....

I mean, what really happened here? Did someone on E*'s executive board insult the mother or wife of someone on the Tivo executive board? It almost seems way to personal...as if the goal is not just restitiution but to cripple and maim...

I don't know...but with the sudden delays and flip-flopping going on, I could only venture to guess that the governing bodies involved here must be thinking the same thing...

 

[jacmyoung]

You know, one needs to ask themselves something here...and in very simple terms at least...

At what point does the helpless victim, they poor guy crying that they on acting in self-defense, actually turn around and all of a sudden become the aggressor..aka...the 'Bully"....

I mean, what really happened here? Did someone on E*'s executive board insult the mother or wife of someone on the Tivo executive board? It almost seems way to personal...as if the goal is not just restitiution but to cripple and maim...

I don't know...but with the sudden delays and flip-flopping going on, I could only venture to guess that the governing bodies involved here must be thinking the same thing...

But think about it, if the new DISH design around stands, it can put TiVo out of business in the worst case, of course it is very personal

 

[mike123abc]

You know, one needs to ask themselves something here...and in very simple terms at least...

At what point does the helpless victim, they poor guy crying that they on acting in self-defense, actually turn around and all of a sudden become the aggressor..aka...the 'Bully"....

I mean, what really happened here? Did someone on E*'s executive board insult the mother or wife of someone on the Tivo executive board? It almost seems way to personal...as if the goal is not just restitiution but to cripple and maim...

I don't know...but with the sudden delays and flip-flopping going on, I could only venture to guess that the governing bodies involved here must be thinking the same thing...

Well there are hundreds of millions and perhaps billions at stake (future patent revenues). TiVo realises that Dish will probably get away with the software changes, so they want to be sure they get every penny. Then they will have to decide if they are going to have to fight the new software if the judge rules against them.

TiVo wants Dish to have no choice but to license the patent on their terms. They want $X/month from every Dish DVR subscriber. Dish would probably license the patent for a flat one time charge if it was offered that way, just to avoid all the hassel and possible bad outcomes. If TiVo wins this I bet we quickly see a deal where Dish licenses the patent at the $X/month TiVo wants, and if Dish wins, I still think there will be a license agreement, but it will be called a cross license agreement where they agree not to sue each other, work together, etc. Dish will probably pay some money (besides the previous amount of infringement) for the cross licensing.

 

[jacmyoung]

Well there are hundreds of millions and perhaps billions at stake (future patent revenues). TiVo realises that Dish will probably get away with the software changes, so they want to be sure they get every penny. Then they will have to decide if they are going to have to fight the new software if the judge rules against them.

TiVo wants Dish to have no choice but to license the patent on their terms. They want $X/month from every Dish DVR subscriber. Dish would probably license the patent for a flat one time charge if it was offered that way, just to avoid all the hassel and possible bad outcomes. If TiVo wins this I bet we quickly see a deal where Dish licenses the patent at the $X/month TiVo wants, and if Dish wins, I still think there will be a license agreement, but it will be called a cross license agreement where they agree not to sue each other, work together, etc. Dish will probably pay some money (besides the previous amount of infringement) for the cross licensing.

When you said if TiVo wins, I hope you meant if DISH fails on appeal. Even if the judge rules DISH in contempt, DISH can appeal, and the appeals court will almost certain to overturn the contempt ruling based on my reading of all prior cases similar to this one when the contempt rulings were overturned.

The question of course will be whether Charlie is as "stubborn" as he said he is to go all the way.

But if DISH wins, I agree a likely cross licensing agreement will be reached, but only if Charlie gets to keep a good portion of the money in the escrow. Otherwise there is no benefit to have an agreement since DISH can continue to sell their DVRs without threat. It will be very difficult for TiVo to sue DISH again to try to rule that the DISH new software still infringe.

Based on the new software evidence, DISH has removed all the elements that were considered to have infringed on the TiVo's patent, and usually when that happens, it is virtually a done deal.