Judge Folsom stated very clearly he used his wide discretion in making his decision to find E* in contempt. In doing so he side-stepped E*'s contentions that when E* removed the two most crucial elements of the invention used by TiVo to prove infringement, at a minimum, were E* able to use the same contentions back then, there clearly would be doubt whether the jury might not return a different verdict and found E* not infringing.
Judge Folsom simply said such is not enough, because he wasn't going to be bothered to speculate what the jury might think differently. But the question of whether the doubt existed is not really a speculation, rather an opinion. By the appeals court standard, only when there is no doubt, meaning one can be sure that the jury would have returned the same infringement verdict despite the changed arguments on both sides, one of which the positions totally reversed too, can there be a contempt.
It is also clear the appeals court had looked at the issues with much more care before, the appeals court said over and over, they gave the district courts wide lattitude, but on appeal, it was their job to narrow such wide lattitude if necessary, that was how they ended up overturning the hardware claims verdict. If E* appeals, their bet must be based on such understanding of the different approaches between the two courts. As I said before, for one thing the appeals court heavily relied on TiVo's own patent specifications in their discussion, not just the patent claims themselves, in contrast, Judge Folsom totally ignored the patent specifications, relied exclusively on the patent claims.
The risk however is much greater for E* this time. I will look at two things, one whether E* will carry out its claim to appeal, and if so, whether the appeals court will indeed stay the order again. IMO, only if both are true, will E* have a chance of winning. It is a very risky move.
But the alternative may not be any better. Settle with TiVo is fine, but E* still has to pay all the damages. I don't think TiVo will simply forgive the damages to secure a licensing agreement at this point, I could be wrong, but E* may not have a choice but take the risk to appeal and see whether the appeals court will stay the order. Only if the order is stayed can E* have a realistic chance, not just to win, but simply to have time to manage the issues.
But if there is no stay, short of an agreement with TiVo, I wonder what E* can do. We know there are less of the 501X and 722 DVRs in use, they had been discontinued for a while, I think they can be replaced. But as far as I know the 625s are still been installed.
While TiVo will likely introduce the VIPs in the next round, they must prove the VIPs are only colorably different both in hardware and software, it wouldn't be easy at all because the hardware part had already been viewed by the appeals court to be non-infringing, so I agree the VIPs should be safe.
But can E* replace the 501x, 722s and 625s fast enough if a stay is not granted by the appeals court? Or put it this way, how many of those legacy DVR users will leave if their DVR functions are stopped?
