$500 Million Settlement for TiVo

05.2011

An arduous seven-year legal battle, in which Irell & Manella LLP represented TiVo every step of the way, ended with TiVo securing a $500 million settlement concluding a long-running patent dispute against DISH Network and EchoStar involving TiVo’s “Time Warp” digital video recorder technology.

Under the terms of the settlement, DISH Network and EchoStar agreed to make an initial payment of $300 million, with the remaining $200 million to be distributed in six equal annual installments between 2012 and 2017. Additionally, the companies agreed to dismiss any litigation connected with the dispute and TiVo granted DISH Network and EchoStar a license to use the “Time Warp” technology and other related patents.

According to Morgan Chu, a partner in the Los Angeles office of Irell & Manella and TiVo's successful lead counsel, "This was a long hard fight, with multiple stops in the District Court and the Court of Appeals along the way.  At each step, TiVo vigorously protected its patents, validating the value of TiVo’s intellectual property."

Andrei Iancu, also a partner in the Los Angeles office of Irell & Manella and one of TiVo’s trial counsel, said, “After so much hard work by the client, the lawyers and staff, it is especially gratifying that the case has settled on terms that recognize the value of TiVo's foundational technology.”

TiVo originally filed suit against EchoStar for its DISH Network DVRs in January 2004 in the U.S. District Court of Eastern District of Texas.  Irell successfully represented TiVo during a jury trial and a subsequent bench trial in 2006, which culminated in a judgment for TiVo and a permanent injunction against EchoStar.  Irell obtained a full affirmance from the Federal Circuit in 2008.  EchoStar paid $104.6 million to satisfy the earlier judgment. 

Following the appeal, EchoStar continued to engage in conduct that violated the injunction. Irell then represented TiVo in contempt proceedings against EchoStar.  In June 2009, the District Court once again held EchoStar in contempt of the 2006 injunction.  Following a separate hearing on contempt sanctions, the Court entered an order requiring EchoStar to pay additional damages and sanctions.  EchoStar appealed the court’s decision on contempt and on March 4, 2010, the Federal Circuit agreed with TiVo on all issues and affirmed the contempt findings against EchoStar.  The Federal Circuit decided to re-hear the case en banc and on April 20, 2011 ruled that DISH Network and EchoStar must disable certain MPEG-2-based DVRs that were found to infringe TiVo's "Time Warp" patent.  The settlement followed shortly after the Federal Circuit decision.

Along the way, EchoStar also placed TiVo's "Time Warp" patent in reexamination twice, and the U.S. Patent and Trademark Office both times confirmed its patentability.  In the last reexamination, Irell successfully overcame a final Office Action to secure the issuance of the reexamination certificate.

"We are extremely pleased to reach an agreement with DISH Network and EchoStar which recognizes the value of our intellectual property," said Tom Rogers, president and CEO of TiVo. "The compensation from this settlement, including the resulting reduction in legal expenditures, puts TiVo in an enviable financial and strategic position. This settlement, which brings the total compensation paid by DISH Network for use of TiVo's '389 patent family to over $600 million, demonstrates the significant return afforded to our shareholders by diligent enforcement of TiVo's intellectual property rights. Those efforts will aggressively continue with other parties."

In addition to Chu and Iancu, the Irell litigation team included attorneys Richard Birnholz, Ben Yorks, Babak Redjaian and Tom Werner.