TIVO vs E*

[Greg Bimson]

Dish is accused of violating an injunction in a patent case by the use of modified devices.

Dish is also accused of violating an injunction in a patent case, charged with non-compliance, to disable those devices found infringing.

The KSM injunction didn't mention infringement just as Judge Folsom's disable order didn't mention infringement.

But Judge Folsom's injunction does mention infringement.

The appeals court called the KSM injunction an infringement injunction anyway because infringement was the fundamental reason for the injunction and injunctions by law are only allowed to prevent infringement in patent cases.

That was because the injunction as written did not comply with Rule 65(d), as the equipment in the injunction referred to the complaint. The original complaint was charging infringement. Infringement is why the injunction was issued in the first place.

Similarly, the appeals court would recognize that the fundamental issue in Folsom's injunction is infringement and would say "a judgment of contempt against an enjoined party for violation of an injunction against patent infringement by the making, using or selling of a modified device may not be upheld without a finding that the modified device falls within the admitted or adjudicated scope of the claims and is, therefore, an infringement."

And because infringement was found on these four million DVR's, this is a non-starter. KSM only applies when the issue is "the making, using or selling of a modified device". Not when the device has legally been found as an infringement. The legal ruling of infringement on Joe Blow's four year old DVR 501 still stands; the receiver still exists. Just because some non-descript software was placed on a receiver ruled as an infringement does not mean the receiver is no longer ruled as an infringement.

Admittedly, that is DISH/SATS defense: to receive a ruling that by changing the software it is no longer an adjudged device. That would mean there aren't any "Infringing Products", and therefore, the disable order applies to ZERO products.

 

[jacmyoung]

Greg, you need to use some common sense to see how TiVo’s argument on the damages is total BS.

What TiVo is saying, had the injunction not been stayed, E* would not have had the chance to design around the patent and E* would have to have disabled those DVRs in 10/06, and had that happened, some of those E* DVR users would have gone and bought those TiVo receivers, and TiVo would have made those millions, but hello? It did not happen, and the reason it did not happen was because the court’s action prevented it from happening.

TiVo forgot who had made the above happen in the first place. It was the court that made it happen, which means if TiVo even has any justification at all to even seek such damage, TiVo should have sought it from the court, the US government, not E*, because it was the action of the court that had caused such harm, not E*.

Stop taking anything said by TiVo as golden, listen to the judges and the Court, that is what we are doing, you did not see us constantly quoting what E* was saying, but what the judges have been saying.

Why? Because it will be the judges that will make the call, not TiVo, nor E*, so please Greg, go read what the judges had said, I have quoted many, including what Judge Folsom said on 9/4, cite those case law, base your argument on what the judges were saying, not what TiVo is saying. Remember TiVo still has yet provided a case. There is a reason when people say: "You don't have a case."

TiVo has no case in their damage argument, just like in their contempt argument, because there has not been a single case in which an infringer made a more than colorable design around, and still was found in contempt, likewise, there has never been once a defendant was asked to pay for some hypothetical damages that was a direct result of an action by the court.

It was the court that blessed E* with that stay and resulted in the so-called damages fantasized by TiVo. Go after the court, not E*. And good luck!

What is TiVo talking about E* should not be allowed to benefit from the Court’s decision to stay the injunction? Is TiVo nuts? Of course E* is allowed to benefit from the court decisions in E*’s favor. According to TiVo’s logic, even if E* is found not in contempt, E* should still pay TiVo to eternity, why? Because E* may not benefit from Court’s decision. And you are actually buying all such crap?

 

[Greg Bimson]

This will be my last post for a while. Anyone that wants to refute or post wild supposations can go right ahead.

What is TiVo talking about E* should not be allowed to benefit from the Court’s decision to stay the injunction? Is TiVo nuts? Of course E* is allowed to benefit from the court decisions in E*’s favor. According to TiVo’s logic, even if E* is found not in contempt, E* should still pay TiVo to eternity, why? Because E* may not benefit from Court’s decision. And you are actually buying all such crap?

TiVo is requesting damages during the stay, which is not a benefit from a court decision. The court only issues a stay when determining the order is valid.

There are two issues:

1) The rate for post-infringement damages can be changed. Try this...

On February 26, 2008, the Federal Circuit decided Amado v. Microsoft Corp. and clarified damage calculation rules for post-verdict infringement. The Federal Circuit held that damages for post-verdict infringement could be considered separately from damages for pre-verdict infringement, and required the district court to provide a clear explanation for its damage assessment on remand. Moreover, the Federal Circuit provided a more detailed standard to guide district courts when considering damages for the sale of an infringing product during a stay of a permanent injunction.

2) but-for analysis during contempt...

This one, specifically relating to contempt

I'll be happy to concede that TiVo won't receive a $220 million judgment. But it certainly isn't like there isn't precedent for asking for those types of damages.

 

[Thomas22]

2) but-for analysis during contempt...

This one, specifically relating to contempt

9 Where there is a settlement agreement resolving patent infringement litigation, a subsequent finding that the defendant has breached the agreement will permit the court to measure damages by lost profits or a reasonable royalty in accordance with 35 U.S.C. § 284 only when the defendant’s conduct constitutes infringement of the patent. Otherwise, damages should be measured under state law governing breach of contract. Gjerlov v. Schuyler Laboratories, Inc., 131 F.3d 1016, 1024 (Fed. Cir. 1997). Here, the court does not undertake an infringement inquiry. The court addresses the issues before it which are whether Wabtec is in contempt because it breached the terms of the License and of the Consent Order. As such the damages issues are not governed by 35 U.S.C. § 284. Instead, they are governed by Delaware state law.

Dish did not breach a contract. Damages are for infringement and not contempt. Damages are calculated according to federal law, not state law.

 

[Thomas22]

Supposedly, Folsom has released an order for a new hearing in February to look at whether the modified units infringe.

 

[Greg Bimson]

So, I'll eat some crow now...

 

[Greg Bimson]

From Investor Village:

O R D E R

Before the Court is TiVo’s Motion to Hold EchoStar In Contempt For Violation Of This

Court’s Permanent Injunction. Dkt. No. 832.

The Court will hold an additional hearing on this matter in the form of a Bench Trial on

February 17-18, 2009 to determine whether EchoStar’s DP-501, DP-508, DP-510, DP-522, DP-

625, DP-721, DP-921, and DP-942 receivers continue to infringe claims 1, 5, 21, 23, 32, 36, 52, 31,

and 61 of U.S. Patent No. 6,233,389, either literally or under the doctrine of equivalents. The

hearing will be held in Texarkana and begin each morning at 9 a.m.. Each side will have five (5)

hours to present their case.

IT IS ORDERED that the following discovery limitations shall apply to this matter.

1. Disclosures. To the extent not already disclosed, within 15 days of this Order, each party

shall disclose to every other party the following information:

a. the legal theories and, in general, the factual bases of the disclosing party’s claims or

defenses;

b. the name, address, and telephone number of persons having knowledge of relevant

facts, a brief statement of each identified persons’ connection with the case, and a

brief, fair summary of the substance fo the information known by any such person;

c. for any testifying expert, by the date set by the court below, each party shall disclose

to the other party or parties:

i. the expert’s name, address, and telephone number;

ii. the subject matter on which the expert will testify;

iii. if the witness is retained or specially employed to provide expert testimony

in this case or whose duties as an employee of the disclosing party regularly

involve giving expert testimony:

(a) all documents, tangible things, reports, models, or data compilations

that have been provided to, reviewed by, or prepared by or for the

expert in anticipation of the expert’s testimony; and

(b) the disclosures required by Fed. R. Civ. P. 26(a)(2)(B) and Local Rule

CV-26;

iv. for all other experts, the general substance of the expert’s mental impression

and opinions and a brief summary of the basis for them or documents

reflecting such information.

2. Additional Disclosures. Each party, within 15 days of this Order and without awaiting a

discovery request, will provide, to the extent not already provided, every other party a copy

of all documents, electronically stored information, and tangible things in the possession,

custody, or control of the party that are relevant to the above stated matter.

3. Discovery Limitations. In addition to the disclosure listed in Paragraphs 1 and 2 above, the

each side may serve 10 interrogatories, 10 requests for admission on the opposing side. In

addition, each side may take 15 hours of fact witness depositions and the depositions of

experts.

4. Pre-hearing disclosure. Each party shall provide to every other party within 7 days of the

trial the following:

a. the name and, if not previously provided, the address and telephone number, of each

witness, separately identifying those whom the party expects to call and those whom

the party may call if the need arises;

b. the designation of those witnesses whose testimony is expected to be present by

means of a deposition and, if not taken stenographically, a transcript of the pertinent

portions of the deposition testimony;

c. an appropriate identification of each document or other exhibit, including summaries

of other evidence, separately identifying those that the party expect to offer and those

which the party may offer if the need arises;

d. an copy of each demonstrative that the party expects to present, separately identifying

those that the party expects to present and those which the party may present if the

need arises.

5. Duty to Supplement. After disclosure is made pursuant to this order, each party is under

a duty to supplement or correct its disclosures immediately if the party obtains information

that a disclosure was incomplete or incorrect when made, or is no longer complete or true.

IT IS FURTHER ORDERED that the following deadlines shall apply to this case.

Date Event

December 22, 2008 TiVo’s Expert Disclosures Due

January 5, 2009 EchoStar’s Expert Disclosures Due

February 10, 2009 Parties’ Proposed Findings of Fact and Conclusions of Law

due

Doesn't this mean the hardware claims are back in?

 

[Thomas22]

From Investor Village:Doesn't this mean the hardware claims are back in?

Good point.

 

[CuriousMark]

Wow. So the judge is following KSM and will see if there is infringement. While he is at it he will try the hardware claims under the doctrine of equivalents. If infringement is found, the contempt issue remains on the table. Since the judge is addressing infringement, Delaware will now almost surely bow out.

 

[jacmyoung]

Greg, you cannot just throw a case out there and hope it will stick, just because TiVo did the same.

In the case you quoted above on the damage calculation, there are several points:

1) The defendant was found in contempt for making a new sale in violation of the order.
2) The damage was based on that actual new sale made by the defendant, that could have gone to the plaintiff, and
3) While the plaintiff sought a total of $12.7 million damages, the court only granted them $1.8 million, and another $2.6 million only if the defendant decided to continue to make more of the new sales despite the contempt ruling.

If you apply your case to this case, then the so called lost-profit part of damages TiVo claims they should get, may happen only after:

1) E* is found in contempt of the current injunction,
2) E* sold additional same-model DVRs in addition to the 4 million DVRs during the stay of the injunction, and
3) The damages will be based on actual units sold, not some hypothetical scenario.

If E* is not in contempt, the lost-profit part of the damage will be out of the window, and if E* is in contempt, the actual damage amount will likely be much less than what TiVo is asking for.

But all the above has nothing to do with what you and I were discussing, the 3rd part of the damages TiVo is seeking. In this part TiVo is asking for damages from an event that never occurred, where the court did not stay the injunction, and E* was forced to disable the DVRs in 10/06 and did not have the opportunity to design around the patent, and the users of those 4 million DVRs decided to buy TiVo’s boxes as a result.

If E* is not in contempt, the damage calculation will have to be based on what the jury awarded for the same 4 million DVRs, and to cover a period that was much shorter because E* completed the design around in 05/07 I think, so the period is about less than one year instead of the multi-year period the jury had to cover.

If you consider that, the $16 million E* calculated is a more reasonable one, only that the judge said he could change the rate (not that he has to), and for argument sake let’s say he does change the rate, the most he will change to will be the $2.50 TiVo asked for, which will be a 60% increase from the rate the jury (and E*) used, that will make the final damage to around $26 million.

If E* is in contempt, the lost-profit damage will have to be calculated based on the actual additional DVRs from those 8 models that E* sold from 09/06 to 04/08, and it will be a rather complicated math because you cannot say everyone one of those new E* DVR users would have bought a TiVo instead.

But still, the 3rd part of the damages TiVo is asking which you and I were discussing, which is based on an event that never happened, will not fly. E* can in fact benefit from the court decision that stayed the injunction, it is called a “relief” from the court, if the parties cannot benefit from the relieves they sought and received from the court, then what is the point of allowing them to seek a relief?

 

[Scott Greczkowski]

I just got the following sattement from Dish Network/Echostar

DISH Network and EchoStar Statement Regarding Tivo

ENGLEWOOD, Colo. – Nov. 20, 2008 – DISH Network Corporation (NASDAQ: DISH) and EchoStar Corporation (NASDAQ: SATS) issued the following statement regarding today’s developments in the Tivo Inc. v. EchoStar Communications Corp. lawsuit:

“We are pleased that the district court did not find us in contempt on the face of the injunction. We look forward to the February bench trial on our software design-around. Our subscribers can continue using their award-winning DVRs from DISH Network.”

 

[Greg Bimson]

Wow. So the judge is following KSM and will see if there is infringement.

Not necessarily. Infringement may have to be found in order to find contempt and apply damages, but I don't see anything about colorable difference anywhere.

 

[Thomas22]

If E* is not in contempt, the lost-profit part of the damage will be out of the window

It wasn't out of the picture for the jury trial. There was no contempt then, why can't there be lost profits for the continued infringement?

 

[jacmyoung]

From Investor Village:Doesn't this mean the hardware claims are back in?

I would say yes too.

Remember when the appeals court reversed the hardware verdict, it allowed the parties to re-address it if they wished to. Ordinarily you would think TiVo would be the one who would be inclined to re-address the issue but TiVo did not. But then the judge himself can re-address the issue too, that is the part I did not think about.

What is surprising to me is, this new order appears the “new action” the judge was telling the TiVo’s attorney on 9/4 because it will be a bench trial, it will be a formal trial, and therefore a new trial, independent of this current trial.

In another word, this case is practically over, as far as the contempt issue is concerned, but not the damage part. Apparently the judge decided to delay the damage part until the new bench trial is concluded.

And this new bench trial will in fact be able to determine if the new design around is still an infringement or not, which is the same goal the case E* filed in the DE court were to accomplish, only that because the DE court had not decided if they would grant E* the trial or not, and the fact Judge Folsom decided to initiate the new trial in his court, E* will not be able to settle it in the DE court, rather again in Judge Folsom’s court.

Just my speculation as I am no lawyer.

 

[jacmyoung]

It wasn't out of the picture for the jury trial. There was no contempt then, why can't there be lost profits for the continued infringement?

You are correct, I should have said for the period after the design around up to 04/08. But keep in mind TiVo is asking for lost profit up to 04/08 regardless contempt or not. And that was the real problem.

 

[mike123abc]

I bet Dish is happy they are getting a bench trial vs a jury trial. At least they will be able to use logic in their arguments.

 

[Thomas22]

I bet Dish is happy they are getting a bench trial vs a jury trial. At least they will be able to use logic in their arguments.

I guess they can cancel their Delaware hotel reservations now.

 

[vampz26]

Funny how Dish's DVR's have gotten better since they stole the Tivo base programming. Their DVR's used to be the worst.

How can you 'steal' something thats being given away? Tivo is open source...

(in case you're lost... )

 

[Ronnie-]

How can you 'steal' something thats being given away? Tivo is open source...

Ask the courts

 

[Thomas22]

ALVISO, Calif., Nov. 20 /PRNewswire-FirstCall/ -- TiVo Inc. (Nasdaq: TIVO - News), the creator of and a leader in television products and services for digital video recorders (DVR), offered the following statement today on the order by the United States District Court, Eastern District of Texas, in the lawsuit against EchoStar Communications Corporation:

"We are pleased that the U.S. District Court has scheduled a hearing on EchoStar's purported workaround on February 17, 2009. Contrary To EchoStar's statement today, the Court did not rule on TiVo's pending motion for contempt of the injunction. The Court will do so after the hearing as well as rule on the amount of damages owed to TiVo beyond the nearly $105 million already paid by EchoStar. This is a positive step, particularly the accelerated discovery ordered by the Court, towards the ultimate resolution of all issues in the litigation and we remain confident that we will prevail in showing that EchoStar's workaround does not avoid infringement."