TIVO vs E*

[isaac newton]

Let me say it again, in the Paice case, Paice had asked for $250, they got $25, on appeal the appeals court remanded the $25 decision, and BTW Toyota had argued for $17, and Paice got $96.

Please do not try to make the Paice case more than what it is, stick to this case. The final damages will be a number between what the two parties had established.

The specific numbers in Paice are irrelevant to this case, but we agree that the answer will likely be between the bid and ask.

You are wrong if you think that Folsom has those numbers as of today, he specifically instructed the parties at the Feb-17,18 hearing that another hearing would be needed to address damages once he makes this determination. There are no numbers in Folsom's hands right now.

 

[jacmyoung]

The specific numbers in Paice are irrelevant to this case, but we agree that the answer will likely be between the bid and ask.

You are wrong if you think that Folsom has those numbers as of today, he specifically instructed the parties at the Feb-17,18 hearing that another hearing would be needed to address damages once he makes this determination. There are no numbers in Folsom's hands right now.

Judge Folsom does not determine a number himself, he will have to find a number between what parties had asked for, not some hypothetical number you want to think of. The numbers are, $16M and $220M.

If you agree the specific numbers in Paice are irrelevant, then don't use those specific numbers, such as the new numbers should be 4 times higher. If they are irrelevant, then don't apply them.

But if you really really want to apply them, then apply them accordingly, for example, E* said $16M, times 5.64 (Toyota's was $17 v. the final $96), you will get a $90M number. Be consistent, that is if you want to apply them.

I am saying $20M to $30M, we shall see.

 

[isaac newton]

Judge Folsom does not determine a number himself, he will have to find a number between what parties had asked for, not some hypothetical number you want to think of. The numbers are, $16M and $220M.

If you agree the specific numbers in Paice are irrelevant, then don't use those specific numbers, such as the new numbers should be 4 times higher. If they are irrelevant, then don't apply them.

But if you really really want to apply them, then apply them accordingly, for example, E* said $16M, times 5.64 (Toyota's was $17 v. the final $96), you will get a $90M number. Be consistent, that is if you want to apply them.

Again, you've missed the point. $16M and $220M are no longer relevant to anything. Folsom said he needed the parties to come back again after he makes his ruling on infringement/contempt and have the parties make their NEW cases for damages, taking into account his ruling. Do you understand?

$16M and $220M are not relevant to anything anymore. And Paice will define some of the standards Folsom will use, we know that becase he wrote them. Tivo will likely argue much more than $2.25 per unit. Do you get it now?

 

[jacmyoung]

Again, you've missed the point. $16M and $220M are no longer relevant to anything. Folsom said he needed the parties to come back again after he makes his ruling on infringement/contempt and have the parties make their NEW cases for damages, taking into account his ruling. Do you understand?

$16M and $220M are not relevant to anything anymore. And Paice will define some of the standards Folsom will use, we know that becase he wrote them. Tivo will likely argue much more than $2.25 per unit. Do you get it now?

You can of course have your opinion, but you used Paice in the first place, in Paice, Paice had asked for $250 before Judge Folsom had even decided anything, and Toyota had asked for $17. Judge Folsom later made the decision of $25, on appeal, the $25 decision was remanded.

Did the previous numbers become "irrelevant?" No, the argument on the numbers were still the same, only that the final number was higher, but still could not go above what was asked for.

Again, you decided to make a big deal out of Paice, then follow the Paice example. Or throw out Paice if you think Paice is irrelevant. Can't have it both ways.


BTW, I am done with Paice v. Toyota, tomorrow I will post two more sessions from the hearing transcript.

 

[Thomas22]

In Paice, Judge Folsom ruled on an ongoing royalty forced on both parties. There is no ongoing royalty is this case. An ongoing royalty is calculated for the life of the patent, sometimes decades. Inflation makes a big dent down the road. Judge Folsom gave a larger future ongoing rate as compensation for the forced loss of Paice's ability to ever negotiate an exclusive license with anyone. That's another reason Paice doesn't apply in this case. There is nothing in this case that restricts TiVo's ability to decide how many willing companies to license to.

 

[vampz26]

Sounds like we have a case of speculation trying to be passed off as a fact...

 

[rockymtnhigh]

Just wanted to put out there Folsom's recent decision regarding post-judgment damages in Paice v Toyota, (if you haven't seen it look it up). This has to be seen as a game-changer for infringers who have played the game based on the assumption that it might be cheaper to ask a jury than negotiate a license for a patent.

Does anyone out there think it's time for E* to fire the lawyers and negotiate a license before they lose more than they can afford? This has the potential to move the continuing infringement numbers into the billions.

you have posted this exact same message three times since I re-opened the thread. Hasta La Vista.

 

[jacmyoung]

In Paice, Judge Folsom ruled on an ongoing royalty forced on both parties. There is no ongoing royalty is this case. An ongoing royalty is calculated for the life of the patent, sometimes decades. Inflation makes a big dent down the road. Judge Folsom gave a larger future ongoing rate as compensation for the forced loss of Paice's ability to ever negotiate an exclusive license with anyone. That's another reason Paice doesn't apply in this case. There is nothing in this case that restricts TiVo's ability to decide how many willing companies to license to.

And the on going royalty applies to past and continuing infringing vehicles only. When Toyota argued for a lower royalty rate of $17, in part that their vehicles were not making as much profit as they used to, Judge Folsom said that was not a reasonable factor, he suggested Toyota either:

1) Raise the price of the vehicle to recover the $96, or
2) Re-tool the factories to build the power train without that infringing part so they did not have to pay the $96 at all.

 

[nobody99]

You can of course have your opinion, but you used Paice in the first place, in Paice, Paice had asked for $250 before Judge Folsom had even decided anything, and Toyota had asked for $17. Judge Folsom later made the decision of $25, on appeal, the $25 decision was remanded.

You are forgetting one very simple thing (more specifically, you are completely misunderstanding the law).

There are 4 million DVRs in the homes of end users that were adjudicated as infringing. You keep crowing about KSM allows new software to magically make these DVRs non-infringing. But you are completely wrong about that. KSM has nothing to do with already-adjudicated devices.

As a result, Paice becomes spectacularly important in this case, because Judge Folsom is going to apply a royalty rate to those DVRs for the past two years. Up until Paice, TiVo was asking for $2.25 per month. Now that amount seems a foregone conculsion, but it might be significantly higher as a result of Paice's quadrupling of pre-judgement royalty.

Pre judgement was $1.25 per DVR. Quadruple that and you get $5 per month. Multiple that by 12 months x 2 years x 4 million DVRs, and you get $480 million.

That's the damanges that TiVo will get as a result of the already-adjudicate DVRs. That's before even having a discussion about whether or not they continue to infringe.

Here's where DISH really gets in trouble

As Chief Judge Robson noted, a defendant, if he has doubts as to his obligations under an order, may petition the court for a clarification or construction of that order. 363 F.Supp. at 534. See McComb v. Jacksonville Paper Co., 336 U.S. 187, 192, 69 S.Ct. 497, 93 L.Ed. 599 (1949). While a defendant is, of course, not required to seek such a clarification, a failure to do so when combined with actions based upon a twisted or implausible interpretation of the order will be strong evidence of a willful violation of the decree.

Even if they believe, under KSM, that they were entitled to a workaround, they did not ask the court for clarification. As Chief Judge Robson said, this is strong evidence of a willful violation of the injunction.

DISH isn't just playing with fire, they are playing with a roaring bonfire of epic proportions.

And if you think this is just idle speculation on my part, how about we look at what Judge Folsom asked of Lead Clown Attorney McElhinny:

Why didn't you simply tell the court back in September of '06 that your client is in the process of an attempted design around, or the federal circuit when you asked for the stay?

Judge Folsom long ago made the connection that they did not seek clarification, and will be held in contempt.

See, Jacmyoung, that's how you make a compelling argument. You back up your opinion with hard, cold facts. You should try it some time.

 

[Thomas22]

Judge Folsom long ago made the connection that they did not seek clarification, and will be held in contempt.

Case law is perfectly clear. Dish wasn't confused.

An enjoined party is entitled to design around the claims of a patent without the threat of contempt proceedings with respect to every modified device although he bears the risk that the enjoining court may find changes to be too insubstantial to avoid contempt.

KSM FASTENING SYSTEMS, INC., Plaintiff-Appellee, v. H.A. JONES COMPANY, INC. and Erico Jones Company, Defendants-Appellants. - Altlaw KSM

 

[nobody99]

Case law is perfectly clear. Dish wasn't confused.


KSM FASTENING SYSTEMS, INC., Plaintiff-Appellee, v. H.A. JONES COMPANY, INC. and Erico Jones Company, Defendants-Appellants. - Altlaw KSM

Let's not forget the whole basis for KSM

In view of these and other considerations to be discussed, where the patent owner seeks to enforce an injunction against an enjoined infringer by reason of a manufacture which was not the subject of the original litigation

 

[Thomas22]

In view of these and other considerations to be discussed, where the patent owner seeks to enforce an injunction against an enjoined infringer by reason of a manufacture which was not the subject of the original litigation

If the modification resulted in more than a colorable difference then there will have been a manufacture which was not the subject of the original litigation. Dish (the enjoined party) bears the risk that the court will find the changes too insubstantial to avoid contempt.

 

[jacmyoung]

Below is the part where the E* lawyer got the TiVo’ expert to admit that the new design no longer analyzed the start codes:

Q AND THE CODE THAT WAS IN THE 50X BOXES THAT LOOKED FOR THOSE START CODES IN THE PAYLOAD OF VIDEO AND AUDIO PACKETS DURING RECORDING HAS BEEN SWITCHED OUT OF THE PRODUCTS, CORRECT?

A WELL, REMEMBER I MENTIONED THAT THERE’S PID FILTERING. I AM NOT SAYING THAT’S BEEN SWITCHED OUT, BUT THE PORTION THAT LOOKS FOR START CODES, THAT’S CORRECT.
Q THE PORTION THAT LOOKS FOR START CODES BEFORE STORAGE IS GONE, RIGHT?
A THE PORTION THAT LOOKED FOR START –- THE PORTION THAT LOOKED –- THAT PORTION WE WERE JUST REFERRING TO, IT CAME RIGHT AFTER THE PID FILTERING, HAS NOT –- IS NO LONGER USED.
Q AND THE PORTION THAT BUILT AN INDEX OF START CODE LOCATIONS BEFORE STORAGE IN THE 50X DEVICES IS GONE, RIGHT?
A THAT BUILT –- THE SPECIFIC INDEX THAT WAS BUILT BEFORE, AND WE TALKED ABOUT THE FACT THERE’S STILL INDEXING IN THE PRODUCTS, BUT THAT, EXCUSE ME, THAT SPECIFIC INDEX YOU ARE REFERRING TO IS NO LONGER USED.
Q AND THE START CODE DETECT HARDWARE THAT WAS PREVIOUSLY USED IN THE BROADCOM BOXES TO ANALYZE THE PAYLOAD OF VIDEO PACKETS TO LOOK FOR THE STARTS OF FRAMES AND TO BUILD AN INDEX OF THEM BEFORE STORAGE IN THE BROADCOM DEVICES IS GONE, RIGHT? IT’S TURNED OFF.
A THAT’S A BETTER WAY TO CHARACTERIZE IT. SO, OBVIOUSLY AS WE MENTIONED BEFORE, THE HARDWARE IN THE FIELD HASN’T BEEN CHANGED. THE CHIP HASN’T –- IS STILL THERE. BUT THAT PORTION OF THE CHIP THAT AFTER –- IT COMES LATER AFTER THE PID FILTERING AND THE TEMPORARY STORAGE YOU TALKED ABOUT, THERE IS A PORTION OF THE CHIP THAT ACTUALLY DOES -- IN HARDWARE THE START CODE DETECTION, THAT HAS BEEN DISABLED, IF YOU WILL.

BTW, please excuse me for the lousy format above, I simply have no idea why they often show up that way when I try to copy and paste.

 

[jacmyoung]

Below is the E* lawyer getting the TiVo expert to admit that the E* new design removed the code that was responsible for the automatic flow control function in the 522/625 DVRs, BTW, automatic flow control is only related to the 522/625:

BY MS. KREVANS:

Q I’VE LOST TRACK A LITTLE, DR. STORER, SO I AM JUST GOING TO ASK YOU THE QUESTION AGAIN. BEFORE THE BREAK WE WERE TALKING ABOUT THE FACT THAT YOU HAD GONE TO THE 522 AND 625 BROADCOM DEVICES AND IDENTIFIED WHAT YOU BELIEVED TO BE THE CODE THAT WAS ANALOGOUS TO THE CODE THAT DR. GIBSON POINTED TO AT TRIAL FOR THE ‘721, CORRECT?
A YES, WE TALKED ABOUT THAT ISSUE. YOU USED THE WORD ANALOGOUS PLACES, I BELIEVE, YES.
Q AND IN FACT YOU HAVE LOOKED AT ECHOSTAR’S REDESIGNED CODE, AND IN THAT REDESIGNED CODE ECHOSTAR SWITCHED OUT, THAT IS, TURNED OFF THAT ANALOGOUS CODE, CORRECT?
A SEE THAT’S –- THAT MAY BE NOT QUITE CORRECT. THERE IS A DIFFERENCE BETWEEN ANALOGOUS, RIGHT, AND WE CERTAINLY HAVE THE ANALOGOUS THING HERE. WE ARE CERTAINLY STILL FILLING BUFFERS AND THINGS LIKE THAT. BUT I AM TAKING YOUR QUESTION EVEN MORE LITERALLY THE NOTION THAT THERE WAS CODE SPECIFICALLY PERTAINING TO THIS COPY BUFFER, THAT NO LONGER IS IN THE COPY BUFFER THAT IS NO LONGER BEING IMPLEMENTED IN THE NEW CODE, AND I CERTAINLY DO, YOU KNOW, AGREE WITH THAT, IF THAT’S WHAT YOU ARE ASKING.
Q YOU AGREE IT’S GONE?
A WELL, AGREE THAT THEY ARE NO LONGER DOING -- USING THE COPY BUFFER, THAT’S CORRECT.

 

[jacmyoung]

Here is what I like to summarize what I have discovered in the full transcript:

1) TiVo tried to make a point that E* failed to inform Judge Folsom and the appeals court of their design around effort, and Judge Folsom asked, where in my order did you see that E* was obligated to inform?
2) TiVo tried very hard to point out that E* did not make an effort to verify that every one of the DVRs received the new software, to which the judge said his decision would not even be based on such fact, let’s move along.
3) It was TiVo during the jury trial argued that the PID filter was not that parser, rather it did tuning and converting, when the E* experts tried to tell the jury that PID filter was the parser, because E* wanted to invalidate the TiVo patent. But E* failed on that argument, the jury rejected E*’s argument that the PID filter was the parser, and accepted TiVo’s argument. That is why E* is now saying the PID filter is not that parser. TiVo had no response other than saying but you said the opposite during the trial. Yes E* said the opposite during the trial, and they were proven wrong, so now they have to correct themselves.
4) The TiVo’s expert admits now that the new design no longer analyzes the start codes.
5) The TiVo’s expert also admits now that the switch, or the valve that performs the automatic flow control function, is gone, the code is now removed.

 

[Mainer_Ayah]

Or break the bank trying to prove it...

Remember the law guarantees nothing. The law does not dictate right or wrong. What the law gives you is the 'right' to defend yourself. The 'right' to pursue damages. And to exercise that right costs money...money up front. And no guarantees beyond that.

To assume a billion dollar windfall is folly. Never happen as it would probably cost a billion dollars to pursue in this current environment. Reflecting back on history isn't going to change that.

In order to protect myself from eternal damnation in this forum, I want to preface my remarks by saying I do this with a maximum of respect for vampz, sat guys, the mods, the forum, Charlie, Echostar, God and country.

Yes, a billion is a bit much to assume will happen, but as they say, never say never.

If, however, you happen to read the Paice judgment, and see how much Folsom referred to Paice in his proceedings with TiVo v E, one must, I feel, admit that it gives Echostar good reason to reevaluate their approach in this case.

 

[jacmyoung]

On all the points TiVo made in the hearing, there is one that I think was on the mark, which is related to the automatic flow control issue, which is only a part of the 522/625 DVRs:

THIS IS THEIR EVIDENCE. ECHOSTAR ANALYZED 5,400 UNITS. OUT OF THOSE, LESS THAN ONE PERCENT OF THE BOXES HAD ANY OVERFLOW. SO 99 PERCENT PLUS OPERATED AT ALL TIMES ABSOLUTELY PERFECTLY. AND I DON’T KNOW ABOUT YOUR HONOR’S CABLE OR SATELLITE TV SERVICE, BUT I KNOW WHEN I AM WATCHING AN HOUR I SEE SOME IMAGES MAYBE THAT ARE FLUTTERS OR WHATNOT. THERE ARE BIRDS OR PIGEONS THAT FLY IN FRONT OF THE DISH OR WHATEVER IT IS, BUT 99 PERCENT PLUS HAD NO PROBLEM AT ALL. AND OF THE ONE PERCENT THAT HAD A BRIEF INSTANT, A MICROSECOND OF A PROBLEM, THE OVERFLOW ACCOUNTED FOR LESS THAN .00019 PERCENT DATA LOSS. THIS DATA LOSS SHOWS THAT THEY ARE DOING AUTOMATIC FLOW CONTROL, WHICH IS THEY ARE REGULATING THE FLOW OF DATA SO THE PRODUCT WORKS AS IT SHOULD. AND AS DR. RHYNE TESTIFIED, ECHOSTAR’S EXPERT, I WOULD NOT CONSIDER ONE PERCENT TO BE A SIGNIFICANT PERCENTAGE, AND THE SAME WOULD BE TRUE OF A TINY FRACTION OF ONE PERCENT.

The above was in TiVo’s opening statement and echoed several times during the hearing, it talked about the automatic flow control, or the lack of it, had very insignificant impact to the actual TV viewing experience, because data over flow, after the removal of the control by the new design, only occurred in a tiny fraction of the instances.

That sounded a reasonable argument that the removal of the automatic flow control, and the difference it made was merely colorable, because it did not have much impact at all from the TV viewer standpoint. But there are still two problems in such argument:

1) Whether the TV viewers can see any difference is not the issue, in fact the good thing about this whole design around is that the TV viewers do not see any significant changes, every change made is under the hood, should be as undetectable as possible to the viewers.
2) Even if it is reasonable to say, the difference between the old and the new is tiny and insignificant, and therefore only colorable, TiVo must still go to the next step to prove by clear and convincing evidence that the removal of that automatic flow control valve code, still did not avoid infringement on the automatic flow control limitation as described in the software claims.

Of course since the TiVo expert admitted that the automatic flow control valve code was removed, the new design no longer does such function, and as far as meeting the software claim step is concerned, it no longer meets such step, therefore the step is no longer infringed on. Whether the TV viewers can see any difference or not is not even in the equation in this infringement analysis. It may be in the colorable difference analysis, but not in the infringement analysis.

Now one can see the brilliance in the appeals court’s standard they setup in KSM, it is not just TiVo may prove mere colorable difference, if they succeed in doing so, they must still prove infringement, which is not related to any comparison between the old infringing products and the redesigned products.

 

[Thomas22]

If, however, you happen to read the Paice judgment, and see how much Folsom referred to Paice in his proceedings with TiVo v E, one must, I feel, admit that it gives Echostar good reason to reevaluate their approach in this case.

The parties were familiar with the administrative scheduling of discovery in the Paice case. Folsom asked the parties to do it the same way. That's the end of any common area, just secretarial stuff. If Folsom thought the cases were in any substantive way similar he would have given Paice an injunction like he did TiVo instead of ongoing royalties.

 

[jacmyoung]

In order to protect myself from eternal damnation in this forum, I want to preface my remarks by saying I do this with a maximum of respect for vampz, sat guys, the mods, the forum, Charlie, Echostar, God and country.

Yes, a billion is a bit much to assume will happen, but as they say, never say never.

If, however, you happen to read the Paice judgment, and see how much Folsom referred to Paice in his proceedings with TiVo v E, one must, I feel, admit that it gives Echostar good reason to reevaluate their approach in this case.

Judge Folsom did mention Paice v. Toyota during the 9/4 hearing, but he did so when the E*’s lawyer asked, if the judge should find a contempt, there could still be a “middle ground” he could try to reach. To which Judge Folsom used his Paice v. Toyota as an example of the “middle ground.”

But regardless, I hope one understands this, a compulsory licensing judgment can only apply to the products that continue to infringe, not any products that no longer infringe. The mandatory royalty rate applies only when the losing infringer argues that they must still be allowed to continue to infringe, due to many reasons, such as it is too costly to avoid the infringement, it is against the public interest to have an injunction.

So you see, it does not matter here, if E* no longer infringes, even if there may be some consideration of a compulsory licensing judgment, it will have no effect on E* on any DVRs after the design around.

As far as using the Paice decision and trying to apply it here, as I said, if you wish to do so, then do so by comparing apple to apple.

In Paice, Paice had always wanted $250 per car, Toyota said no, $17 per car. The judge said ok I am going to use the jury’s rate and order a $25 per car deal. On appeal, the appeals court affirmed all of Judge Folsom’s decisions except the rate of $25 per car, because the judge did not explain where this $25 rate came from.

Judge Folsom then reconsidered the royalty rate issue, and heard both parties’ argument again, and decided that the rate now is $96 per car.

So to compare apple to apple, it is as if after TiVo asked for $220M, and E* argued for $16M, Judge Folsom said ok $25M it is. On appeal, TiVo says hey how could the judge come up with that $25M figure, and the appeals court agrees with TiVo and tells Judge Folsom to explain it.

On remand, Judge Folsom reconsiders the issue, and hears the argument from both parties again, and says, ok, let’s do $100M instead. And this will be a true apple to apple comparison if you really want to apply the Paice decision here.

But we are not even there yet, and as Thomas22 and I agree, the Paice case is entirely different, it should not even apply here, but if you really want to try to apply it here, at least consider the context of the things at issue.

 

[nobody99]

automatic flow control valve

You do realize that there is no "valve" right, and that this is data, not a liquid that's being flow controlled.

Please try to stick to the correct terminology.