It is a big loss for E*, but I hope they appeal.
The judge side-stepped, or wrongly accused E* of two things:
First the term "audio and video data" was never defined by the court, and yes E* did not try to ask the appeals court to define it either, because it was pointless back then.
But the new software by no longer analyzing the start code, i.e. the audio and video data, at a minimum should allow the court to further either agree, or disagree, what the audio and video data means, as E* argued it means the start codes.
Judge Folsom completely side-stepped this issue. But there is clear evidence that the appeals court may take a different view, as they did during the last appeal when they overturned the hardware claims verdict.
The second is Judge's view that E* believed they could ignore the order as long as they changed the software, which is not true, E* never believed they could simply ignore the order, they believed what they did had conformed to the order. Judge Folsom simply was wrong to accuse E* of ignoring the order.
Although it is entirely now up to Charlie to decide if he wished to appeal or not. Correction, just saw Scott's post, I guess another round to come.
Regardless I must eat crow on this first round.