Tivo's (TIVO) $200 Million Payday

Tivo (TIVO) has moved further down the road in collecting huge penalities from Dish Network (DISH) and Echostar (SATS) for violating the little DVR company’s patents.

The United States District Court, Eastern District of Texas ordered contempt sanctions against the satellite TV firms.

Tivo said “We are pleased by the Court’s ruling to impose contempt sanctions of approximately $200 million against EchoStar for its continued violation of a court-ordered permanent injunction, and to award TiVo its attorney fees and costs incurred during the contempt proceedings. This brings total damages and sanctions in this case to approximately $400 million through July 1, 2009, plus attorney fees, and is exclusive of potential further damages and sanctions.”

The matter is not over. Echostar and Dish will continue the appeal process, which could go on for years.

According to MarketWatch, In April 2005, a Texas jury found in favor of TiVo, and a judge subsequently issued a permanent injunction against EchoStar, ordering it to pay $94 million in damages, to stop selling its DVRs and to turn off about 4 million of the devices.

In August 2006, after EchoStar filed an appeal, a federal appeals court in Washington stayed the permanent injunction.

In January 2008, after another EchoStar appeal, the U.S. Court of Appeals for the Federal Circuit unanimously ruled that TiVo be awarded full damages, and that the injunction ordering EchoStar to stop deploying its DVRs be reinstated.

But EchoStar continued to deploy its DVRs, claiming that it had made an adjustment to its software that didn’t infringe on TiVo’s patents. TiVo subsequently asked that EchoStar be held in contempt of the injunction.

In June 2009, after a hearing, the U.S. District Court for the Eastern District of Texas again found in TiVo’s favor, ruling that EchoStar’s software “workaround” still infringed on TiVo’s patents. That court also found EchoStar to be in contempt of court and ordered that the injunction it first issued four years ago be fully enforced.

Douglas A. McIntyre