When Some of the Parts Equal the Whole

TiVo v. EchoStar

You might want to fast forward through more than the commercials on this one-all the best action is in the finale.  In TiVo v. Echostar the Federal Circuit engages in page after page of dense claim construction only to deliver the heart of the opinion in a single, concluding paragraph. There, it upheld the jury's entire damage award of $73 million even though it had reversed the jury's determination that patent holder TiVo's hardware claims had been infringed.

How did the Federal Circuit come up with this plot twist? 

First, upon review, it upheld the jury's verdict that all of EchoStar's accused devices infringe TiVo's software patent claims.  Second, it found that the damages calculation at trial was not predicated on the infringement of particular claims.  Enough, the court said, to affirm the entirety of the damages award entered by the district court.

Let's rewind to review the underlying facts. TiVo introduced the world to the time shifting television technologies known as DVR about ten years ago.  Since then that technology-which allows television viewers to record, store and playback television broadcasts-has become immensely popular. In 2004, TiVo sued EchoStar for infringement of its hardware and software DVR patent claims.  EchoStar operates the DISH Network brand of satellite television and offers competing DVR technologies to DISH Network customers. TiVo has partnered with DIRECTV, DISH Network's biggest competitor.

At trial in the district court, the jury found that EchoStar had infringed both the hardware and software claims of TiVo's patents. The jury then awarded the $73 million in damages and the trial judge ordered a permanent injunction to stop future infringement.  The injunction was subsequently stayed pending appeal.

On appeal, the Federal Circuit concluded that EchoStar's competing DVR technology did not infringe TiVo's hardware claims but did infringe the claims of its software patent.  The court's unusual construction of the claim term "a" or "an" proved key to TiVo's success.  Usually, "a" or "an" are construed to mean one or more.  Here the court construed the claim term to "an MPEG stream" as limited to a single MPEG stream because "the context clearly evidences that the usage is limited to the singular."

The jury's damage calculation did not divide out the portion of damages associated with the hardware invention and the portion associated with the software invention. Consequently, the Federal Circuit found infringement of the software claims alone sufficient to sustain the entire judgment.  The court also dissolved the stay of the permanent injunction and directed the lower court to assess additional damages based on continued infringement during the appeal.

Kudos to TiVo for understanding that not every starring role requires a speaking part.  By not staking to much ground on any particular portion of its damage claim it demonstrated the art of saying best by saying nothing at all and proved that silence truly can be golden.

Interestingly, EchoStar (DISH) issued a press release stating that the injunction was meaningless because its engineers had already developed and deployed "non-infringing" ‘next-generation' DVR software to its customers.  

Has EchoStar produced a truly non-infringing technology?  Will TiVo trust EchoStar?  Is their dispute really over?

Stay tuned here and we'll bring you the answers if, and when they happen.

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