Tivo v. echostar

1. IEOR 190G: Patent Engineering Tivo v. echostar Sarah C. Kabiling

2. Is this just “method and system” for digitizing video onto a hard-disk for random-access playback by user? • Not just a replacement for a videotape • Not just putting in Hard-Drive • Could you record to and playback from random locations on that video tape at the same time? No! TiVo is much more than a replacement. Tivo DVR technology

3. Allows subscribers to play one television show while recording another and contains storage format that allows pausing LIVE TV! TIME WARPING! Tivo DVR technology

4. TiVo alleged that Echostar’s set-top boxes were in violation of a patent for a “multimedia time warping system” Tivo v. echostar

5. Interruption Tolerant Video Program Viewing (‘186) Multimedia Direct Access Storage Device and Formatting Method (‘804 and ‘685) Patents in question

6. Technology in question: • Time Warping – the ability for customers to watch one show, while recording another • Hardware • Relate to the process and apparatus used to effect time shifting according to the invention • Accepting, Storing, Converting, Tuning signal • Storage of TV programs as MPEG data enables users to control playback of programs (currently broadcasted – use pause, fast forward, reverse) • Software • Relate software processes and apparatus • Buffing, decoding, separation of streams • Storage, transformation, and decoding Hardware and software infringements

7. How data was placed and moved • Data streams • Accused DVRs both receive television signals and store data relating to the transmission on a hard disk in Motion Picture Expert Group (MPEG) format. • MPEG stream – interleaved audio and video components • Number of steams • How streams separated • Video • Audio • Acquiring • Wording: “a/an” for different streams Hardware Infringement

8. How data was processed (extracted) • Data streams • Source object • Transform object • Sink object • Control object • Wording: “object” • EchoStar wants definition to be item within a computer program (like C++) • TiVo wants “collection of data and operations” (IEEE) software Infringement

9. EchoStar was given an injunction for the duration of the trial. Important!

10. An equitable remedy in the form of a court order, where a party is required to do, or to refrain from doing, certain acts • For TiVo’s case, Judge decided upon injunction because TiVo was “losing market share at a critical time in the market’s development, market share that it will not have the same opportunity to capture once the market matures” • During trial, EchoStar cannot sell any more DVRs (which are in question) What is injunction?

11. Verdict important because it is “likely to shape competition in market for digital video recorders” (Wall Street Journal) • April 2006 $74M Initial jury verdict • $33M lost profits from lost sales of set-top boxes • $41M royalties for >4 million DVR devices • August 2006  increase to $90M • Permanent injunction • Very rare • EchoStar must shut off infringing DVRs in homes within 30 days of settlement • EchoStar granted stay (refrain from permanent injunction until court can consider appeal) • TiVo spent $10.7M for legal costs fighting EchoStar Settlement - Results