EchoStar Sues TiVo in Effort to Buy Time

by: Thomas Hawk posted on: June 01, 2008 | about stocks: DISH / DTV / TIVO

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Apparently EchoStar (DISH) has been losing customers over the fact that their recent loss to TiVo (TIVO) in an appeals court has people thinking that they will have to turn off their DVRs.

Dish has appealed their recent loss all the way to the Supreme Court, but I seriously doubt that the Supreme Court is going to hear their case. Last ditch desperation from a company trying to buy time.

At stake is a settlement of somewhere between $100 and $200 million. But even more powerful is the fact that part of the judgment TiVo secured against Echostar requires Echostar not to use their offending and infringing DVR technology.

Now I'm no patent attorney. But this leads me to believe that Echostar may be required to turn off their DVR service. And this is the rub. After losing the most recent case, Echostar issued a statement saying that their technology no longer infringes on TiVo's patents.

We are disappointed that the Federal Circuit did not grant our petition for rehearing. The decision, however, will have no effect on our current or future customers because EchoStar's engineers have developed and deployed 'next-generation' DVR software to our customers' DVRs. This improved software is fully operational, has been automatically downloaded to current customers, and does not infringe the Tivo patent at issue in the Federal Circuit's ruling.

All DISH Network customers can continue to use their DVRs without any interruption or changes to the award-winning DVR features and services provided by DISH Network.

Apparently TiVo doesn't see it that way, though, and so this latest suit from Echostar wants TiVo "to stop making public statements that allege that the current software on Dish's DVRs are still in violation because it's causing uncertainty in the marketplace for DVRs."

TiVo hasn't commented on the suit yet and it seems to me that whether or not Dish will have to turn off their customers' DVRs is still up in the air.

Personally, this whole drama would be enough to keep me from signing up for Dish right now if I were so inclined. Especially since I'd probably be stuck with a contract that I couldn't get out of. And maybe this is what Dish is hoping this suit will clarify.

Myself, I have no use for satellite and cable TV providers at all anymore. I ditched DirecTV (DTV) a few months back and have never looked back. With a dual OTA (over the air) digital tuner, a Media Center PC, 3 Xboxes that act as extender units, I get all my HDTV network TV for free now with a kick ass DVR in Media Center. I fill in the premium content with a Netflix (NFLX) subscription and I'm good to go.

If you are considering satellite service, though, check out this thread from FriendFeed where people talk about which service is better, DirecTV or Dish.