Appeals Court Blocks Order to Disable DISH Network DVRs

A federal appeals court on Friday temporarily blocked a trial judge's order that EchoStar Communications Corp. (DISH), parent of the Dish satellite-TV service, disable more than 3 million digital video recorders.

The appeals court blocked an injunction that was issued Thursday by a federal district court judge in Texarkana.

The injunction followed a jury decision in April that EchoStar infringed on TiVo's (TIVO) patent for "time-warp" technology — the ability to record a live television program while playing another.

Judge David Folsom also increased the jury's verdict that EchoStar should pay $74 million in damages to $89.6 million — beyond the $87 million that TiVo's lawyers asked the jury to award.

The judge, however, could have tripled the jury's amount, because jurors found that EchoStar willfully infringed TiVo's patent. TiVo was considering seeking a larger award on appeal.

The judge also gave EchoStar 30 days to turn off some of the digital video recorders it has provided to customers and stop selling new ones.

EchoStar said it was pleased with the delay approved Friday by the federal appeals court in Washington. The company said it was altering its recorders to avoid future claims of patent infringement.

An EchoStar spokeswoman said more than 3 million of Dish's 12 million subscribers use an EchoStar recorder that would have been affected by Folsom's ruling.

A TiVo spokesman declined to comment immediately on the appeals court decision blocking the injunction.

Earlier, Alviso, Calif.-based TiVo had hailed Folsom's ruling.

"This decision recognizes that our intellectual property is valuable and will ensure that moving forward EchoStar will be unable to use our patented technology without our authorization," TiVo said in a statement.

TiVo shares rose 51 cents, or 7.9 percent, to $7 in early afternoon trading on the Nasdaq Stock Market. EchoStar shares dropped 39 cents, or 1.2 percent, to $32.36.

TiVo hopes that a victory against EchoStar will convince other cable and satellite-TV providers that sell digital video recorders, or DVRs, other than TiVo's to agree to pay royalties and licensing fees to the company whose name is synonymous with recording TV on a hard drive.

EchoStar's Dish network is the nation's second-largest satellite-TV provider. The Englewood, Colo.-based company had argued before the jury that its DVRs used other technology and didn't violate TiVo's patent.

The jury took less than two hours of deliberations to find in favor of TiVo.