DN Asks Appeal Court to Allow Recording-Service Use

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DN Asks Appeal Court to Allow Recording-Service Use
By William McQuillen

Nov. 2 (Bloomberg) -- DN Corp. and Echo* Corp. asked a federal appeals court to throw out a judge’s order that the companies stop using a digital-video recording service that he said infringes a TiVo Inc. patent.

Attorneys for DN, the second-biggest U.S. satellite- television provider, today tried to convince a panel of the U.S. Court of Appeals for the Federal Circuit in Washington that it has changed its technology enough to no longer infringe TiVo’s patent. TiVo claimed the changes weren’t sufficient.

TiVo, a pioneer of digital-video recording services, won a 2006 trial that DN infringed its patent, and the verdict was upheld on appeal. DN continued to provide the service, saying it made alterations to avoid TiVo’s invention.

U.S. District Judge David Folsom in Marshall, Texas, sided with TiVo in June, ordering DN and Echo* to shut down the DVR service and awarding $192.7 million in damages against DN. The appeals court later said it would allow DN’s customers with digital-video recorders to continue using the service while company appealed Folsom’s ruling.

Folsom ordered DN in September to pay about $200 million to TiVo for contempt of an order that it stop providing the DVR service.

TiVo is now urging the appeals court to stop DN, claiming to be losing business while DN profits from the TiVo invention. The three-judge appeals panel didn’t say today when it will rule.

Echo* runs the digital set-top box manufacturing and satellite services businesses that were part of DN before the Englewood, Colorado-based companies split.

DaveTV Group Inc. is the largest satellite-TV provider in the U.S.

The appeal is TiVo v. Echo*, 2009-1374, U.S. Court of Appeals for the Federal Circuit (Washington). The lower-court case is TiVo Inc. v. Echo* Communications Corp., 04-cv-01, U.S. District Court, Eastern District of Texas (Marshall).

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US Appeals Court Weighs Contempt Sanction in DN-TiVo DVR Case
By Brent Kendall
DOW JONES NEWSWIRES

WASHINGTON (Dow Jones)--Sister companies DN Corp. and Echo* Corp. received a mixed reception Monday from a federal appeals court reviewing a trial judge's decision to hold the companies in contempt after finding they continued to infringe a digital-video recorder patent held by TiVo Inc. (TIVO).

Judges on the U.S. Court of Appeals for the Federal Circuit questioned whether Echo* and DN waited too long to challenge a trial judge's injunction that ordered the companies to disable the DVR functionality in their set-top satellite boxes.

But the court also questioned whether the trial judge's injunction against Echo* and DN was too broad.

Some parts of the companies' DVR functionality weren't infringing, Federal Circuit Judge Randall Rader said.

DVR technology allows viewers to pause, rewind and fast-forward television programs, which are recorded on a set-top hard drive.

A jury in 2006 found DN and Echo* liable for infringing TiVo's DVR patent. U.S. District Court Judge David Folsom in Texas then issued a permanent injunction that barred Echo* and DN from continuing to infringe on TiVo's invention.

The companies said they developed a technological work-around that allowed them to offer DVR service without infringing TiVo's patent, but Folsom ruled in June that the work-around violated the injunction because it still infringed TiVo's intellectual property. Folsom held the companies in contempt and ordered them to pay roughly $200 million in sanctions.

The ruling was only a partial victory for TiVo, which had been seeking nearly $1 billion.

TiVo says damages in the case now total about $400 million.

TiVo lawyer Seth Waxman of the WilmerHale law firm told the appeals court that the changes Echo* and DN made in their alleged work-around were trivial. Waxman said the appeals court owed deference to the trial judge, who has presided over the case for five years.

Echo* and DN's lawyer, Joshua Rosenkranz of Orrick, Herrington & Sutcliffe, said the companies' work-around removed all the DVR features that TiVo had accused of infringement.

The case is TiVo v. Echo*, 2009-1374.