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By Susan Decker
May 14 (Bloomberg) -- TiVo Inc.’s legal victory against Dish Network Corp. and EchoStar Corp. for infringing a patent on digital-video recording services will be reconsidered by an appeals court.
The decision today by the U.S. Court of Appeals for the Federal Circuit to revisit the case pushed TiVo shares down as much as 35 percent, its biggest one-day drop since Sept. 30, 1999. Dish rose as much as 10 percent.
The court said it will take a second look at its March 4 finding that Dish and EchoStar were still in violation of TiVo’s patent, even after claiming they had changed their technology enough to avoid infringement. TiVo, based in Alviso, California, had argued the changes weren’t sufficient.
The court said it will consider whether the judge erred in not giving Dish a trial to determine if its workaround was still infringing TiVo’s patent. The judge considered the issue in a hearing.
TiVo fell $6.03, or 35 percent, to $11.36 at 10:57 a.m. New York time in Nasdaq Stock Market trading.
TiVo, a pioneer of digital-video recording services, won a trial in 2006 that Dish infringed its patent for so-called “time warp” technology that lets users record a TV program and play it back at the same time. It first sued Dish and EchoStar in 2004, when the two were a single company.
The verdict was upheld on appeal, as was an order that Dish stop providing its DVR service. Dish, the second-biggest U.S. satellite-television provider, continued to provide the service, saying it made alterations to bypass TiVo’s invention. TiVo disagreed.
The appeal is TiVo v. EchoStar, 2009-1374, U.S. Court of Appeals for the Federal Circuit (Washington). The lower-court case is TiVo Inc. v. EchoStar Communications Corp., 04-cv-01, U.S. District Court, Eastern District of Texas (Marshall).
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