DISH, EchoStar win stay of TiVo patent award

LOS ANGELES (Reuters) - A U.S. appeals court on Wednesday stayed a Texas court's order forcing set-top box maker EchoStar Corp and satellite pay TV provider DISH Network Corp to disable millions of digital video recorders that infringe on a patent held by TiVo Inc.

The U.S. Court of Appeals for the Federal Circuit temporarily halted execution of the judgment by U.S. District Judge David Folsom, and ordered TiVo to respond by June 10 to the motion for a stay pending appeal, the order showed.

The move is the latest in a long-running court battle that resulted in a jury verdict in TiVo's favor in 2006, followed by an unsuccessful appeal by sister companies DISH and EchoStar.

The jury awarded TiVo about $74 million in damages plus interest, for a total payment by EchoStar and DISH of $104 million.

The stay comes a day after Folsom imposed additional damages of $103 million plus interest against DISH and EchoStar for continuing to infringe on TiVo's patent for "Time Warp" software -- which allows users to record one TV program while watching another -- while it appealed.

In his final judgment, Folson gave EchoStar and DISH 30 days to disable all but about 192,000 DVRs distributed among its 13.6 million customers.

DISH and Echostar made good on Wednesday on a pledge to appeal and secure a stay postponing execution of the order.

"We are pleased that the Federal Appeals Court in Washington temporarily stayed the district court's order in the TiVo litigation," DISH and EchoStar said in a statement. "DISH Network customers can continue using their DVRs. We believe we have strong grounds for appeal."

In a statement, TiVo said it was "confident" the appeals court would again uphold Folsom "and not permit EchoStar to further delay this case once it has an opportunity to consider TiVo's response and EchoStar's motion on the ... stay."

DISH was formerly known as EchoStar Communications Corp. It spun off its technology assets over a year ago, including its set-top box division, to create EchoStar Corp.

The news dampened trading in TiVo shares, which experienced their biggest single day gain in four years on Wednesday.

TiVo shares closed up 53.3 percent at $10.70 on Wednesday on Nasdaq. The shares were down 30 cents, or 2.8 percent, at $10.55, in after-hours electronic trade.

(Reporting by Gina Keating; Editing by Andre Grenon, Bernard Orr)