Media News

UPDATE 2-TiVo awarded $200 mln in Dish Network patent suit

* Court rules that Dish pay TiVo $2.25 per DVR

* Sanctions bring court costs against Dish to $400 mln

* TiVo shares up 6 pct, Dish up 7.5 pct (Adds analyst, background, byline)

NEW YORK, Sept 4 (Reuters) - A U.S. district court awarded TiVo Inc TIVO.O, a maker of DVR boxes, nearly $200 million in damages in its long-running patent case with Dish Network Corp DISH.O and EchoStar Corp SATS.O.

The U.S. District Court for Eastern Texas ruled to impose contempt sanctions against sister companies Dish and EchoStar for violating a court-ordered permanent injunction from April 2008 through July 1, 2009.

TiVo had originally asked the court to impose costs of nearly $1 billion on Dish and EchoStar, but the judge ruled that was “unreasonable.”

The court found that contempt sanctions equal to a rate of $2.25 per DVR subscriber per month were appropriate.

TiVo said it was pleased by the court’s ruling, which it said brings the total damages and sanctions in the case to about $400 million through July 1, plus attorney fees.

Judge David Folsom said that while the court found it “distasteful” Dish had advertised that its DVRs were “better than TiVos” while infringing TiVo’s patent, he took testimony from Dish founder Charlie Ergen at face value when Ergen said the company believed it had been successful in its efforts to design around the infringement.

But Folsom warned that if Ergen’s companies are unsuccessful on appeal and continue to disregard the court’s orders the court will “seriously entertain the award of enhanced sanctions.”

In July, Dish and EchoStar won a stay, pending their appeal of the court’s order to disable millions of subscribers’ digital video recorders that infringe on TiVo’s patent for ‘time warp’ technology.

Last month TiVo filed broader patent infringement suits against phone companies AT&T Inc T.N and Verizon Communications VZ.N. Both companies are both building out pay-TV services in the United States.

Shares in TiVo were up 54 cents or 5.5 percent to $10.34 while DISH shares were up 88 cents or 5.4 percent to $17.18. EchoStar shares were unchanged at $18.00.

“This increases the likelihood of a constructive resolution, which is why both stocks are up,” said Todd Mitchell, analyst at Kaufman Bros. “This is something theoretically that both parties should be able to live with and the market wants to see resolution for both parties.”

DISH and EchoStar said in a statement they will appeal this latest ruling.

“While we disagree that any amount of sanctions was warranted, the decision confirms our belief that we designed around TiVo’s patent in good faith. We believe that we ultimately will prevail on appeal.”

The case is: TiVo Inc v Dish Network Corp No: 2:04-CV-01 (DF) in the U.S District Court for the Eastern District of Texas.

Reporting by Yinka Adegoke; Editing by Gerald E. McCormick and Richard Chang