Dish to pay TiVo $104 million after court ruling

NEW YORK (Reuters) - Dish Network Corp and EchoStar Corp will pay $104 million in damages to TiVo Inc after the U.S. Supreme Court on Monday denied Dish’s appeal of a patent infringement case.

The court’s decision not to review an appellate court’s ruling follows years of legal wrangling over TiVo’s “Time Warp” software that allows users to record one television program while watching another via a digital video recorder.

“Because of the Supreme Court’s decision, we will pay Tivo approximately $104 million (the amount the jury awarded in 2006 plus interest),” Dish said in a statement. “The money is in an escrow account and will be released to Tivo in the next few days.”

Still to be determined is how U.S. District Judge David Folsom in Texas will rule on whether EchoStar owes TiVo more damages for allegedly failing to turn off its DVRs, as required in the injunction.

EchoStar, instead, continued collecting subscription fees for the infringing DVRs and replaced the infringing software with a “work-around” that does not use TiVo’s patented technology.

“Judge Folsom has to determine how to treat these workarounds,” said Jand Partners analyst Murray Arenson. “Today’s ruling doesn’t change anything -- the bigger issue is this injunction. That determines whether EchoStar is backed into a corner or not.”

TiVo, in a statement, said it was looking forward to receiving the award, and is confident a lower court will enforce the injunction against Dish, which operates the No. 2 U.S. satellite television service.

Dish, in a statement, disagreed.

“We believe that the design-around does not infringe Tivo’s patent and that TiVo’s pending motion for contempt should be denied,” Dish said.

Dish, formerly known as EchoStar Communications Corp, recently spun off its technology assets, including its set-top box division, to create EchoStar Holding Corp.

On Nasdaq, TiVo fell 13 cents, or 2.08 percent, to $6.13; and Dish dropped $1.30, or 6.9 percent to $17.50 at mid-afternoon.

Reporting by Franklin Paul, editing by Richard Chang