Nice forum-shopping job by Tivo's lawyers:
Trial Over TiVo Patent Begins in Texas
Wednesday March 29, 9:52 am ET
By David Koenig, AP Business Writer
Trial Over TiVo Patent Gets Underway in Texas Courtroom; Testimony Expected to Be Technical
MARSHALL, Texas (AP) -- Lawyers for TiVo Inc. were expected to tell a federal court jury Wednesday that satellite-TV broadcaster Dish Network stole the technology used in TiVo's popular device for recording and replaying live television.
Lawyers for EchoStar Communications Corp., the parent of Dish Network, planned to argue that their client didn't infringe on TiVo's patent for a "multimedia time warping system" and instead invented their own digital video recorder.
After opening statements by lawyers, testimony was expected to take a technical turn as each side trots out expert witnesses to describe the inner workings of each company's set-top box.
If TiVo wins, it could collect millions in damages to boost its sagging financial performance and gain leverage to force cable operators to pay royalties for offering customers TiVo-like service. Analysts say the outcome also will affect the price of TiVo stock, which is up 38 percent so far this year.
TiVo, based in Alviso, Calif., is seeking unspecified damages. Lawyers following the case said the company is probably seeking an amount equal to what Dish Network would have paid TiVo if it had licensed TiVo technology in 2001, when TiVo received a patent for the technology.
TiVo changed the way many Americans watch TV and made the company name a verb for recording programs. It has never translated its status in pop culture into profits, however. The company has lost money ever since it started in 1997.
The company faces competition from bigger companies that also make digital video recorders, or DVRs. They include Motorola Inc.; NDS, a unit of News Corp.; and Scientific-Atlanta Inc., which has been bought by Cisco Systems Inc.
Conversely, EchoStar, based in Englewood, Colo., earned $1.5 billion last year as Dish Network has grown to 12 million subscribers.
It was no accident that TiVo chose to file its lawsuit in an East Texas city of about 24,000 residents. The federal courts in Marshall and other East Texas cities are known for handling patent cases quickly -- a boon to plaintiffs.
Lawyers not connected to the case say it will be difficult for EchoStar to make its technical-sounding defense to local jurors, who favor plaintiffs about three-fourths of the time. EchoStar says the TiVo patent is unenforceable.
EchoStar has filed a countersuit against TiVo. That case is scheduled for trial next year in federal court in Texarkana, Texas. |
