Los Angeles, CA, September 6 -- Victory at last for TiVo Inc (NASDAQ: TIVO) in the 5 1/2-year patent battle against Dish Network Corp (NASDAQ: DISH) and EchoStar Corp (NASDAQ: SATS).
The U.S. District Court for Eastern Texas directed EchoStar and Dish Network to pay $200 million in damages to the manufacturer of DVR boxes for using the digital video recorder's technology and infringing its patent.
The court ruled to inflict contempt sanctions against the sister concerns Dish and EchoStar for violating a court-ordered ban from April 2008 through July 1, 2009.
"We are pleased by the Court's ruling to impose contempt sanctions of approximately $200 million against EchoStar for its continued violation of a Court-ordered permanent injunction," TiVo said in a statement.
Total penalty $400 million
Judge David Folsom awarded TiVo $2.25 per DVR subscriber per month from the said period. The court, however, termed TiVo’s request to impose costs of nearly $1 billion on Dish and EchoStar as "unreasonable".
In all, EchoStar and Dish will have to cough up $400 million because of the dispute. A jury had granted TiVo $103 million plus interest in June earlier this year.
The latest award includes $110 million in compensation and about $90 million in sanctions and litigation costs.
Appeal against ruling
In the month of July, Dish and EchoStar had won a stay, pending their appeal of the court's order to render inoperative millions of subscribers' digital video recorders that violate TiVo's patent for 'time warp' technology.
The two companies claimed that they will appeal against it. The companies argued that they had altered the service to work around the patent.
"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," stated the joint statement.
Shares of TiVo and Dish soar
After the judgment, shares of TiVo increased 5.5 percent to $10.34 while shares of Dish increased 5.4 percent to $17.18. The shares of Colorado based EchoStar remained unchanged at $18.00.
Todd Mitchell, analyst at Kaufman Bros opined, “This increases the likelihood of a constructive resolution, which is why both stocks are up. This is something theoretically that both parties should be able to live with and the market wants to see resolution for both parties."