TiVo 2009 Annual Report Download - page 22

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For example, on April 29, 2005, EchoStar Technologies Corporation filed a complaint against TiVo and Humax USA, Inc. in the U.S. District Court for
the Eastern District of Texas alleging infringement of U.S. Patent Nos. 5,774,186 ("Interruption Tolerant Video Program Viewing"), 6,529,685 B2
("Multimedia Direct Access Storage Device and Formatting Method"), 6,208,804 B1 ("Multimedia Direct Access Storage Device and Formatting Method")
and 6,173,112 B1 ("Method and System for Recording In-Progress Broadcast Programs"). The complaint alleges that TiVo and Humax have infringed,
contributorily infringed and/or actively induced infringement of the patents by making, using, selling or importing digital video recording devices, digital
video recording device software and/or personal television services in the United States that allegedly infringe the patents, and that such infringement is
willful and ongoing. Under the terms of our agreement with Humax governing the distribution of certain DVRs that enable the TiVo service, we are required
to indemnify Humax against any claims, damages, liabilities, costs, and expenses relating to claims that our technology infringes upon intellectual property
rights owned by third parties. We intend to defend this action vigorously; however, we are incurring expenses in connection with this lawsuit, which could
become material in the future, and in the event there is an adverse outcome, our business could be harmed. For a complete description of this lawsuit, please
see our discussion under Item 3. "Legal Proceedings."
Pending intellectual property litigations. We are subject to a number of pending intellectual property litigations. We intend to defend these actions
vigorously; however we could be forced to incur material expenses in connection with these lawsuits and/or as a result of our indemnification obligations and,
in the event there is an adverse outcome in any of these cases, our business could be harmed. For more information on our pending intellectual property
litigations, please see our discussion under Item 3. "Legal Proceedings."
We have filed a patent infringement lawsuit against EchoStar Communications Corporation. We are incurring significant expenses as a result,
and an adverse outcome in the lawsuit could harm our business.
On January 5, 2004, we filed a complaint against EchoStar Communications Corporation ("ECC") in the U.S. District Court for the Eastern District of
Texas alleging willful and deliberate infringement of U.S. Patent No. 6,233,389, entitled "Multimedia Time Warping System." On January 15, 2004, we
amended our complaint to add EchoStar DBS Corporation, EchoStar Technologies Corporation, and Echosphere Limited Liability Corporation as additional
defendants. We allege that we are the owner of this patent and further allege that the defendants have willfully and deliberately infringed this patent by
making, selling, offering to sell and/or selling digital video recording devices, digital video recording device software, and/or personal television services in
the United States. On April 13, 2006, the jury rendered a verdict in our favor for the amount of approximately $74.0 million dollars. On January 31, 2008, the
U.S. Court of Appeals for the Federal Circuit in Washington, D.C. unanimously ruled in favor of TiVo Inc. in connection with EchoStar's appeal of the
district court judgment of patent infringement against EchoStar with respect to several claims (so called software claims) of the patent, upholding the full
award of damages from the district court, and ordering that the stay of the district court's injunction against EchoStar's infringing digital video recorders that
was issued pending appeal will dissolve when the appeal becomes final. On April 11, 2008, the Federal Circuit denied EchoStar's combined petition for a
panel rehearing and en banc rehearing of the Federal Circuit's denial of their appeal of the district court's judgment. On October 6, 2008, the Supreme Court
denied EchoStar's writ of certiorari. On October 8, 2008, the Company received $104.6 million from EchoStar. On February 17, 2009, the U.S. District Court
held a contempt hearing in connection with EchoStar's alleged work-around of the Company's patent. On June 2, 2009, the district court found EchoStar in
contempt of its permanent injunction regarding EchoStar's on-going infringement of TiVo's U.S. Patent No. 6,233,389 which was stayed pending appeal on
July 1, 2009 by the Federal Circuit. On March 4, 2010, the Federal Circuit fully affirmed the District Court's finding of contempt of its permanent injunction
against EchoStar. EchoStar has indicated that it intends to file a petition seeking rehearing en banc. On March 9, 2010, EchoStar filed a motion with the
District Court seeking pre-approval of a new alleged design-around for its Broadcom DVR receivers ("rework2") as well as an emergency motion for
expedited resolution of its pre-approval motion. On March 25, 2010, the United States District Court for the Eastern District of Texas entered an order staying
the injunction until midnight April 30, 2010. We continue to incur material expenses in connection with this lawsuit. For a complete description of this
lawsuit, please see our discussion under Item 3. "Legal Proceedings."
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