TiVo and EchoStar’s Attempt to Settle Case After Appeal Decision Fails

Washington, DC – As a nonprecedential disposition, the United States Court of Appeals for the Federal Circuit has issued an order denying an attempt by TiVo, Inc., EchoStar Corporation, related EchoStar affiliates, and Dish Network Corporation to settle, following a decision on appeal, their long-running patent dispute.

At issue is certain video recording technology, such as that employed in digital video recorders (DVRs), allowing DVR users to watch one program while another is recorded. Following a trial at which it was held liable for infringement and permanently enjoined from making or selling infringing products, EchoStar modified its product and continued to sell it. TiVo brought a contempt action, and the trial court found EchoStar in contempt because the modified product violated the injunction by not being “colorably different” from the infringing version.

The contempt ruling was appealed. On April 20, 2011, the Federal Circuit issued a rare en banc (the full court, rather than just a panel) decision which would have required EchoStar and Dish Network pay $90 million in damages to TiVo. Importantly, that opinion provided new rules for courts to utilize in contempt proceedings involving infringing products which have been modified following issuance of an injunction.

The parties reached a settlement on April 29th and, informing the Federal Circuit of this on May 2nd, they asked the court to dismiss the appeal. At that point, the Federal Circuit had not issued a mandate to the trial court implementing the appellate decision. However, in the latest order, the Federal Circuit, again ruling en banc, succinctly refused to grant the parties’ request. Citing decisions by sister federal courts of appeal, the Federal Circuit noted that dismissing the case would essentially vacate the prior en banc opinion, which is “neither required nor a proper use of the judicial system.”

Practice Tip: Regardless of what type of wrong is alleged, if parties to a case on appeal reach a settlement before the court issues a decision, they have a duty to inform the court of the agreement.

TiVoEchoStar 5-10-11 Order

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