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EchoStar Gets Temporary Reprieve in DVR Case

Aug 18, 2006  •  Post A Comment

EchoStar Communications Friday got a temporary reprieve from a federal judge’s order that would force the satellite-television provider to switch off its customers’ digital video recorders.

A U.S. District Judge in Texas today ordered the shutdown in a patent case brought by DVR pioneer TiVo Inc. and awarded TiVo $89.6 million in damages. EchoStar turned to an appeals court, which temporarily blocked the trial court’s order while the panel considers the appeal.

About 4 million of EchoStar’s 12.5 million subscribers have DVRs, and the ability to offer pause and playback functions is a key feature for the company as it competes for viewers with DirecTV Group Inc. and cable providers. TiVo shares rose after the trial-court ruling and EchoStar stock fell.

The appeals court decision will let EchoStar continue to offer DVRs while it considers the company’s request. EchoStar is seeking to reverse the lower court’s decision and said it is working on modifications to its devices that will help it avoid future allegations of patent infringement.

“We are pleased that this morning, the Federal Circuit Court of Appeals in Washington, D.C. temporarily blocked an injunction issued by a Texas Court, while it considers a longer-term stay of that injunction,” EchoStar said in a statement.

TiVo, which innovated DVR technology and since has seen its product copied by cable and satellite-TV providers, noted that the appeals court action today only spares EchoStar a DVR shutdown temporarily.

“The court stated that the temporary stay is not based on a consideration of the merits of EchoStar’s request. This action is routine and is taken to give a court sufficient opportunity to decide if a stay should be in effect pending appeal,” the company said in a statement.