$74 Million Patent Infringement Verdict for DVR Market Leader TiVo

04.2006

In a closely-watched trial involving one of the most popular forms of technology in the home entertainment market, law firm Irell & Manella LLP represented TiVo Inc. in its $74 million patent infringement verdict against EchoStar Communications Corp.

On April 13, a Marshall, Texas jury concluded that EchoStar had willfully infringed TiVo's patent on its "time-warp" technology for digital video recorders (known as DVRs). Despite two weeks of testimony about complex technology and patent issues, the jurors needed only two hours and fifteen minutes of deliberations to reach the unanimous verdict.

The finding of willful infringement exposes EchoStar to potential treble damages. In addition, EchoStar faces a potential injunction that would preclude it from further distribution of infringing DVRs. TiVo's general counsel Matthew Zinn noted after the trial that an injunction would be even more meaningful than the sheer dollar award.

Although many companies – EchoStar included – had previously tried to develop DVRs, TiVo was the first to produce successfully and market a low-cost DVR product that allows consumers to pause, rewind, and fast forward a live television program.

"We're extremely pleased that the jury agreed with our view of the case," said Morgan Chu, the Irell lawyer who led TiVo's trial team. "TiVo is a great company whose innovations have forever changed the landscape of the home entertainment industry. While trial lawyers always like to win, doing so for a company that has pushed existing boundaries to create a valuable product makes the verdict even more rewarding."

Irell has been representing Silicon Valley-based TiVo since January 2000, when the market leader first came under attack from companies looking to profit from the DVR craze. The firm successfully defended TiVo in separate actions by both Gemstar and Pause Technology.

The EchoStar verdict reached in Texas, TiVo's first against an infringing competitor, is the natural outcome of a comprehensive litigation strategy that Irell has pursued since 2004 when the case was filed.

"Although a trial verdict understandably gets the most attention in a patent suit, the road to obtaining a verdict of infringement is usually paved by a series of wins in extremely complicated pretrial motions and discovery proceedings," said Mr. Chu. "This case was no different. In large part, our victory at trial sprang directly from earlier achievements, which included obtaining favorable claim construction and discovery rulings."

Mr. Chu added: "One of the reasons for our firm's frequent success is our staffing philosophy. Our IP litigation teams usually include attorneys who are not technologists, in addition to lawyers with technical backgrounds. As a result, we are able to offer clients such as TiVo the best of all possible worlds – complete understanding of the complex technologies at issue in these cases integrated with well-rounded problem-solving perspectives and differentiated skill sets."

In addition to Mr. Chu, TiVo was represented at trial by Irell attorney Ben Yorks and by local counsel Sam Baxter and Garret Chambers of McKool Smith.