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Tivo Settlement: Dish Network, EchoStar to Pay TiVo $500 Million

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By Cynthia Hsu, Esq. on May 10, 2011 6:46 AM

In a landmark patent infringement case, Dish Network and EchoStar have agreed to pay TiVo a $500 million settlement in a suit about TiVo's "time warp" technology. The TiVo settlement comes after an April 20th ruling by a federal court that Dish and EchoStar were in contempt of a court-ordered injunction.

The injunction was supposed to prevent Dish and EchoStar from using any parts of their digital-video recording service that were infringing on a TiVo patent that allowed TiVo DVRs to record, playback, and fast forward through television programs at the same time, according to Bloomberg.

The TiVo settlement grants Dish Network and EchoStar a license to utilize the technology in their DVR boxes. The companies will be required to pay $300 million to TiVo now, with the other $200 million divided into six payments of $33 million to be paid through 2017, according to The Los Angeles Times.

In part, TiVo has also agreed to help promote Blockbuster digital video service, which was bought out by Dish last month, according to the AP.

The settlement vacates the previous judgment of contempt on the injunction. The April 20th contempt ruling would have required Dish and EchoStar to pay TiVo $90 million in damages, and shut down all of the DVRs with the disputed technology, reports The Los Angeles Times.

The federal court had also decided to send the case back down to the lower court to evaluate if any of the newer Dish DVR boxes would be covered by the injunction, according to the AP. This might have disrupted services for Dish subscribers, and likely would have cut down on the number of subscribers for the service.

In recent years, TiVo has brought similar suits against other companies, including AT&T and Verizon, in an effort to protect its intellectual property. 

In most patent infringement cases, it is typical for a court to issue a permanent injunction after an infringement is found. The permanent injunction is meant to stop the unlawful use of the patent.

The $500 million TiVo settlement is one of the largest in the patent infringement arena. Though, it's not a complete loss for EchoStar and Dish - now they will no longer have to turn off their DVRs in compliance with the injunction.

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