Dish fights TiVo again in court
Posted
Jun 02 2008, 03:04 PM
by
Kim Peterson
Dish Network is heading toward two options: shut down DVR service for its customers or license technology from TiVo. Neither one is particularly palatable, so the company filed a lawsuit against TiVo Friday to buy some time. Today, TiVo shares are down 9% to $7.66 as investors freak out about the litigation. Dish shares are pretty much unchanged.
This is a huge deal to Dish because two years ago, the courts told it to stop selling DVRs to customers. (This was after a jury found that Dish's sister company, EchoStar, infringed on TiVo's DVR software). Luckily, Dish got the courts to place that injunction on hold as long as the appeals process was taking place. But the courts refused to hear an appeal earlier this year.
Now Dish says its new DVR software is legit and doesn't infringe on TiVo's patents. TiVo disagrees, and recently hinted that it wanted the courts to block Dish from using that software. So Dish's lawsuit filed Friday is essentially a preemptive move, asking the courts to declare the Dish software as legal.
This is a big lawsuit for both sides. If Dish loses, it may have no other choice but to license TiVo's technology. Customers would be mighty unhappy with no DVR service. And TiVo last week reported a mere $3.6 million quarterly profit on $54.9 million in revenue. A licensing deal would be a huge boost to its bottom line.
