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A three-judge federal appeals court ruled on Thursday that EchoStar/Dish Network violated Tivo's DVR software patent. Tivo is expected to receive about $94 million in damages and interest. As a result, Tivo's stock soared 29% on Thursday. Naturally, EchoStar said it would appeal the ruling, which will extend litigation that has been ongoing since 2004. Dish said in a statement:

We are pleased the Federal Circuit found for us on Tivo's hardware claims, but are disappointed in the Federal Circuit's decision on the software claims. The decision, however, will have no effect on our current or future customers because EchoStar's engineers have developed and deployed 'next-generation' DVR software to our customers' DVRs. This improved software is fully operational, has been automatically downloaded to current customers, and does not infringe the Tivo patent at issue in the Federal Circuit's ruling.

So Dish customers will be able to use their existing DVRs without being affected much by this ruling. For its part Tivo's press release was full of joy:

"We are extremely pleased that the United States Court of Appeals for the Federal Circuit unanimously ruled in our favor in EchoStar's appeal of the district court judgment of patent infringement, full award of damages and that the injunction, which was stayed pending appeal, was ordered to be  reinstated. Today's ruling is confirmation of the value of TiVo's IP portfolio, which is in addition to the other benefits TiVo has to offer. TiVo can now continue to focus on its goal to drive greater distribution in both its stand alone and mass distribution efforts."

So essentially Tivo won on software, but not on its hardware claims. That's ok, I guess, since Tivo is discontinuing its Series 3 HD DVRs according to Megazone at Tivo Lovers. [tags] DVR, Tivo, Dish Network, EchoStar, lawsuit, Series 3 [/tags]