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Injunction Against EchoStar Blocked

Posted by ryuzaki0 on from the judge-vs-judge dept.

bestinshow writes "ExtremeTech has the news that a judge has blocked the injunction against Echostar Communications selling its PVRs." From the article: "The ruling was the latest in an ongoing battle between TiVo, one of earliest companies to design personal video recorders, now called digital video recorders or DVRS. 'As a result of the stay EchoStar can continue to sell, and provide to consumers, all of its digital video recorder models,' EchoStar added. 'We continue to believe the Texas decision was wrong, and should be reversed on appeal. We also continue to work on modifications to our new DVRs, and to our DVRs in the field, intended to avoid future alleged infringement.'"

17 of 109 comments (clear)

  1. question for those who understood this stuff.. by free+space · · Score: 4, Interesting

    Does that mean that EchoStar can rest assured that their recorders will work indefinitely, or should they continue worrying that the blocking of the ruling can be reversed?

    1. Re:question for those who understood this stuff.. by StringBlade · · Score: 5, Informative

      It means they still have to worry about losing on appeal and getting an injunction again, but for the time being, they can continue to do what they're doing.

      --
      ...and that's the way the cookie crumbles.
    2. Re:question for those who understood this stuff.. by SeaFox · · Score: 2, Insightful

      While I'm sure Echostar can rest easy, consumers shouldn't. I was rather shocked with the initial denial of stay. Normally I don't see companies ever having to do anything about any litigation until after the last appeal is lost. A patent dispute rarely has any effect on consumers themselves in such a way as the company will have a drastic effect on their business. ...and I was rather looking forward to the outrage.

      The quick turn around on this will probably help keep the legal fight and what it means to consumers under wraps. But I hope it servs as a wake up call to people what sort of conditions they're agreeing to when they get a DVR from their provider.

      Be wary of any electronic device that depends on authorization or information from someone else in order to function. Because you never know when they may have to/choose to pull the plug.

      The only DVR you can really depend on is one you own outright and can make configuration changes to for the programming data source yourself (like a Myth box).

    3. Re:question for those who understood this stuff.. by Buran · · Score: 2, Interesting

      The only DVR you can really depend on is one you own outright and can make configuration changes to for the programming data source yourself (like a Myth box).

      And if (I don't know if this applies here, just conjecturing) the patents apply to that code as well, and it can't be distributed anymore?

      If someone has a legitimate patent, and the invention was non-obvious when the patent application was made, then the only source you can depend on is the inventor's, if they choose to be sole distributor.

      --
      i am a soviet space shuttle
  2. This is good. by SonicBurst · · Score: 2, Interesting

    This is good news for consumers. With a little luck, the original judgment will be dismissed, perhaps even Tivo's obvious patent invalidated. I can't believe the case made it this far in the first place.

    --

    Geek used to be a four letter word. Now it's a six-figure one.
    1. Re:This is good. by StringBlade · · Score: 5, Interesting

      From friends who have one, I hear TiVo is a great product - far better than anything offered by Dish, DirecTV or cable companies and I'd hate to see them go out of business because of this. Additionally, Echostar seems to have played some dirty pool in getting their own DVR out the gate by peeking at a TiVo that was left behind during negotiations between TiVo and Echostar for licensing DVRs. But at the same time, I don't think that TiVo should have such a broad patent on this technology. In this case, it seems they're using their patent defensively simply to stay alive in a market that can quickly and easily be taken away from them by the satellite and cable companies that provide the content transport.

      This is a philosophically painful case for me because I want to root for TiVo because they have a superior product, but not for patents. And I want to root for Echostar because I have one of their DVRs and would hate to lose it's functionality. I also don't want to root for TiVo because a win for them will negatively impact Dish customers who through no fault of their own are being punished for Echostar's behavior. That's like Microsoft users being forced to remove the Quicktime player from all Windows installations because of some industrial espionage they did against Apple (just by way of example -- it didn't really happen).

      --
      ...and that's the way the cookie crumbles.
    2. Re:This is good. by Rich0 · · Score: 3, Insightful

      Tivo came out with a GREAT product which was well marketed. However, it really was just the next technological step - apparently other companies were working on the same thing at the same time.

      Tivo enjoyed great profits from their launch, but what they want now is a lock on the market for what was essentially a small up-front investment.

      Tivo's current systems are generally superior to most of the competition. Their problem is that they are EXPENSIVE. The cable companies realized that DVRs sell service, so like cell phones they give them away in exchange for monthly contracts. Tivo is selling $400 cell phones in a market where most people expect them to be free (even if a bit more junky). This is why Tivo is losing market share fast.

      While I'd love to see Tivo win, the fact is that their original product wasn't that innovative. Others were working on the same sorts of things, but Tivo executed better. That should earn them some bucks, but not royalties for 17 years. Plus, Tivo's up-front expenses were not that high - probably not more than a few 10's of millions of dollars - they were almost certainly fully recovered with a healthy profit.

      Patents should exist where they are needed to allow companies to make healthy profits on risky ideas. However, that is all they are needed for - if a company is able to make a healthy profit without a patent, then one is not necessary. Patent lifetimes should probably be tweaked by industry as well - in industries where we expect a high level of expense to ensure quality (such as pharmaceuticals) we should probably grant longer patents (or lower the safety standards to reduce up-front costs). In an industry like toothbrush designs they should probably be shorter. Software patents should probably only last a year or two - as softare is not capital-intensive and a two year head start is plenty to make a profit.

      In general patents should exist for the benefit of society - to encourage companies to come up with innovative products. That benefits everyone. However, if a company is willing to do R&D with the promise of a 200% payback we shouldn't be offering them 20,000%.

    3. Re:This is good. by Znork · · Score: 2, Insightful

      "Patents should exist where they are needed to allow companies to make healthy profits on risky ideas."

      Unfortunately, protection from competition breeds expenses, encourages waste and creates inefficient uncompetetive organizations.

      "in industries where we expect a high level of expense to ensure quality (such as pharmaceuticals)"

      Pharmaceuticals are a perfect example; they waste 80% of their income outside research. They spend more than twice as much on marketing and administration as they do on R&D. The protection breeds the expense which makes the protection necessary for the protected business model.

      "However, if a company is willing to do R&D with the promise of a 200% payback"

      Then offer them a 200% payback. Outright. Instead of a patent creating a monopoly, let it be worth a 200% ROI for the patent holder if it gets used in products to a certain amount within the next five (or ten, or thirty) years. Paid by the patent office, financed through ordinary state financing rather than a hidden economic tax in the incarnation of monopoly pricing. You get rid of the customer/inventor conflict relationship, small inventors get paid even if some big company rips them off, etc.

      Economic incentives for R&D can take many forms. State protected monopolies has to be about the most inefficient and economically damaging model conceivable.

    4. Re:This is good. by mungtor · · Score: 2, Insightful

      "Unfortunately, protection from competition breeds expenses, encourages waste and creates inefficient uncompetetive organizations."

      Patents are needed to give people the incentive to innovate to begin with. Let's say that you come up with some novel, highly efficient form of the internal combustion engine. You put millions into research, mortgaged your house, everything. Without a patent, or equivalent legal means of protetion, some auto manufacturer could by 1 engine, tear it down, and due to the economies of scale begin producing it more cheaply than you almost immediately. So you've just pissed away years of effort and millions of dollars. That would be OK with you?

      The biggest problem with the patents is the process. The USPTO is run like a sweatshop. You have a quota on how many patents to work on, not enough time to do adequate research into proir art, and people who are not specalized sufficiently in the fields that they are reviewing patent applications in.

      Simply because there are a lot of people working on an idea does not invalidate the claim of the first one to bring it to market either. Another fundemental problem with the patent process is that patents are granted for concepts, not things. If you don't have a working example or implementation of what you are trying to patent, then no patent should be granted.

      The real problem here rather than a flat out patent case seems to be that EchoStar simply acted in bad faith with TiVo by using a TiVo to jumpstart the development of their own product under the guise of licensing negotiations. I know that a lot of EchoStar customers could suffer due to the unethical behavior of their provider, but IMO all that means is that EchoStar customers should start lining up for a class action lawsuit to recover subscription fees immediately.

    5. Re:This is good. by Kaktrot · · Score: 2, Funny

      "Then offer them a 200% payback. Outright. Instead of a patent creating a monopoly, let it be worth a 200% ROI for the patent holder if it gets used in products to a certain amount within the next five (or ten, or thirty) years. Paid by the patent office,"

      I'm not sure this is a good way to encourage thrift. "Hey guys, whatever you spend, you'll make double. Now go out there and invent somethin! Save your receipts!"

      Seriously, though, the red tape and government bungling that this would encourage would be dreadful, IMO.

      --
      BSD: The most efficient way of subsidizing the enemy.
    6. Re:This is good. by Rich0 · · Score: 2, Interesting

      Then offer them a 200% payback. Outright. Instead of a patent creating a monopoly, let it be worth a 200% ROI for the patent holder if it gets used in products to a certain amount within the next five (or ten, or thirty) years. Paid by the patent office, financed through ordinary state financing rather than a hidden economic tax in the incarnation of monopoly pricing.

      You essentially described how the phone company used to work. You know why the telephone company invented the transistor? Simple - their profits were a fixed percentage of their costs - the more they spent the more they made. As a result blue sky R&D was heavily financed - since every dollar spent was GUARANTEED a $1.10 return (or whatever the rate was). It also used to be the case that people would tiptoe around the house when somebody was on a long distance call, since the rates were amazingly high - probably a result of the aforementioned waste. Sure, the transistor was a good thing to come out of the arrangement, but for every dollar spent on R&D I'm sure 50 were spent on bureaucracy - since the more you wasted the more you made.

      Pharmaceuticals are a perfect example; they waste 80% of their income outside research. They spend more than twice as much on marketing and administration as they do on R&D. The protection breeds the expense which makes the protection necessary for the protected business model.

      Hardly - the figures you quote apply in ANY industry - Pharma actually tends to invest more in R&D comparatively than most industries. NOBODY spends more on R&D than they do on marketing. That is simply because people buy the products they see on TV regardless of whether they are better. If you ban advertising of any kind then maybe that might change. Your own figures above suggests Pharma is spending 20% on R&D. Name any company outside of Pharma that has comparable expenses - other than startups that obviously only spend money on R&D as they have no product to market (and even then they often spend money to create a market for products that don't yet exist). Even software houses that have low manufacturing costs probably don't spend more than 20% on R&D.

      Don't get me wrong - I'd like to see more of the money going to R&D. However, that is a function of how society actually works - if you have to make a profit, then you need to market. And if consumers buy what the Hollywood actor tells them to buy, then it is more important to pay Hollywood actors to promote your product than scientists to make it better.

  3. Stayed Tuned For More Judge-on-Judge Action! by Chaffar · · Score: 4, Insightful

    Consumers win, consumers lose... all of this is irrelevant, the truth is that we have a sh*tty patent system that's vague enough to have two judges give 2 different verdicts on the same case.

    In all cases I believe that it is wrong to make EchoStar stop its service immediately, and to remotely disable the current consumers. Consumers that have already paid shouldn't be the ones to bear the consequences. But then again, the consumers' interest is the least of the worries of those concerned...

  4. No confilct there. by Tracer_Bullet82 · · Score: 2, Insightful

    while perhaps Tivo has a superior product(which I won't comment eitherway).. the granting of patents to obvious things/concept in the long run would create a monopoly.

    Monopolies rarely in the long run, or hect short run, produce products that are inferior or of lesser value.

    Or put it in the other way, without the patent, other companies or inventors.. can produce prducts that are better. That's the nature of competition.

    --


    Timang tinggi tinggi
    parang sudah asah
    alang alang mandi
    biar sampai basah
  5. Re:When did it become obvious? by swillden · · Score: 2, Informative

    Obvious when? To whom?

    To a skilled practitioner of the relevant art, at the time of the invention.

    The law already defines that. It's just that it's quite hard to prove obviousness, except in the case of prior art.

    --
    Note to ACs: I usually delete AC replies without reading them. If you want to talk to me, log in.
  6. Re:When did it become obvious? by SonicBurst · · Score: 2, Informative

    Yet if the disk based DVR and such was so obvious why wasn't it out and established before tivo?
    Simple...the necessary HD space just didn't exist at the time (well, economically anyway). First gen Tivos hit the street in what, 1997 or so? HDs then, 4GB to maybe 8GB if you were lucky, were just barely spacious and speedy enough to do what a DVR needs to do. The market appeared because the core technology (hard disks) had matured enough, not because of the idea of recording/viewing directly from HD had been patented.

    --

    Geek used to be a four letter word. Now it's a six-figure one.
  7. MythTV by Lars83 · · Score: 2, Informative

    OSS, no subscription fees, fairly straightforward to build.

    Also, you OWN the recordings once you've made them.

  8. WTH? by mgkimsal2 · · Score: 2, Insightful

    Good lord I would have thought this would have been obvious to anyone who's used a DVR for awhile, but apparently it's not...

    allow for the recording of one program while watching another program (aka, anything one can normally do with a VCR) on a DVR.

    Look at a VCR. It holds one video cassette.

    Look at a DVR. It holds one hard drive (usually).

    Try recording to a VCR while watching another program on the same tape (or on a different tape). It's physically impossible. Recording to and watching from the same physical media is what makes the Tivo/VCR analogy fall apart.

    (aka, anything one can normally do with a VCR)

    Why not just argue that we've been able to do this all along with multiple television sets?

    --
    creation science book