The US Court of Appeals for the Federal Circuit today handed down their ruling on EchoStar’s appeal of the district court ruling in favor of TiVo. The court unanimously upheld the decision on patent infringement for the software, full award of the damages, and reinstated the injunction against EchoStar’s DVRs, which had been suspended during the appeal. They did reverse the judgment of patent infringement on the hardware and remanded any further proceedings with regard to the hardware infringement claims back to the lower court:

In sum, because of a failure of proof of literal infringement, we reverse the judgment of infringement of the hardware claims with respect to all of the accused devices. We remand for any further proceedings that may be necessary with respect to those claims. We affirm the judgment of infringement of the software claims with respect to all of the accused devices. Because the damages calculation at trial was not predicated on the infringement of particular claims, and because we have upheld the jury’s verdict that all of the accused devices infringe the software claims, we affirm the damages award entered by the district court.

The district court’s injunction was stayed during the course of these proceedings. The stay that was issued pending appeal will dissolve when this appeal becomes final. At that time, the district court can make a determination as to the additional damages, if any, that TiVo has sustained while the stay of the permanent injunction has been in effect.

TiVo issued a statement regarding the ruling:

“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.”

This is certainly not the outcome EchoStar was hoping for, and it is all good news for TiVo. While EchoStar may try to appeal this ruling, I think it is more likely that they will quickly come to terms with TiVo on licensing of TiVo’s patents, to avoid having to disable EchoStar DVRs already in the field under terms of the injunction. I don’t think it is very likely that they will actually license the TiVo platform and use it on DVRs, as DirecTV did, but rather that they will license the patents so that they can use the IP in their own DVRs.

This ruling is not only good for TiVo for the damages, and licensing revenue, they’ll collect from EchoStar, but also because it strengthens their position when negotiating with other vendors. With the infringement ruling upheld, other DVR vendors are more likely to license TiVo’s patent portfolio, rather than face their own lawsuit. And it could encourage more cable MSOs to license TiVo’s OCAP software for their networks.

Certainly a good day for TiVo.

Thanks to reader Jason for the link to the PDF of the ruling.

EDIT: See follow-up post for additional comments on the case.