EchoStar wins partial reversal of TiVo verdict on DVR infringement

A complex tangle of technological arguments ended up being untangled in EchoStar's favor, in an appeals court decision today that could lead to DVR service being restored to Dish Network.

A technically replete, yet still dramatic, decision handed down today by Federal Circuit Appeals Court Judge David Folsom has found that two of EchoStar lines of digital video recorders, including its own 50X line and another, using technology supplied by Broadcom, did not infringe upon two patents held by TiVo.

The decision will likely mean that EchoStar's Dish Network can go ahead with plans to deploy DVR services for its subscribers based partly on technology from Broadcom, though it will still have to change its DVR software, which the court found did infringe on TiVo's methods.

TiVo's hardware patent is for a time-shifting device -- a component capable of receiving a digital signal, recording it somehow (in TiVo's case, to a hard disk), and then transmitting it later. But as Judge Folsom found, that patent wasn't actually general enough for EchoStar's DVR design to have infringed on TiVo's idea, despite an April 2006 jury decision in TiVo's favor.

The case begins with a curious argument about a single word: or. It originally made the case that its own hardware patent protected its right to a device capable of processing video signals that follow what it described as "a multitude of standards." It then listed some of those standards: "(NTSC) broadcast, PAL broadcast, satellite transmission, DDS, DBS, or ATSC."

And there's the "or." That word, EchoStar argued in its appeal, suggested that all of these items in the list were merely examples of standards. However, it would be improper for TiVo to suggest, EchoStar argued, that its patent covered the transmission of video and audio that supported any standard just because it was a standard. Thus the list could not be construed as having referred indirectly to data transmission standards such as MPEG-2.

"Although the claim refers to the recited television signals as being 'based on a multitude of standards, including, but not limited to' the particular specified standards," reads Judge Folsom's decision today, "the use of the word 'or' in the list of standards makes it clear that the claim language does not require that the claimed device be capable of processing signals based on all of the listed standards."

Furthermore, the judge wrote, NTSC is an analog standard, implying the clear distinction between it and ATSC, the digital standard being applied to the US' new DTV system. That distinction plays an important role later.

EchoStar made the argument in its appeal that TiVo, by claiming rights to a device that can process "a multitude of standards," was describing a device that must process a multitude of standards rather than just one. EchoStar bunched the MPEG-2 series of standards into one suite, and for this argument, treated them as one. Here's where the "or" began to work against EchoStar: "As to EchoStar's argument that the claimed DVR must be capable of processing signals based on some undetermined number of standards greater than one," Judge Folsom wrote, "it seems unlikely that a claim drafter would use a term of such biblical imprecision as 'multitude' if that term were meant to have an important restrictive function in the claim. On the other hand, if the drafter intended to require only that the DVR be capable of processing signals based on 'one or more' broadcast standards, including but not limited to those referred to in the limitation, it is difficult to understand why the drafter would not have used that very common (and clear) manner of expressing the idea."

Later, EchoStar argued that TiVo's claim appeared to be limited to devices that could only process analog and digital streams, but not one or the other. Judge Folsom rejected that argument as well. Strike two.

But in the marble machine that technology and the law always manage to intertwine, the fact that EchoStar lost those initial arguments ended up being the reason why it won partial reversal and partial remand of its appeal.

EchoStar's 50X line and its Broadcom line split their incoming data signals into distinct audio and video streams, but they do so differently from one another. The Broadcom line uses software to split the streams, so Judge Folsom found based on the fact that he had rejected EchoStar's earlier notion that TiVo's claim applied only to devices that processed analog and digital streams, that the way the Broadcom line splits incoming streams does not fall under TiVo's categorization of how streams must be separated.

Thus when EchoStar later argued that a person of ordinary skill would assume that such separated streams must be reassembled later somehow -- to which the judge agreed -- its argument that TiVo failed to specify how that reassembly must take place won the day. As things turned out, TiVo can't claim infringement on a process it didn't expressly specify. So the 50X line, which reassembles streams using interleaving, can't be said to infringe upon TiVo's claim for the fact that it uses interleaving.

It was a squeaker of a victory, but EchoStar has pulled it off. The case is not over, however, as the jury's judgment of infringement against EchoStar upon TiVo's software claims stands, and remaining matters have been remanded to a lower court. EchoStar had no comment yet on the matter at press time.