TiVo Inc. on Thursday won a pivotal patent infringement lawsuit that might allow it to pause and rewind the marketplace the way its pioneering digital video recorders do with live TV.
A federal jury in Texas awarded TiVo $73.9 million after finding that satellite dish provider EchoStar Communications Inc. infringed its patents in a case described as "life or death" for the money-losing video recorder company.
TiVo lawyers said they would seek an injunction barring EchoStar, which owns the Dish Network, from selling digital video recorders. That could help TiVo tamp down competition as it tries to build market share.
Although TiVo is virtually synonymous with the increasingly popular digital video recorders, the company's machines have been overshadowed by those offered by cable and satellite providers. Analysts said TiVo's court victory could give it leverage as it seeks licensing agreements with cable operators that offer set-top boxes with built-in recorders.
"If you're going to defend your patents and try to license it, this kind of win certainly makes those negotiations easier," said Larry Gerbrandt, senior vice president and general manager of Nielsen Analytics, which specializes in emerging media technology.
The verdict sent TiVo's shares up 22% to $9.80 in after-hours trading, after falling 7 cents to $8.05 in regular trading. EchoStar's shares closed up 12 cents at $29.97 during regular trading. They were little changed in late trading.
EchoStar issued a statement calling the verdict a "first step in a very long process" and expressing confidence that the verdict would be overturned on appeal or through a continuing U.S. Patent Office review of TiVo's technology.
"We believe the patent, as interpreted in this case, is overly broad given the technology in existence when TiVo filed its patent," the company said in a statement. "We believe the decision will be reversed."
Only about 12% of U.S. households have digital video recorders, Gerbrandt said. But he expects that number to grow to 18% by the end of the year.
Alviso, Calif.-based TiVo was one of the first companies to develop and market recorders that could pause and rewind live television. But in the seven years since the company went public, it has posted only one quarterly profit -- in the second quarter of last year.
