TiVo (NSDQ: TIVO) shares are up as much as 40 percent today, after an appeals court ruled in the company’s favor in its long-standing patent battle with Echostar (NSDQ: SATS) and Dish Network (NSDQ: DISH). The court upheld a lower court’s ruling in the company’s favor, saying that the satellite companies are in contempt of a permanent injunction prohibiting infringement on TiVo’s DVR patents. It is the second time in just over a year that an appeals court has sided with TiVo in the case.
The ruling could not have come at a better time for unprofitable TiVo, which said last month that it would have to borrow $150 million to cover its legal costs and is facing patent other battles with Verizon, AT&T (NYSE: T), Motorola (NYSE: MMI) and Microsoft.
It will be an interesting historical moment, which expresses the power of tech patents in the modern age. In the near future, a judge will likely sign an order that turns off a piece of major consumer electronics in people’s homes. It now looks like EchoStar and DISH will-at long last-have to remotely disable a large number of DVRs (it’s never been disclosed how many, although it’s at least in the hundreds of thousands despite the fact these models are aging.)
Some patent system observers had begun to questions whether injunctions could even work at all against a deep-pocketed infringer like Echostar. Today’s results show that, at long last, they can.
In a statement, the company said the ruling “paves the way for TiVo to receive substantial damages and contempt sanctions regarding the DVRs that EchoStar and Dish Network failed to disable.” For their part, Dish Network and EchoStar said they were “disappointed.”
The legal fight is not over, however. The appeals court asked the lower court to revisit one aspect of the case, according to a Reuters report, and Dish Network and EchoStar said they would ask the supreme court to review the other part of the appeals court’s ruling.