## Facts

- TiVo owned U.S. Patent No. 6,233,389 covering a “Multimedia Time Warping System” used in digital video recorders (DVRs) to support time-shifted television viewing.
- TiVo sued EchoStar entities in the Eastern District of Texas (2004), alleging EchoStar DVRs infringed asserted software method claims and asserted hardware claims of the patent.
- After a 2006 jury trial, the jury found EchoStar infringed all asserted claims and that infringement was willful, awarding $73,991,964 in reasonable-royalty damages.
- The district court entered judgment on the verdict and issued a permanent injunction barring certain DVR-related acts and requiring disablement of DVR functionality in specified existing units.
- EchoStar appealed issues including claim construction, infringement (software and hardware), willfulness, damages, and the injunction; the injunction was stayed pending appeal.

## Issues

1. Whether the district court correctly construed key limitations, including “object” (software claims) and “parsing/start code detector” (hardware claims).
2. Whether substantial evidence supported the jury’s finding that EchoStar’s DVR software infringed the asserted software method claims.
3. Whether EchoStar was entitled to judgment as a matter of law (JMOL) of noninfringement on the asserted hardware claims.
4. Whether substantial evidence supported the jury’s willfulness finding under then-governing law.
5. Whether the unitary reasonable-royalty award could stand after reversal of hardware-claim infringement.
6. Whether the permanent injunction should remain in place and when any stay should dissolve, and whether additional damages were warranted for the stay period.

## Decision

- Affirmed the district court’s constructions as applied to sustain software-claim liability, including a construction of “object” broad enough to cover EchoStar’s indexing/segmentation approach.
- Affirmed the jury’s verdict of infringement of the asserted software method claims, holding substantial evidence supported the finding, including expert testimony mapping accused functionality to the claim steps.
- Reversed the verdict as to the asserted hardware claims and held EchoStar was entitled to JMOL of noninfringement because the accused DVRs did not satisfy the construed “start code detector” limitation.
- Affirmed the full $73,991,964 reasonable-royalty award, concluding software-claim infringement independently supported the unitary damages verdict.
- Affirmed the willfulness finding based on evidence of notice and continued conduct meeting the then-applicable standard.
- Left the permanent injunction intact; held the appellate stay would dissolve when the Federal Circuit’s judgment became final.
- Remanded for the district court to determine whether TiVo was entitled to additional damages for infringement occurring during the period the injunction was stayed.

## Legal Principles

- Claim construction can be outcome-determinative: if an accused product lacks a properly construed limitation, JMOL of noninfringement is required for those claims.
- A jury’s infringement verdict on complex software method claims may be sustained where substantial evidence, including technical expert testimony, supports that the accused methods perform each claimed step.
- Reversal of infringement on some asserted claims does not require a new damages trial where a unitary reasonable-royalty award is supported by remaining, independently sufficient liability and is not shown to rest on a legally impermissible theory.
- A permanent injunction in a patent case may remain effective after appeal when liability is largely affirmed; an appellate stay may be structured to dissolve upon finality of the appellate judgment.
- Willfulness may be upheld where the accused infringer had notice of the patent and the record supports culpable continuation under the governing willfulness standard at the time.

## Conclusion

The Federal Circuit upheld liability for infringement of TiVo’s software method claims, the willfulness finding, and the full approximately $74 million reasonable-royalty award, but reversed infringement as to the asserted hardware claims for failure to meet a construed limitation, left the permanent injunction to resume after the judgment became final, and remanded to consider additional damages for infringement during the stay period.


TiVo, Inc. v. EchoStar Commc’ns Corp., No. 2006-1574 (Fed. Cir. 2008)