## Facts

- TiVo, Inc. owned U.S. Patent No. 6,233,389, which disclosed features used in digital video recorders (DVRs).
- TiVo sued EchoStar (including Dish-related entities) for infringing the ’389 patent based on EchoStar’s satellite TV DVR receivers.
- In the underlying infringement case, a jury found EchoStar’s receivers infringed the ’389 patent, and the district court entered a permanent injunction.
- The injunction included (1) an infringement provision barring EchoStar from making, using, offering to sell, or selling receivers that infringed the ’389 patent (including devices not more than colorably different from adjudged infringing receivers), and (2) a disablement provision requiring EchoStar to disable DVR functionality in certain deployed receivers, subject to limited exceptions.
- After the injunction, EchoStar implemented software changes and continued distributing receivers. In the original case, EchoStar’s “start-code detection” feature was found to infringe the “parsing” limitation in TiVo’s software claims.
- In the redesigned software, EchoStar removed the start-code-detection feature and used a “statistical estimation” technique instead, along with other changes.
- TiVo moved for contempt, arguing EchoStar’s modified receivers still infringed and that EchoStar failed to comply with the disablement requirement.
- The district court found EchoStar in contempt of both the infringement provision and the disablement provision and imposed sanctions.
- In assessing whether the redesign was more than colorably different, the district court found no more than colorable differences but did not compare the redesigned statistical-estimation feature to the prior start-code-detection feature that supported the original infringement finding.
- EchoStar appealed, and the Federal Circuit reheard the case en banc to clarify the standard for contempt proceedings involving redesigned products subject to a patent injunction.

## Issues

1. What standard governs whether a redesigned product violates a patent injunction in contempt proceedings, including how to assess “more than colorable differences” and continued infringement.
2. Under that standard, did the district court properly find contempt of the injunction’s infringement provision for EchoStar’s redesigned receivers.
3. Was the injunction’s disablement provision sufficiently clear to support contempt, and did EchoStar violate it.
4. Is an enjoined party’s diligence or good faith in attempting a redesign a defense to a finding of contempt.

## Decision

- The en banc court rejected prior applications of the KSM framework that treated “substantial open issues of infringement” as a controlling threshold and set a unified approach for contempt in patent-injunction cases involving redesigned products.
- The court held that contempt for a redesigned product requires (1) a finding that the redesign is not more than colorably different from the adjudged infringing product as to the features that supported the prior infringement determination, and (2) a finding that the redesigned product continues to infringe under the existing claim constructions.
- The court vacated the contempt finding as to the injunction’s infringement provision and remanded because the district court did not conduct the required comparison between the specific infringing feature (start-code detection) and the modified feature (statistical estimation) when evaluating colorable differences.
- The court affirmed the contempt finding as to the disablement provision, holding that the disablement requirement was sufficiently clear and that EchoStar’s noncompliance supported contempt.
- The court affirmed sanctions tied to the disablement violation and vacated or set aside sanctions to the extent they rested on the infringement-provision contempt finding that was vacated.
- The court confirmed that good faith is not a defense to contempt liability, though it may bear on the sanction imposed.

## Legal Principles

- A district court may use contempt proceedings to enforce a patent injunction against a redesigned product only when the patentee proves, by clear and convincing evidence, both (1) no more than colorable differences from the adjudged infringing product and (2) continued infringement.
- The “colorable differences” inquiry compares the specific features that were a basis for the prior infringement finding with the corresponding modified features in the redesigned product; general similarity is not enough.
- If the redesigned product is more than colorably different from the adjudged infringing product, contempt is not the proper vehicle; the patent owner must test the redesign in a new infringement action.
- In deciding continued infringement at the contempt stage, the court applies the claim constructions from the underlying case and determines whether the modified product meets the asserted claim limitations.
- Diligence or good faith efforts to design around an injunction do not bar a contempt finding, but such conduct may be considered when setting sanctions.
- An injunction’s disablement obligation is enforceable by contempt when it gives clear notice of what must be disabled and the enjoined party leaves prohibited functionality enabled in covered devices.

## Conclusion

The en banc Federal Circuit set a clarified contempt standard for post-injunction redesigns requiring a feature-by-feature comparison tied to the original infringement finding plus proof of continued infringement, vacated and remanded the contempt finding based on the injunction’s infringement provision because the district court did not properly analyze the redesign, and affirmed contempt and sanctions for violating the injunction’s clear disablement requirement.


TiVo, Inc. v. EchoStar Corp., 646 F.3d 869, 98 U.S.P.Q.2d 1413 (2011)