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The U.S. Patent and Trademark Office has invalidated software patent claims that TiVo Inc. used to win $200 million in sanctions and infringement damages against EchoStar Corp., but TiVo is digging in to continue the legal fight. TiVo has been waging its patent infringement battle over digital video recorder technology against EchoStar since 2004. On Tuesday, EchoStar Corp. and its technology partner Dish Network Corp. announced the PTO’s final office action on a TiVo patent they challenged. The PTO ruled that two pieces of prior art — evidence of prior inventions using the same technology — made the software claims in TiVo’s patent invalid. The PTO ruling represents yet another setback for TiVo, following a ruling against it last month at the U.S. Court of Appeals for the Federal Circuit. “In the final office action, three examiners of the PTO considered TiVo’s response and, in a detailed 32-page decision, finally concluded that the software claims were unpatentable in view of two prior art references,” stated EchoStar and Dish. But the legal fight between the two entities is “a long way from being over” at the PTO or in a related federal court case, said Edward Kessler, of counsel to Washington’s Sterne, Kessler, Goldstein & Fox, who handled TiVo’s re-examination proceedings. “The litigation goes on independently of the PTO proceedings, and the PTO proceedings are a long way from finished,” Kessler said. TiVo can file a response asking the PTO to reverse its action on the patent claims. If that fails, it can appeal first to the PTO’s Board of Patent Appeals and Interferences and then to the Federal Circuit. In a statement, TiVo said the company would “continue to work with the PTO to explain the validity of the claims under review.” “It is important to note that TiVo received a ‘final action’ holding several claims invalid during EchoStar’s first re-examination request at this juncture only to have the PTO ultimately uphold the validity of all claims of the patent,” stated TiVo. The PTO ruling is a hurdle and a hiccup for TiVo, but it doesn’t mean that the case is over, said Erik Belt, a Boston intellectual property partner at Newark, N.J.-based McCarter & English, who isn’t involved in the case. “It could mean more fighting,” Belt said. “It’s happening more and more that defendants in litigation are using the re-examination process as another forum in which to test the validity of the patent. It’s not an uncommon occurrence.” TiVo originally sued EchoStar in 2004 over the patent, which lets television viewers record and play television broadcasts at the same time with a digital video recorder. The PTO setback follows last month’s Federal Circuit decision to vacate an earlier ruling that upheld a lower court’s $200 million damages award to TiVo. At an en banc rehearing in TiVo Inc. v. EchoStar Corp. scheduled for Nov. 9, the full Federal Circuit will weigh whether Chief Judge David Folsom of the Eastern District of Texas should have held a trial on whether EchoStar still infringed TiVo’s patented technology after it redesigned the product in question. Folsom’s Sept. 4, 2009 contempt ruling ordered EchoStar to pay TiVo an estimated $110 million for continued infringement and about $90 million for sanctions.

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