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TiVo Inc. has scored another court victory against fierce rival EchoStar Communications Corp., albeit a brief one. Thursday a Texas federal judge ordered Echostar to halt the use and sale of digital video recorders that infringed on TiVo’s patents. The judge also denied EchoStar’s request to stay the injunction pending appeal and ordered the company to pay $89.6 million in damages to TiVo. In April, a jury found EchoStar had willfully infringed TiVo’s patents on a “multimedia time-warping system.” But giving TiVo hardly any time to celebrate, the Federal Circuit U.S. Court of Appeals issued a temporary stay of the injunction early Friday morning in response to EchoStar’s emergency appeal. The ruling would have forced EchoStar to shut down service of more than 4 million devices used by its satellite TV customers. In a footnote, the Federal Circuit said: “The temporary stay is not based on a consideration of the merits. Rather, it is granted to preserve the status quo while the court is considering the parties’ papers.” TiVo attorney Morgan Chu, an Irell & Manella partner, said in an e-mail that he believes the court will uphold the injunction on appeal. “EchoStar should not be permitted to continue its willful infringement of TiVo’s intellectual property rights for DVR technology,” Chu wrote. TiVo has until Wednesday to respond to the emergency stay. The down-to-the-wire turn in the two-year case illustrates the uncertainty many companies involved in patent litigation now face after the U.S. Supreme Court ruled injunctions should not be issued as a matter of course in infringement cases. After the Supreme Court’s May ruling in eBay v. MercExchange, 06 C.D.O.S. 3935 experts have predicted patent litigants would fight each other more bitterly and fiercely than usual. And that is what’s happening, according to veteran patent litigator Henry Bunsow, a partner at Howrey in San Francisco. “The CAFC will likely take a hard look at all grants of injunction going forward to insure that the balancing analysis dictated by the Supreme Court is followed,” Bunsow said. In arguing for a permanent injunction, TiVo told the trial court that it would face “severe irreparable harm” if EchoStar continues to sell its infringing products. U.S. District Judge David Folsom agreed. In applying the four-factor test recommended by the high court to determine whether to issue an injunction, Folsom concluded EchoStar’s infringement cannot be remedied by monetary damages alone. “Plaintiff’s primary focus is on growing a customer base specifically around the product with which Defendant’s infringing product competes. And, as Plaintiff is a relatively new company with only one primary product, loss of market share and of customer base as a result of infringement cause severe injury,” he wrote. In denying the stay of a permanent injunction, Folsom said EchoStar had not demonstrated “a strong likelihood of success on appeal that would overturn the jury’s verdict on all infringed claims.” Stephen Akerley, a patent litigation partner at McDermott, Will & Emery in Palo Alto, calls Folsom’s ruling “a rational application” of the eBay ruling. “It shows that courts will still not hesitate to issue an injunction when the parties involved are competing head-to-head against each other,” Akerley said.

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