EchoStar’s Patent Counter-Attack Against TiVo Gains New Life

Even as sales of its pioneering digital video recorder have continued to decline, TiVo (NSDQ: TIVO) has been using its patents to try to get licensing fees out of the big players in the DVR business. There have been various lawsuits and counter-suits, but the fundamental question is whether TiVo will be able to use its patents to exert some control over the DVR market and survive as a company. A new development shows how tough a road that is going to be.

The initial target of TiVo’s patent wrath was EchoStar (NSDQ: SATS), which got sued back in 2004; the following year, EchoStar purchased some patents of its own and used them to mount its own lawsuit against TiVo. That counter-attack was put on hold for years, but an East Texas judge has now ruled it can move forward.

This counter-suit isn’t the only headache TiVo is dealing with, either. In 2009, TiVo sued Verizon and AT&T (NYSE: T) over those companies’ video-on-demand services; now it’s facing legal counterattacks not only from those two defendants, but a whole different patent suit from Microsoft (NSDQ: MSFT), which provided the software behind AT&T’s system. All three of those companies not only have deep pockets, but have legal departments experienced in using patents.

Meanwhile, TiVo awaits a ruling in its most critical legal challenge yet. TiVo won its lawsuit against EchoStar and has been paid more than $100 million in damages, but a federal appeals court is considering (again) whether TiVo should get a bigger reward: an injunction that would shut off EchoStar’s infringing DVRs. If TiVo can’t get its injunction enforced, its patent litigation campaign could lose much of its steam. The appeal over the injunction issue was argued in November, and a ruling in that case could come any day.