UPDATE 1-U.S. patent court rules for TiVo, against EchoStar

Thu Jan 31, 2008 7:36pm GMT

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WASHINGTON Jan 31 (Reuters) - EchoStar Communications Corp (DISH.O) infringed a TiVo Inc (TIVO.O) patent in building digital video recorders and must pay nearly $74 million in damages, a court that specializes in patent cases ruled on Thursday.

Once the appeal is final, EchoStar will be barred from selling the infringing devices, the ruling said. EchoStar said it already had a substitute for the software in question, and that customers would not be affected.

TiVo's stock soared more than 33 percent to $9.11, a new 52-week high, and EchoStar's shares rose nearly 1 percent to $28.63, both on the Nasdaq.

It upheld the lower court's damage award of $73,991,964. With interest, the damages would be $94 million, EchoStar said.

"Because the damages calculation at trial was not predicated on the infringement of particular claims, and because we have upheld the jury's verdict that all of the accused devices infringe the software claims, we affirm the damages award entered by the district court," the court said in its ruling.

"We're very pleased by the ruling today and we feel like our efforts have been vindicated," TiVo General Counsel Matthew Zinn told Reuters.

EchoStar said it would appeal the damage award, and sought to reassure customers that they had a substitute for the infringing software.

"This improved software is fully operational, has been automatically downloaded to current customers, and does not infringe the TiVo patent at issue in the Federal Circuit's ruling," EchoStar said in a statement.

The U.S. Court of Appeals for the Federal Circuit said in its decision that it partially affirmed a verdict from a federal district court in Texas.

That lower court had ruled that EchoStar's digital video recorders infringed what it called the "software" claims of a TiVo patent. But the appeals court reversed a portion of the lower court's decision that said the EchoStar devices also infringed on what it called "hardware" claims. (Reporting by Diane Bartz; Editing by Maureen Bavdek)

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