Tivo v' EchoStar

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Tivo v. EchoStar

• CS181

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• The Software Patent Controversy
• Software patents slow and/or discourage the
  adoption of new technologies (except by rich
  companies)
• Patent holders have too much power

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• Companies think ahead to lock up a piece of
  technology that all their competitors will need
  as a part of the natural evolution of the
  technology (nVidia)

4

• Companies lock up entire technologies to keep
  competitors out entirely, or to benefit from
  licensing fees (Tivo)

5

• If software patents are valid means of promoting
  scientific progress, is this actually playing out
  in the courts?
• By far, most patent litigation settles out of
  court with a license agreement. Those that go to
  trial are big-money, big-issue cases
• Are juries competent to decide factual issues
  regarding complex, sophisticated technologies?

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How it started

• Jan. 2004 Tivo sues EchoStar
• Tivo 200M
• EchoStar 3B
• Suit was filed in a federal district court in
  eastern Texas.
• Court denied EchoStar's motion to transfer the
  case outside Texas

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Patents and Tivo

• The patent in question, which TiVo filed for in
  1998, is an "invention allowing the user to store
  selected television broadcast programs while the
  user is simultaneously watching or reviewing
  another program."
• TiVo has been awarded 40 patents and has more
  than 100 applications pending.

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How it ended

• Case went to trial in Marshall, Texas in March
  2006
• Tivo won
• Court awarded Tivo more than 73 million for lost
  profits and reasonable royalties.
• Tivo is seeking a permanent injunction against
  EchoStars DVR products
• Appeal is on-going EchoStar won in one area
  where judge made an error
• Recently, some of Tivos patent claims have been
  invalidated by USPTO and the appeal was denied

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The patent

• Demos

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Object

• At the crux of the argument over software claims
  was the use of the term object in the claims,
  and the use of C and an object hierarchy in the
  specification.

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Object

• EchoStar An object is an abstraction
  programmers use to design and build software
  systems using an object-oriented programming
  language (for example, C).  The tasks a system
  performs are accomplished in this paradigm by
  delegating software objects that cooperate to
  perform the tasks.  The software objects
  themselves contain data and methods which operate
  on the contained data.  This encapsulation of
  data and methods in an object, which is derived
  from a class, is a key characteristic of
  object-oriented programming.

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Object

• Tivo An object is any piece of a program, i.e.,
  software

13
Claim Construction

• Court construed object as a collection of
  data and operations.
• Can a jury of 8 (6 of whom have only a
  high-school education) understand the subtle
  difference?

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Whats Fair?

• Tivo did whatever necessary to take the focus off
  the technology and emphasize instead a small,
  smart start-up being victimized by a big,
  unethical company
• EchoStar did whatever necessary to put the focus
  on the technology did they infringe or not?