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TiVo vs. Echostar: Judge grants TiVo motion to disallow patent invalidity defense

Discussion in 'General DISH™ Discussion' started by Curtis52, Feb 4, 2009.

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  1. Feb 4, 2009 #1 of 70
    Curtis52

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    Thanks Mainer.

    O R D E R

    Before the Court is TiVo’s Motion to Strike “Invalidity” Contentions from Dr. Rhyne’s Expert Report and to Exclude Evidence and Argument Concerning “Invalidity” at the February 2009 Hearing. Dkt. No. 887. Also before the Court are EchoStar’s response and TiVo’s reply. Dkt. Nos. 889 & 891. For the reasons set forth below, TiVo’s Motion is hereby GRANTED.

    This Court has scheduled a hearing on February 17-18, 2009 to address TiVo’s motion requesting that EchoStar be found in contempt for violation of this Court’s permanent injunction. See Dkt. Nos. 832, 864, 869, 870, and 880. Specifically, this hearing will address “(1) whether the software downloaded to EchoStar’s DP-501, DP-508, DP-510, DP-522, DP-625, DP-721, DP-921, and DP-942 is no more than colorably different from the adjudged software; and (2) whether these receivers continue to infringe claims 31 and 61 of U.S. Patent No. 6,233,389, either literally or under the doctrine of equivalents.” Dkt. No. 870 at 1.

    TiVo now requests that all “invalidity contentions” be stricken from the expert report of Dr. V. Thomas Rhyne, EchoStar’s expert for the upcoming hearing. Dkt. No. 887. In addition, TiVo argues that EchoStar should be precluded from introducing any evidence or argument concerning
    validity at the hearing. Id.

    The expert report of Dr. Rhyne contains 42 paragraphs under the heading “The ’389 Patent is invalid under TiVo’s attempted new application of the software claims.” Rhyne Report at ¶¶ 225-67 (Dkt. No. 887, Ex. B). In those paragraphs, Dr. Rhyne opines that TiVo’s expert has expanded the scope of claims 31 and 61 such that the patent is now invalid for multiple reasons, including obviousness and a lack of written description. Id.

    TiVo contends that any such argument is improper because the validity of the ’389 Patent is the law of this case and cannot be challenged during contempt proceedings. Dkt. No. 887 at 2-4 (citing KSM Fastening Sys., Inc. v. H.A. Jones Co., 776 F.2d 1522, 1529 (Fed. Cir. 1985); Additive Control & Measurement Sys., Inc. v. Flowdata, Inc., 154 F.3d 1345, 1350 (Fed. Cir. 1998)). In addition, TiVo contends that its own expert testimony and argument properly relies on this Court’s claim construction and does not depart from it. Id. at 5.

    In response, EchoStar contends that TiVo has created new infringement theories not argued at trial by expanding the scope of the “parsing” and “automatic flow control” limitations in claims 31 and 61. Dkt. No. 889 at 5-7. As a result, EchoStar argues that it is entitled to defend against these new theories as they “give rise to substantial new invalidity issues.” Id. at 8-11 (citing Robert Tyer and Assoc., Inc. v. Envtl. Dynamics, Inc., No. 95-1270, 96-1324, 96-1541, 1997 U.S. App. LEXIS 19101 (Fed. Cir. Jul. 14, 1997) (unpublished); Bass Pro Trademarks, L.L.C. v. Cabela’s, Inc., 485 F.3d 1364, 1369 (Fed. Cir. 2007)).

    Federal Circuit precedent is clear on this issue: “Whether there is infringement may not be challenged in contempt proceedings on the basis that the patent is invalid. The validity of the patent is the law of the case in such proceedings.” KSM Fastening, 776 F.2d at 1522. The Federal Circuit elaborated on this position in Additive Control, stating:

    Additive Control, 154 F.3d at 1529. EchoStar does not distinguish the present case from these holdings. Instead, EchoStar relies on (1) a non-precedential opinion and (2) an inapposite opinion in which the Federal Circuit reversed on a claim construction issue rather than a validity issue.

    This Court is bound by the Federal Circuit’s clear holdings in KSM Fastening and Additive Controls. Therefore, all statements or arguments regarding the validity of the ’389 Patent, specifically paragraphs 225-67, must be stricken from Dr. Rhyne’s expert report. In addition, the parties shall be precluded from presenting evidence or argument concerning the validity of the ’389 Patent at the upcoming hearing.
    IT IS SO ORDERED.
     
  2. Feb 4, 2009 #2 of 70
    Greg Bimson

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    There was another motion filed regarding discovery and interrogatories. Below are DISH/SATS interrogatories, and the joint stipulation on what some of those answers will be...
     
  3. Feb 4, 2009 #3 of 70
    Greg Bimson

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    The order:
     
  4. Feb 4, 2009 #4 of 70
    CuriousMark

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    So in summary, Dish tried to change the subject to patent validity in their expert witness's report. TiVo cried foul. The judge agreed. The subject will be infringement, and only infringement.
     
  5. Feb 4, 2009 #5 of 70
    jacmyoung

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    This is a clear loss for E* due in part to the fact that the judge refused to address the point E* raised, that TiVo is now expanding the claim limitations beyond what the court had construed during the trial.

    At this point I must agree with Greg, that the judge is making history out of this case, however whether he is indeed trying to make history or not will have to be answered when his final ruling is out.

    The petentee is not allowed to expand the patent claim limitations during the contempt proceeding, the Judge simply side-stepped this particular point. There are many cases in which the contempt was denied when the Court had determined that the patentees had expanded the claim constructions.
     
  6. Feb 4, 2009 #6 of 70
    Greg Bimson

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    And the evaluation of colorable difference.

    Here's one statement that piques my interest:
    If Judge Folsom is of the belief that the "Infringing Products" are the "original devices", DISH/SATS is in for a world of hurt.

    Here is the other statement that makes me wonder what DISH/SATS is thinking:
    TiVo admits they knew of a workaround through DISH/SATS SEC filings. What TiVo did not admit was they knew DISH/SATS would apply the workaround to the "Infringing Products", which is completely counter to the questions DISH/SATS raised in their interrogatories.
     
  7. Feb 4, 2009 #7 of 70
    peak_reception

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    Why? Either/Both were modified. The modification is what needs adjudication. Colorably different or not? It's the multi-million dollar question.

    p.s. I should say "colorably different, or more than colorably different. " That is the critical question now before the court.
     
  8. Feb 4, 2009 #8 of 70
    the judge

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    Here is E*'s notice in August, 2006 from their 10-Q. Could you explain the nuance that Tivo did not admit the workaround would apply to the Infringing Products?

     
  9. Feb 4, 2009 #9 of 70
    Greg Bimson

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    Because DISH/SATS didn't admit their workaround would apply to the receivers that were already found to infringe, counter to the language of the injunction...
     
  10. the judge

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    I get it. At that time the workaround was going to include both software and hardware which would have required them to swap out the boxes, i.e. entirely new devices. Once the hardware claims were remanded, they were off that hook and realized that they could try the software-only download. Check out their change in tune in their 10Q filing before and after the Appeal:

    From Echostar Sep-2006 10-Q:
    Then, from their Sep-2008 10-Q:
    When they would have had to pay for hardware and software infringement, they calculated $6M plus per month! Afterwards they claimed the total reserve (including the $104M already paid) was only $28M.
     
  11. jacmyoung

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    Exactly, this is why no one can convince the other because we will just interpret whatever the way we like, and it goes both ways.

    The way I interpret it is that when the judge said "the original device" he was referring to the unmodified DVRs, not the modified DVRs. Because if he believes the modified DVRs are the same as "the original DVRs" there would be no point to again determine if the modified DVRs still infringe.

    Now I had said the reason the claim invalidity might be argued was because the judge ordered an infringement analysis, but E* did not argue that way, instead E* said the reason they should be allowed to argue the claim invalidity was that TiVo was trying to expand the claim limitations. But whether TiVo is trying to expand the claim limitations (which I think they clearly are) has not been determined by the judge.

    TiVo ran into a similar problem on 9/4 when they cited two cases in which the defendants were already found in violation and therefore in contempt, and that two cases did not help TiVo a bit to obtain a contempt ruling, because whether there was a violation or not had not been determined by the judge in this case.

    E* is now doing the same, saying TiVo is trying to expand the patent claim limitations, therefore...

    Except whether TiVo is indeed trying to expand its claim limitations will be for the judge to decide after the hearing.

    I say yes because TiVo is arguing that since the modified DVRs still use PID filters, therefore they still infringe. If true, all MPEG receivers, DVRs or non-DVRs, all infringe, because they all use PID filters.

    A clear expansion of the TiVo's patent claim limitations in which at the very first description it defines a DVR process.
     
  12. Curtis52

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    Judge Folsom didn't say that. He was quoting from case law. That part isn't really applicable to this case. Dish isn't arguing that the original devices didn't infringe.
     
  13. CuriousMark

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    A clever debating tactic. To paraphrase you: "Since the modified parakeet still has wings, it can fly. If true, all birds, of any size or shape that have wings can fly." it sounds reasonable, but every child can think of an example that proves it wrong. Think Ostrich. In the same way your posted logic fails.

    First, PID filtering is only one step of the claim. All those other devices would have to also meet ALL the other steps before they could be found to infringe. You know as well as I do that all MPEG receivers that are not DVRs cannot meet all the other steps, they don't even have a hard drive, or the ability to do trick play. So their PID filters don't even begin to turn them into infringing devices. So PID filtering can be used to help show that these particular DVRs still infringe, so long as they also meet the other steps of the claim.

    Second, PID filtering was shown at the original trial as an action that meets the first step of the claim as many quotes here have shown. Thus it is not an expansion of the claim at all.
     
  14. Greg Bimson

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    I never said Judge Folsom said that.
    But DISH/SATS has been arguing because they made a modification to the original devices (the adjudged ones subject to the disable order), there are no longer any adjudged devices over the almost 193K receivers allowed by the injunction.

    I believe the court will clarify that soon.
     
  15. Curtis52

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    If there is more than a colorable difference they are correct. Estoppel prevents the trying of the same devices twice but the court requires a new trial if there is more than a colorable difference. QED, they aren't considered the same devices if there is more than a colorable difference.
     
  16. jacmyoung

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    It is if PID filter is the only thing TiVo is using to try to again prove infringement.

    I know TiVo is using E*'s own words against them. For one thing, TiVo cannot use E*'s previous admission which may or may not be correct, to prove infringement, TiVo must prove with clear and convincing evidence that the modified DVRs still infringe, based on literal and/or equivalents doctrine.

    Also E* is saying the "parsing" as described by the claim limitations is no longer formed, that is to say while there may still be parsing, as long as such parsing is done to perform a different function, or is operated in a different way, or is to achieve a different result, there is no infringment.

    TiVo does not even contest that, only that it still parses.
     
  17. jacmyoung

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    They aren't considered the same devices even if the differences are only colorable, however, in such case the patentee shall not be forced to go through another new trial, the contempt proceeding shall be enough to end the infringer's effort.
     
  18. jacmyoung

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    The link below is a very good read, I think it had been cited some time ago but most people may not have read it:

    http://www.law.com/jsp/PubArticle.jsp?id=900005504899

    In summary, right around 2005 this district court of Taxes had become a magnet for patentees to file lawsuits against their alleged infringers to forced them to settle, the reason was, for a few years 100% of the cases in that court ended in favor of the patentees, that was most notably marked by TiVo’s win over E* for $74 million, Microsoft’s loss of $133 million in another case, and DirecTV's loss of $78 million yet in another case. At that point most lawyers had concluded that it was too risky to go through a jury trial in that court, and advised their clients to rather settle.

    A few months after E* lost $74 million to TiVo, Forgent filed a similar lawsuit against E*, D*, Time Warner on DVR infringement. At that time E* and D* worked together to defend themselves. But two weeks before the jury trial, Time Warner chickened out and settled with Forgent for $20 million, and one day before the jury trial, D* chickened out and settled to pay Forgent $8 million.

    E* was the only one went ahead through the jury trial, right after they just lost $74M to TiVo, and managed to convince the jury that the Forgent DVR patent was invalid. E* won that case and tossed Forgent out, but not before Time Warner and D* each wasted $20M and $8M to Forgent, respectively.

    That Forgent case along with one other case were the first two that began to turn the tide in that courtroom, from the previous 100% win by the patentees, to a 7 out of 12 won by the defendants afterwards.

    You never know when parties will decide to settle, the above history can offer some indication as far as the likelihood of any settlement from this case.
     
  19. Greg Bimson

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    Sure TiVo can use the previous admission; once again, just like the trial, it is the law of the case. Of course, TiVo was gung-ho to use claim charts, measuring the differences between the receivers as configured when infringement was found against the same receivers with a software modification. So since the differences between the two are being measured, TiVo will simply need to prove infringement on points that could only exist due to the modification.
    Let's remember that the devices are not being tested for colorable difference:
    The colorable difference is only about the software. And we still do not know why evaluating colorable difference was ignored in Judge Folsom's original order for a bench trial, even though he stated it was always his intention to evaluate for colorable differences. It could be that Judge Folsom had no reason to measure colorable difference on the receivers originally found to infringe, but colorable difference determination is definitely needed for all models sold with the new software.

    I still believe Judge Folsom is creating a standard, as neither KSM nor Additive Controls address a device found infringing that can be modified by software download.
     
  20. jacmyoung

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    No they can't, because in the original trial if you ever read the appeals court decision, none of the evidence had to do with E*'s "admission", and the PID was never a part of argument in rendering and upholding infringement verdict.


    It was not gung-ho rather a standard requirement to produce such claims charts during the trial, the courts administrating such patent trials have standardized claims charts for the patentee to fill out to prove infringement.

    When did he say that? If in his latest order I missed that.

    The judge cannot do that, because all other DVR models beyond the 8 are not at issue in front of him. The next hearing is only about the 8 named DVRs. Just read his order.

    Again devices found infringing had been modified many many times in the past to avoid contempt, including the use of software download.

    If software download cannot be used, then there is no point wasting time to determine the colorable differences between the old software and the new software.
     
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