EchoStar Communications came close to the forced disconnection of at least 3 million DVRs Friday, saved for the time being by an temporary injunction. The flurry of week’s end activity stems from TiVo’s claim—successful thus far in a federal district court in Texas—that EchoStar’s DVRs infringe on its patented technology. Judge David Folsom first ruled against EchoStar in April; late Thursday afternoon he agreed again with TiVo and issued an injunction ordering EchoStar to stop selling its DVRS and gave the Denver-based company 30 days to shut down those in use. (He also increased the judgment for TiVo to $89.6 million from the jury’s $74 million.) But EchoStar got a last-minute reprieve from the U.S. Court of Appeals as it studies the issues in the case. TiVo has until Wednesday to explain why the stay should be lifted. TiVo also has grounds for its own appeal—according to the AP, the judge could have tripled the damages.
Reuters: Janco Partners analyst Matthew Harrigan: “When you look at the pool of people who are going to be dissuaded from signing up for EchoStar and instead go to DirecTV or cable, it really would be a very serious competitive impediment.”
BW: Of course, this leads to another round of speculation about DirecTV and EchoStar pairing up, the idea being that legal losses could force EchoStar’s Charlie Ergen into a deal.