I think the court ordered zapping the DVRs rather than just money because money didn’t completely cure the harm. After all, if the infringement is ongoing, a one-time payment won’t help TiVo. From TiVo’s perspective, either (1) ongoing payment isn’t as good as getting the competitor off the market or (2) the injunction is a useful bargaining chip. I don’t know why the court isn’t willing to consider a more limited injunction that would just modify the infringing technology. It may have been considered earlier and the court decided it wasn’t really feasible, despite EchoStar’s representations. (By the way, I think that’s the answer to the question about the iPhone—maybe a court theoretically could order them to kill all the phones, but realistically they’d just have to remove the offending app.)

I’m not sure what the endgame of a contempt finding is, if EchoStar doesn’t end up settling—it’s possible EchoStar is just paying a huge fine to avoid killing the DVRs, but it’s possible the court will enforce its mandate.

As to the questions about whether this is a good outcome from a patent perspective: while I’m a patent novice, the system is obviously striking some kind of balance between protecting inventors and protecting other parties (customers, shareholders, etc). That balance was initially struck at a time when this kind of remote bricking wasn’t possible. Even if remote bricking is the “right” answer under the current law, I just wonder if judges or legislators should be thinking hard about whether remote bricking that punishes customers is the balance we want to strike. (If people have received stolen goods innocently, we have all sorts of trouble figuring out whether they have to return them, right?) I thought of the Kodak case too, but that case stands out partly because it was so remarkable for its time, and it’s going to become the standard case.

Or it may be (as a couple people have noted) that the system is already moving to address this problem in some ways, and that pragmatically all of this is posturing that leads to a settlement.

Tivo is a company that is losing money on its main product; despite its superior product and being first-to-market, they’re losing subscribers and money every quarter. Most of their value is in their IP claims. TiVo currently only builds DVRs for cable and OTA, not satellite.
Echostar chose to take a large risk by allowing this case to go to court; its main competitor (DirecTV) settled w/ Tivo long ago and has a cross licensing agreement with them.

Another salient point is that these satellite DVRs are almost all leased by the month and not owned. The box was never yours to begin with! If these boxes are bricked, the best that consumers could hope for is that they’ll be let out of their contract (if any) early so they can switch to a provider that has a working DVR.

This is a game of high-stakes chicken that will almost certainly end up in a settlement. If there’s no settlement there are no winners among the involved parties: Tivo loses licensing revenue, Echostar loses customers+$, and customers lose a useful service.

The differences seem to be that Kodak immediately obeyed the order AND initiated a compensation program for customers holding Kodak Colorburst doorstops. It wasn’t perfect (at first, they were not offering cash, and changed that under threat of suit), but ultimately customers were compensated for their products having been disabled.

Injunctions (or the threat of them) is the tool by which plaintiffs extract the value of their patented innovations from infringers. Rarely do the services actually get shut off.

In light of the fact that TiVo innovated and EchoStar appears to have copied and has had more success in the market, this kind of outcome was probable. It is premature to sympathize with the customers, since the more likely injured party will be shareholders, who have been knowingly gambling on this issue for many years.

IMHO, we need a separate patent court system which could adjudicate these things faster and without standard juries (although juries of engineers that are appropriately paid might make sense). Part of the problem here is also that patents now take and average of 7 years to issue due in large part to the fact that the PTO can’t keep the filing fees to hire and retain enough good examiners to do their jobs properly, which also leads to some bad patents being issued and good patents not being issued. These are the real problems with the patent system, but the current Patent Reform Act in congress addresses none of them and will actually make it worse if they switch to a first-to-file system (due to the need to apply early and often rather than wait until the technology is refined).

TiVo has a patent, which means that they have a legally protected exclusive right to sell “X”. Echostar never had the right to sell “X”, thus you never had a legal right to BUY “X” from Echostar.

Yes, you’re right, the best strategy is to sue Echostar yourself for not selling you what you paid for. But good luck with that.

However, I’m not sure what you think the solution *should* be? That those millions of customers — who if they want “X”, should be getting it from Tivo — keep putting money into the pockets of people who don’t deserve it instead of into Tivo’s pockets?

If TiVo could actually collect on a judgment whose damages were derived from the expected lifetime fees of all the units, I bet they’d take that, but from your article it sounds like EchoStar doesn’t have those kinds of assets, so TiVo’s next best bet is to shut down the offending units and hope EchoStar’s customers, newly sans DVR, will sign up for TiVo service.

The problem with that logic is that while legally TiVo is the victim here, one must wonder whether any of EchoStar’s customers will see it that way.

And if Echostar chooses the contempt-into-bankruptcy option rather than the brick-into-bankruptcy one, do the owners of the infringing DVRs have anything to worry about?