A three-judge federal appeals court ruled on Thursday that EchoStar/Dish Network violated Tivo’s DVR software patent. Tivo is expected to receive about $94 million in damages and interest. As a result, Tivo’s stock soared 29% on Thursday. Naturally, EchoStar said it would appeal the ruling, which will extend litigation that has been ongoing since 2004.

Dish said in a statement:

We are pleased the Federal Circuit found for us on Tivo’s hardware claims, but are disappointed in the Federal Circuit’s decision on the software claims. The decision, however, will have no effect on our current or future customers because EchoStar’s engineers have developed and deployed ‘next-generation’ DVR software to our customers’ DVRs. 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.

So Dish customers will be able to use their existing DVRs without being affected much by this ruling.

For its part Tivo’s press release was full of joy:

“We are extremely pleased that the United States Court of Appeals for the Federal Circuit unanimously ruled in our favor in EchoStar’s appeal of the district court judgment of patent infringement, full award of damages and that the injunction, which was stayed pending appeal, was ordered to be  reinstated. Today’s ruling is confirmation of the value of TiVo’s IP portfolio, which is in addition to the other benefits TiVo has to offer. TiVo can now continue to focus on its goal to drive greater distribution in both its stand alone and mass distribution efforts.”

So essentially Tivo won on software, but not on its hardware claims. That’s ok, I guess, since Tivo is discontinuing its Series 3 HD DVRs according to Megazone at Tivo Lovers.

Technorati Tags: DVR, Tivo, Dish Network, EchoStar, lawsuit, Series 3

Tom Keating over at TMCnet writes that his DirecTV DVR has a new firmware that has introduced a bug in his fast forward feature. He says that after the update, his DVR does not stop accurately when he is fast forwarding through commercials. In fact, he said it even puts him back to a point before he started the fast forwarding.

I don’t use or know much about the DirecTV DVR (with the DVD receiver), but the fast forwarding appears to work much like Tivo’s. If you’re fast forwarding, and stop after the commercials are over, Tivo backs up a few seconds so that you reach the correct stop point. It looks like the DirecTV DVR is taking this fast forwarding correction to the extreme and going back too far.

In order to avoid this problem, Keating said he has to slow down and use the slower 2x or 3x fast-forward now since the 4x doesn’t work correctly anymore.

DirecTV “espouses” this feature on their website when they write, “Fast-forwarded too far? Fast Forward Correction takes you to where you really wanted to stop”. Yeah, right. Can I sue for false advertising? Losing the ability to FFW is really starting to tick me off.

Although Keating admits that he can use the 30 second skip button, an over-sensitive correction feature can definitely frustrate veteran DirecTV DVR users. I wonder if DirecTV will fix this or if users will have to have a work around.

Are you a DirecTV user and are experiencing this problem? Write a comment so we can track this and see if there’s a fix available.

Technorati Tags: DirecTV, DVR, fast forwarding, digital video recover, DirecTV DVR, Tivo

Nick Wingfield from the Wall Street Journal writes about how no one’s really figured how  to watch Internet video on TV sets.  So far, products like Apple TV and Akimbo haven’t reached mass usage for a number of reasons such as they’re hard to use, hard to install, high cost and low value proposition because content can be found elsewhere.

Wingfield goes through the problems and talked to vendors to discuss possible solutions. For example, the problem of too many set-top boxes. Consumers need to know that a new stand-alone box gives them something they can’t get anywhere else. Things like new high def DVD players have the potential to keep a coveted place underneath the TV set. Also, game systems like PlayStation 3 and Xbox 360 act as set-tops since they can download music and movies.

The solution to this is incorporating features into existing devices or one new converged box. However, there’s no consensus on what that box might be. Will it be Tivo? A cable box with a DVR and Internet functions?

According to Scientific Atlanta, cable companies may end up winning this battle. Cable and satellite TV providers already provide the majority of DVR devices to U.S. consumers, so it seems possible that Internet connectivity will soon be a part of set-tops. Kip Compton, general manager at Scientific Atlanta said that cable companies will begin rolling cable boxes that can access Internet video next year.

However, others believe that cable companies won’t want to do this because consumers will be able to watch TV free by accessing content on the Internet. And that may impact their revenue.

Cable and satellite companies, however, need to think beyond their quarterly earnings cycle and think longer term. Consumers will be happier and increased usage in Internet video may mean better integration of digital media advertising and may spur other revenue that we haven’t even thought of.

IPTV services may have the biggest jump. In the U.S. AT&T’s U-Verse and Verizon’s FiOS TV services use IP networks to deliver broadcast TV programming. So integrating other IP features should be relatively easier than it would be for cable or satellite providers.

So far, however, IPTV providers are just ramping up in the U.S. so they’re just trying to roll out broadcast and VOD services and gain new customers. Advanced Internet features aren’t yet a big part of IPTV, either in the U.S. or the rest of the world where IPTV is much more mature.

An analysis by the Television Bureau of Advertising found that cable penetration fell to 61.3% of all TV households compared to 62.1% last year. That’s the lowest that cable penetration has been since February 1990.

It’s not a big drop, but it’s a sign that other broadcast TV providers are gaining. There’s no information on how the Internet other VOD systems are affecting cable penetration rates, but it’s likely there’s some cause-effect here.

Meanwhile, satellite and other TV providers are gaining on cable.  So called “alternative delivery systems” went from 24.5% last year to 28% this year.  Broadcast satellite is the leader in this category with an estimated 27.6% of TV households, up from 24 percent a year ago.

The study didn’t look at IPTV specifically, but it should be among the alternative systems since it’s usually delivered via fiber or DSL. But in the U.S. IPTV deployments have been rather small still, unlike Europe or Asia where IPTV is growing at a very fast rate.

AT&T and Verizon are now battling cable and satellite providers with their IPTV offerings in many states and communities, but so far their subscriber numbers are pretty low. AT&T’s U-Verse offering has about 126,000 subscribers, while Verizon’s FiOS TV has about 515,000 as of the end of the second quarter 2007.

Technorati Tags: cable penetration, cable TV, cable, satellite, IPTV 

Bonus: Press release from the TV Bureau of Advertising.

In filings with the SEC, EchoStar said it was changing its name to DISH Network Corporation. It’s also expected to spin off its set-top box business as well as its Sling Media division to a new company called EchoStar Holding Company.

This makes things a bit easier to keep track of, since most people know the brand (Dish Network) rather than the company behind it (EchoStar).

Meanwhile, AT&T is supposedly still looking to acquire the DISH Network Corporation but no announcements have been made yet. This is one rumor that everyone expects, but that hasn’t happened yet.