TiVo (TIVO) stock dropped by 11% today to close at $6.67, following an appeals court ruling that allows EchoStar (DISH) to continue selling PVR units.
As mentioned earlier today by Chris, TiVo and Echostar had been locked in a patent battle; TiVo claimed that Dish Network PVRs used technology that infringed on TiVo patents, and in April a federal jury ruled in favor of TiVo. EchoStar was ordered to pay close to $90 million in damages, and to stop selling PVRs.
An appeals court temporarily blocked the injunction preventing EchoStar from selling video recorders, and on Monday, that injunction was permanently lifted.
EchoStar stock rose by about $.6 today to close at $32.13.
1. The injunction against EchoStar was not permanently lifted. It was stayed pending appeal, because Echostar proved 1) they would face considerable hardship from the injunction and 2) their issues on appeal were not trivial.
If the injunction would cost them basically nothing, and/or it appeared that they didn't have any real issues to appeal (ie, they were appealing just to delay the process), then it would remain in place. The court basically said that, in the interest of fairness, we won't force them to comply with the injunction until we've reviewed the case.
This isn't really a "hopeful" scenario for Echostar. All the court said was "this appeal isn't frivolous, and we recognize that the injunction will cost you dearly." But the odds are in Tivo's favor (most cases are not overturned on appeal), so this just saves E*'s skin for a few more months.
Posted at 2:36PM on Oct 5th 2006 by Jake