DISH granted en banc review, delays potential TiVo settlement


The U.S. federal court of appeals has agreed to grant EchoStar’s DISH Network an en banc review of the litigation with TiVo.  In March, a 3-judge panel of the same court upheld a trial judge’s decision to hold DISH in contempt for continuing to infringe on TiVo’s DVR patent. Now it appears that all 12 judges of the court will review this case AND the March decision has been vacated. For DISH to win the en banc case, the majority of the 12 judges (7) must rule in DISH’s favor – already 2 ruled against DISH while 1 ruled for. So that means 6 of the 9 remaining judges must rule in DISH’s favor.

Most people were handicapping DISH’s chance of getting an en banc review at 10-15%, given the infrequency with which something like this is granted – especially as this ties up an entire court for a period of time. 

“Clearly, we see what the market was expecting, with TIVO shares down 40% and DISH shares up 5% v. the S&P down 2%,” noted Marci Ryvicker, Senior Analyst at Wachovia/Wells Fargo Securities, in her report. “We believe that there are many different ”roads” of en banc review – the length of time will depend on whether or not the panel of judges rehears the entire case (which means additional briefings and oral arguments) or decides to just reread the papers and transcripts.  This can take as quickly as 30 days to 6 months.   Should DISH then lose in this en banc review, the final step would be to file a petition of certiorari with the Supreme Court – which would likely not be granted but again extend the time table until this litigation is finalized.”

She adds, “While many people believe that today’s decision may result in a faster negotiation between DISH and TIVO over a licensing deal, we do not agree.  We feel that today’s decision only emboldens [EchoStar CEO] Charlie Ergen to run the legal proceedings to the gamut, until he gets a full victory. We believe today’s decision is a small victory for DISH; however, it does give Charlie what he needs – additional time to fine-tune the workaround of the workaround.”