TiVo Inc. v. EchoStar Corp.

646 F.3d 869, 98 U.S.P.Q. 2d (BNA) 1413, 2011 U.S. App. LEXIS 8142, 2011 WL 1486162
CourtCourt of Appeals for the Federal Circuit
DecidedApril 20, 2011
Docket2009-1374
StatusPublished
Cited by40 cases

This text of 646 F.3d 869 (TiVo Inc. v. EchoStar Corp.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Federal Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
TiVo Inc. v. EchoStar Corp., 646 F.3d 869, 98 U.S.P.Q. 2d (BNA) 1413, 2011 U.S. App. LEXIS 8142, 2011 WL 1486162 (Fed. Cir. 2011).

Opinions

LOURIE, Circuit Judge.

Appellants (collectively, “EchoStar”) appeal from the district court’s decision finding EchoStar in contempt of two separate provisions of the court’s permanent injunction order. See TiVo Inc. v. Dish Network Corp., 640 F.Supp.2d 853 (E.D.Tex.2009). A panel of this court affirmed the district court’s decision, concluding that EchoStar had in fact violated the infringement provision of the permanent injunction under our earlier decision in KSM Fastening Systems v. H.A. Jones Co., 776 F.2d 1522, 1532 (Fed.Cir.1985), and that EchoStar had waived its unenforceability arguments on the disablement provision of the permanent injunction. TiVo, Inc. v. EchoStar Corp., No. 2009-1374, slip op. at 1 (Fed. Cir. Mar. 4, 2010), vacated, TiVo, Inc. v. EchoStar Corp., 376 Fed.Appx. 21, 21-22 (Fed.Cir.2010). EchoStar petitioned for [876]*876rehearing en banc, urging clarification of the proper scope of the colorable differences test and challenging the enforceability of the district court’s injunction based on overbreadth and vagueness. We granted EchoStar’s petition and directed the parties to address the circumstances under which a finding of contempt by a district court would be proper as to infringement by newly accused products and also address the proper time to raise the defenses of vagueness and overbreadth of an injunction.

As a result of our consideration of this case en banc, we hold that the two-step KSM analysis is unsound in contempt cases and we clarify the standards governing contempt proceedings in patent infringement cases. We therefore vacate the district court’s finding of contempt of the infringement provision of the permanent injunction, and remand to the district court to make a factual determination of colorable differences under the new standard we lay out here. We thus vacate in part the damages awarded to TiVo for EchoStar’s continued infringement. However, we once again affirm the district court’s finding of contempt of the disablement provision of the permanent injunction and its sanctions award in its entirety because we conclude that EchoStar waived arguments of overbreadth and vagueness with regard to that provision.

Background

TiVo Inc. (“TiVo”) owns U.S. Patent 6,233,389 (“the '389 patent” or “TiVo’s patent”), which is entitled “Multimedia Time Warping System.” The patented technology allows television users to simultaneously record and play (“time-shift”) television broadcasts using what is commonly known as a digital video recorder (“DVR”). A DVR allows users to fast-forward, rewind, pause, and replay a “live” television program while it is playing on the television set. TiVo’s patent covers various features essential to the working of a DVR.

In 2004, TiVo sued EchoStar in the United States District Court for the Eastern District of Texas, alleging that its receivers infringe “hardware” claims (claims 1 and 32) and “software” claims (claims 31 and 61) of the '389 patent. The hardware claims are not at issue in this appeal.

Claim 31 of the '389 patent is the first of the two software claims. It provides as follows:

A process for the simultaneous storage and play back of multimedia data, comprising the steps of:
[1] providing a physical data source, wherein said physical data source accepts broadcast data from an input device, parses video and audio data from said broadcast data, and temporarily stores said video and audio data;
[2] providing a source object, wherein said source object extracts video and audio data from said physical data source;
[3] providing a transform object, wherein said transform object stores and retrieves data streams onto a storage device;
[4] wherein said source object obtains a buffer from said transform object, said source object converts video data into data streams and fills said buffer with said streams;
[5] wherein said source object is automatically flow controlled by said transform object;
[6] providing a sink object, wherein said sink object obtains data stream buffers from said transform object and outputs said streams to a video and audio decoder;
[877]*877[7] wherein said decoder converts said streams into display signals and sends said signals to a display;
[8] wherein said sink object is automatically flow controlled by said transform object;
[9] providing a control object, wherein said control object receives commands from a user, said commands control the flow of the broadcast data through the system; and
[10] wherein said control object sends flow command events to said source, transform, and sink objects.

'389 patent claim 31 (emphases added). Claim 61 is similar to claim 31, except that it recites an apparatus rather than a process. See id. claim 61.

The accused EchoStar satellite television receivers can be broadly classified into two categories based on the processing chip employed by the receiver: the “50X” series and the “Broadcom” series. The district court submitted questions of infringement and invalidity to the jury. TiVo, Inc. v. Dish Network Corp., No. 2:04-CV-00001, ECF No. 690 (E.D.Tex. Apr. 13, 2006) [hereinafter Verdict Form]. On infringement, the jury was asked whether eight different models of EchoStar receivers, three of the 50X series and five of the Broadcom series, literally infringed the hardware or software claims of TiVo’s patent. Id. at 2-3. The jury answered “yes” for each of the asserted claims, for each of the eight listed receivers. Id. It also found, by clear and convincing evidence, that EehoStar’s infringement was willful, id. at 4, and awarded TiVo approximately $74 million in lost profits and reasonable royalties, id. at 8. The district court entered judgment on the verdict and issued a permanent injunction against EchoStar. In its injunction, the district court ordered EchoStar: (1) to stop making, using, offering to sell, and selling the receivers that had been found infringing by the jury (the “infringement” provision) and (2) to disable the DVR functionality in existing receivers that had already been placed with EchoStar’s customers and in new placements that were yet to be placed with EchoStar’s customers (the “disablement” provision). The infringement provision reads:

Each Defendant, its officers, agents, servants, employees, and attorneys, and those persons in active concert of participation with them who receive actual notice hereof, are hereby restrained and enjoined, pursuant to 35 U.S.C. 283 and Fed.R.Civ.P. 65(d), from making, using, offering to sell, selling, or importing in the United States, the Infringing Products, either alone or in combination with any other product and all other products that are only colorably different therefrom in the context of the Infringed Claims, whether individually or in combination with other products or as a part of another product, and from otherwise infringing or inducing others to infringe the Infringed Claims of the '389 patent.

J.A.162.

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646 F.3d 869, 98 U.S.P.Q. 2d (BNA) 1413, 2011 U.S. App. LEXIS 8142, 2011 WL 1486162, Counsel Stack Legal Research, https://law.counselstack.com/opinion/tivo-inc-v-echostar-corp-cafc-2011.