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May 10, 2010

Dish Network Prepared to Shut Down Customer DVRs

By Patrick Barnard, Senior Web Editor, TMCnet

Dish Network Corp. may have to remotely disable millions of its customers' DVR boxes if it loses a patent infringement case brought by TiVo (News - Alert).

In published reports, company officials say they are prepared to shut down the approximately 7 million DVRs if the court sides with TiVo, which first brought the suit against Dish Networks in 2004. TiVo claims that Dish Networks' DVRs include technology which infringes on its real-time TV pausing and rewinding features.

Although Dish Networks is prepared to shut down the DVRs immediately if it loses the case and the court issues an injunction, a more likely scenario is that it will pay damages and technology licensing fees to TiVo.

Having to remotely disable the DVRs would probably be a last-resort move - since it could potentially cause millions of customers to cancel their contracts and move to competing providers. Dish Network recently reported a 26 percent drop in first-quarter net income.

A three-judge federal appeals panel in Washington sided with TiVo in March. Dish Networks, the second largest satellite TV provider in the US, has asked the full appeals court to review the case.

Should the appeals court deny a review, the case would return to a federal court in Texas for possible enforcement of an injunction on Dish's DVR boxes that infringe TiVo's patent. A federal judge would have to decide whether redesigned software (i.e. workaround) for Dish's DVRs still infringes on TiVo's patents.

For more, check out this report.

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