Monday, May 17, 2010

"The Five Law Professors" and Tivo v. EchoStar

On 14 May 2010, the Court of Appeals for the Federal Circuit [CAFC] issued an order in Tivo v. Echostar, of which
BusinessWeek noted:

“Many investors had been hoping for a resolution to this case that has been going on for many years now,” said Mark Harding an analyst with New York-based Maxim Group, who rates TiVo a “buy” and doesn't own shares. It's “more of a waiting game than anything now.”

The Order vacates a previous appellate victory by TiVo and includes the following text:

(1) The petition of Defendants-Appellants EchoStar Corporation et al. for
panel rehearing is denied.
(2) The petition of Defendants-Appellants EchoStar Corporation, et al. for
rehearing en banc is granted.
(3) The court’s March 4, 2010 opinion is vacated, and the appeal is
(4) The parties are requested to file new briefs addressing the following
a) Following a finding of infringement by an accused device at trial,
under what circumstances is it proper for a district court to
determine infringement by a newly accused device through
contempt proceedings rather than through new infringement
proceedings? What burden of proof is required to establish that a
contempt proceeding is proper?

b) How does “fair ground of doubt as to the wrongfulness of the
defendant’s conduct” compare with the “more than colorable
differences” or “substantial open issues of infringement” tests in
evaluating the newly accused device against the adjudged
infringing device? See Cal. Artificial Stone Paving Co. v. Molitor,
113 U.S. 609, 618 (1885); KSM Fastening Sys., Inc. v. H.A. Jones
Co., 776 F.2d 1522, 1532 (Fed. Cir. 1985).

c) Where a contempt proceeding is proper, (1) what burden of proof is
on the patentee to show that the newly accused device infringes
(see KSM, 776 F.2d at 1524) and (2) what weight should be given
to the infringer’s efforts to design around the patent and its
reasonable and good faith belief of noninfringement by the new
device, for a finding of contempt?

d) Is it proper for a district court to hold an enjoined party in contempt
where there is a substantial question as to whether the injunction is
ambiguous in scope?

Elsewhere in the Order there is mention of the "Five Law Professors"-->
The court also granted leave to Five Law Professors to file a brief as amici curiae in
support of the petition.

The blogs Patently-O, IPWatchDog, and IAM covered the Order, but none mentioned The Five
Law Professors. The IAM blog post was most related to the business
consequences of the Order:

TiVo's run of positive results in the US courts in its litigation with EchoStar has come to a halt. Yesterday the CAFC decided to rehear Echo Star's appeal against a lower court's decision that it infringed TiVo patents and was in contempt. The CAFC originally upheld this decison; this seemed to open up a range of opportunities for TiVo and resulted in the company's share price rising 59% on the day the CAFC issued its judgment. Well, as we all know - shares can go down as well as up, and yesterday TiVo's went into freefall and lost 40% of their value.

What canny investors will now be weighing up is what will happen when the CAFC does deliver its final en banc decision in this case. A new hearing does not necessarily imply a different outcome. And if the court does end up reaffirming, anyone buying TiVo stock now is probably going to make one hell of a profit. On the other hand, a decision to overturn could send shares even further south. Investing in IP clearly remains a high-risk activity!

from CAFC decision sends TiVo shares into freefall

Relating to the point about "canny investors" is a matter going on with The Five Law Professors. From a letter BY Robert Merges TO the CAFC on 28 April 2010:

At the request of TiVo’s counsel, I am writing to offer some additional information related to the amicus filing I submitted on Monday in TiVo v. EchoStar. Specifically, counsel has asked that I explain more fully any interactions that the amicus law professors have had with private clients with respect to this case. I am happy to do so.

During the six-year pendency of this case, the law professors who signed the amicus brief have had many opportunities to discuss the issues raised. As we wrote in the brief, in addition to discussing the issues with our students and with the media, we have also discussed the case with paying private clients. This has included (among other things) offering investment advice to institutional investors that have had large positions in, and made buy-and-sell decisions with respect to, securities of one or more of the parties. There has been no inconsistency between the views we previously offered in private and the views we now offer in public. Moreover, as previously noted, none of us has any personal financial interest in any of the parties to the case or their related entities.

Out of an abundance of caution, I ask that this letter be distributed alongside our original filing, as I would very much like to show respect for counsel’s view that this additional information is helpful to the court.

Hmmm, law professors taking a position in the case in which law professors have separately been giving investment advice to paying clients. Perhaps no financial interest in the PARTIES, but a financial interest in the OUTCOME of the case in the sense of having given advice to "canny investors"?


Blogger TheBoogieMan said...

So Is Tivo going to win in the long run?

3:16 PM  

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