Tivo, Inc. v. Echostar Corp. ( 2010 )

United States Court of Appeals for the Federal Circuit
*Revised March 16, 2010
2009-1374
TIVO INC.,
Plaintiff-Appellee,
v.
ECHOSTAR CORPORATION,
ECHOSTAR DBS CORPORATION,
ECHOSTAR TECHNOLOGIES CORPORATION,
ECHOSPHERE LIMITED LIABILITY COMPANY,
ECHOSTAR SATELLITE LLC,
and DISH NETWORK CORPORATION,
Defendants-Appellants.
Seth P. Waxman, Wilmer Cutler Pickering Hale and Dorr LLP, of Washington, DC,
argued for plaintiff-appellee. With him on the brief were Edward C. DuMont, Daniel S.
Volchok and Thomas Saunders. Of counsel on the brief were Morgan Chu, Andrew Iancu,
Christine W.S. Byrd and Perry Goldberg, Irell & Manella LLP, of Los Angeles, California.
E. Joshua Rosenkranz, Orrick, Herrington & Sutcliffe LLP, of New York, New York,
argued for defendants-appellants. With him on the brief were Joseph Evall and Alex V.
Chachkes. Of counsel on the brief were Donald R. Dunner, Don O. Burley and Erik R.
Puknys, Finnegan, Henderson, Farabow, Garrett & Dunner, LLP, of Washington, DC, and
Rachel Krevans, Jason A. Crotty and Scott F. Llewellyn, Morrison & Foerster LLP, of San
Francisco, California. Of counsel was Tina E. Hulse, Finnegan, Henderson, Farabow,
Garrett & Dunner, LLP, of Palo Alto, California.
Appealed from: United States District Court for the Eastern District of Texas
Chief Judge David Folsom
*Correction of law firm name Door (“Dorr”)
United States Court of Appeals for the Federal Circuit
2009-1374
TIVO, INC.,
Plaintiff-Appellee,
v.
ECHOSTAR CORPORATION,
ECHOSTAR DBS CORPORATION,
ECHOSTAR TECHNOLOGIES CORPORATION,
ECHOSPHERE LIMITED LIABILITY COMPANY,
ECHOSTAR SATELLITE LLC,
and DISH NETWORK CORPORATION,
Defendants-Appellants.,
Appeal from the United States District Court for the Eastern District of
Texas in case no. 2:04-CV-01,Chief Judge David Folsom.
____________________________
DECIDED: March 4, 2010
____________________________
Before MAYER, LOURIE, and RADER, Circuit Judges.
Opinion for the court filed by Circuit Judge LOURIE. Dissenting opinion filed by Circuit
Judge RADER.
LOURIE, Circuit Judge.
Appellants (collectively, “EchoStar”) appeal from the district court’s decision
finding them in contempt of the court’s permanent injunction order. TiVo Inc. v. Dish
Network Corp., 640 F. Supp. 2d 853 (E.D. Tex. 2009). Because we find that the district
court did not abuse its discretion in imposing sanctions against EchoStar, we affirm the
finding of contempt.
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
2009-1374 2
data stream buffers from said transform object and outputs
said streams to a video and audio decoder;
[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.
Claim 61 is similar to claim 31, except that it recites an apparatus rather than a
process.
The accused EchoStar receivers can be broadly classified in two categories
based on the processing chip employed by the receiver: the “50X” series and the
“Broadcom” series. The jury found that both the 50X receivers and the Broadcom
receivers infringed the asserted hardware as well as software claims and awarded TiVo
approximately $74 million in lost profits and reasonable royalties. The district court
entered judgment on the verdict and issued a permanent injunction against EchoStar.
In granting the 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,
with the exception of select receivers that had already been placed with its subscribers
(the “disablement” provision).
Following the entry of final judgment by the district court, we affirmed in part,
reversed in part, and remanded the district court’s decision. EchoStar had appealed
issues of claim construction and infringement to us. We found that the district court had
incorrectly construed at least one limitation of the hardware claims and reversed the
2009-1374 3
portion of the judgment upholding the jury’s verdict that EchoStar’s DVRs literally
infringed the hardware claims. TiVo, Inc. v. EchoStar Commc’ns Corp., 516 F.3d 1290,
1304–05 (Fed. Cir. 2008). However, we found no error in the district court’s claim
construction of the software claims and also affirmed the jury’s verdict that the EchoStar
devices infringed the software claims of the ’389 patent. Id. at 1310.
At that time, EchoStar did not appeal the district court’s grant of a permanent
injunction. In our opinion, we noted that the district court’s injunction, which had been
stayed during the course of the appeal, would take effect following our decision. Id. at
1312. We advised the district court that it may make a determination as to any
additional damages that TiVo may have sustained while the stay of the permanent
injunction had been in effect. Id.Following the decision on the appeal, TiVo moved the district court to find
EchoStar in contempt of the court’s permanent injunction. After conducting a series of
hearings on TiVo’s motion, the district court ruled that EchoStar was in contempt of its
earlier order. The district court rejected EchoStar’s argument that it had redesigned its
infringing products so that they were more than colorably different from the adjudged
infringing devices. The district court evaluated two of EchoStar’s major modifications to
the infringing DVR software and concluded that the modified software continued to
infringe. The district court therefore found EchoStar to be in violation of the
infringement provision of the injunction. Moreover, the district court found that even if
EchoStar had achieved a noninfringing design-around, EchoStar would still be in
contempt because it had failed to comply with the disablement provision in the district
court’s order requiring it to disable DVR technology completely from the receivers
2009-1374 4
adjudged to be infringing at trial. For EchoStar’s contempt of the court’s order, the
district court imposed sanctions against EchoStar in the amount of nearly $90 million.
TiVo Inc. v. Dish Network Corp., 655 F. Supp. 2d 661, 666 (E.D. Tex. 2009). The court
also awarded damages to TiVo for the continued infringement by EchoStar’s redesigned
software. Further, the court amended its earlier injunction, requiring EchoStar to seek
the court’s approval before implementing future noninfringing workarounds to its DVR
software. EchoStar now appeals. We have jurisdiction pursuant to 28 U.S.C.
§ 1295(a)(1).
DISCUSSION
A. Contempt of the Infringement Provision
1. Contempt Proceeding
We have held that a district court must make a two-part inquiry in finding a
defendant in contempt of an injunction in a patent infringement case. See KSM
Fastening Sys., Inc. v. H.A. Jones Co., 776 F.2d 1522, 1530 (Fed. Cir. 1985). First, the
court must determine whether a contempt hearing is an appropriate forum to adjudge
infringement by the redesigned product. Id. at 1532. The court may do this by
comparing the accused product with the original infringing product to determine if there
is “more than a colorable difference” between the accused product and the adjudged
infringing product such that “substantial open issues with respect to infringement” exist.
Id. Where the court finds that to be the case, a new trial is necessary to determine
further infringement and the court may not proceed with a contempt finding. Id. Only in
cases where the court is satisfied on the threshold inquiry of forum appropriateness can
a court inquire whether the redesigned product continues to infringe the claims as
2009-1374 5
previously construed by the court. Id.EchoStar argues that it was impermissible for the district court to try issues
relating to continued infringement by EchoStar’s modified software in a contempt
proceeding. According to EchoStar, its modifications to the infringing DVR software
were so substantial that TiVo should have been required to litigate its claims over the
modified software in a separate infringement action.
EchoStar contends that it undertook a Herculean effort in redesigning the DVR
software in its receivers so that it would no longer infringe the software claims in TiVo’s
patent. Primarily, EchoStar claims that it removed at least two key infringing elements
from the software in its Broadcom series receivers: video and audio data parsing, and
automatic flow control. Regarding the first modification, EchoStar claims that it
eliminated the parsing feature which was useful in creating an index of “start codes” of
the audio and video data. That index enabled “trick play” operations. The new
EchoStar DVR software is therefore “indexless” and performs those operations through
a “brute-force” method, utilizing average frame rate statistics to estimate the location of
any video data. With regard to the second modification, EchoStar claims that its earlier
software made use of a “record buffer” in addition to a pool of ten transport buffers. The
record buffer acted as intermediate storage for data being written to the hard drive when
each of the ten transport buffers was full. The record buffer also performed a “blocking”
function whereby data transfer from the transport buffers would be blocked until the
successful transfer of record buffer data to the hard drive. EchoStar claims that it
removed the record buffer and redesigned its software to transfer data directly from the
transport buffers to the hard drive, thereby eliminating the blocking feature from its
2009-1374 6
Broadcom receiver software. For its 50X series receivers, EchoStar implemented only
the change to the indexing mechanism described above.
According to EchoStar, the district court failed to recognize that the modified
components had completely transformed the infringing software. EchoStar argues that
the court misapplied the colorable differences test by failing to analyze the theories
upon which the jury had adjudged EchoStar’s software to be infringing. EchoStar
argues that a contempt proceeding is only suitable where the adjudged infringer makes
nothing more than bad-faith cosmetic changes. EchoStar presents a long list of
arguments as to why its redesigned software should be considered more than colorably
different. It argues that it removed features from its software that TiVo had previously
pointed to as infringing. In order to succeed, EchoStar contends, TiVo had to accuse
completely different components of its software and advance new infringement theories
with regard to the modified software. According to EchoStar, the fact that TiVo was
forced to contradict one of its positions at trial, and that the district court had to resort to
expert testimony in order to resolve the new infringement theory both show that the
changes were substantial.
TiVo responds by arguing that EchoStar’s modifications are trivial. TiVo
contends that the modified software comprises only a small fraction of EchoStar’s DVR
software. Moreover, TiVo contends, the modifications do not affect any element of the
two asserted claims. TiVo also urges us to reject EchoStar’s proposition that its
modified software must be evaluated against the claims as adjudged by the previous
jury instead of the claims construed by the district court. According to TiVo, removing
infringing elements identified by it at the previous trial cannot ensure that EchoStar does
2009-1374 7
not infringe TiVo’s patent, or even guarantee a new trial as long as those changes do
not raise substantial open issues of infringement. TiVo contends that none of the
modifications EchoStar made to its software presented the trial court with such open
issues.
We review the district court's decision to proceed via a contempt hearing for
abuse of discretion. KSM, 776 F.2d at 1532. We conclude that the district court did not
abuse its discretion in finding that EchoStar’s modified software raised no substantial
open questions of infringement. As a threshold matter, we determine that the district
court used the proper standard in its analysis. EchoStar argues that TiVo had to prove
by clear and convincing evidence that a contempt proceeding was appropriate in this
case. We agree instead with the district court that, although TiVo was required to put
forth evidence that such a proceeding was appropriate, that question is left to the
discretion of the trial court to be answered under the analysis mandated by our decision
in KSM.
With regard to the 50X series receivers, the district court found that the
modification made to remove indexing of start codes impacted only a single claim
limitation, namely, “parses video and audio data from said broadcast data.” The court
found that the change did not render the infringing software more than colorably
different because there was another feature of the software that continued to meet that
limitation. The court noted that EchoStar’s own experts had testified at trial that “PID
filtering,” a mechanism designed to distinguish between various television programs,
satisfied that limitation. Moreover, the court noted, EchoStar’s own engineers referred
to PID filtering as “parsing,” and EchoStar’s own internal documents referred to the
2009-1374 8
modified software as “Indexless DVR and TS Parsing.” Given that EchoStar’s
modification impacted only one limitation, one that it had already conceded was
infringed by another software component, the court concluded that the adjudicated and
modified products were not more than colorably different.
We agree with the district court that no substantial open questions of
infringement remained to be resolved through a trial on this modification. The district
court did not err when it looked to other components that EchoStar had itself conceded
met the same limitation that was being claimed. In KSM, we stated that “the district
court is able to utilize principles of claim and issue preclusion (res judicata) to determine
what issues were settled by the original suit and what issues would have to be tried.”
776 F.2d at 1532. Here, there was ample testimony presented at trial regarding parsing
of data in EchoStar’s receiver software and whether it satisfied the parsing limitation.
Multiple experts for both TiVo and EchoStar had testified at trial that PID filtering was in
fact “parsing.” EchoStar did not make any changes to its PID filter software
components. In light of such evidence, it was not an abuse of discretion for the district
court to conclude that EchoStar’s modification to its indexing software component had
not rendered its 50X receivers more than colorably different from the adjudged infringing
ones.
We also reject EchoStar’s and the dissent’s argument that the district court was
required to limit its analysis to whether the modified devices had eliminated start-code
detection and indexing. EchoStar argues that a contempt hearing is proper only when
the redesigned devices are alleged to infringe in the exact same manner that has
already been adjudicated to infringe. We disagree. The test for colorable differences is
2009-1374 9
not divorced from the scope of the claim that has previously been found to have been
infringed. See Additive Controls & Measurement Sys., Inc. v. Flowdata, Inc., 154 F.3d
1345, 1350 (Fed. Cir. 1998) (evaluating only those changes that were relevant claim
limitations). Modifications that EchoStar made to its software based on what it alone
considered to be the basis of the jury’s infringement finding cannot guarantee the
creation of substantial open issues with respect to infringement. Where the court is
clearly convinced, based on evidence presented at trial, that there are no substantial
open issues on continuing infringement of the asserted claims, we see no reason to
disallow summary proceedings. See KSM, 776 F.2d at 1532 (citing MAC Corp. of Am. v.
Williams Patent Crusher & Pulverizer Co., 767 F.2d 882, 885-86 (Fed. Cir. 1985)) (“So
long as the district court exercises its discretion to proceed or not to proceed by way of
contempt proceedings within these general constraints, this court must defer to its
judgment on this issue.”); see also Additive Controls, 154 F.3d at 1350 (holding that
within the general constraints stated in KSM, the district court has broad discretion to
determine how best to enforce its injunctive decrees). EchoStar’s proposed standard
would make it almost impossible for a district court to employ a contempt proceeding to
enjoin infringing products. Compelling the parties to undertake a new trial every time
there is a dispute over previously adjudicated infringing products would fail to serve the
goals of judicial economy. We disagree with the dissent that a new trial is necessary
here for the parties to reargue an issue – the operation of the exact same PID filter –
that has now been argued multiple times to the district court.
For the same reasons, we conclude that the district court did not err in finding
only colorable differences between the adjudicated Broadcom receiver software and the
2009-1374 10
modified one. For its Broadcom receivers, EchoStar implemented a software change
eliminating a record buffer in addition to the start code indexing modification discussed
above. The district court found that the additional change affected only the automatic
flow control claim limitation. The court found that both the modified and original
products operate a circular transport buffer structure with ten buffers within the
structure. The court concluded that in essence the buffer modification was nothing
more than a change from eleven buffers to ten.
We agree with the district court that that was not a major redesign of the
software. EchoStar seeks to magnify the significance of its buffer redesign by arguing
that the modifications resulted in skewing of the infringement mapping asserted by TiVo
at trial, thereby requiring TiVo to remap each claim limitation against different
components of the software. That, EchoStar argues, mandates a new trial. However,
EchoStar did not significantly change the manner in which data flows to the transport
buffers, simply the manner in which it is written to the hard disk. The district court was
familiar with the operation of the prior infringing software, and properly determined that
EchoStar’s change primarily impacted the manner in which automatic flow control was
achieved. Moreover, we have made clear that the presence of a new issue does not
necessarily preclude the district court from making use of a contempt proceeding to
determine continued infringement. See Additive Controls, 154 F.3d at 1350 (“The
presence of a new issue, however – even a new issue of claim construction – does not
necessarily require that a separate infringement action be brought to determine whether
the accused device infringes the patent in suit.”). In Additive Controls, we upheld a
district court’s decision to proceed with contempt proceedings where the court had to
2009-1374 11
conduct claim construction prior to determining whether the variations were more than
colorably different from the infringing products. Id. We held that the district court’s
determination (via a contempt proceeding) of infringement by the modified devices and
based on its new claim construction was not an abuse of discretion. Id. We therefore
conclude that the court did not abuse its discretion in finding that the Broadcom receiver
software had not been altered significantly enough to raise substantial open issues of
infringement.
Finally, we reject EchoStar’s argument that evidence of its good faith suffices to
protect it from any finding of contempt. EchoStar argues that it paid 15 engineers to
spend 8000 hours on the redesign, which took a year. Similarly, it stresses the fact that
it obtained an opinion of noninfringement from a respected patent law firm. It further
contends that the redesign compromised performance in order to avoid infringement of
TiVo’s patent, giving it a product inferior to what it previously had. In light of this
evidence, EchoStar argues, the district court was prohibited from utilizing a contempt
hearing in this case.
We disagree and conclude that EchoStar misreads our law. Although we have
acknowledged that good faith may be an indicator that redesigned products are more
than colorably different, Arbek Mfg., Inc. v. Moazzam, 55 F.3d 1567, 1570 (Fed. Cir.
1995), we have also made it clear that a lack of intent alone cannot save an infringer
from a finding of contempt. Additive Controls, 154 F.3d at 1353 (“The general rule in
civil contempt is that a party need not intend to violate an injunction to be found in
contempt.”). It was clearly within the district court’s discretion to give appropriate weight
to EchoStar’s good faith arguments, but not to accept them.
2009-1374 12
The district court has presided over this case for over five years. Given its
familiarity with the parties, the patent at issue, and the infringing products, in addition to
the well articulated reasoning for its decision, we do not find an abuse of discretion in
the court’s decision to hold contempt proceedings.
2. Infringement of the ’389 Patent
EchoStar argues that because TiVo failed to prove by clear and convincing
evidence that the redesigned devices infringe, it is not in contempt of the infringement
provision of the injunction. With regard to the 50X series receivers, EchoStar argues
that at the very least, the claim limitation “parses video and audio data from said
broadcast data” is not met by its new software. It argues that the district court
improperly found infringement based on the simple fact that the software includes a PID
filter that parses some data. The filter, however, EchoStar argues, looks only at the
header of a data packet, not the payload where the video and audio are contained.
Therefore, EchoStar urges, its modified software does not parse any audio and video
data.
TiVo responds that the district court has previously construed the term “parses”
broadly to mean “analyzes,” a construction that has never been challenged, and all that
is required for the modified software to meet this limitation is a component that analyzes
video and audio data. TiVo argues that EchoStar’s attempt to differentiate header data
from the packet payload is improper because both are part of an MPEG packet, and the
whole packet is video and audio data. Moreover, TiVo argues that experts for both
sides testified at trial that PID filtering meets the parsing limitation under the court’s
claim construction.
2009-1374 13
We review the district court’s finding of continued infringement and other
subsidiary factual findings made in a contempt proceeding for clear error. Additive
Controls, 154 F.3d at 1351. We may reverse a finding of infringement only if we are left
with a definite and firm conviction that a mistake has been committed by the trial court.
Unique Concepts, Inc. v. Brown, 939 F.2d 1558, 1564 (Fed. Cir. 1991) (citations
omitted).
We have no such conviction here. We agree with TiVo that there was
overwhelming evidence before the district court to find that the “parses” limitation was
met by the PID filter component. EchoStar’s own expert, Dr. Rhyne, testified at trial that
the infringing software contained PID filters “that examine the MPEG transport stream
and do a parsing.” At the contempt proceeding, Dr. Rhyne testified that the operation of
PID filters in the modified software had not changed since trial. As TiVo points out, the
PID codes in the packet headers are just as necessary to view television as the start
codes in the packet payload. More importantly, there is nothing in the claims or the
specification that requires audio and video data to be limited to specific fields of an
audio or video data packet in the context of this limitation.
EchoStar argues that both parties have switched positions on this issue and
therefore that judicial estoppel prevents TiVo, the prevailing party, from taking a position
that is clearly inconsistent with its earlier position. We, like the district court, do not see
TiVo’s position on the PID filter component as being “clearly inconsistent” with the one
that it took at trial. See New Hampshire v. Maine, 532 U.S. 742, 750 (2001) (holding
that in order to invoke judicial estoppel, “a party’s later position must be ‘clearly
inconsistent’ with its earlier position”). EchoStar does not point to any statement
2009-1374 14
wherein TiVo unequivocally denied that a PID filter can accomplish audio and video
parsing. On the contrary, TiVo points to several instances where it conceded the fact.
For example, at the summary judgment stage, EchoStar’s own counsel pointed out to
the district court that TiVo’s expert had agreed that PID filtering satisfies the parsing
limitation. Moreover, TiVo’s statements at trial regarding the PID filter were made in
connection with EchoStar’s infringement of the hardware claims. Those claims
specifically required a “media switch,” which parses an MPEG stream, separating it into
its video and audio components. See ’389 patent, cls. 1, 32. As we noted in our earlier
opinion, the specification discloses in detail the parsing function that is claimed as part
of the media switch. TiVo, 516 F.3d at 1301–02. TiVo’s expert testimony at trial was
clearly related to infringement of that media switch limitation of the asserted hardware
claims. In pursuing contempt against EchoStar, TiVo takes the position that the
operation of a PID filter in EchoStar’s software meets the parsing limitation of the
software claims. Although the general presumption is that the same claim term in the
same patent carries the same construed meaning, Omega Eng’g, Inc, v. Raytek Corp.,
334 F.3d 1314, 1334 (Fed. Cir. 2003), here, the scope of the software claims is indeed
very different from that of the hardware claims. We cannot agree with EchoStar that
TiVo’s current position on PID filtering is entirely inconsistent with its position at trial.
See Sandisk Corp. v. Memorex Prods., Inc., 415 F.3d 1278, 1291 (Fed. Cir. 2005)
(rejecting judicial estoppel arguments where the patentee’s earlier claim construction
position related to narrower term and the subsequent position was on a broader term).
The district court properly found that the PID filter in EchoStar’s modified software
“parses video and audio data” as required by the software claims.
2009-1374 15
We now turn to the question of continued infringement by the Broadcom receiver
software wherein EchoStar implemented an additional record buffer modification.
Regarding the Broadcom software, EchoStar argues that the claims require that data
move through a specific set of software components in a specific order, and neither
TiVo nor the district court was able to map this flow within EchoStar’s redesigned
software. Specifically, EchoStar argues that following the removal of the record buffer
and related operations, its software no longer met claim limitations that require
extraction and conversion of data as well as filling of a buffer. Further, EchoStar
argues, that with its new buffer design, the automatic flow control limitation is no longer
met. Specifically, EchoStar contends that by eliminating the “blocking” function that had
been alleged to provide automatic flow control, it completely removed this claim
limitation from its software.
TiVo responds by arguing that EchoStar’s software cannot escape infringement
by the trivial change that it made. TiVo contends that all EchoStar did was to remove a
copy buffer that was available as a programming convenience, allowing programmers to
divorce themselves from the Broadcom driver code. TiVo contends that EchoStar’s own
engineers represented the modification as nothing more than the removal of an
intermediate buffer. It points out that it provided detailed mapping of each claim
limitation against components of EchoStar’s modified software, complete with record
citations and specific examples of code, showing how the software continues to infringe.
Further, TiVo argues, its expert testified at the contempt hearing to infringement of each
of the claim limitations at issue.
We are persuaded that the district did not clearly err in finding continued
2009-1374 16
infringement by the modified Broadcom receiver software. We reject EchoStar’s
primary argument that TiVo’s new mapping of the modified software results in
noninfringement. According to EchoStar, under the new mapping, the “Input Buffer” on
the Broadcom chip is the “temporary storage,” and the “transport buffer” in RAM is the
“buffer.” Therefore, EchoStar argues, its software no longer extracts, converts, or fills
data as required by the claims, or at least not in the order required by the claims. For
instance, EchoStar argues that in the redesigned receivers, the buffer is filled not by
software but by hardware, namely, the Broadcom chip. We have previously rejected a
similar distinction between the operation of hardware and software proposed by
EchoStar. See TiVo, 516 F.3d at 1309 (finding EchoStar’s hardware/software
distinction unhelpful because software alone cannot perform data extraction from a
physical device). The fact that the buffer is now filled by the Broadcom chip software
does not render EchoStar’s modified software noninfringing. TiVo provided expert
testimony, along with exemplary code, on how the modified software satisfies each of
these limitations. TiVo further produced infringement charts showing how each of these
claim limitations continued to be met. Moreover, there was ample evidence presented
at trial by both parties to analyze the workings of EchoStar’s software. It was therefore
not improper for the district court to summarily find that each of the limitations continued
to be met in substantially the same manner as before. The court focused on the one
limitation that was clearly impacted by the modification, the automatic flow control
limitation. The court found that in spite of the redesign, several aspects of the software
continued to satisfy that limitation. Before trial in this case, the district court had
construed “automatically flow controlled” to mean “self-regulated.” The court held that
2009-1374 17
such self-regulation is found in the ten buffers that the software uses in a circular
arrangement, rotating between buffers as each of them begins to fill. As TiVo points
out, the system ensures that under normal conditions the buffers are no more than 70%
full. The court looked to pointers and descriptors used by the software to manage flow
of data and concluded that those were all methods of self-regulation of data. The
claims do not require, and the court did not construe the claims to require, that data flow
be completely halted in order to achieve automatic flow control. We find that there was
clear and convincing evidence that the automatic flow control limitation was met.
We also agree with TiVo that there is no inherent order required among the claim
limitations, and none has been argued before. We therefore conclude that each of the
claim limitations continues to be met by the modified Broadcom receiver software. We
are persuaded that there was clear and convincing evidence before the district court to
find that both types of EchoStar receivers continue to infringe and that it was not an
abuse of discretion for the court to find EchoStar in contempt of the infringement
provision.
B. Contempt of the Disablement Provision
EchoStar argues that the district could not find it in contempt of a provision that,
when reasonably read, does not require it to do anything more than to change its DVR
software component. EchoStar contends that it simply downloaded noninfringing
software to the receivers that it had placed with consumers. EchoStar argues that the
district court’s injunction cannot be read to prohibit such noninfringing design-arounds.
According to EchoStar, the plain language of the disablement provision contains two
distinct directives. EchoStar explains that the first clause, requiring disablement of “the
2009-1374 18
DVR functionality,” refers only to the functionality that previously existed and was found
to be infringing. EchoStar argues that because its modified software had not yet been
developed or installed in those receivers, the district court could not have ordered it to
disable functionality that did not exist. EchoStar contends that the second clause,
requiring EchoStar not to enable the same infringing DVR functionality in future
products, confirms its understanding. EchoStar further argues that the district court, in
ordering that it “disable all storage to and play back from a hard disk drive of television
data,” had to mean that EchoStar was required to disable all infringing storage and
playback functionality. Therefore, EchoStar argues, the district court erred when it
interpreted its injunction to require a permanent disablement of all DVR functionality in
the specified EchoStar units.
TiVo responds that the district court was abundantly clear about what it meant by
the disablement provision. According to TiVo, the order defines the term “DVR
functionality” and specifically lists the eight EchoStar models to which it applies.
Further, TiVo notes, the court emphasized what it meant by requiring disablement of “all
storage to and playback from a hard disk of television data” in the enumerated EchoStar
models. TiVo also contends that EchoStar had adequate notice of the meaning of the
injunction because EchoStar had argued to the district court that it should be allowed to
implement DVR functionality in the listed models in a noninfringing manner. In
response, TiVo contends, TiVo had argued to the district court that all DVR functionality
in all EchoStar units should be disabled. According to TiVo, the district court rejected
EchoStar’s argument and adopted TiVo’s proposal for broader relief in order to prevent
mischief on the part of EchoStar. TiVo argues that such broad injunctions have
2009-1374 19
previously been approved by this court. TiVo argues that in light of such clear notice,
EchoStar simply assumed the risk of a future finding of contempt by deciding to proceed
based on its own understanding of the order, without seeking further guidance from the
district court or appealing the injunction to this court. Therefore, TiVo argues, EchoStar
is barred from collaterally attacking the disablement provision now.
A district court’s interpretation of the terms of an injunction or any other legal
instrument is a question of law that we review de novo. See Laitram Corp. v. NEC
Corp., 115 F.3d 947, 951 (Fed. Cir. 1997). Under the Federal Rules of Civil Procedure,
“[e]very order granting an injunction . . . shall be specific in terms [and] shall describe in
reasonable detail, and not by reference to the complaint or other document, the act or
acts sought to be restrained.” Fed. R. Civ. P. 65(d). Rule 65(d) “was designed to
prevent uncertainty and confusion on the part of those faced with injunctive orders, and
to avoid the possible founding of a contempt citation on a decree too vague to be
understood.” Abbott Labs. v. TorPharm, Inc., 503 F.3d 1372, 1382 (Fed. Cir. 2007)
(quoting Schmidt v. Lessard, 414 U.S. 473, 476 (1974)). We have held that a district
court cannot find a party in contempt of its injunction order where the party had no
explicit notice that it was enjoined from specific conduct. Id. at 1383. However, it is
also well established that where a district court has made clear its intent in barring
certain conduct, a party is not free to ignore the court’s order and only appeal a later
contempt finding. See Carborundum Co. v. Molten Metal Equip. Innovations, Inc., 72
F.3d 872, 883 (Fed. Cir. 1995) (finding no abuse of discretion in a district court
contempt finding where a defendant had failed to follow an injunction that the court had
clarified during the proceedings). The time to appeal such an order is when it is handed
2009-1374 20
down, not when a party is later found to be in contempt. Other circuits have also held
that the scope of an injunction may be challenged only on direct appeal. W. Water
Mgmt., Inc. v. Brown, 40 F.3d 105, 108 (5th Cir. 1994); accord John Zink Co. v. Zink,
241 F.3d 1256, 1260 (10th Cir. 2001) (finding arguments related to interpretation of an
injunction waived where the defendants had failed to raise them in their earlier appeal).
We conclude that the district court’s injunction was sufficiently clear to bar
EchoStar from challenging it now. The injunction expressly proscribes “the DVR
functionality” and further clarifies what it means by the term. The order clearly defines
the term “Infringing Products” prior to referring to it in the disablement provision. The
order then goes on to restate that “[t]he DVR functionality, storage to and playback from
a hard disk drive shall not be enabled in any new placements of the Infringing
Products.” EchoStar’s argues that this second sentence, because it references new
placements, requires that the term “DVR functionality” be read as referring only to
infringing software.
We do not agree with the stretched reading of this provision that EchoStar
proposes. See Signtech USA, Ltd. v. Vutek, Inc., 174 F.3d 1352, 1359 (Fed. Cir. 1999)
(holding that where an injunction provides adequate notice of the conduct enjoined, the
specificity requirement of Rule 65(d) is served). “All” plainly means all. At a minimum,
EchoStar had notice of the possibility that the district court was imposing a complete
ban on the DVR software of each of the listed receivers. As TiVo points out, at the time
the district court issued its injunction, EchoStar’s receiver hardware had been found to
infringe the hardware claims as well, a finding that we later reversed. It would thus have
been reasonable for one to read the injunction when it issued as barring any
2009-1374 21
implementation of software similar to the one found by the district court to be infringing
in all of the hardware that was found to be infringing. We find it important to note that
the district court did not order a complete disablement or recall of the infringing
hardware. The DVR software is but one of many components of EchoStar’s receiver
software. The one piece of evidence that we do have of EchoStar’s understanding of
the disablement provision is its emergency motion for us to stay the injunction, in which
EchoStar repeatedly stated that the injunction would render millions of its customers
without DVR service or require them to go through considerable trouble and expense of
obtaining DVR service from another provider. The motion, filed even as EchoStar was
developing and preparing to roll out its workaround, in no way demonstrates EchoStar’s
contrary understanding of the disablement provision. As long as a plain reading of the
order would have provided EchoStar with notice of what it is now being held in
contempt, we cannot allow a collateral challenge to the order at this time. See
Travelers Indem. Co. v. Bailey, 129 S. Ct. 2195, 2204 (2009) (barring a collateral
challenge to an order, regardless of its merits, where the issue could have been raised
on direct appeal).
EchoStar raised a variety of issues including claim construction, infringement,
and various other trial rulings in its appeal from the district court’s prior judgment. See
TiVo, 516 F.3d 1290. EchoStar even moved us to stay the permanent injunction
pending that appeal, and we granted a stay. EchoStar strongly protested the injunction,
detailing the potential damage it would suffer from the injunction in its motion to stay.
However, it failed to raise the issue on appeal. The fact that there were numerous other
issues on appeal cannot excuse its failure to appeal the injunction. Had EchoStar
2009-1374 22
brought an appeal on the injunction, we could have addressed its legitimacy. The time
to do so has long passed. “It is just as important that there should be a place to end as
that there should be a place to begin litigation.” Travelers, 129 S. Ct. at 2206 (citations
omitted). We thus agree with the district court that EchoStar waived any argument that
the injunction was overbroad.
The dissent argues that it would be completely improper for the district court to
find EchoStar in contempt of the disablement provision if the modified technology was
outside the scope of the asserted claims. While it is true that infringement is generally
essential for a violation of an injunction against infringement, KSM, 776 F.2d at 1528, it
is also settled law that as long as EchoStar had explicit notice of what it had been
ordered to do and had refused to do so, the court possessed broad equitable powers to
enforce its decree. See Abbott, 503 F.3d at 1383; see also KSM, 776 F.2d at 1524 (“A
civil contempt proceeding for violation of an injunction issued after patent litigation, while
primarily for the benefit of the patent owner, nevertheless, involves also the concept of
an affront to the court for failure to obey its order.”).
The dissent suggests that under the trial court’s interpretation of the disablement
provision, in order to escape contempt, EchoStar was effectively required to go into
each of its customers’ homes and physically replace each cable box containing any
DVR functionality with an identical cable box with the same software. However, use of
identical boxes with the same software would be in contempt of the court’s infringement
provision. See Additive Controls, 154 F.3d at 1350, 1356 (affirming the district court’s
contempt finding where the redesigned products were manufactured by a successor
company and marketed under a different name). Regardless of its validity, which was
2009-1374 23
never before us, the district court’s disablement provision was clearly meant to prevent
EchoStar from providing DVR functionality on its receivers.
In reading the disablement provision as applying only to infringing DVR software,
the dissent relies on the fact that TiVo acknowledged to the district court that EchoStar
could reprogram receiver software at its existing placements to disable the DVR
component within those receivers via satellite. We find the manner in which the
disablement could be accomplished irrelevant to the issue at hand. TiVo never
conceded to the district court that EchoStar should be allowed to replace the infringing
DVR software component (in its then-adjudged infringing hardware) with a potentially
noninfringing software component either via satellite or otherwise. We find that
EchoStar had ample notice of what it had been ordered to do. Further, by adding a
separate provision on disablement and specifically defining what it meant by “DVR
functionality” in its order, the district court made its expectations sufficiently clear, and
more importantly fulfilled the requirements of Rule 65(d).
Finally, we address EchoStar’s request that we vacate the district court’s recent
amendment to its injunction requiring EchoStar to inform the court of any further
redesign attempts and to seek preclearance before implementing a design-around. We
deny that request.
Pursuant to 35 U.S.C. § 283, district courts are authorized to “grant injunctions in
accordance with the principles of equity to prevent the violation of any right secured by
patent, on such terms as the court deems reasonable.” We have repeatedly stated that
district courts are in the best position to fashion an injunction tailored to prevent or
remedy infringement. See Joy Techs., Inc. v. Flakt, Inc., 6 F.3d 770, 777 (Fed. Cir.
2009-1374 24
1993). Although we have discouraged judicial restraint of noninfringing activities, Johns
Hopkins Univ. v. CellPro, Inc., 152 F.3d 1342, 1367 (Fed. Cir. 1998), we have also held
that broad injunctions that preempt future design-arounds may be used in exceptional
cases where the district court reasonably concludes that such measures are necessary
to compel compliance with the court’s orders. See Additive Controls, 154 F.3d at 1356.
Where an infringer refuses to acknowledge a judicial finding of infringement and obey
an injunction barring future infringement, the district court has broad discretion in
enforcing its orders.
Having presided over this case for many years, the district court was in a unique
position to evaluate the likelihood that EchoStar would continue to infringe TiVo’s
patent. Id. (emphasizing that the “district court’s familiarity with the proceedings”
justified upholding an injunction requiring pre-approval of “any activities with respect to”
infringing devices); Spindelfabrik Suessen-Schurr Stahlecker & Grill v. Schubert &
Salzer, 903 F.2d 1568, 1577 (Fed. Cir. 1990) (explaining that repeated and blatant
violations of the district court’s earlier injunction fully justified broad provisions requiring
court approval before implementing design around efforts). Given EchoStar’s refusal to
disable the DVR functionality in its existing devices and the fact that its original attempts
to design around TiVo’s patent were wholly unsuccessful, the district court had ample
justification for its determination that court pre-approval of any new design-around effort
was necessary to prevent future infringing activity. We see no reason to set this
determination aside.
CONCLUSION
We have considered the EchoStar’s remaining arguments and do not find them
2009-1374 25
persuasive. Accordingly, the judgment of the district court is
AFFIRMED
2009-1374 26
United States Court of Appeals for the Federal Circuit
2009-1374
TIVO, INC.,
Plaintiff-Appellee,
v.
ECHOSTAR CORPORATION,
ECHOSTAR DBS CORPORATION,
ECHOSTAR TECHNOLOGIES CORPORATION,
ECHOSPHERE LIMITED LIABILITY COMPANY,
ECHOSTAR SATELLITE LLC,
and DISH NETWORK CORPORATION,
Defendants-Appellants.
Appeal from the United States District Court for the Eastern District of Texas in
case no. 2:04-CV-01,Chief Judge David Folsom.
RADER, Circuit Judge, dissenting.
I.
“Contempt . . . is not a sword for wounding a former infringer who has made a
good-faith effort to modify a previously adjudged or admitted infringing device to remain
in the marketplace. Rather, the modifying party generally deserves the opportunity to
litigate the infringement question at a new trial, ‘particularly if expert and other testimony
subject to cross-examination would be helpful or necessary.’” Arbek Mfg. Inc., v.
Moazzam, 55 F.3d 1567, 1570 (Fed. Cir. 1995) (quoting KSM Fastening Sys., Inc. v.
H.A. Jones Co., 776 F.2d 1522, 1531 (Fed. Cir. 1985)). Citing a broad injunctive
provision and a substantially-altered accused design, this court today punishes a good
faith design-around effort.
A full examination of the disputed claim shows little similarity between the former
infringement proceedings and the issues now before this court. The accused structures
are different. The theories of infringement are different. The pertinent claim
constructions apply in ways that are different. The parties’ positions have flip-flopped.
The modified method operates in a significantly different way from the old. Indeed, the
only thing that is not different is the identity of the parties themselves. These
differences deserve a trial, not a summary contempt proceeding.
II.
“Even if Echostar had achieved a non-infringing design around, this Court would
still find that Echostar is in contempt of this Court’s permanent injunction.” Those words
come directly from the district court’s contempt order. In other words, even assuming
the modified technology falls outside the asserted claims, Echostar would still be in
contempt. How can that be correct?
Under its strained interpretation of its earlier injunction, the district court
effectively required Echostar to go into each of its customers’ homes and physically
remove each cable box containing any DVR functionality — infringing or not! The trial
court required this course of action even in the face of both parties’ recognition that a
satellite link could more easily remove or replace the “infringing” technology. In other
words, if Echostar would enter each home and replace each of its cable boxes with
identical cable boxes uploaded with the same software, it would escape contempt.
These absurdities spring from the “disablement provision:”
Defendants are hereby FURTHER ORDERED to, within thirty (30) days of
the issuance of this order, disable the DVR functionality (i.e., disable all
storage to and playback from a hard disk drive of television data) in all but
2009-1374 2
192,708 units of the Infringing Products that have been placed with an end
user or subscriber. The DVR functionality, i.e., disable all storage to and
playback from a hard disk drive of television data) [sic] shall not be
enabled in any new placements of the Infringing Products.
While this court manages to find a way to refashion the intent and purpose of the
disablement provision, no reasonable patent attorney would read it as this court does.
The district court’s injunction applied only to infringing products. The court did not refer
to any modified product or any other “DVR functionality” for that matter. Yet, the
injunction today applies to any DVR functionality regardless of infringement.
Neither Tivo nor this court cite to any case supporting such a broad injunction. In
fact, this court’s case law directs otherwise: “If a trial court is faced with an overly broad
injunction during a contempt proceeding, the court should interpret it according to the
rule of law quoted from KSM,” which prohibits only “infringement of the patent by the
devices adjudged to infringe and infringement by devices no more than colorably
different therefrom.” Int’l Rectifier Corp. v. IXYS Corp., 383 F.3d 1312, 1316 (Fed. Cir.
2004). This court only gives that rule lip service.
The reason for this rule is clear: “[T]hose against whom an injunction is issued
should receive fair and precisely drawn notice of what the injunction actually prohibits.”
Granny Goose Foods, Inc. v. Bhd. of Teamsters, 415 U.S. 423, 444 (1974). This
premise has “led courts to construe injunctions narrowly where they failed to give
adequate notice that particular conduct was enjoined.” Abbott Labs. v. TorPharm, Inc.,
503 F.3d 1372, 1382 (Fed. Cir. 2007). Because no reasonable patent attorney would
have read the disablement provision to cover what is now enjoined, this court’s decision
sounds rather hollow in referring to Echostar’s failure to appeal. In the end, Echostar
2009-1374 3
should rely on the most reasonable interpretation of the disablement provision and
avoid unnecessary appeals. If the district court wished to enjoin the broad conduct it
now claims it did, it should have done so with a few simple words and given clear notice
of its expectations. Instead, it provides an artificial, after-the-fact justification for its
contempt finding.
In the proceedings leading up to the injunction, Tivo used broad language to
request an injunction that it characterized as “narrow.” In defending the very language
ultimately adopted by the district court, Tivo stated that it was only seeking to enjoin
“infringement of the patent by the devices adjudged to infringe and infringement by
devices no more than colorably different therefrom” — “nothing more, nothing less.”
The record belies these representations.
For starters, this court and Tivo draw a dichotomy between hardware and
software claims. At the time of the injunction, neither party nor the district court offered
such a distinction. To the contrary, the only distinction tendered by Tivo was between
“new placements” and “existing placements.” New placements referred to cable boxes
sitting on the shelves of retailers and distributors awaiting distribution to customers.
Existing placements referred to cable boxes already installed in customers’ homes. As
to the former category, Tivo requested that Echostar “be ordered to recall and retrieve
from its distributors and retailers the infringing DVR products that have not yet entered
the stream of commerce or are in the possession of the distributors and retailers.” That
is, for this limited category of products, Tivo requested the exact proscription it now
seeks to apply to all of Echostar’s products. Echostar encouraged the trial court to
“enjoin only the provision of infringing DVR software to those boxes upon activation.”
2009-1374 4
The district court ultimately sided with Tivo:
Defendants are hereby FURTHER ORDERED immediately to recall and
retrieve from their distributors and retailers the Infringing Products that
have not yet entered the stream of commerce or are still in the possession
of Defendants’ distributors and retailers.
The existing placements, however, were a different story. As to that category of
products, Tivo admitted that Echostar could avoid infringement and the scope of the
putative injunction by merely reprogramming and disabling the DVR functionality in
question. Tivo made the following admission:
Echostar can reprogram and disable the infringing DVR functionality in all
existing DVR units by updating their software via satellite transmission. . . .
Echostar has used this method of updating software routinely.
These statements appear directly below the heading “Existing placements” in Tivo’s
brief supporting an injunction submitted after the jury returned a verdict of infringement
on both hardware and software claims. Yet surprisingly, this court now claims that
Echostar was on notice of the broad reach of its injunction. Again, Tivo expressly
acknowledged that the infringing technology could be removed and replaced via
satellite. Tivo now disingenuously contends that its intention during all stages of the
proceedings was to force Echostar to physically remove all of its products containing the
infringing software. Given Tivo’s clear bait-and-switch ploy, this court should have
recognized and forbid this game.
III.
Turning to the “infringement provision,” contempt proceedings are not the
appropriate forum to resolve the infringement issues on the “parses video and audio
data” limitation. Echostar’s modified design seems far “more than colorably different”
2009-1374 5
such that “substantial open issues with respect to infringement” remain. KSM, 776 F.2d
at 1530. In the original trial, Tivo identified Echostar’s “video frame start-code detection”
as infringing the limitation. That “start code” technology parses the digital video and
audio data before storing to memory so that the user can later conveniently reference
the individual frames when fast forwarding or rewinding through the data. According to
Tivo’s expert, the technology was necessary to produce a viable DVR.
In its redesign efforts, Echostar eliminated its video frame start-code detection in
its entirety. Rather than parsing through all the video and audio data before storing onto
the system, the modified design, upon request from the user, statistically estimates
where a given frame might appear long after storage of the video and audio data. This
change was a critical component of a vast redesign effort by fifteen engineers working
full time for over 800 total hours. Before proceeding, Echostar got two separate
approvals of this change from an independent law firm.
Because of the substantial change to the design, Tivo abandons its infringement
theory premised on the start-code feature. Instead, Tivo focuses on an entirely different
structure in the modified device — the PID filter. The PID filter had been part of the
prior design but was never accused of infringement. Every channel broadcasted over
Echostar’s system carries a particular set of numbers known as the PID number.
Broadcast data breaks into two discrete components: header information and payload.
The header information contains the PID number. The payload contains the actual
video and audio data for the particular channel. Before passing through the PID filter,
the payload information is scrambled to avoid piracy. When a user turns the cable box
to a particular channel, the PID filter receives a message to pass the payload
2009-1374 6
information under that number to the user.
The problem with Tivo’s new theory is simple: it had previously disclaimed the
PID filter as an infringing structure. Actually Tivo deliberately disclaimed it to avoid prior
art during the infringement trial. When asked directly by Tivo’s counsel about the PID
filter, Tivo’s expert admitted:
And so inside the receiver card, the input section, yes, there is a little bit of
what you might call separation in order to perform this translation, a little
bit of what you might call even a type of parsing in order to pick out the
correct packets and turn them and convert them into the MPEG-I.
But just because these are words you use to describe this conversion
process, you shouldn't confuse that with the claim terms. And when you're
done with the input section, it's afterwards that comes the part of the claim
that talks about the media switch that parses and separates.
For its part, Echostar argued that the PID filter did “parse video and audio data.” Tivo’s
arguments won at trial. Now the parties have directly switched positions. Tivo finds
infringement in the PID filter; Echostar finds no application of the claimed elements.
A “modifying party generally deserves the opportunity to litigate the infringement
question at a new trial, ‘particularly if expert and other testimony subject to cross-
examination would be helpful or necessary.’” Arbek, 55 F.3d at 1570 (quoting KSM,
776 F.2d at 1530). At the contempt proceedings, both parties proffered conflicting
expert testimony. Echostar’s expert highlighted that the PID filter did not even look to
the “video and audio” data because its role was restricted to passing only header
information. Indeed, at the point and time when the PID entered the broadcast chain,
the payload — i.e., the audio and video data — was necessarily scrambled for security.
In other words, the PID filter could not reference the audio and video data even if it
2009-1374 7
wanted to. And, of course, Tivo had previously renounced the PID filter as an infringing
structure.
This record cannot support this contempt conclusion. The very structure which
provided the basis for Tivo’s infringement theory was eliminated by Echostar in its
modified design. This redesign, at a minimum, shows Echostar’s substantial good faith
efforts to comply. As noted, the new accused structure is and has always been a part of
Echostar’s design. Moreover, it has not changed its function in the slightest.
Still, ignoring these problems, Tivo’s expert in the contempt proceedings relied
on the district court’s substitution of “analyzes” for the term “parses.” Tivo also stressed
that Echostar engineers used the term “parsing” in conjunction with the PID filter. Loose
language, particularly in reference to features ruled out as infringing technology earlier,
should not provide the basis for contempt. Rather, “[i]n litigated cases, the injunction
must be interpreted in light of the rulings of the court on the scope of the claims. The
patent owner may not, in contempt proceedings, seek to broaden the scope of the
claims which were adjudicated and, thereby, catch the modified device.” KSM, 776
F.2d at 1529; see also Cal. Artificial Stone Paving Co. v. Molitor, 113 U.S. 609, 618
(1885) (“Process of contempt is a severe remedy, and should not be resorted to where
there is fair ground of doubt as to the wrongfulness of the defendant’s conduct.”)
(emphasis added).
As with the disablement provision, this court again relies on a distinction between
hardware and software claims to vitiate Tivo’s previous disclaimer of the PID filter. To
my eyes, this distinction deserves no credibility on this record. Tivo only presented one
theory of infringement to the jury. That theory did not depend on any distinction
2009-1374 8
between hardware or software claims. To the contrary, Tivo’s theory spoke to all terms
across all asserted claims. Tivo’s expert admitted during the contempt proceedings:
Q. Now back before the original trial, Dr. Storer, your opinion was that
parsing meant the same thing in claim 1 and claim 31 and 61, right?
A. I took parsing to be analyze as the court construction, and took it to
mean the same thing, absolutely.
Q. In all the claims?
A. In all the claims.
Tivo simply provided no evidence for a reasonable jury to make any infringement finding
limited to either the hardware or software claims. Nor were Echostar’s statements
about the PID filter limited to either software or hardware claims. Both types of claims
stood and fell together.
At trial, the jury returned a verdict of infringement based on the record. That
record is entirely different from the theories, evidence, and positions in the contempt
proceeding. Tivo should not be able to bootstrap its new, previously abandoned
infringement theory to that verdict. If Tivo believes that Echostar’s new design still
infringes its patent, it should file a new infringement suit, not attempt to short circuit a full
proceeding. In its current form, this decision discourages good faith efforts to design
around an infringement verdict.
2009-1374 9