TiVo wins ruling in Echostar case, shares spike

SAN FRANCISCO (Reuters) - A federal appeals court affirmed a contempt finding against Dish Network Corp and EchoStar Corp in their long-running patent case against digital video recorder maker TiVo Inc, sending TiVo shares soaring 56 percent.

The U.S. District Court for Eastern Texas had previously imposed contempt sanctions against sister companies Dish and EchoStar for violating a court-ordered permanent injunction to stop making and selling DVRs.

TiVo sued EchoStar back in 2004, and a jury found that its DVR technology infringed TiVo patents.

TiVo said it was pleased with the appeals court ruling, and said it paves the way for the company to receive $300 million in damages and contempt sanctions awarded to it for EchoStar's infringement through July 1, 2009.

TiVo said it plans to seek further damages and contempt sanctions for infringement after July 1.

Dish and EchoStar claimed they had modified certain components of the DVRs it continued to sell so that they would no longer infringe TiVo's patents.

Dish was spun out of EchoStar in 2008.

In a statement, the companies expressed disappointment with the appeals court ruling, made by a three-judge panel, and said they will seek a review by the full court.

Dish and EchoStar said their DVR customers are not affected by the ruling, and said they will propose "new design-around" DVR technology to the district court for approval.

Shares of Alviso, California-based TiVo were up 56 percent at $15.93 in midday trading on the Nasdaq. Shares of Dish Network were down 6.3 percent at $20.34.

(Reporting by Gabriel Madway. Editing by Matthew Lewis and Robert MacMillan)