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TiVo Case Affects Difficulty of Designing Around Patents

There are hundreds of millions of dollars at stake, but that's not why the lawsuit is so important. Businesses throughout the country, in all industries, are waiting for the Federal Circuit's decision in TiVo Inc. v. EchoStar Corp. because the en banc ruling could significantly shift the balance of power between patent owners and infringers--in patentees' favor. Designing around patents could become far more difficult, and the penalties for failure could be far more severe.

At issue is how courts should handle allegations of repeat infringement--claims that an adjudged infringer is infringing the same patent again. Should that infringer be treated like any other defendant? Or can that company face an abbreviated legal process which provides fewer legal defenses and harsher penalties? In other words, can the accused simply be tried for contempt?

"Defendants don't get to have the same presumptions and defenses. There's no jury trial. There's no Markman hearing. It's a shortcut proceeding. You have one streamlined hearing, then an issuance," says Charles Macedo, a partner at Amster, Rothstein & Ebenstein and author of "The Corporate Insider's Guide to U.S. Patent Practice."

A finding of contempt, moreover, is particularly stinging. "No one wants to be found in contempt of court," Macedo says. "It's a pretty harsh sounding remedy, even if the damages aren't any bigger [than for infringement]."

Guidance Needed

In addition to making contempt proceedings more widely available, the panel majority also made it easier to hold a repeat infringer in contempt. The panel declared, for instance, that a defendant's good faith redesign efforts are not a defense to contempt (see "Not Enough").


Steven Seidenberg

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