Tivo Inc. v. Echostar Corp..

• Decision Date: 20 April 2011
• Docket Number: No. 2009–1374.,2009–1374.
• Citation: 646 F.3d 869,98 U.S.P.Q.2d 1413
• Parties: 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.
• Court: U.S. Court of Appeals — Federal Circuit

646 F.3d 869
98 U.S.P.Q.2d 1413

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.

No. 2009–1374.

United States Court of Appeals, Federal Circuit.

April 20, 2011.

[646 F.3d 873]

Seth P. Waxman, Wilmer Cutler Pickering Hale and Dorr, LLP, of Washington, DC, argued for the plaintiff-appellee on rehearing en banc. With him on the brief were Edward C. Dumont, Daniel S. Volchok, and Thomas G. Saunders. Of counsel on the brief were Morgan Chu, Joseph M. Lipner, Andrei Iancu, Perry Goldberg, and Christine W.S. Byrd, Irell & Manella, LLP of Los Angeles, CA.E. Joshua Rosenkranz, Orrick, Herrington & Sutcliffe, LLP, of New York, NY, argued for the defendants-appellants on rehearing en banc. With him on the brief were Joseph Evall and Alex V. Chachkes. Of counsel on the brief were Deanne E. Maynard, Morrison & Foerster, LLP, of

[646 F.3d 874]

Washington, DC, Donald R. Dunner, Don O. Burley, Erik R. Puknys, Finnegan, Henderson, Farabow, Garrett & Dunner, L.L.P., of Washington, DC, Rachel Krevans, Jason A. Crotty, and Scott F. Llewellyn, Morrison & Foerster, LLP, of San Francisco, CA. Of counsel was Tina E. Hulse, Finnegan, Henderson, Farabow, Garrett & Dunner, L.L.P., of Palo Alto, CA.Willard K. Tom, General Counsel, Federal Trade Commission, of Washington, DC, for amicus curiae Federal Trade Commission on rehearing en banc.William P. Nelson, Howrey LLP, of East Palo Alto, CA, for amicus curiae SAP America, Inc. on rehearing en banc.Edward R. Reines, Weil, Gotshal & Manges LLP, of Redwood Shores, CA, for amicus curiae, American Intellectual Property Law Association on rehearing en banc. With him on the brief were Amber H. Rovner, Weil, Gotshal & Manges LLP, Houston, TX, and Alan J. Kasper, American Intellectual Property Law Association, of Arlington, VA.Gary M. Hoffman, Dickstein Shapiro LLP, of Washington, DC, for amici curiae, General Electric Co. and Johnson & Johnson on rehearing en banc. With him on the brief were John T. Gallagher and Kenneth W. Brothers.Matthew Schruers, Computer & Communications Industry Association (CCIA), of Washington, DC, for amicus curiae Computer & Communications Industry Association on rehearing en banc.Robert P. Taylor, Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., of Palo Alto, CA, for amicus curiae Intellectual Property Owners Association on rehearing en banc. With him on the brief were Douglas K. Norman and Kevin H. Rhodes, Intellectual Property Owners Association, of Washington, DC. Of counsel was Herbert C. Wamsley, Intellectual Property Owners Association, of Washington, DC.Elaine J. Goldenberg, Jenner & Block LLP, of Washington, DC, for amici curiae, Law Professors Erwin Chemerinsky, et al. on rehearing en banc. With her on the brief were Marc A. Goldman and Jessica Ring Amunson.Mark J. Abate, Goodwin Procter LLP, of New York, NY, for amicus curiae New York Intellectual Property Law Association on rehearing en banc. With him on the brief was Dale L. Carlson, Wiggin & Dana LLP, of New Haven, CT. Of counsel was Ankur P. Parekh, Goodwin Procter LLP, of New York, NY.Christopher J. Kelly, Mayer Brown LLP, of Washington, DC, for amici curiae Professors of Intellectual Property and Competition Law and Economics on rehearing en banc. With him on the brief were Sharon A. Israel, Mayer Brown LLP, of Houston, TX and Brandon Baum, Mayer Brown LLP, of Palo Alto, CA.Michael K. Kellogg, Kellogg, Huber, Hansen, Todd, Evans & Figel, P.L.L.C., of Washington, DC, for amicus curiae Verizon Communications, Inc. on rehearing en banc. With him on the brief was Aaron M. Panner. Of counsel on the brief were John Thorne and Gail F. Levine, Verizon Communications Inc., of Arlington, VA.Scott A.M. Chambers, Patton Boggs LLP, of McLean, VA, for amicus curiae Greatbatch, Inc. on rehearing en banc. With him on the brief was Kevin M. Bell. Of counsel on the brief were Caroline Cook Maxwell, Patton Boggs, LLP, of Dallas, TX; Richard J. Oparil and David G. Henry, Patton Boggs LLP, of Washington, DC.Edward A. Pennington, Hanify & King, PC, of Boston, MA, for amicus curiae Acushnet Company on rehearing en banc. With him on the brief was

[646 F.3d 875]

Amanda M. Rettig. Of counsel on the brief was Troy R. Lester.Matthew D. McGill, Gibson, Dunn & Crutcher LLP, of Washington, DC, for amici curiae Hewlett–Packard Company, et al. on rehearing en banc.Paul D. Clement, King & Spalding, LLP, of Washington, DC, for amicus curiae Finjan, Inc. on rehearing en banc. With him on the brief were Daryl L. Joseffer, Erin E. Morrow, and Adam Conrad.Jeffrey A. Lamken, MoloLamken LLP, of Washington, DC, for amicus curiae Association for Competitive Technology on rehearing en banc. With him on the brief was Michael G. Pattillo, Jr. Of counsel were Raymond Millien and Thomas Henry Jackson, PCT Law Group, PLLC, of Washington, DC.Richard A. Epstein, of Chicago, IL, for amici curiae Professors of Law and Economics, Fred S. McChesney, et al. on rehearing en banc.Rodney A. Cooper, Protecting Assets of the Mind, of Colorado Springs, CO, for amici curiae Distinguished Economists on rehearing en banc.Bruce A. Lehman, International Intellectual Property Institute, of Washington, DC, for amicus curiae International Intellectual Property Institute on rehearing en banc. With him on the brief were Andrew Jaynes, Jason D. Koch, and Cameron Coffey.Alexander C.D. Giza, Russ, August & Kabat, of Los Angeles, CA, for amici curiae Former Federal Court Judges, Honorable Stephen G. Larson, et al. on rehearing en banc.Philip J. Graves, Graves & Walton LLP, of Los Angeles, CA, for amici curiae Arizona Science and Technology Enterprises, LLC, et al. on rehearing en banc. With him on the brief was Fredricka Ung.Robert S. Schwartz, Constantine Cannon LLP, of Washington, DC, for amici curiae Agricultural Organizations on rehearing en banc. With him on the brief were Seth D. Greenstein and Mitchell L. Stoltz.Before RADER, Chief Judge, and NEWMAN, MAYER, LOURIE, BRYSON, GAJARSA, LINN, DYK, PROST, MOORE, O'MALLEY, and REYNA, Circuit Judges, on rehearing en banc.Opinion for the court filed by Circuit Judge LOURIE, in which Circuit Judges NEWMAN, MAYER, BRYSON, MOORE, O'MALLEY, and REYNA join in full, and in which Chief Judge RADER and Circuit Judges GAJARSA, LINN, DYK, and PROST join in parts A1–A3(a).Dissenting-in-part opinion filed by Circuit Judge DYK, in which Chief Judge RADER and Circuit Judges GAJARSA, LINN, and PROST join.LOURIE, Circuit Judge.

Appellants (collectively, “EchoStar”) appeal from the district court's decision finding EchoStar in contempt of two separate provisions of the court's permanent injunction order. See TiVo Inc. v. Dish Network Corp., 640 F.Supp.2d 853 (E.D.Tex.2009). A panel of this court affirmed the district court's decision, concluding that EchoStar had in fact violated the infringement provision of the permanent injunction under our earlier decision in KSM Fastening Systems v. H.A. Jones Co., 776 F.2d 1522, 1532 (Fed.Cir.1985), and that EchoStar had waived its unenforceability arguments on the disablement provision of the permanent injunction. TiVo, Inc. v. EchoStar Corp., No. 2009–1374, slip op. at 1 (Fed.Cir. Mar. 4, 2010), vacated, TiVo, Inc. v. EchoStar Corp., 376 Fed.Appx. 21, 21–22 (Fed.Cir.2010). EchoStar petitioned for

[646 F.3d 876]

rehearing en banc, urging clarification of the proper scope of the colorable differences test and challenging the enforceability of the district court's injunction based on overbreadth and vagueness. We granted EchoStar's petition and directed the parties to address the circumstances under which a finding of contempt by a district court would be proper as to infringement by newly accused products and also address the proper time to raise the defenses of vagueness and overbreadth of an injunction.

As a result of our consideration of this case en banc, we hold that the two-step KSM analysis is unsound in contempt cases and we clarify the standards governing contempt proceedings in patent infringement cases. We therefore vacate the district court's finding of contempt of the infringement provision of the permanent injunction, and remand to the district court to make a factual determination of colorable differences under the new standard we lay out here. We thus vacate in part the damages awarded to TiVo for EchoStar's continued infringement. However, we once again affirm the district court's finding of contempt of the disablement provision of the permanent injunction and its sanctions award in its entirety because we conclude that EchoStar waived arguments of overbreadth and vagueness with regard to that provision.

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...