[Update below] Dish Network (DISH) has failed to convince an appeals court to overturn TiVo's (TIVO) earlier patent win against the company. TiVo's earlier win is upheld.

This means that you very well may be screwed if you use Dish Network and may be seeing your DVR go away very soon. It also means that TiVo gets to keep at least $94 million in damages from Dish and possibly up to $200 million depending on the judge.

Friday's court decision is the final decision and means that Dish Network can no longer appeal their loss to TiVo.*

It is unlikely that TiVo would negotiate with Dish going forward to allow them to use TiVo's patented DVR technology. Instead TiVo will enjoy the windfall from the company and will be able to use Dish as an example when negotiating with other companies.

Two weeks ago on an analysts' conference call, TiVo CEO Tom Rogers said as much:

"I would say based on our experience with litigation, the costs of litigation are far less than the returns that we are seeing just from the cap side of this equation and I don't think people have seen the end of what the cap side of that equation is, but just on the basis of damage award, what we've spent versus what we've gotten back, it's been a great business move. But again, my hope would be that the perception of what we've achieved and the value of our intellectual property and the enforcement of an injunction and what the implications of that are will help us significantly to drive forward broader distribution deals than do so without having to litigate."

My guess is that TiVo will use the muscle and threat behind this recent injunction to force Time Warner (TWX), one of the last operators to hold out, to do a deal with TiVo.

Update: TiVo has now issued a direct statement on their website:

"We are extremely pleased that the United States Court of Appeals for the Federal Circuit today denied EchoStar's petition for a rehearing en banc, upholding the Court's unanimous ruling in our favor on January 31, 2008, in EchoStar's appeal of the district court judgment of patent infringement, full award of damages and an order for the injunction to be reinstated.

Today's ruling brings us closer to resolution of EchoStar's infringement and reconfirms the strength of TiVo's Time Warp patent, which is in addition to the other benefits TiVo has to offer. We look forward to full enforcement of our rights in the near term."

*Update #2: Amazingly, Dish is now saying that they actually will appeal this verdict all the way to the Supreme Court. Good luck with that fellas!

Dish is also saying that this injunction will not require them to turn off any DVRs.

"We are disappointed that the Federal Circuit did not grant our petition for rehearing. The decision, however, will have no effect on our current or future customers because EchoStar's engineers have developed and deployed 'next-generation' DVR software to our customers' DVRs. This improved software is fully operational, has been automatically downloaded to current customers, and does not infringe the Tivo patent at issue in the Federal Circuit's ruling."

"All DISH Network customers can continue to use their DVRs without any interruption or changes to the award-winning DVR features and services provided by DISH Network. We intend to appeal the Federal Circuit's ruling to the United States Supreme Court."

On digg here.

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Thomas Hawk

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