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Blog Home | September 22, 2014

Brand Owners: Own a New Top Level Domain–at a Price!

On June 20, 2011, the Board of the Internet Corporation for Assigned Names and Numbers (ICANN) granted the expansion of the number of top-level domains (TLDs).  A TLD is one of the domains at the highest level in the hierarchical Domain Name System of the Internet.  The TLD is the portion of a domain name to the right of the dot.  For example, in the domain name www.google.com, the TLD is “.com”.  This expansion allows for an unlimited number of TLDs, including private brands (e.g., .nike) or places (e.g., .newyork).  Thus, the new program exposes the Internet to creative new uses by industries and brand owners.

Brand owners applying for a new TLD may receive the following benefits: obtaining a short and memorable domain name; improved advertising and ranking on search engines; new, creative marketing opportunities; and improved security because users will recognize a domain as belonging to a specific brand owner.  Brand owners who purchase a TLD must use the TLD.  Thus, the brand owners participating in the program may either restrict a new TLD to internal use, open the new TLD to limited partners, or allow third parties to register domain names within the new TLD.

Despite the benefits a brand owner may receive when applying for a new TLD, there are unavoidable drawbacks.  For example, the application process is expensive; the application fee is $185,000 per TLD, and the estimated cost of employing consulting experts to prepare a complete application may be $100,000 or more.  Additionally, brand owners may pay dispute resolution fees, auction fees if another party is competing for the same TLD, or other potential fees.  ICANN’s Consensus Policies also require brand owners to commit to a 10-year Registry Agreement that requires a minimum payment of $25,000 annually.  Furthermore, the application process is time-consuming.  The application contains fifty questions covering general business, financial, technical and operation information.  Moreover, if a brand owner does not apply for a new TLD, the brand owner may lose a preferred TLD or market share to a competitor who obtains a new TLD and may not be able to apply for a subsequent TLD until 2013 or later.

ICANN has implemented procedures to resolve conflicts that arise over ownership of .brand TLDs, such as when two TLDs are confusingly similar.  For example, third parties may file both comments and objections to applications.  Additionally, legal rights holders may file an objection if the proposed TLD infringes upon legal rights that are enforceable under internationally recognized principles of law.  Registered or unregistered trademarks may form the basis of an objection.

ICANN anticipates accepting TLD applications from January 12, 2012 to April 12, 2012 and posting the applications fifteen days after the deadline.  Following a seven month objection period, ICANN will post initial results in November 2012, and new TLDs will be introduced in early 2013.

The take-away message is clear: regardless of whether brand owners apply for a TLD, they should be assertive, enforce their trademark rights once the new TLDs are launched, and monitor the use of their brands.

Internet Service Providers Implement a Copyright Alert System to Curb Online Copyright Infringement

Several U.S. Internet service providers (ISPs) have recently joined forces with the film, music and television industries to develop a “Copyright Alert System” to safeguard ISPs from online copyright infringement by their subscribers.  Notable ISPs involved are AT&T, Cablevision Systems Corporation, Comcast Corporation, Time Warner Cable and Verizon.  These ISPs will implement the Copyright Alert System between 2011 and 2012.  The system will be administered by a new “Center for Copyright Information” that consists of the ISPs, the Motion Picture Association of America, the independent Film and Television Alliance, the Recording Industry Association of America and the American Association of Independent Music.

The Copyright Alert System is intended to provide major ISPs’ systems with the ability to deal with claims of copyright infringement by the entertainment business.  Under the Digital Millennium Copyright Act (17 U.S.C. §512), ISPs “shall not be liable for monetary relief . . . or other equitable relief, for infringement of copyright by reason of the provider’s transmitting, routing, or providing connections [or] for material through a system or network controlled or operated by or for the service provider” if they enforce measures to prevent repeat copyright infringement.

The Copyright Alert System is a six-stage notification system that will electronically alert internet users when their account is used for wrongful downloading.  The system will have escalating remedies in place in the event infringing activity continues.  The six stages are as follows:

Stage 1: After an ISP receives a notice from a copyright owner, the ISP sends an online alert to its subscriber containing educational materials about copyright infringement.

Stage 2: The subscriber receives a second online alert similar to the first online alert, and the ISP may escalate the subscriber straight to the third online alert.

Stage 3: The subscriber receives a third online alert.  However, the alert requires the subscriber to acknowledge that he or she has received the alerts concerning copyright infringement.  Additionally, the third online alert warns the subscriber that content theft can lead to consequences under the law and the ISPs’ policies.

Stage 4: The subscriber receives a fourth online alert identical to the third online alert.

Stage 5: The subscriber receives a fifth online alert.  At this stage, however, the ISP may take “mitigation measures” that are “reasonably calculated to stop future content theft,” including “temporary reductions of Internet speeds, redirection to a landing page until the subscriber contacts the ISP to discuss the matter or reviews and responds to some educational information about copyright, or other measures that the ISP may deem necessary to help resolve the matter.”

Stage 6: The subscriber receives a sixth online alert, and the ISP will execute one of the above “mitigation measures.”

A subscriber who finds himself or herself at the latter stages of the Copyright Alert System must go before an independent reviewer to stop or contest the mitigation.  The review costs $35.  Additionally, the Copyright Alert System is designed to be flexible.  For example, the ISPs will not be required to terminate a subscriber’s membership in the event of copyright infringement.  Further, subscribers may request independent review of their alleged copyright infringement to avoid any “mitigation measure.”  Still further, the Copyright Alert System will not allow copyright owners to determine the identity of subscribers. Moreover, the ISPs will not be required to enforce any “mitigation measure” that will disable fundamental services, such as email or security services.

Critics fear that the Copyright Alert System will prove more harmful than beneficial to ISPs and copyright owners.  For example, some analysts believe that the Copyright Alert System will be detrimental to the ISPs that have joined forces with the entertainment industry because infringing subscribers will be frustrated with the online alerts.  Thus, subscribers may leave these ISPs for other service providers that have not implemented the Copyright Alert System.  Additionally, critics argue that the Copyright Alert System will be ineffective because subscribers will always find a way to steal creative content.  Only time will tell how effective the Copyright Alert System will be to ISPs and copyright owners.

United States Supreme Court Grants Certiorari to Review en banc Decision in Hyatt v. Kappos

On Monday, June 27, 2011, the United States Supreme Court granted certiorari to review the en banc Federal Circuit decision in Hyatt v. Kappos, which held that district courts have broad power to consider new evidence in cases that contest United States Patent and Trademark Office (PTO) decisions.  The Supreme Court decision may discourage patent applicants from using district court proceedings to challenge PTO decisions.

Under 35 U.S.C. §§ 145 and 146, a patent applicant may challenge a decision of the Board of Patent Appeals and Interferences by appealing to the Court of Appeals for the Federal Circuit.  The Court of Appeals will review the Board’s decision based on the record submitted to the PTO under a deferential standard outlined in the Administrative Procedure Act.  Alternatively, a patent applicant may file a civil action in district court so that the case would be evaluated under a de novo standard of review.  Because the PTO has spent time, money, and resources to resolve the patent applicant’s underlying issues, many legalists believe that PTO decisions should be given deference on appeal to a district court.

The Federal Circuit ruled in Hyatt v. Kappos that in district court actions, to review a PTO decision, (1) there were virtually no limits on new evidence other than the ordinary rules of evidence and civil procedure, and (2) when new evidence is admitted, the PTO decision is reviewed de novo.  The Federal Circuit held that “35 U.S.C. § 145 imposes no limitation on an applicant’s right to introduce new evidence before the district court, apart from the evidentiary limitations applicable to all civil actions contained in the Federal Rules of Evidence and Federal Rules of Civil Procedure.”  The only limitation that the Federal Circuit addressed was that new evidence must relate to issues that were evaluated by the PTO.  Additionally, the Federal Circuit held that “if no new evidence is introduced, the district court reviews the action on the administrative record, subject to the court/agency standard of review.”  However, if a patent applicant introduces new evidence that is relevant to an issue considered by the PTO, the Federal Circuit ruled that the district court must review the issue de novo.

Following the Federal Circuit’s decision in Hyatt v. Kappos, the United States filed a petition for writ of certiorari.  The United States is requesting that the Supreme Court hold that an applicant in a 35 U.S.C. § 145 action may not introduce new evidence that could have initially been submitted to the PTO, and that the district court should give deference to prior PTO decisions when a patent applicant presents new evidence.
The following issues will be addressed by the United States Supreme Court: (1) whether a patent applicant who files a 35 U.S.C. § 145 action may present new evidence to the Federal District Court that could have been presented to the PTO in the first place; and (2) when new evidence is introduced under 35 U.S.C. § 145, whether the district court may decide related factual questions de novo without giving deference to the prior decision of the PTO.

The Supreme Court’s decision in this case could greatly impact the route a dissatisfied patent applicant will take in response to a PTO rejection.  If the Supreme Court upholds the judgment of the Federal Circuit, then a patent applicant has an incentive to challenge PTO decisions in district court because new evidence may be evaluated under a de novo standard of review.  However, if the Supreme Court vacates the judgment of the Federal Circuit, a patent applicant may be less compelled to pursue review in district court because deference would be accorded to the PTO.  Thus, under the latter circumstances, a patent applicant would be encouraged to appeal directly to the Court of Appeals for the Federal Circuit.

Paul “Pauly D” DelVecchio from MTV’s Show “Jersey Shore” Sued for Trademark Infringement

On July 1, 2011, Paul “DJ Paulie” Lis of South Windsor, Connecticut sued Paul “Pauly D” DelVecchio from MTV’s show “Jersey Shore” for trademark infringement.  Mr. Lis registered the marks “DJ PAULIE” and “DJ PAULIE’S WORLDWIDE COUNTDOWN” for “entertainment services in the nature of disc jockey services” with the United States Patent and Trademark Office (USPTO) in May 2008.

Trademark infringement is a violation of the exclusive rights attached to a trademark without the consent of the trademark owner.  Infringement occurs when an infringer uses a mark that is identical or confusingly similar to a mark owned by another party with identical or similar products or services covered by the registration.  Courts weigh certain factors to determine whether marks are confusingly similar: (1) strength of the mark; (2) proximity of the services; (3) similarity of the marks; (4) evidence of actual confusion; (5) marketing channels used; (6) type of services and the degree of care likely to be exercised by the purchaser; (7) defendant’s intent in selecting the mark; and (8) likelihood of expansion of the product lines.

In his registration, Mr. Lis claims he adopted the mark “DJ PAULIE” in 1971 and has used it continuously since 1973, seven years before Mr. DelVecchio was born.  Although Mr. DelVecchio filed two applications for “DJ PAULY D” in February 2010, the USPTO has refused his registration on the grounds that the mark “DJ PAULY D” is confusingly similar to Mr. Lis’ registrations.

In his complaint, Mr. Lis is asking for $4 million in damages.  Mr. Lis is focusing on how the mark “DJ PAULY D” has impaired his ability to be known by his DJ PAULIE marks.  According to Mr. Lis, “[b]efore [Jersey Shore] went on the air, my website was very successful and getting attention from national advertisers, but [n]ow, I’ve pretty much been wiped off the Google map.”  Additionally, the complaint alleges that “the reality television show gained immediate popularity by following a group of young adults pursuing a debauched lifestyle suggestive of loose morals, violence, intoxication and liberal profanity – the exact opposite of the reputation [of] ‘DJ Paulie’.”

Mr. Lis claims that the mark “DJ PAULY D” has caused “reverse confusion,” which occurs when a second user becomes better known than the first user.  Thus, Mr. Lis is concerned that consumers will incorrectly believe that he is a latecomer trying to capitalize on Mr. DelVecchio’s fame, rather than the first user.

Jose M. Rojas, Mr. Lis’s attorney, claims that a cease and desist letter was sent to MTV to prohibit the marketing of the mark “DJ PAULY D,” but no response was received.  Thus, Mr. Lis filed a lawsuit against not only Mr. DelVecchio, but also Viacom, Hearst Publications, and Baskin Robbins, alleging that they “advertised, promoted and sold disc jockey software incorporating the mark “DJ PAULY D,” and in association with the persona” of Mr. DelVecchio.

Assuming that Mr. Lis can substantiate his first use date of 1973, sources believe that he will have priority over the mark “DJ PAULIE” considering that Mr. DelVecchio was born seven years after 1973.

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United States Supreme Court Limits Ability of U.S. Research Universities to Secure Patent Rights

On June 6, 2011, the U.S. Supreme Court ruled in Board of Trustees of Stanford University v. Roche Molecular Systems that rights to patents developed under federal research grants are not automatically given to universities.  The case had been closely followed within the biotechnology community given the hundreds of billions of dollars generated by discoveries that originate in U.S. research universities.  The Court’s ruling marks a defeat to Stanford University and other research universities bidding for full patent rights, and is a victory for companies that fund research universities.  Intel Corp., Eli Lilly & Co., Johnson & Johnson, and Pfizer Inc. were among the companies that supported Roche.

The case involved patents for technology that were used to measure human immunodeficiency virus (HIV) in blood samples.  The technology for measuring these samples was developed by Stanford scientists who were funded by the National Institutes of Health.  Stanford researchers had worked with a private company on such a technique, which ultimately led to a test kit marketed by Roche Molecular Systems, the world’s largest maker of cancer drugs.  Along with forty other universities and the American Council on Education, the University of Colorado submitted an amicus brief to the Court in support of Stanford in the case, a ruling which will greatly impact universities that own patents resulting from federally funded research.
The issue involved the interpretation of the University and Small Business Patent Procedures Act, also known as the Bayh-Dole Act of 1980.  The Bayh-Dole Act gives U.S. universities, small businesses and nonprofit groups rights to inventions and other intellectual property resulting from federally funded research.

Stanford filed suit for patent infringement over three patents against Roche Molecular Systems in 2005.  The university alleged that the HIV test kits sold by Roche emerged from research conducted by Dr. Mark Holodniy when he was at Stanford in the late 1980s.  While at Stanford, Dr. Holodniy signed an agreement giving the university “right, title and interest in” inventions stemming from his research.  During that time period, however, Dr. Holodniy worked at a private California biotechnology company called Cetus, which was later bought by Roche, to develop a blood testing system.  While at Cetus, Dr. Holodniy signed a contract agreeing to assign to Cetus the rights to his “ideas, inventions and improvements,” as a consequence of his access to the company’s polymerase chain reaction (PCR) – a method that allows billions of DNA sequences to be copied from a small blood sample – techniques, a technique that Cetus developed in the 1980′s.  Through Dr. Holodniy’s research, Stanford secured three patents to the blood-quantifying techniques.

The Supreme Court ruled 7-2 in favor of Roche Molecular Systems.  The Court held that Dr. Holodniy transferred his rights to the discoveries to Cetus, which made Roche the owner of the patents upon acquiring Cetus.  The Supreme Court ruled that inventors, rather than the universities that employ them, have the first right to patent and profit from their discoveries.  Thus, the majority held that Stanford interpreted the Bayh-Dole Act too broadly, stating that “nowhere in the Act are inventors deprived of their interest in federally funded inventions.”

According to Chief Justice John G. Roberts Jr., writer for the majority opinion, “since 1790, the patent law has operated on the premise that rights in an invention belong to the inventor . . . Although much in intellectual property law has changed in the 220 years since the first Patent Act, the basic idea that inventors have the right to patent their inventions has not.”  Chief Justice Roberts added that “we are confident that if Congress had intended such a sea change in intellectual property rights it would have said so clearly.”  In other words, Chief Justice Roberts held that the Bayh-Dole Act allows federal contractors, including universities, to elect to retain title to discoveries; the Act does not vest title automatically in universities.  Justices Stephen G. Breyer and Ruth Bader Ginsburg dissented, stating that the 1980 law intended to give federal contractors title to discoveries that arise from related research.

Although the Supreme Court’s decision clarifies the Bayh-Dole Act of 1980, some lawyers are skeptical as to its effects because the case arose under unusual circumstances; Dr. Holodniy signed two conflicting contracts.  In one contract, he promised Stanford the rights to his future inventions.  In the other contract, he assigned his rights to Cetus.  The Supreme Court ruled that Cetus’ contract prevailed because it covered current work, whereas Stanford’s contract applied only to future inventions.  Thus, the outcome of the case may, therefore, rest on the loose wording in the contracts.

Mike Tyson’s Tattoo Artist Sues Warner Brothers Entertainment for Copyright Infringement over the Movie “The Hangover: Part II”

The tattoo artist, S. Victor Whitmill, who gave Mike Tyson a facial tattoo, is suing Warner Brothers Entertainment for copyright infringement over its use of similar-looking facial art on Ed Helms’ character in the movie “The Hangover: Part II.” Mr. Whitmill filed suit in Missouri federal court in April 2011.
Mr. Whitmill asked for an injunction to stop the release of the movie, which was released over Memorial Day weekend.  However, his request was denied.  The federal judge ruled that “The Hangover: Part II” could open in theaters as planned; however, the judge ruled that the copyright lawsuit would be allowed to go forward.
Mr. Whitmill claims in his lawsuit that he was never “asked for permission for, and has never consented to, the use, reproduction or creation of a derivative work based on his original tattoo.”  The complaint alleges that “when Mr. Whitmill created the Original Tattoo, Mr. Tyson agreed that Mr. Whitmill would own the artwork and thus, the copyright in the Original Tattoo.”
The case turns on the fact that the tattoo in the movie is being used as a parody of Mr. Tyson’s tattoo.  According to Warner Brothers Entertainment attorney, Joey Jackson, “using the tattoo in the movie is simply part of the joke.  It is also transformative in that it makes use of the tattoo in a scene where it adds value to the meaning of the original design.  The show will go on as no court will order an injunction.”
Nevertheless, because Mr. Whitmill filed a copyright suit, Warner may be forced to settle with the tattoo artist.  According to entertainment attorney Yemi Adegbonmire, the court will likely lean in favor of Mr. Whitmill because the tattoo is registered as a copyright.  Thus, according to Mr. Adegbonmire, Warner Brothers Entertainment should have had notice as to Mr. Whitmill’s intent to protect his work.

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NTP Inc. Sues Six Major Smartphone Companies

On Friday July 9, 2010, NTP Inc. filed patent infringement suits against six major smartphone companies.  NTP is suing Apple, Google, HTC, LG Electronics, Microsoft, and Motorola over eight NTP Inc. patents which relate to wireless e-mail delivery.  NTP is a patent holding company or also known as a “non-practicing entity.”  A non-practicing entity does not practice the patented technology but instead makes money from licensing the technology and damages from infringement suits.  A co-founder at NTP , Donald Stout, stated that “[t]he filing of suit today is necessary to ensure that those companies who are infringing NTP’s patents will be required to pay a licensing fee.”  The NTP patents expire in 2012.

NTP may be remembered for their lawsuit in 2000 against the Blackberry manufacturer, Research in Motion (RIM).  RIM settled the case in 2006 and paid a reported $613 million to NTP.  In return, RIM now has a license to practice NTP’s patented technology.  In 2007, NTP sued AT&T, Sprint Nextel, T-Mobile, and Verizon Wireless for similar patent infringement which are still pending in the courts.

Microsoft and Google do not manufacture smartphones but do make operating systems for smartphones.  Donald Stout stated that the “[u]se of NTP’s intellectual property without a license is just plain unfair to NTP and its licensees.”  The defendant companies have yet to comment about the suit.

Bilski v. Kappos

http://static.fsf.org/fsforg/img/bilski.jpgOn June 28, 2010, the Supreme Court of the United States released a long-awaited opinion regarding the patentability of business method patents.  The Supreme Court upheld a decision which found a process for hedging commodities was non-patentable subject matter.  In 1997, Bernard Bilski and Rand Warsaw filed a patent application for a procedure for hedging commodities.  The United States Patent and Trademark Office (USPTO) rejected the application, and the Federal Circuit upheld the rejection because the application claimed non-patentable subject matter. The Federal Circuit Court of Appeals created a “machine-or-transformation” test which required a process to be tied to a machine or transform an article from one form to another.  The Federal Circuit found that the process claimed in Bilski’s application only manipulated abstract ideas and was neither tied to a machine nor transformed an article into another form.

The Supreme Court upheld the ruling that Bilski’s application claimed non-patentable subject matter.  The Supreme Court rejected the Federal Circuit’s holding that the “machine or transformation” test was the sole test for determining patentability.  Instead, the Court stated that the test was merely a factor to consider.  Kennedy’s majority opinion specifically stated that “[t]his Court’s precedents establish that the machine-or-transformation test is a useful and important clue, an investigative tool, for determining whether some claimed inventions are processes under §101.”  Additionally, the Court held that business method patents could still be patentable, but Bilski’s application was not patentable.  35 U.S.C. 101 states that a “process” is patentable subject matter; however, the statute states that laws of nature, physical phenomenon, and abstract ideas are not patentable.  The Supreme Court held that Bilski’s patent application only  manipulated an abstract idea and was, therefore, unpatentable.  In conclusion, the Supreme Court seems to have established that processes or business method claims which do not satisfy the machine-or-transformation test may still be patentable if they do not claim abstract ideas.

The USPTO released an internal memo to examiners explaining that they should continue to “examine patent applications for compliance with section 101 using the existing guidance concerning the machine-or-transformation test as a tool for determining whether the claimed invention is a process under 101.”   If a claimed method satisfies the test, then the method is likely patentable unless it is clearly an abstract idea.  On the other hand, if the claimed method does not meet the test, the examiner should reject the application unless there is a clear indication that it is not an abstract idea.

For more information, the actual opinion can be found at: http://www.supremecourt.gov/opinions/09pdf/08-964.pdf

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“Three Track” Initiative Proposal


The United States Patent and Trademark Office (USTPO) is requesting comments and input from the general public about a potential multi-track examination initiative.  The proposed “Three Track” initiative will give applicants better control over their examination process while increasing efficiency in the Patent Office.   The proposed “Three Track” initiative would classify examination tracks in three categories.  An applicant may request:

Track I:  prioritized examination (which would require an associated fee in addition to the filing fee)

Track II:  traditional examination under the current procedures

Track III:  for non-continuing applications first filed in the USPTO, an applicant-controlled delay for up to 30 months prior to docketing for examination (applicant must request examination and pay examination fee within 30 months of filing)

By giving applicants better control over the timing of examination, the proposed initiative will decrease pendency and allow the USPTO to employ its resources more efficiently. Specifically, one thing the initiative could change is how applications which are based on foreign priority are examined.

“For applications filed in the USPTO that are based on a prior foreign-filed application, no action would be taken by the USPTO until the agency receives a copy of the search report, if any, and first office action from the foreign office as well as an appropriate reply to the foreign office action as if the foreign office action was made in the application filed in the USPTO.  Following or concurrent with the submission of the foreign office action and reply, the applicant may request prioritized examination or obtain processing under the current procedure. This proposal would increase the efficiency of the examination of these applications by avoiding or reducing duplication of efforts by the office of first filing and the USPTO.”

The USPTO is holding a public meeting on July 20, 2010 at 1:30 p.m. at the USPTO’s Madison building, 600 Dulany Street, Alexandria, Virginia. Please see the USPTO press release for more information about submitting comments and attending the general meeting: http://www.uspto.gov/news/pr/2010/10_24.jsp

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En Banc Hearing for TiVo

http://lincgeek.org/blog/wp-content/uploads/2008/05/tivo.jpgOn Friday, May 14, 2010, the United States Court of Appeals for the Federal Circuit announced that it would grant an ‘en banc’ hearing of the TiVo v. Echostar case.  An ‘en banc’ hearing is a decision made by all the judges of a court, where typically only a panel of three judges hear an appellate case.  An ‘en banc’ hearing is extremely rare.  An ‘en banc’ hearing vacates the earlier appellate decision, and the original briefs and filings will be reexamined.  The ‘en banc’ hearing in the present case will address whether a product released by Dish Networks is infringing under the previous decision or whether a new trial is necessary.

Back in 2004, TiVo sued Dish Networks (Echostar) for infringing its patent, U.S. Patent No. 6,233,389 (“the ‘389 patent”), which allows a user to record a television show while simultaneously watching or viewing another program or show.  In mid-2006, the Eastern District Court of Texas returned a jury verdict holding that Dish Networks infringed the ‘389 patent and awarded $89.6M in damages and a permanent injunction to TiVo.  The permanent injunction prohibited Dish Networks from providing its DVR service.  Dish Networks appealed this decision, and in January 2008, the United States Court of Appeals upheld the District Court’s ruling.  Throughout this period, Dish Networks continued to sell its DVR system.  Dish Networks claimed they made design-around adjustments to the DVR system that would avoid infringement of the ‘389 patent.  However, TiVo argues that the changes were insubstantial and seeks additional damages caused by Dish Networks.  If the Federal Circuit upholds the permanent injunction, it could mean the end for Dish Networks’ and DirectTV’s recording devices.

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