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Dish-TiVo ruling could hit 6 million subscribers

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A federal appeals court panel today upheld a lower court’s ruling that ’s DVRs infringe on patents held by .

Among other things, the ruling could mean that about 6 million Dish subscribers will have their DVRs removed or disabled because they violate TiVos patents, according to JP Morgan analyst Mike McCormack. He says that number could be as high as 13.9 million (out of 14.1 million Dish subscribers).

But that won’t happen just yet as Dish said it plans to seek an en banc, or full court, review of the three-judge panel’s split decision.

“At this time, our DVR customers are not impacted,” Dish said in a statement.

McCormack said the most likely scenario is that Dish hammers out a royalty agreement with TiVo to allow Dish customers to continue using their DVRs.

“Given the court’s decision that damages be awarded based on $2.25 per DVR subscriber per month, we believe ongoing royalty payments to TiVo in the future could be $2 to $3 per subscriber,” McCormack wrote in a research note today.

TiVo said, if the decision stands, the company is in line to collect at least $300 million from Dish.

McCormack said Dish has already set aside $394 million for potential damages from April 2006 to December 2009. Through July 2009, the damages were pegged at about $300 million.

The AP story states that analysts are perplexed at Dish’s uncompromising stance with TiVo in this long-running dispute. The first reader comment in that article says it all: It’s .


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