The Informationist

A Bit of Handicapping

Last Thursday (8/17), Judge David Folsom of the Eastern District of Texas issued his rulings in the epic patent battle of Tivo v. Echostar. The most significant of his rulings was an injunction ordering Echostar to disable some of the devices that it has already circulated, and to change the way that it does business. Folsom also declined to stay the injunction pending appeal, concluding that the balance of hardships tipped in Tivo’s favor.

Not surprisingly, Tivo’s stock spiked on the announcement; Echostar’s dipped. Echostar then flew to the Federal Circuit seeking a stay. On Friday (8/18). Chief Judge Michel granted a temporary stay until tomorrow (8/23), to give Tivo a chance to respond. Tivo’s stock glided lower; Echostar’s higher. Headlines and articles suggested that the business press saw real significance in the temporary stay.

As luck would have it, part of my practice involves fielding phone calls from Wall Street types confused by patent litigation. I spent the better part of the day yesterday reading Judge Folsom’s various rulings in this matter and explaining Federal Circuit procedure to investment bankers. In particular, they asked me to assign odds to the temporary stay being lifted or being allowed to remain until the appeal.

I boldly predicted 2:1 that the stay would disappear by the end of the month, and that the injunction would be in place no later than 9/1.

Judge Folsom’s rulings were as clean as any that I have seen in a major patent case. If you’re looking for an example of a trial judge who knows patent law and understands its complexities, look no further. He got the claim construction standards correct in his Markman ruling, applied those standards correctly, provided the jury with clear instructions, and ran the right balancing test on both the injunction and the stay. Kudos to the man from Texarkana!

Now all that we need to see is whether or not the folks at the Federal Circuit agree with me. . .

. . . if they do, I claim bragging rights. If not, well, if sunshine is the best disinfectant, The Informationist remains a pretty dirty site.

Posted by Bruce Abramson from on 08/22 at 03:34 PM in The Not-Quite-Yet Information Economy