Following an earlier finding that defendant violated the court's injunction by selling products that were not colorably different from products found to infringe, the court awarded contempt sanctions. The court rejected (i) plaintiff's argument that disgorgement of profits or trebling the jury's royalty rate was an appropriate measure of sanctions, and (ii) defendant's arguments that no sanctions were warranted, that sanctions should be calculated using the royalty rate awarded by the jury, or that a 20% rate increase should apply. "The harm suffered by [plaintiff] . . . is slightly offset by patent policy, which favors and promotes attempts to design around valid patents. . . . [T]he Court finds that a $1 increase—in effect, an 80% increase of the jury award—would yield an effective sanction. A $2.25 rate per month would represent a nearly 40% royalty on the $5.98 per month fee that [defendant] currently charges its customers. Although [defendant's] financial resources are considerable, a 40% royalty is substantial and cannot be easily overlooked. It will be difficult for [defendant] to pass this $1 rate increase onto its consumers without charging more for DVR service than its main competitors." The court awarded plaintiffs approximately $110 million in damages for the additional infringement, $90 million in sanctions, plus an award of attorneys' fees.
TiVo Inc. v. Echostar Communications Corp., et al., 2-04-cv-00001
(TXED September 4, 2009, Order) (Folsom, J.)