DAY FOUR: TiVo-EchoStar Trial (Tues Apr. 4)
Keith Ugone, an economist, testified that EchoStar caused damages totaling $87 million by selling 4.3 million DVRs that infringe TiVo’s patent. Ugone (factoring in competitive sales) conservatively estimated TiVo would have sold 192,700 more PVRs had Echostar not sold these units representing a loss of $34 million. Estimating a loss of $1.00 per month (the royalty rate paid by DirecTV) for each of the 4.1 million remaining Echostar subscribers, TiVo claims further lost royalties in the amount of $52.95 million. Echostar attorney Harold McElhinny challenged Ugone’s calculations based on the “market penetration rates method”, suggesting that Ugone used this method because he did not have the information needed to calculate damages another (presumably more appropriate) way. On re-direct, Ugone stated that this method was commonly used by economists. When McElhinny pointed out that Echostar had used similar technology as early as 1999 in its Dish-player TV, Ugone pointed out that those products used only ‘primitive’ DVR functionality . When asked, Ugone testified that his fee to TiVo for testifying is $425 per hour and that he will receive about $500,000 for his work on the trial. Stuart West, TiVo’s VP of finance testified that TiVo spent $193 million on research and development. TiVo expects to conclude its opening testimony on Wednesday.