The simplified test makes it more difficult for patent holders to prove contempt as a result of repeat infringement.
[8] Soon after the appeal concluded, TiVo Inc. motioned to hold EchoStar Corp in contempt of the permanent injunction.
The District Court utilized the two-part test for patent infringement established in KSM Fastening Systems, Inc. V. H.A.
Jones Company, Inc. [11] The crux of this test involved determining whether there is "more than a colorable difference" between the original infringing product and the redesign.
Furthermore, the District Court held that EchoStar Corp never complied with the Disablement Provision of the permanent injunction.
The en banc Federal Circuit vacated and remanded the judgment on the Infringement Provision of the permanent injunction.
[9][14] On April 29, 2011, the companies reached a $500 million settlement whereby EchoStar Corp. agreed to license DVR technology from TiVo Inc.
Consequently, the parties were "free upon remand…to request that the District Court dismiss the complaint and vacate its previously imposed sanctions"[15] due to the settlement.
"[8] As a result, TiVo Inc. was awarded approximately $74 million in damages from lost profits and royalties, and a permanent injunction was issued against EchoStar.
[17] TiVo Inc. motioned to hold EchoStar Corp. in contempt for violating the Infringement and Disablement Provisions of the permanent injunction.
"[13] Applying the second step of the KSM test, the District Court held "modifications do not affect elements of the disputed claims as construed … the infringing and modified devices may be treated as the same.
[13] EchoStar argued the Disablement Provision only covered original infringing products (non-software updated 50X and Broadcom DVRs).
However, the District Court held that a plain reading of the order includes all 50X and Broadcom DVRs whether non-infringing redesigned or original infringing.
The Federal Circuit disagreed and held that the District Court "used the proper standard in its analysis,"[9] the KSM test.
The Federal Circuit concluded there was no "abuse of discretion in the court's decision to hold contempt proceedings,"[9] In addition, the Federal Circuit was persuaded that the District Court could find EchoStar in contempt of the Infringement Provision and that there was "clear and convincing evidence"[9][18] to do so.
These differences deserve a trial, not a summary contempt proceeding.Judge Rader argued the District Court's injunction was too broad and ambiguously worded.
"[14] As a result of the application of the new test, the en banc Federal Circuit vacated the District Court's finding of contempt for violating the Infringement Provision of the permanent injunction.
[10][14] The en banc Federal Circuit found EchoStar Corp's arguments for overbreath and vagueness in the permanent injunction "unpersuasive.
Jones Company, Inc.[10] The new test "raised the bar for proving that defendant committed contempt" by requiring that a patentee show "the elements found infringing in the original product without significant change in the redesign.