United States Court of Appeals
for the Federal Circuit
__________________________
TIVO INC.,
Plaintiff-Appellee,
v.
ECHOSTAR CORPORATION,
ECHOSTAR DBS CORPORATION,
ECHOSTAR TECHNOLOGIES CORPORATION,
ECHOSPHERE LIMITED LIABILITY COMPANY,
ECHOSTAR SATELLITE LLC,
AND DISH NETWORK CORPORATION,
Defendants-Appellants.
__________________________
2009-1374
__________________________
Appeal from the United States District Court for the
Eastern District of Texas in Case No. 2:04-CV-01, Chief
Judge David Folsom.
___________________________
Decided: April 20, 2011
___________________________
SETH P. WAXMAN, Wilmer Cutler Pickering Hale and
Dorr, LLP, of Washington, DC, argued for the plaintiff-
appellee on rehearing en banc. With him on the brief
were EDWARD C. DUMONT, DANIEL S. VOLCHOK, and
THOMAS G. SAUNDERS. Of counsel on the brief were
MORGAN CHU, JOSEPH M. LIPNER, ANDREI IANCU, PERRY
TIVO v. ECHOSTAR 2
GOLDBERG, and CHRISTINE W.S. BYRD, Irell & Manella,
LLP of Los Angeles, California.
E. JOSHUA ROSENKRANZ, Orrick, Herrington & Sut-
cliffe, LLP, of New York, New York, argued for the defen-
dants-appellants on rehearing en banc. With him on the
brief were JOSEPH EVALL and ALEX V. CHACHKES. Of
counsel on the brief were DEANNE E. MAYNARD, Morrison
& Foerster, LLP, of Washington, DC, DONALD R. DUNNER,
DON O. BURLEY, ERIK R. PUKNYS, Finnegan, Henderson,
Farabow, Garrett & Dunner, L.L.P., of Washington, DC,
RACHEL KREVANS, JASON A. CROTTY, and SCOTT F.
LLEWELLYN, Morrison & Foerster, LLP, of San Francisco,
California. Of counsel was TINA E. HULSE, Finnegan,
Henderson, Farabow, Garrett & Dunner, L.L.P., of Palo
Alto, California.
WILLARD K. TOM, General Counsel, Federal Trade
Commission, of Washington, DC, for amicus curiae Fed-
eral Trade Commission on rehearing en banc.
WILLIAM P. NELSON, Howrey LLP, of East Palo Alto,
California, for amicus curiae SAP America, Inc. on rehear-
ing en banc.
EDWARD R. REINES, Weil, Gotshal & Manges LLP, of
Redwood Shores, California, for amicus curiae, American
Intellectual Property Law Association on rehearing en
banc. With him on the brief were AMBER H. ROVNER,
Weil, Gotshal & Manges LLP, Houston, Texas, and ALAN
J. KASPER, American Intellectual Property Law Associa-
tion, of Arlington, Virginia.
GARY M. HOFFMAN, Dickstein Shapiro LLP, of Wash-
ington, DC, for amici curiae, General Electric Co. and
Johnson & Johnson on rehearing en banc. With him on
3 TIVO v. ECHOSTAR
the brief were JOHN T. GALLAGHER and KENNETH W.
BROTHERS.
MATTHEW SCHRUERS, Computer & Communications
Industry Association (CCIA), of Washington, DC, for
amicus curiae Computer & Communications Industry
Association on rehearing en banc.
ROBERT P. TAYLOR, Mintz, Levin, Cohn, Ferris,
Glovsky and Popeo, P.C., of Palo Alto, California, for
amicus curiae Intellectual Property Owners Association
on rehearing en banc. With him on the brief were
DOUGLAS K. NORMAN and KEVIN H. RHODES, Intellectual
Property Owners Association, of Washington, DC. Of
counsel was HERBERT C. WAMSLEY, Intellectual Property
Owners Association, of Washington, DC.
ELAINE J. GOLDENBERG, Jenner & Block LLP, of
Washington, DC, for amici curiae, Law Professors Erwin
Chemerinsky, et al. on rehearing en banc. With her on
the brief were MARC A. GOLDMAN and JESSICA RING
AMUNSON.
MARK J. ABATE, Goodwin Procter LLP, of New York,
New York, for amicus curiae New York Intellectual Prop-
erty Law Association on rehearing en banc. With him on
the brief was DALE L. CARLSON, Wiggin & Dana LLP, of
New Haven, Connecticut. Of counsel was ANKUR P.
PAREKH, Goodwin Procter LLP, of New York, New York.
CHRISTOPHER J. KELLY, Mayer Brown LLP, of Wash-
ington, DC, for amici curiae Professors of Intellectual
Property and Competition Law and Economics on rehear-
ing en banc. With him on the brief were SHARON A.
ISRAEL, Mayer Brown LLP, of Houston, Texas and
TIVO v. ECHOSTAR 4
BRANDON BAUM, Mayer Brown LLP, of Palo Alto, Califor-
nia.
MICHAEL K. KELLOGG, Kellogg, Huber, Hansen, Todd,
Evans & Figel, P.L.L.C, of Washington, DC, for amicus
curiae Verizon Communications, Inc. on rehearing en
banc. With him on the brief was AARON M. PANNER. Of
counsel on the brief were JOHN THORNE and GAIL F.
LEVINE, Verizon Communications Inc., of Arlington,
Virginia.
SCOTT A.M. CHAMBERS, Patton Boggs LLP, of McLean,
Virginia, for amicus curiae Greatbatch, Inc. on rehearing
en banc. With him on the brief was KEVIN M. BELL. Of
counsel on the brief were CAROLINE COOK MAXWELL,
Patton Boggs, LLP, of Dallas, Texas; RICHARD J. OPARIL
and DAVID G. HENRY, Patton Boggs LLP, of Washington,
DC.
EDWARD A. PENNINGTON, Hanify & King, PC, of Bos-
ton, Massachusetts, for amicus curiae Acushnet Company
on rehearing en banc. With him on the brief was AMANDA
M. RETTIG. Of counsel on the brief was TROY R. LESTER.
MATTHEW D. MCGILL, Gibson, Dunn & Crutcher LLP,
of Washington, DC, for amici curiae Hewlett-Packard
Company, et al. on rehearing en banc.
PAUL D. CLEMENT, King & Spalding, LLP, of Washing-
ton, DC, for amicus curiae Finjan, Inc. on rehearing en
banc. With him on the brief were DARYL L. JOSEFFER,
ERIN E. MORROW, and ADAM CONRAD.
JEFFREY A. LAMKEN, MoloLamken LLP, of Washing-
ton, DC, for amicus curiae Association for Competitive
Technology on rehearing en banc. With him on the brief
5 TIVO v. ECHOSTAR
was MICHAEL G. PATTILLO, JR. Of counsel were RAYMOND
MILLIEN and THOMAS HENRY JACKSON, PCT Law Group,
PLLC, of Washington, DC.
RICHARD A. EPSTEIN, of Chicago, Illinois, for amici cu-
riae Professors of Law and Economics, Fred S. McChes-
ney, et al. on rehearing en banc.
RODNEY A. COOPER, Protecting Assets of the Mind, of
Colorado Springs, Colorado, for amici curiae Distin-
guished Economists on rehearing en banc.
BRUCE A. LEHMAN, International Intellectual Property
Institute, of Washington, DC, for amicus curiae Interna-
tional Intellectual Property Institute on rehearing en
banc. With him on the brief were ANDREW JAYNES, JASON
D. KOCH, and CAMERON COFFEY.
ALEXANDER C.D. GIZA, Russ, August & Kabat, of Los
Angeles, California, for amici curiae Former Federal
Court Judges, Honorable Stephen G. Larson, et al. on
rehearing en banc.
PHILIP J. GRAVES, Graves & Walton LLP, of Los Ange-
les, California, for amici curiae Arizona Science and
Technology Enterprises, LLC, et al. on rehearing en banc.
With him on the brief was FREDRICKA UNG.
ROBERT S. SCHWARTZ, Constantine Cannon LLP, of
Washington, DC, for amici curiae Agricultural Organiza-
tions on rehearing en banc. With him on the brief were
SETH D. GREENSTEIN and MITCHELL L. STOLTZ.
__________________________
Before RADER, Chief Judge, and NEWMAN, MAYER,
LOURIE, BRYSON, GAJARSA, LINN, DYK, PROST, MOORE,
TIVO v. ECHOSTAR 6
O’MALLEY, and REYNA, Circuit Judges, on rehearing en
banc.
Opinion for the court filed by Circuit Judge LOURIE, in
which Circuit Judges NEWMAN, MAYER, BRYSON, MOORE,
O’MALLEY, and REYNA join in full, and in which Chief
Judge RADER and Circuit Judges GAJARSA, LINN, DYK,
and PROST join in parts A1-A3(a).
Dissenting-in-part opinion filed by Circuit Judge DYK, in
which Chief Judge RADER and Circuit Judges GAJARSA,
LINN, and PROST join.
LOURIE, Circuit Judge.
Appellants (collectively, “EchoStar”) appeal from the
district court’s decision finding EchoStar in contempt of
two separate provisions of the court’s permanent injunc-
tion order. See TiVo Inc. v. Dish Network Corp., 640 F.
Supp. 2d 853 (E.D. Tex. 2009). A panel of this court
affirmed the district court’s decision, concluding that
EchoStar had in fact violated the infringement provision
of the permanent injunction under our earlier decision in
KSM Fastening Systems v. H.A. Jones Co., 776 F.2d 1522,
1532 (Fed. Cir. 1985), and that EchoStar had waived its
unenforceability arguments on the disablement provision
of the permanent injunction. TiVo, Inc. v. EchoStar
Corp., No. 2009-1374, slip op. at 1 (Fed. Cir. Mar. 4,
2010), vacated, TiVo, Inc. v. EchoStar Corp., No. 2009-
1374, slip op. at 2 (Fed. Cir. May 14, 2010). EchoStar
petitioned for rehearing en banc, urging clarification of
the proper scope of the colorable differences test and
challenging the enforceability of the district court’s in-
junction based on overbreadth and vagueness. We
granted EchoStar’s petition and directed the parties to
address the circumstances under which a finding of
contempt by a district court would be proper as to in-
fringement by newly accused products and also address
7 TIVO v. ECHOSTAR
the proper time to raise the defenses of vagueness and
overbreadth of an injunction.
As a result of our consideration of this case en banc,
we hold that the two-step KSM analysis is unsound in
contempt cases and we clarify the standards governing
contempt proceedings in patent infringement cases. We
therefore vacate the district court’s finding of contempt of
the infringement provision of the permanent injunction,
and remand to the district court to make a factual deter-
mination of colorable differences under the new standard
we lay out here. We thus vacate in part the damages
awarded to TiVo for EchoStar’s continued infringement.
However, we once again affirm the district court’s finding
of contempt of the disablement provision of the perma-
nent injunction and its sanctions award in its entirety
because we conclude that EchoStar waived arguments of
overbreadth and vagueness with regard to that provision.
BACKGROUND
TiVo Inc. (“TiVo”) owns U.S. Patent 6,233,389 (“the
’389 patent” or “TiVo’s patent”), which is entitled “Multi-
media Time Warping System.” The patented technology
allows television users to simultaneously record and play
(“time-shift”) television broadcasts using what is com-
monly known as a digital video recorder (“DVR”). A DVR
allows users to fast-forward, rewind, pause, and replay a
“live” television program while it is playing on the televi-
sion set. TiVo’s patent covers various features essential
to the working of a DVR.
In 2004, TiVo sued EchoStar in the United States Dis-
trict Court for the Eastern District of Texas, alleging that
its receivers infringe “hardware” claims (claims 1 and 32)
and “software” claims (claims 31 and 61) of the ’389
patent. The hardware claims are not at issue in this
appeal.
TIVO v. ECHOSTAR 8
Claim 31 of the ’389 patent is the first of the two soft-
ware claims. It provides as follows:
A process for the simultaneous storage and play
back of multimedia data, comprising the steps of:
[1] providing a physical data source,
wherein said physical data source accepts
broadcast data from an input device,
parses video and audio data from said
broadcast data, and temporarily stores
said video and audio data;
[2] providing a source object, wherein said
source object extracts video and audio
data from said physical data source;
[3] providing a transform object, wherein
said transform object stores and retrieves
data streams onto a storage device;
[4] wherein said source object obtains a
buffer from said transform object, said
source object converts video data into data
streams and fills said buffer with said
streams;
[5] wherein said source object is automati-
cally flow controlled by said transform ob-
ject;
[6] providing a sink object, wherein said
sink object obtains data stream buffers
from said transform object and outputs
said streams to a video and audio decoder;
[7] wherein said decoder converts said
streams into display signals and sends
said signals to a display;
9 TIVO v. ECHOSTAR
[8] wherein said sink object is automati-
cally flow controlled by said transform ob-
ject;
[9] providing a control object, wherein said
control object receives commands from a
user, said commands control the flow of
the broadcast data through the system;
and
[10] wherein said control object sends flow
command events to said source, transform,
and sink objects.
’389 patent claim 31 (emphases added). Claim 61 is
similar to claim 31, except that it recites an apparatus
rather than a process. See id. claim 61.
The accused EchoStar satellite television receivers
can be broadly classified into two categories based on the
processing chip employed by the receiver: the “50X” series
and the “Broadcom” series. The district court submitted
questions of infringement and invalidity to the jury.
TiVo, Inc. v. Dish Network Corp., No. 2:04-CV-00001, ECF
No. 690 (E.D. Tex. Apr. 13, 2006) [hereinafter Verdict
Form]. On infringement, the jury was asked whether
eight different models of EchoStar receivers, three of the
50X series and five of the Broadcom series, literally
infringed the hardware or software claims of TiVo’s
patent. Id. at 2-3. The jury answered “yes” for each of the
asserted claims, for each of the eight listed receivers. Id.
It also found, by clear and convincing evidence, that
EchoStar’s infringement was willful, id. at 4, and
awarded TiVo approximately $74 million in lost profits
and reasonable royalties, id. at 8. The district court
entered judgment on the verdict and issued a permanent
injunction against EchoStar. In its injunction, the district
court ordered EchoStar: (1) to stop making, using, offering
TIVO v. ECHOSTAR 10
to sell, and selling the receivers that had been found
infringing by the jury (the “infringement” provision) and
(2) to disable the DVR functionality in existing receivers
that had already been placed with EchoStar’s customers
and in new placements that were yet to be placed with
EchoStar’s customers (the “disablement” provision). The
infringement provision reads:
Each Defendant, its officers, agents, servants,
employees, and attorneys, and those persons in
active concert of participation with them who re-
ceive actual notice hereof, are hereby restrained
and enjoined, pursuant to 35 U.S.C. 283 and Fed.
R. Civ. P. 65(d), from making, using, offering to
sell, selling, or importing in the United States, the
Infringing Products, either alone or in combina-
tion with any other product and all other products
that are only colorably different therefrom in the
context of the Infringed Claims, whether indi-
vidually or in combination with other products or
as a part of another product, and from otherwise
infringing or inducing others to infringe the In-
fringed Claims of the ’389 patent.
J.A.162. The disablement provision reads:
Defendants are hereby FURTHER ORDERED
to, within thirty (30) days of the issuance of this
order, disable the DVR functionality (i.e., disable
all storage to and playback from a hard disk drive
of television data) in all but 192,708 units of the
Infringing Products that have been placed with an
end user or subscriber. The DVR functionality,
i.e., disable all storage to and playback from hard
disk drive of television data) [sic] shall not be en-
abled in any new placements of the Infringing
Products.
11 TIVO v. ECHOSTAR
Id. The injunction defines both the terms “Infringing
Claims” and “Infringing Products”:
[T]he Court thereby enters judgment for Plaintiff
against Defendants for willful infringement of
U.S. Patent No. 6,233,389 (“’389 patent”), claims
1, 5, 21, 23, 32, 36, 52, 31 and 61 (“the Infringed
Claims”) by Defendants’ following DVR receivers
(collectively the “Infringing Products”): DP-501;
DP-508; DP-510; DP-522; DP-625; DP-721; DP-
921; and the DP-942.
Id. 161. The district court’s definition of the term “In-
fringing Products” listed the same model numbers that
the jury in its verdict had found infringing.
Following the entry of final judgment by the district
court, we affirmed in part, reversed in part, and re-
manded the district court’s decision. EchoStar had ap-
pealed issues of claim construction and infringement. We
found that the district court had incorrectly construed at
least one limitation of the hardware claims and reversed
the portion of the judgment upholding the jury’s verdict
that EchoStar’s DVRs literally infringed the hardware
claims. TiVo, Inc. v. EchoStar Commc’ns Corp., 516 F.3d
1290, 1304–05 (Fed. Cir. 2008). However, we found no
error in the district court’s construction of the software
claims and also affirmed the jury’s verdict that the
EchoStar devices infringed the software claims of the ’389
patent. Id. at 1310.
At that time, EchoStar had not appealed the district
court’s grant of a permanent injunction. In our opinion,
we noted that the district court’s injunction, which had
been stayed during the course of the appeal, would take
effect following our decision. Id. at 1312. We remanded
to the district court to make a determination as to any
additional damages that TiVo may have sustained while
TIVO v. ECHOSTAR 12
the stay of the permanent injunction had been in effect.
Id. Our mandate issued, and the injunction became
effective, on April 18, 2008.
Following the decision on the appeal, TiVo moved the
district court to find EchoStar in contempt of the court’s
permanent injunction. After conducting a series of hear-
ings on TiVo’s motion, the district court ruled that
EchoStar was in contempt of both provisions of its per-
manent injunction. With regard to the infringement
provision, the district court rejected EchoStar’s argument
that it had redesigned its infringing receivers in a manner
that rendered them more than colorably different from
the adjudged infringing devices. EchoStar contended that
it had redesigned the infringing software on both the 50X
and the Broadcom receivers so that the “parsing” limita-
tion of claims 31 and 61 was no longer satisfied. EchoStar
argued that that was because it had replaced the “start
code detection” feature, which was originally alleged to
meet the parsing limitation, with a “statistical estima-
tion” feature. Video recordings in a DVR are comprised of
sequential frames of audio and video data that are re-
ceived as a data stream and stored to the hard drive of the
DVR. The start code detection feature in the infringing
receivers parsed for codes that designated the start of
each video frame and indexed those codes so as to allow
the system to precisely locate and access a required frame
from the data stream whenever needed, such as during
rewind and fast forward operations by the user. EchoStar
contended that that functionality was now accomplished
by using a statistical estimation feature that relied on
average frame rate statistics to estimate the location of a
given video frame. EchoStar further argued that it had
modified the infringing software on the Broadcom receiv-
ers so that the “automatically flow controlled” limitation
of claims 31 and 61 was no longer satisfied. On that
13 TIVO v. ECHOSTAR
point, EchoStar’s contention was that it completely elimi-
nated the “record buffer” that existed in its original
software to provide flow control of data that was being
transferred from a pool of data buffers to the hard drive of
the receiver. Thus, in its modified software, EchoStar
argued, there was no “automatic flow control,” thereby
allowing for some data loss whenever there was an over-
flow of data in one of the data buffers resulting from a
difference in data transfer rates to and from the buffer.
The district court evaluated the two modifications and
found by clear and convincing evidence that the modified
DVR software was not more than colorably different from
the infringing software, and did continue to infringe the
software claims. On EchoStar’s contention that the
“parsing” limitation was not met, the court held that the
modified receivers, like the adjudicated ones, continued to
utilize “PID filtering,” which EchoStar itself had recog-
nized as “parsing,” and thus were not more than colorably
different from the adjudicated receivers. TiVo, 640 F.
Supp. 2d at 870. As for EchoStar’s contention that it had
eliminated the automatic flow control limitation by re-
moving one of the buffers, the court, looking at the actual
amount of data loss in the modified software, discredited
EchoStar’s claim, and held that, in essence, it was a
change from eleven buffers to ten, and did not render the
modified devices more than colorably different from the
original device. Id. at 871. In the absence of more than a
colorable difference between EchoStar’s original and
modified devices, the district court concluded that con-
tempt proceedings were appropriate under our decision in
KSM. Id. at 871. Because it then found clear and con-
vincing evidence of continued infringement of the soft-
ware claims by the modified devices, the district court
held EchoStar to be in violation of the infringement
provision of the injunction. Id. at 873.
TIVO v. ECHOSTAR 14
Moreover, the district court held that even if EchoStar
had achieved a noninfringing design-around, EchoStar
would still be in contempt because it had failed to comply
with the plain language of the disablement provision in
the district court’s order requiring it to disable DVR
functionality completely from the specifically named
receiver models adjudged to be infringing at trial.
EchoStar argued to the district court that because the
disablement provision required it to disable “Infringing
Products,” EchoStar was merely required to disable
infringing DVR software, which did not exist once it had
redesigned its receiver software. The district court re-
jected that argument, reasoning that if EchoStar believed
that the infringing receivers in their entirety were not
subject to the order or that the order improperly covered
noninfringing practices, then EchoStar should have
requested that the district court modify its order or should
have challenged the scope of the injunction on appeal. Id.
at 874. The district court concluded that having failed to
do either at the time that the injunction issued, EchoStar
had waived any argument that the injunction was over-
broad. Id.
In view of EchoStar’s contempt of the court’s order,
the district court imposed sanctions against EchoStar in
the amount of nearly $90 million. TiVo Inc. v. Dish
Network Corp., 655 F. Supp. 2d 661, 666 (E.D. Tex. 2009).
The court also awarded damages to TiVo for the continued
infringement by EchoStar’s redesigned software. Id.
Further, the court amended its earlier injunction, requir-
ing EchoStar to seek the court’s approval before imple-
menting future noninfringing workarounds to its DVR
software.
15 TIVO v. ECHOSTAR
DISCUSSION
A.
Contempt for Violation of the Infringement Provision
We begin by providing clarification of the standard to
be used for determining contempt in cases of alleged
continued infringement. EchoStar argues that it was
improper for the district court to decide issues relating to
continued infringement by EchoStar’s modified software
in a summary contempt proceeding, as opposed to a new
trial on the merits, and to find EchoStar in contempt of
the infringement provision of the injunction. According to
EchoStar, its modifications to the infringing DVR soft-
ware rendered the modified receivers more than colorably
different from the one found infringing in the prior jury
trial. Moreover, EchoStar contends, it undertook a “Her-
culean” effort in redesigning the DVR software in its
receivers and, by obtaining opinions of counsel, it made a
good faith effort to ensure that its devices would no longer
infringe the software claims of TiVo’s patent. We address
each of these arguments in turn.
1. Good Faith as a Defense to Civil Contempt
We first consider EchoStar’s arguments that contempt
is improper “where the defendant engaged in diligent,
good faith efforts to comply with the injunction and had
an objectively reasonable basis to believe that it was in
compliance.” EchoStar argues that it employed 15 engi-
neers for 8000 hours to complete the software redesign,
which took a year. Similarly, it stresses the fact that it
obtained an opinion of noninfringement from a respected
patent law firm. It further contends that the redesign, by
allowing for data loss, compromised performance in order
to avoid infringement of TiVo’s patent, giving it a product
inferior to what it previously had. In light of this evi-
TIVO v. ECHOSTAR 16
dence, EchoStar argues, the district court was incorrect in
finding it in contempt.
We disagree and conclude that EchoStar misreads the
law. We have made it clear that, under Supreme Court
precedent, a lack of intent to violate an injunction alone
cannot save an infringer from a finding of contempt.
Additive Controls & Measurement Sys., Inc. v. Flowdata,
Inc., 154 F.3d 1345, 1353 (Fed. Cir. 1998) (“The general
rule in civil contempt is that a party need not intend to
violate an injunction to be found in contempt.”). “Since
the purpose [of civil contempt] is remedial, it matters not
with what intent the defendant did the prohibited act. . . .
An act does not cease to be a violation of a law and of a
decree merely because it may have been done innocently.”
McComb v. Jacksonville Paper Co., 336 U.S. 187, 191
(1949). We are thus bound by Supreme Court precedent
to reject EchoStar’s good faith arguments and its reliance
upon opinions of counsel. Although a defendant’s dili-
gence and good faith efforts are not a defense to contempt,
these factors may be considered in assessing penalties, a
matter as to which the district court has considerable
discretion. See, e.g., Test Masters Educ. Servs., Inc. v.
Singh, 428 F.3d 559, 582 (5th Cir. 2005); Stryker Corp. v.
Davol, Inc., 234 F.3d 1252, 1260 (Fed. Cir. 2000). How-
ever, the district court was correct in rejecting EchoStar’s
good faith arguments in deciding whether a violation had
occurred.
2. The Propriety of a Contempt Proceeding on
Infringement
In recent times, we have required district courts to
make a two-part inquiry in finding a defendant in con-
tempt of an injunction in patent infringement cases. KSM
Fastening Sys., Inc. v. H.A. Jones Co., 776 F.2d 1522,
1530–32 (Fed. Cir. 1985). First, the court must determine
17 TIVO v. ECHOSTAR
whether a contempt hearing is an appropriate setting in
which to adjudge infringement by the redesigned product.
Id. at 1532. The court may do this by comparing the
accused product with the adjudged infringing product to
determine if there is “more than a colorable difference”
between the accused product and the adjudged infringing
product such that “substantial open issues with respect to
infringement” exist. Id. Where the court finds that to be
the case, a new trial is necessary to determine further
infringement and the court may not proceed with a con-
tempt finding. Id. Only in cases where the court is
satisfied on the threshold inquiry of the appropriateness
of a contempt proceeding can a court inquire whether the
redesigned product continues to infringe the claims as
previously construed. Id.
We conclude that KSM’s two-step inquiry has been
unworkable and now overrule that holding of KSM. KSM
crafted a special rule for patent infringement cases, in
that it required a threshold inquiry on the propriety of
initiating a contempt proceeding. We recognize now that
that inquiry confuses the merits of the contempt with the
propriety of initiating contempt proceedings. Moreover,
as a practical matter, district courts do not separately
determine the propriety of a contempt proceeding before
proceeding to the merits of the contempt itself. As a
result, we will telescope the current two-fold KSM inquiry
into one, eliminating the separate determination whether
contempt proceedings were properly initiated. That
question, we hold, is left to the broad discretion of the
trial court to be answered based on the facts presented.
Additive Controls, 154 F.3d at 1349 (The district court
“has broad discretion to determine how best to enforce its
injunctive decrees.”). What is required for a district court
to hold a contempt proceeding is a detailed accusation
from the injured party setting forth the alleged facts
TIVO v. ECHOSTAR 18
constituting the contempt. As with appeals from findings
of civil contempt in other areas of law, we will only review
whether the injunction at issue is both enforceable and
violated, and whether the sanctions imposed were proper.
Allegations that contempt proceedings were improper in
the first instance do not state a defense to contempt. As
to the question whether an injunction against patent
infringement has been violated, courts should continue to
employ a “more than colorable differences” standard as
discussed below.
Thus, we decline to address EchoStar’s argument that
the district court, applying the old KSM standard, im-
properly held contempt proceedings in this case, although
we note that there may be circumstances in which the
initiation of contempt proceedings would constitute an
abuse of discretion by the district court. Under our hold-
ing today, we find no abuse of discretion by the district
court in proceeding to contempt. TiVo moved the district
court to find EchoStar in contempt. Having reviewed the
computer source code of the modifications to the infring-
ing software, TiVo asserted to the district court that the
modified EchoStar receiver software was not more than
colorably different from the original one, and thus that
EchoStar was in violation of the infringement provision of
the permanent injunction. Given its familiarity with the
parties, the patent at issue, and the infringing products,
we do not find an abuse of discretion in the district court’s
decision to hold contempt proceedings.
3. The “More than Colorable Differences” Test
(a) Discussion of the Law
The criteria for adjudicating a violation of a prohibi-
tion against continued infringement by a party whose
products have already been adjudged to be infringing is a
matter of Federal Circuit law. The Supreme Court has
19 TIVO v. ECHOSTAR
cautioned that contempt “is a severe remedy, and should
not be resorted to where there is a fair ground of doubt as
to the wrongfulness of the defendant’s conduct.” Cal.
Artificial Stone Paving Co. v. Molitor, 113 U.S. 609, 618
(1885); see also MAC Corp. of Am. v. Williams Patent
Crusher & Pulverizer Co., 767 F.2d 882, 885 (Fed. Cir.
1985) (citing Cal. Artificial Stone Paving Co., 113 U.S. at
618). We have previously interpreted that inquiry in
patent cases as one of colorable differences between the
newly accused product and the adjudged infringing prod-
uct. Abbott Labs. v. TorPharm, Inc., 503 F.3d 1372, 1380
n.3 (Fed. Cir. 2007). Thus, the party seeking to enforce
the injunction must prove both that the newly accused
product is not more than colorably different from the
product found to infringe and that the newly accused
product actually infringes.
We have stated the test for colorable differences as
one that requires determining whether “substantial open
issues with respect to infringement to be tried” exist.
KSM, 776 F.2d at 1532. In some cases, that has misled
district courts to focus solely on infringement by the
newly accused devices in deciding contempt. That is the
case here. Today, we reject that infringement-based
understanding of the colorably different test. Instead of
focusing solely on infringement, the contempt analysis
must focus initially on the differences between the fea-
tures relied upon to establish infringement and the modi-
fied features of the newly accused products.
The primary question on contempt should be whether
the newly accused product is so different from the product
previously found to infringe that it raises “a fair ground of
doubt as to the wrongfulness of the defendant’s conduct.”
Cal. Artificial Stone Paving Co., 113 U.S. at 618. The
analysis must focus not on differences between randomly
chosen features of the product found to infringe in the
TIVO v. ECHOSTAR 20
earlier infringement trial and the newly accused product,
Additive Controls, 154 F.3d at 1350, but on those aspects
of the accused product that were previously alleged to be,
and were a basis for, the prior finding of infringement,
and the modified features of the newly accused product.
Specifically, one should focus on those elements of the
adjudged infringing products that the patentee previously
contended, and proved, satisfy specific limitations of the
asserted claims. Where one or more of those elements
previously found to infringe has been modified, or re-
moved, the court must make an inquiry into whether that
modification is significant. If those differences between
the old and new elements are significant, the newly
accused product as a whole shall be deemed more than
colorably different from the adjudged infringing one, and
the inquiry into whether the newly accused product
actually infringes is irrelevant. Contempt is then inap-
propriate. Arbek Mfg., Inc. v. Moazzam, 55 F.3d 1567,
1570 (Fed. Cir. 1995) (“[T]he modifying party generally
deserves the opportunity to litigate the infringement
questions at a new trial.”).
The significance of the differences between the two
products is much dependent on the nature of the products
at issue. The court must also look to the relevant prior
art, if any is available, to determine if the modification
merely employs or combines elements already known in
the prior art in a manner that would have been obvious to
a person of ordinary skill in the art at the time the modi-
fication was made. 1 A nonobvious modification may well
1 We do not suggest that the law on obviousness is
binding in contempt proceedings, where, in most cases, a
single limitation that has been modified by an infringer is
at issue. However, the innovative significance of the
modification is best viewed in light of the existing art and
from the perspective of one of ordinary skill in the art.
21 TIVO v. ECHOSTAR
result in a finding of more than a colorable difference.
Where useful, a district court may seek expert testimony
in making the determination. See Abbott Labs., 503 F.3d
at 1380 (allowing the use of expert testimony on the
colorable differences question). The analysis may also
take account of the policy that legitimate design-around
efforts should always be encouraged as a path to spur
further innovation. State Indus. Inc. v. A.O. Smith Corp.,
751 F.2d 1226, 1236 (Fed. Cir. 1985) (“One of the benefits
of a patent system is the so-called ‘negative incentive’ to
‘design around’ a competitor’s products”). But an asser-
tion that one has permissibly designed around a patent
should not be used to mask continued infringement.
Determining the requisite level of difference is a question
of fact.
Conversely, when a court concludes that there are no
more than colorable differences between the adjudged
infringing product and modified product, a finding that
the newly accused product continues to infringe the
relevant claims is additionally essential for a violation of
an injunction against infringement. KSM, 776 F.2d at
1528. Thus, the court is required to evaluate the modified
elements of the newly accused product against the as-
serted claim, on a limitation by limitation basis, to ensure
that each limitation continues to be met. In making this
infringement evaluation, out of fairness, the district court
is bound by any prior claim construction that it had
performed in the case. The patentee bears the burden of
proving violation of the injunction by clear and convincing
evidence, a burden that applies to both infringement and
colorable differences. 2 As with other factual determina-
2 See, e.g., KSM, 776 F.2d at 1524; Martin v. Trinity
Indus., Inc., 959 F.2d 45, 47 (5th Cir. 1992); AMF, Inc. v.
Jewett, 711 F.2d 1096, 1100 (1st Cir. 1983); Stringfellow
v. Haines, 309 F.2d 910, 912 (2d Cir. 1962); Telling v.
TIVO v. ECHOSTAR 22
tions, both findings are reviewed for clear error. Where
the court finds a violation and awards sanctions, such a
sanctions award is reviewable for an abuse of discretion.
(b) Application of the “More Than Colorable Differences”
Test to This Case
Applying the test in this case, one of the features of
EchoStar’s original receivers that TiVo relied upon to
prove infringement to the jury was the start code detec-
tion feature. TiVo argued, and the jury accepted, that
that feature satisfied the “parsing” limitation found in the
software claims. It is undisputed that EchoStar replaced
that feature with a statistical estimation feature. In
finding contempt of the infringement provision of the
injunction under our KSM standard, TiVo alleged, and
the district court looked to, a different feature of
EchoStar’s modified devices, viz., the PID filter, as meet-
ing the parsing limitation of the software claims. Al-
though the parties disputed their prior positions on
whether the PID filter performs “parsing,” TiVo never
unequivocally alleged prior to the contempt stage that the
PID filter met that claim limitation. That was a new
allegation. However, because the district court concluded
that EchoStar had itself conceded that the PID filter
performs a type of parsing, the court held that EchoStar’s
modified devices continued to infringe the software
claims, and that EchoStar was in contempt of the in-
fringement provision.
The district court found no need to evaluate the newly
designed statistical estimation feature to determine
whether it was significantly different from the start code
detection feature, the feature that had been previously
Bellows-Claude Neon Co., 77 F.2d 584, 585 (6th Cir.
1935).
23 TIVO v. ECHOSTAR
alleged by TiVo to meet the parsing claim limitation, and
whether the replaced feature continued to meet the
parsing limitation of the software claims. Our holding
today requires that those issues be determined on remand
because the statistical estimation feature is the replace-
ment for a feature that had been previously alleged to be
infringing. As noted, the district court’s determination
that the modified devices are in fact infringing would be
irrelevant to the question whether the injunction has been
violated if the differences between the two features at
issue are indeed significant, thus rendering the new
devices more than colorably different from the original
ones. It is also possible that, in a new infringement
proceeding, a fact finder could conclude that the PID filter
in EchoStar’s redesigned device meets the “parsing”
limitation and that the devices continue to infringe the
asserted claims, but that should not be decided in a
contempt proceeding.
We therefore vacate the district court’s finding of con-
tempt for violation of the infringement provision and
remand to the district court to make that factual determi-
nation under the guidance that we have provided today.
If the district court determines that there are more than
TIVO v. ECHOSTAR 24
colorable differences between the two devices, 3 EchoStar
is entitled to a new infringement proceeding. 4
Consequently, we also vacate the district court’s order
awarding TiVo “$1.25 per subscriber per month plus
interest,” totaling approximately $110 million, for
EchoStar’s continued infringement by EchoStar’s modi-
fied software during the stay of the injunction and the
district court’s order requiring EchoStar to seek preclear-
ance for any future attempts to design around the patent.
On remand, the district court is required to separately
calculate and award TiVo damages at the rate of “$1.25
per subscriber per month plus interest” for the use of the
original infringing software during the stay of the injunc-
tion.
B.
Contempt for Violation of the Disablement Provision
We consider next EchoStar’s arguments that the in-
junction is unenforceable either because it is overly broad
3 EchoStar asserts that its statistical estimation
methodology is the subject of a U.S. patent. That fact
alone, EchoStar suggests, serves as prima facie evidence
of colorable differences. We disagree. The colorable
differences analysis should be based on the court’s inde-
pendent evaluation of specific differences between the
original and the modified products. Here, the court must
compare the newly developed statistical estimation fea-
ture with the original start code detection feature to
determine if the difference between the two is significant.
4 We make no holding as to how a district court
should proceed in a new infringement proceeding. As we
have stated before, the district court is able to utilize
principles of claim and issue preclusion (res judicata) to
determine what issues were settled by the original suit
and what issues would have to be tried. KSM, 776 F.2d at
1532.
25 TIVO v. ECHOSTAR
or it is too vague to provide fair notice of what it actually
prohibits. We find both arguments unpersuasive.
1. Vagueness
EchoStar argues that the only natural reading of the
phrase “disable the DVR functionality . . . in . . . the
Infringing Products” is that EchoStar was required to
disable only products that maintained the infringing
functions, and not products that did not continue to
infringe. Presuming that its redesigned software was
noninfringing, EchoStar argues that it had no obligation
to disable the DVR component of the new software. In
light of the district court’s later reading of the provision
as barring all DVR functionality in all of the enumerated
receiver models regardless of later modifications to the
software, EchoStar argues that the express language
failed to provide EchoStar with even the slightest hint
that the district court was thinking about non-infringing
functionality that had yet to be invented. In the absence
of fair notice of the district court’s interpretation of the
provision, EchoStar, citing the Supreme Court’s decision
in Granny Goose Foods, Inc. v. Teamsters, argues that it
cannot be held in contempt of an order that was not
“sufficiently specific and definite.” 415 U.S. 423, 445
(1974).
We reject EchoStar’s argument that vagueness can
operate as a defense to the district court’s holding of
contempt here. Under the Federal Rules of Civil Proce-
dure, “[e]very order granting an injunction . . . shall be
specific in terms [and] shall describe in reasonable detail,
and not by reference to the complaint or other document,
the act or acts sought to be restrained.” Fed. R. Civ. P.
65(d). Rule 65(d) “was designed to prevent uncertainty
and confusion on the part of those faced with injunctive
orders, and to avoid the possible founding of a contempt
TIVO v. ECHOSTAR 26
citation on a decree too vague to be understood.” Schmidt
v. Lessard, 414 U.S. 473, 476 (1974). Thus, the judicial
contempt power is a potent weapon that cannot be
founded upon “a decree too vague to be understood.” Int’l
Longshoremen’s Ass’n v. Phila. Marine Trade Ass’n, 389
U.S. 64, 76 (1967). On the other hand, where a party
faced with an injunction perceives an ambiguity in the
injunction, it cannot unilaterally decide to proceed in the
face of the injunction and make an after-the-fact conten-
tion that it is unduly vague. McComb, 336 U.S. at 192.
EchoStar’s vagueness defense rests on its argument
that the term “Infringing Products” in the district court’s
injunction is ambiguous, thereby rendering the injunction
vague and unenforceable. The disablement provision
deals separately with the receivers already placed in
EchoStar’s customers’ homes and new placements that
are yet to reach the customer. EchoStar notes that while
the first directive of the disablement provision calls for
EchoStar to “disable the DVR functionality of the Infring-
ing Products that have been placed with an end user or
subscriber,” the sentence following it requires that “[t]he
DVR functionality, storage to and playback from a hard
disk drive shall not be enabled in any new placements of
the Infringing Products.” EchoStar argues that this
second sentence, because it references new placements,
requires that the term “Infringing Products” be read as
referring only to infringing functionality. After all, Echo-
Star continues, one does not disable a function that has
yet to be devised or installed. As for the court’s definition
of the term “DVR functionality,” EchoStar argues that the
definition “all storage to and playback from” refers merely
to the entire infringing function. Moreover, EchoStar
argues that a provision that requires such detailed “sen-
tence diagramming” to arrive at the district court’s read-
ing of the order cannot be sufficiently “specific and
27 TIVO v. ECHOSTAR
definite” to satisfy the contempt standard. If the district
court wanted to prevent EchoStar from deploying modi-
fied DVR functionality on its receivers, EchoStar sug-
gests, it should have specifically done so.
We do not agree with EchoStar that the stretched
reading of the disablement provision that it proposes
allows it to collaterally attack the district court’s injunc-
tion at this stage of the proceedings. We agree that in
certain circumstances vagueness can operate as a defense
to contempt. Granny Goose, 415 U.S. at 445. In a case
such as this, however, where a party has bypassed oppor-
tunities to present its asserted vagueness claim on appeal
or through a motion to clarify or modify the injunction,
the party cannot disregard the injunction and then object
to being held in contempt when the courts conclude that
the injunction covered the party’s conduct. McComb, 336
U.S. at 192 (“Respondents could have petitioned the
District Court for a modification, clarification or construc-
tion of the order . . . . They undertook to make their own
determination of what the decree meant. They knew they
acted at their peril.”); see also Chaganti & Assocs., P.C. v.
Nowotny, 470 F.3d 1215, 1224 n.2 (8th Cir. 2006); Szabo
v. U.S. Marine Corp., 819 F.2d 714, 718 (7th Cir. 1987)
(“Not having appealed from the grant of the injunction,
U.S. Marine cannot argue that it is too vague to be en-
forced . . . .”); Polo Fashions, Inc. v. Stock Buyers Int’l,
Inc., 760 F.2d 698, 700 (6th Cir. 1985) (“The defendants
acted at their own risk by failing to seek the court’s
interpretation of the injunction if they had any good faith
doubt as to its meaning or by failing to have it set aside or
amended if they thought it was defective.”); Perfect Fit
Indus., Inc. v. Acme Quilting Co., Inc., 646 F.2d 800, 808
(2d Cir. 1981) (“[A] party to an action is not permitted to
maintain a studied ignorance of the terms of a decree in
order to postpone compliance and preclude a finding of
TIVO v. ECHOSTAR 28
contempt. The party and his counsel have a duty to . . .
ascertain the terms of any order entered against the
party”).
EchoStar’s reading of the disablement provision is
contrary to the most natural reading of the provision, as it
would necessarily render the injunction vague on its face.
The injunction clearly defines the term “Infringing Prod-
ucts” in terms of eight actual receiver models, specifically
listing each model number. 5 If the term “Infringing
Products” in the disablement provision were to refer
merely to products containing infringing functionality, the
court’s definition of the term, immediately preceding the
disablement provision, as a list of eight receiver models
would directly contradict EchoStar’s understanding of the
term. If that were the case and the injunction were in
fact facially vague and susceptible of two alternative
readings, the burden was clearly on EchoStar to seek
clarification or modification from the district court.
McComb, 336 U.S. at 192. EchoStar did neither. Nor did
it ever disable any DVR functionality in even a single
receiver that had been found infringing by the jury. It
unilaterally decided that downloading modified software
to its infringing receivers was sufficient to comply with
the district court’s injunction.
In McComb, employers faced with an order barring
them from violating any provision of the Fair Labor
Standards Act relating to minimum wage, overtime, or
record keeping argued that, because they had changed
their methods of computing hours worked, and because
the modified practices were “not specifically enjoined,”
5 It is notable that the district court’s definition of
“Infringing Products” is consistent with the products
found by the jury in the earlier infringement proceeding
to infringe TiVo’s patent. See Verdict Form at 2-3.
29 TIVO v. ECHOSTAR
they were immune from contempt proceedings. The Court
disagreed, roundly condemning a rule that “would give
tremendous impetus to the program of experimentation
with disobedience of the law.” Id. The Court stated that
a rule requiring the conduct at issue in contempt to have
been “specifically enjoined” would “prevent accountability
for persistent contumacy.” Id. EchoStar’s position here,
in essence, arguing that it was not “specifically enjoined”
from downloading modified DVR software in place of the
infringing software, is not very different, and we find the
Supreme Court’s decision in McComb binding. See also
Walker v. Birmingham, 388 U.S. 307, 316–17, 320 (1967)
(refusing to permit a collateral challenge to the validity of
an injunction despite the fact that the “breadth and
vagueness of the injunction itself would . . . unquestiona-
bly be subject to substantial constitutional question,” and
emphasizing that “the way to raise that question was to
apply to the . . . courts to have the injunction modified or
dissolved.”) (emphasis added). Fifth Circuit law, applica-
ble here, similarly places the burden on the party faced
with the injunction. Gulf King Shrimp Co. v. Wirtz, 407
F.2d 508, 517 (5th Cir. 1969) (“If for some reason Gulf
King had doubts about the meaning of any part of the
injunction, it could have sought district court clarifica-
tion.”).
The cases cited by EchoStar in its argument that it is
entitled to raise the vagueness defense at this time are
inapposite. The Supreme Court’s decision in Granny
Goose involved an ex parte temporary restraining order,
such that, unlike EchoStar, the defendants were not
involved in the proceedings leading to the issuance of the
order. Moreover, the Supreme Court considered only the
duration of the order, not whether any terms in the order
were so vague as to make it unenforceable. Granny
Goose, 415 U.S. at 445 (“There being no order to violate,
TIVO v. ECHOSTAR 30
the District Court erred in holding the Union in con-
tempt.”). Thus, we find Granny Goose inapplicable to the
factual circumstances presented here.
In International Longshoremen, the record of the
lower court proceedings made it abundantly clear that the
alleged contemnor did not understand the terms of the
order, repeatedly telling the district court, “I don’t know
what this order means,” but receiving no clarification.
389 U.S. at 70–71. Indeed, the order there was simply a
blanket statement requiring the union to “to comply with
and to abide by the said [arbitrator’s] Award,” but the
award contained “only an abstract conclusion of law, not
an operative command capable of ‘enforcement.’” Id. at 74
(holding that the order at issue could “only be described
as unintelligible”). The Supreme Court expressly ex-
plained that “[w]e do not deal here with a violation of a
court order by one who fully understands its meaning but
chooses to ignore its mandate.” Id. at 76. The injunction
here is not unintelligible. Moreover, from the time that
the injunction issued to the time that the district court
found it in contempt, EchoStar never once raised the
facial ambiguity that it now finds in the injunction. It
cannot now spring its ambiguity defense to avoid con-
tempt on the basis of its self-serving interpretation of the
court’s injunction. To hold otherwise would indeed im-
pose an unnecessarily heavy burden on district courts to
draft immaculate orders—a burden that neither the
federal rules nor the Supreme Court mandate—and would
radically constrict district courts’ inherent power to
enforce their orders. We decline to do so and conclude
that EchoStar has waived its vagueness arguments.
The dissent cites our precedent and several cases from
our sister circuits to argue that contempt is improper,
even in the absence of a direct appeal, if the contemnor
can later propose an interpretation of the injunction that
31 TIVO v. ECHOSTAR
allows the conduct on which the contempt allegation is
based. Given the strained nature of EchoStar’s proposed
reading of the disablement provision 6 and the fact that it
had ample notice of the proposed terms of the injunction
as well as a full and fair opportunity to litigate the issue, 7
we do not find the law cited by the dissent persuasive on
the facts before us. Some of the cited cases address con-
duct that simply could not have violated the order at
issue, thus finding no application to this case. See, e.g.,
Abbott Labs., 503 F.3d at 1383. Others cover orders that
were truly inadequate to meet the mandate of Rule 65,
similar to the one in International Longshoremen. See,
e.g., Common Cause v. Nuclear Regulatory Comm’n, 674
F.2d 921, 926–27 (D.C. Cir. 1982); H.K. Porter Co., Inc. v.
Nat’l Friction Prods. Corp., 568 F.2d 24, 27 (7th Cir.
1977).
Moreover, most of the cases cited deal with situations
very different from the one presented here and address
6 The dissent argues that the district court read the
term “Infringing Products” in the two provisions of the
disablement provision inconsistently in order to find
EchoStar in contempt. We need not reach that issue
because there is a clear definition of that term at the
beginning of the order that contradicts EchoStar’s pro-
posed reading of the term.
7 TiVo’s Proposed Permanent Injunction was sub-
mitted on May 26, 2006. JA 7820-24. Both the merits
and the wording of the injunction were fully briefed and
were the subject of a hearing held on June 28, 2006.
Thereafter, the district court issued a thorough order
addressing the eBay factors and the parties’ arguments
related thereto. TiVo Inc. v. EchoStar Commc’ns Corp.,
446 F. Supp. 2d 664 (E.D. Tex. 2006). In short, the par-
ties were intimately involved in the proceedings leading
up to the injunction, as well as its wording, and the
injunction was the result of careful consideration by the
district court.
TIVO v. ECHOSTAR 32
specific circumstances where it may be proper to allow
vagueness as a defense to contempt, such as with ex parte
orders being enforced against non-parties to the order,
see, e.g., U.S. v. Saccoccia, 433 F.3d 19, 21-22 (1st Cir.
2005); N.Y. Telephone Co. v. Commc’n Workers of Am.,
445 F.2d 39, 42 (2d Cir. 1971); or consent decrees that did
not provide adequate notice to the enjoined party, 8 see,
e.g., Perez v. Danbury Hosp., 347 F.3d 419, 422 (2d Cir.
2003); Gates v. Shinn, 98 F.3d 463, 464 (9th Cir. 1996);
Harris v. City of Phila., 47 F.3d 1342, 1344 (3d Cir. 1995).
More importantly, we decide that the facts presented here
fall squarely within the holding of McComb, and we are
not persuaded that we are inconsistent with Supreme
Court precedent.
2. Overbreadth
EchoStar argues that even if the district court’s read-
ing of the disablement provision is the proper one, the
order would still be unenforceable because the prohibition
of noninfringing activity is unlawful. EchoStar contends
that it simply downloaded noninfringing software to the
receivers that it had placed with consumers. EchoStar
argues that the district court’s injunction cannot prohibit
8 With consent decrees, it is generally the case that
a district court summarily approves the agreement that
the parties reach. Where disputes later arise in such
cases, the court is required, for the first time, to interpret
the letter of the contract and determine the intent of the
parties. Thus, in such cases, contempt can be disfavored
where the party had no notice that the decree barred the
alleged conduct. In determining notice to the alleged
contemnor, courts are limited to the four corners of the
decree. United States v. Armour & Co., 402 U.S. 673, 682
(1971) (“[T]he scope of a consent decree must be discerned
within its four corners, and not by reference to what
might satisfy the purposes of one of the parties to it.”).
The situation here is very different.
33 TIVO v. ECHOSTAR
such noninfringing design-arounds. Because such an
injunction would be unlawfully overbroad, EchoStar
contends that it should not be expected to “appeal an
unnatural reading of an injunction” at the time that the
injunction issued. We disagree and conclude that a broad
reading of the disablement provision to include all DVR
functionality is not “unnatural” and that having failed to
raise the issue on direct appeal, EchoStar is now barred
from using it as a defense to the district court’s finding of
contempt.
EchoStar’s primary business is satellite television
transmission, and the products that were found by the
jury to infringe TiVo’s patent are satellite receivers that
receive and display broadcasts to users. The DVR func-
tionality that allows users to record and play back such
broadcasts is merely one of the software components of
the receivers. The disablement provision of the injunction
required disablement only of that DVR software compo-
nent in eight specific models of receivers that had been
found infringing by the jury. J.A. 162. The district court
further defined “DVR functionality” as “all storage to and
playback of . . . television data.” Id. Plainly, the word
“all” refers to all DVR functionality, infringing or not, and
that is not an unnatural reading of the disablement
provision. The second directive of the disablement provi-
sion, requiring EchoStar not to enable DVR functionality
in any new placements of the receivers, i.e., DVR func-
tionality that could potentially be noninfringing, supports
a plain reading of the word “all.” It was therefore not
“unnatural” to read the court’s order as a prohibition on
employing any type of DVR software, infringing or not, on
those listed receiver models.
Supreme Court precedent is clear on the issue. The
time to appeal the scope of an injunction is when it is
handed down, not when a party is later found to be in
TIVO v. ECHOSTAR 34
contempt. Maggio v. Zeitz, 333 U.S. 56, 69 (1948). In
Maggio, affirming an appeals court’s conclusion that a
bankruptcy order “is subject only to direct attack, and
that its alleged infirmities cannot be relitigated or cor-
rected in a subsequent contempt proceeding,” the Su-
preme Court stated that “[i]t would be a disservice to the
law if we were to depart from the long-standing rule that
a contempt proceeding does not open to reconsideration
the legal or factual basis of the order alleged to have been
disobeyed and thus become a retrial of the original con-
troversy.” 333 U.S. at 69. Sixty years later, that law
remains unchanged. Travelers Indemnity Co. v. Bailey,
129 S. Ct. 2195, 2203 (2009). In Travelers, claimants
sought to overturn a bankruptcy court order interpreting
an injunction previously issued by that court, barring any
future claims against insurer defendants. The Second
Circuit agreed with the claimants that the previously
issued order could not be enforced according to its terms
because the bankruptcy court had exceeded its jurisdic-
tion when it issued those orders in the first place. Reject-
ing the Second Circuit’s willingness to entertain this
collateral attack, the Supreme Court held the challenge
foreclosed–even though it concerned the bankruptcy
court’s subject matter jurisdiction and statutory authority
to issue such an order–because it could have been raised
on direct appeal. Id. at 2205–06. Fifth Circuit law,
applicable here, is also in accord on the issue. See W.
Water Mgmt., Inc. v. Brown, 40 F.3d 105, 108 (5th Cir.
1994) (holding that the scope of an injunction may be
challenged only on direct appeal).
We therefore conclude that EchoStar’s arguments on
overbreadth of the district court’s injunction have been
waived by its failure to raise them earlier. Had EchoStar
brought an appeal on the injunction at the time that it
issued, arguing that the injunction was overbroad, we
35 TIVO v. ECHOSTAR
could have addressed its legitimacy. 9 The time to do so
has long passed. “It is just as important that there should
be a place to end as that there should be a place to begin
litigation.” Travelers, 129 S. Ct. at 2206 (citations omit-
ted).
As a result, we affirm the district court’s finding of
contempt and the $1.00 per subscriber per month, totaling
approximately $90 million, awarded by the district court
as a sanction against EchoStar. The district court ex-
pressly stated that this award was made on alternative
grounds, i.e., for violation of either of the two separate
provisions of the injunction, that dealing with disable-
ment and the other dealing with infringement. 10 See
TiVo, 655 F. Supp. 2d at 663, 666 (stating that “[i]n the
alternative, the Court found that EchoStar had failed to
comply with the plain directives of [its] order,” and award-
ing the “additional $1.00 sanction to promote EchoStar’s
compliance with [its] orders.”). Although we vacate the
9 We note, however, that, although we have
strongly discouraged judicial restraint of noninfringing
activities, Johns Hopkins Univ. v. CellPro, Inc., 152 F.3d
1342, 1367 (Fed. Cir. 1998), we have never barred it
outright and instead have repeatedly stated that district
courts are in the best position to fashion an injunction
tailored to prevent or remedy infringement. See Joy
Techs., Inc. v. Flakt, Inc., 6 F.3d 770, 777 (Fed. Cir. 1993).
Because it is not before us in this case, we make no en
banc holding on that issue.
10 We do not agree with the dissent’s suggestion that
the “disablement provision” is limited only to products
that had been placed with end users. Dissent at 5-6. On
the contrary, the district court and the parties have thus
far referred to both directives of that provision, i.e., that
relating to units placed with end users as well as that on
new placements, together as the “disablement provision,”
and the district court imposed sanctions for the violation
of the entire “disablement provision.”
TIVO v. ECHOSTAR 36
finding of contempt of the infringement provision, the
finding of contempt of the disablement provision has been
affirmed. We therefore have no basis for modifying the
amount of the sanction.
CONCLUSION
In sum, we vacate the court’s holding of contempt of
the infringement provision and remand for the court to
make a finding concerning any colorable difference be-
tween the previously adjudicated infringing devices and
the newly accused devices. We vacate in part the dam-
ages awarded for continued infringement. We affirm the
district court’s finding of contempt of the disablement
provision of the court’s injunction and the sanctions
imposed by the district court.
AFFIRMED IN PART, VACATED IN PART, AND
REMANDED
United States Court of Appeals
for the Federal Circuit
__________________________
TIVO INC.,
Plaintiff-Appellee,
v.
ECHOSTAR CORPORATION,
ECHOSTAR DBS CORPORATION,
ECHOSTAR TECHNOLOGIES CORPORATION,
ECHOSPHERE LIMITED LIABILITY COMPANY,
ECHOSTAR SATELLITE LLC,
AND DISH NETWORK CORPORATION,
Defendants-Appellants.
__________________________
2009-1374
__________________________
Appeal from the United States District Court for the
Eastern District of Texas in case no. 2:04-CV-01, Chief
Judge David Folsom.
__________________________
DYK, Circuit Judge, with whom Chief Judge RADER and
Circuit Judges GAJARSA, LINN, and PROST join, dissenting-
in-part.
While I join Parts A(1)–(3)(a) of the majority decision,
I dissent from parts A(3)(b) and B. In particular, I dissent
from the majority’s decision to uphold the finding of
contempt of the disablement provision. In my view, the
disablement provision does not bar the installation of
modified software that renders the devices non-infringing,
TIVO v. ECHOSTAR 2
and, even if the provision were unclear, an unclear injunc-
tion cannot be the basis for contempt. The majority’s
holding that lack of clarity provides no defense is incon-
sistent with established law reflected in numerous deci-
sions of the Supreme Court, our own court, and our sister
circuits.
I also dissent from the majority’s decision to remand
to the district court to determine whether EchoStar
violated the infringement provision. In my view, that
provision plainly was not violated. Finally, I dissent from
the majority’s affirmance of the $90 million sanctions
award, which was based in part on the finding of con-
tempt of the infringement provision. If the contempt
finding is set aside with respect to the infringement
provision, the sanctions award must also be set aside.
I
Before today’s majority decision—upholding contempt
of the disablement provision based on an apparently
successful design-around—two principles seemed well
established. The first of these was that accused infringers
were encouraged to design around patent claims to
achieve non-infringing products and methods. As this
court has recognized, “designing new and possibly better
or cheaper functional equivalents [of a competitor’s prod-
uct] is the stuff of which competition is made.” State
Indus. Inc. v. A.O. Smith Corp., 751 F.2d 1226, 1235–36
(Fed. Cir. 1985). 1 The second was that contempt sanc-
1 See also State Indus., 751 F.2d at 1236 (“One of
the benefits of a patent system is its so-called ‘negative
incentive’ to ‘design around’ a competitor’s products, even
when they are patented, thus bringing a steady flow of
innovations to the marketplace.”); Brief of Amicus Curiae
Federal Trade Commission on Rehearing En Banc at 4–
10, TiVo, Inc. v. EchoStar Corp., No. 2009-1374 (Fed. Cir.
3 TIVO v. ECHOSTAR
tions could not be imposed for the violation of an injunc-
tion that failed to provide sufficient clarity. As the Su-
preme Court stated in Granny Goose Foods, Inc. v.
Teamsters, 415 U.S. 423, 444 (1974), the “basic principle
built into [Federal Rule of Civil Procedure] 65 is that
those against whom an injunction is issued should receive
fair and precisely drawn notice of what the injunction
actually prohibits.” The majority has disregarded both
principles with predictably unhappy consequences for the
innovation community.
A
A crucial question in any contempt proceeding is
whether the injunction bars the accused conduct. The
“interpretation of the terms of an injunction is a question
of law we review de novo.” Abbott Labs. v. TorPharm,
Inc., 503 F.3d 1372, 1382 (Fed. Cir. 2007). The disable-
ment provision of the injunction here provided:
Defendants are hereby FURTHER ORDERED
to, within thirty (30) days of the issuance of this
order, disable the DVR functionality (i.e., disable
all storage to and playback from a hard disk drive
of television data) . . . of the Infringing Products
that have been placed with the end user or sub-
scriber.
J.A. 162 (emphasis added). Because other provisions are
also pertinent, the entire injunction is included as an
Appendix to this opinion.
TiVo and the district court essentially interpret this
provision as barring design-arounds (i.e., the substitution
of non-infringing software for software found to infringe
in the devices installed in customers’ homes). In its
Nov. 11, 2010) (emphasizing the importance of incentives
to design-around innovation).
TIVO v. ECHOSTAR 4
briefing to the panel, TiVo characterized the injunction as
prohibiting the “continued provision of DVR functions
through the exact units previously found to infringe—
whether or not they have purportedly been modified by
the downloading of new software.” Br. of Pl.-Appellee
TiVo, Inc. at 21, TiVo, Inc. v. EchoStar Corp., No. 2009-
1374 (Fed. Cir. Jun. 25, 2010). The district court simi-
larly characterized the injunction as “not limited to in-
fringing software.” TiVo, Inc. v. EchoStar Corp., 640 F.
Supp. 2d 853, 874 (E.D. Tex. 2009) [hereinafter Contempt
Opinion]. The language of the injunction itself contra-
dicts this interpretation.
First, contrary to TiVo’s argument, the definition of
the term “Infringing Products” on its face does not simply
refer to devices with particular model numbers; it re-
quires that those products be “Infringing.” The term
“Infringing Products” appears in the introductory para-
graph of the injunction, which enters judgment “against
Defendants for willful infringement . . . by Defendants’
following DVR receivers (collectively the ‘Infringing
Products’): DP-501; DP-508; DP-510; DP-522; DP-625;
DP-721; DP-921; and the DP-942.” J.A. 161. The injunc-
tion was thus written to address devices with particular
model numbers that had been found by the jury to be
infringing. The verdict form itself is framed in terms of
whether particular model numbers infringed. See Verdict
Form at 2–3, TiVo, Inc. v. EchoStar Corp., No. 2:04-CV-
01, (E.D. Tex. Apr. 13, 2006), ECF No. 690. Thus it is not
surprising that the injunction also made reference to
those particular model numbers that were found to in-
fringe. The evident purpose of the injunction was to
award relief concerning the specific products found to
infringe.
Second, interpreting the term “Infringing Products” as
extending to non-infringing products is contradicted by
5 TIVO v. ECHOSTAR
the usage of the same term elsewhere in the injunction.
In addition to the disablement provision, the term “In-
fringing Products” is also used in the infringement provi-
sion—barring continued infringement by the “Infringing
Products . . . and [those] products that are only colorably
different”—and in the enablement provision—barring the
enablement of “DVR functionality . . . in any new place-
ments of the Infringing Products.”2 J.A. 162. Neither
TiVo nor the district court interprets the injunction as
barring design-arounds in other contexts (i.e., the instal-
lation of new, non-infringing software in new products or
the substitution of new, non-infringing software in old
products still on the shelves). For example, under the
heading, “The Disablement Provision Does Not Prohibit
EchoStar From Attempting To Design Around The Pat-
ent,” TiVo states explicitly that “[n]othing in the injunc-
tion . . . prevents EchoStar from providing DVR functions
using new, non-infringing receivers.” Br. of Pl.-Appellee
TiVo, Inc. at 21. The district court adopted a similar
interpretation. In finding EchoStar in contempt of the
infringement provision, the district court did not rest its
contempt finding on the fact that the model numbers were
the same. Contempt Opinion, 640 F. Supp. 2d at 871–73.
Instead, the court’s contempt finding rests on the fact that
the model numbers are the same and the accused prod-
ucts are not more than colorably different from those
found to infringe. Id. If the infringement and enablement
provisions barred the sale or placement of products bear-
2 The majority’s treatment of the latter provision is
confusing. The majority treats the enablement provision
as though it is part of the disablement provision, although
it clearly was not the basis for a contempt finding. “By
not disabling DVR functionality in adjudged receivers
that had been placed with end-users, EchoStar failed to
comply with the plain language of this Court’s order.”
Contempt Opinion, 640 F. Supp. 2d at 874.
TIVO v. ECHOSTAR 6
ing the listed model numbers regardless of infringement,
there would have been no need to evaluate whether
EchoStar’s modified products were “no more than colora-
bly different” and “continue[d] to infringe.” Id. at 860–61.
The inconsistency of the interpretation adopted by
TiVo and the district court is particularly acute when the
disablement and enablement provisions are compared.
Identical language is used in the disablement provision,
which deals with products that are already in the hands
of customers, and the enablement provision, which deals
with products still on the shelf.
Disablement Provision Enablement Provision
“Defendants are hereby “The DVR functionality
FURTHER ORDERED to, (i.e., disable all storage
within thirty (30) days of the to and playback from a
issuance of this order, disable hard disk drive of televi-
the DVR functionality (i.e., sion data) shall not be
disable all storage to and enabled in any new
playback from a hard disk placements of the In-
drive of television data) . . . of fringing Products.” J.A.
the Infringing Products that 162 (emphases added).
have been placed with an end
user or subscriber.” J.A. 162
(emphases added).
By using the same terminology in both the disable-
ment and enablement provisions, it is clear that the
injunction extends only to infringing software. It would
be contrary to established principles of construction to
give identical language a different meaning in one provi-
sion than the other. Nor can the use of the term “DVR
functionality,” with the notation “disable all storage to
7 TIVO v. ECHOSTAR
and playback from a hard disk drive of television data,”
distinguish the disablement provision from other provi-
sions in which the term “Infringing Products” is used.
The enablement provision also uses the term “DVR func-
tionality” and describes it in the same manner as the
disablement provision (“i.e., disable all storage to and
playback from a hard disk drive of television data”). J.A.
162.
In the context of statutory construction, identical lan-
guage is assumed to have the same meaning. See, e.g.,
Clark v. Martinez, 543 U.S. 371, 378 (2005); Dept. of
Revenue of Or. v. ACF Indus., Inc., 510 U.S. 332, 341–42
(1994). In Clark, the Supreme Court held that identical
language in two separate provisions of a statute must be
interpreted in the same manner even though the two
provisions had different purposes. 543 U.S. at 378–380.
This basic principle of interpretation should apply to
injunctions as well. Thus, the terms “Infringing Products”
and “DVR functionality” must be interpreted consistently
throughout the injunction. Under such a construction,
the disablement provision would necessarily permit the
replacement of the infringing software with new non-
infringing software.
Third, the injunction does not explicitly address the
issue of design-arounds, and TiVo’s proposed interpreta-
tion is clearly contrary to the established policy in favor of
design arounds discussed above. There is indeed a seri-
ous question as to whether, in light of this strong policy,
the district court would even have the authority to issue
an injunction barring design-arounds. This court has
repeatedly instructed that injunctions in the patent
context must be limited to restraints designed to prevent
further infringement. See Riles v. Shell Exploration and
Prod. Co., 298 F.3d 1302, 1311–12 (Fed. Cir. 2002); Johns
Hopkins Univ. v. CellPro, Inc., 152 F.3d 1342, 1366–67
TIVO v. ECHOSTAR 8
(Fed. Cir. 1998); Joy Techs., Inc. v. Flakt, Inc., 6 F.3d 770,
772–73 (Fed. Cir. 1993); Eli Lilly & Co. v. Medtronic, Inc.,
915 F.2d 670, 674 (Fed. Cir. 1990). Specifically, this court
has recognized that “an injunction is only proper to the
extent it is ‘to prevent the violation of any right secured
by patent.’” Eli Lilly, 915 F.2d at 674 (quoting 35 U.S.C.
§ 283). For example, in Riles we held that “an injunction
cannot impose unnecessary restraints on lawful activity,”
and thus concluded that enjoining the use of the entire
product was improper where the defendant “may lawfully
use its [product] without infringing.” 298 F.3d at 1311–
12. Similarly, in Joy Technologies, we held that an in-
junction “which precludes [the defendant] from activities
that are not necessary to prevent infringement of the
patented process cannot stand.” 6 F.3d at 777. Absent
explicit language, no reasonable attorney would read the
disablement provision as barring design-arounds because
such an injunction would likely exceed the district court’s
authority. Here there is no such explicit language. For
these reasons, it is clear that the injunction does not in
fact bar design-arounds and that it permits the substitu-
tion of non-infringing software in existing products that
are in the hands of customers, just as it permits the use of
non-infringing software in identical devices not yet dis-
tributed to the customer.
B
Unlike the district court, the majority does not hold
that the injunction clearly prohibits the accused conduct.
Rather, the majority concludes that even if the injunction
is unclear, the district court’s reading is “the most natu-
ral” and lack of clarity is not a defense in contempt pro-
ceedings. 3 Maj. Op. at 28. With respect, this position is
3 The majority suggests that EchoStar’s reading of
the disablement provision is “contrary to the most natural
9 TIVO v. ECHOSTAR
untenable. The question here is not whether the injunc-
tion is invalid because it is vague. The question is
whether contempt is appropriate where the injunction
does not clearly prohibit the challenged conduct. The
Supreme Court, our own court, and our sister circuits
have clearly answered that question in the negative: An
accused party cannot be held in contempt for violating an
injunction which does not clearly reach the accused con-
duct. This is so because contempt is improper where
there is “a fair ground of doubt” as to whether the defen-
dant’s conduct is barred by the injunction. Cal. Artificial
Stone Paving Co. v. Molitor, 113 U.S. 609, 618 (1885);
MAC Corp. of Am. v. Williams Patent Crusher & Pulver-
izer Co., 767 F.2d 882, 885 (Fed. Cir. 1985) (citing Cal.
Artificial Stone Paving Co., 113 U.S. at 618). The fair
ground of doubt principle is itself reflected in Rule 65(d) of
the Federal Rules of Civil Procedure, which the Supreme
Court has interpreted to require that an injunction con-
tain a clear and unambiguous statement of “what the
court intends to require and what it meant to forbid.”
Int’l Longshoremen’s Ass’n v. Phila. Marine Trade Ass’n,
389 U.S. 64, 76 (1967); see also Square Liner 360, Inc. v.
Chisum, 691 F.2d 362, 378 (8th Cir. 1982) (“An enjoined
party ought not to be compelled to risk a contempt cita-
tion unless the proscription is clear.”).
The majority relies primarily on McComb v. Jackson-
ville Paper Co., 336 U.S. 187 (1949), to suggest that the
requirement of clarity may be invoked only on direct
appeal or by a motion to modify the injunction, and that,
absent a successful appeal or modification, there can be
reading of the provision” because “it would necessarily
render the injunction vague on its face.” Maj. Op. at 28.
The exact same point, however, could be made with
respect to the reading of the disablement provision ad-
vanced by TiVo and the district court.
TIVO v. ECHOSTAR 10
no defense to a contempt charge based on a lack of clarity
in the injunction. As discussed below, that novel theory is
inconsistent with numerous cases subsequent to McComb
in the Supreme Court and courts of appeals holding that
contempt is improper, even in the absence of a successful
direct appeal or modification, if the injunction could
reasonably be read not to prohibit the conduct on which
the contempt allegation is based. McComb itself lends no
support to the majority’s theory.
In order to understand the Supreme Court’s holding
in McComb, it is essential to understand the facts of the
case. The original decree enjoined violations of the Fair
Labor Standards Act. Id. at 189. It also explicitly re-
quired the defendants to pay their employees a specific
hourly rate of pay, compensate them for overtime, and
keep adequate records. Id. The defendants were found in
violation of the decree because they had (1) set up a “false
and fictitious method of computing compensation without
regard to the hours actually worked;” (2) “adopted a plan
which gave the employees a wage increase in the guise of
a bonus” to avoid paying overtime; (3) improperly classi-
fied some employees as “executive or administrative
employees” (exempt categories); and (4) employed workers
“in excess of the maximum workweek without paying
them overtime compensation.” Id. at 190. The defen-
dants argued that they could not be held in contempt
because the “plan or scheme which they adopted was not
specifically enjoined.” Id. at 192. The Supreme Court
rejected this argument, noting that the defendants “were
alerted by the decree against any violation of the specified
provisions of the Act.” Id. The Court did not suggest that
the decree (or the Act itself) was in any way unclear or
that lack of clarity would not be a defense to contempt.
Rather, the Court concluded that contempt was proper
because the defendants’ actions were clearly prohibited by
11 TIVO v. ECHOSTAR
the decree. Id. To be sure, the Court stated: “Respon-
dents could have petitioned the District Court for a modi-
fication, clarification or construction of the order.” Id.
But the Court’s recognition that such relief existed “if
there were extenuating circumstances or if the decree was
too burdensome in operation,” is just that—the acknowl-
edgment of an alternative remedy available where defen-
dants had difficulty in complying with an otherwise clear
decree. The Court in McComb did nothing to discard the
“fair ground of doubt” standard set forth more than sixty
years before in California Artificial Stone Paving. See
113 U.S. at 618.
Indeed, after McComb, the Supreme Court twice af-
firmed the principle that an accused party cannot be held
in contempt for violating an injunction which does not
clearly reach the accused conduct. See Granny Goose, 415
U.S. at 428; Int’l Longshoremen’s, 389 U.S. at 76. In
International Longshoremen’s, the parties disputed the
meaning of a provision in a collective bargaining agree-
ment. 389 U.S. at 65. The union argued that the “set-
back” provision entitled the workers to a partial day’s pay
when the start of their work day was postponed due to
unfavorable weather conditions, while the employers
argued that the workers were entitled to no more than
one hour’s pay. Id. at 65–66. An arbitrator ruled that the
employer’s reading of the set-back provision was correct,
but the union refused to work unless the employers
adopted the contrary interpretation. Id. at 66–68. At the
request of the employers, the district court entered an
order requiring the union “to comply with and to abide by
[the arbitrator’s award].” Id. at 69. The district court
later found the union in contempt of the order because it
had engaged in a strike designed to require the employers
to provide the increased set-back pay. Id. at 72. The
Supreme Court reversed the contempt finding because
TIVO v. ECHOSTAR 12
”the order . . . did not state in ‘specific . . . terms’ the acts
that it required or prohibited.” Id. at 76 (quoting Fed. R.
Civ. P. 65(d)).
In Granny Goose, the district court issued a tempo-
rary restraining order without specifying an expiration
date. 415 U.S. at 428. Under the rule in effect at the
time, the order would expire no later than twenty days
after issuance. Id. at 432–33. Prior to its expiration, the
district court denied a motion to dissolve the order. Id. at
429. After twenty days, the district court held the union
in contempt for violation of the order. Id. at 425–26. The
union argued that contempt was improper because the
order had expired before the date of the alleged contempt,
id. at 430, but the district court rejected this argument on
the ground that its denial of the motion to dissolve had
“effectively converted the order into a preliminary injunc-
tion of unlimited duration,” id. at 440. The Supreme
Court reversed the contempt finding, holding that “where
a court intends to supplant such an order with a prelimi-
nary injunction of unlimited duration . . . , it should issue
an order clearly saying so.” Id. at 444–45. “And where it
has not done so, a party against whom a temporary re-
straining order has issued may reasonably assume that
the order has expired within the time limits imposed by
Rule 65(b).” Id. at 445. The Court noted that the “basic
principle built into Rule 65 is that those against whom an
injunction is issued should receive fair and precisely
drawn notice of what the injunction actually prohibits.”
Id. at 444.
Despite the majority’s assertion that, under McComb,
“[t]he burden was clearly on EchoStar to seek clarification
or modification from the district court,” Maj. Op. at 28, no
other court has read McComb in this way. In cases which
are quite similar to the present case, courts of appeals,
including ours, have consistently held that contempt is
13 TIVO v. ECHOSTAR
inappropriate where the injunction does not clearly pro-
hibit the accused conduct. For example, in Abbott, an
injunction barred Apotex from “commercially manufactur-
ing, using, selling, offering to sell, or importing into the
United States generic divalproex sodium which the Court
has found to be infringing . . . .” 503 F.3d at 1376. Apotex
was found in contempt for violating the injunction by
filing an Abbreviated New Drug Application (“ANDA”) for
a generic divalproex sodium with the Food and Drug
Administration. Id. at 1375. This court reversed the
contempt finding because the injunction did not clearly
prohibit the conduct on which the contempt allegation
was founded, stating that “we cannot agree that Apotex’s
actions actually violated the original injunction” because
“[t]he injunction contains no ‘explicit notice’ to Apotex
that the filing of a new ANDA . . . was forbidden.” Id. at
1382–83. We noted that Rule 65(d) requires that “those
enjoined receive explicit notice of precisely what conduct
is outlawed.” Id. at 1382. “These concerns have led
courts to construe injunctions narrowly where, as here,
they failed to give adequate notice that particular conduct
was enjoined.” Id. at 1382–83.
In New York Telephone Co. v. Communications Work-
ers of America, 445 F.2d 39, 48 (2d Cir. 1971), a tempo-
rary restraining order barred the unions “from engaging
in . . . any strike, work stoppage, boycott of overtime
work, slowdown or any other form of interference with the
business of plaintiff.” Id. at 43. In the interest of reach-
ing a settlement, the parties agreed to extend this order
indefinitely. Id. An agreement was reached and the work
stoppage ended, but several months later the workers
commenced a strike over a different issue than the one
leading to the original order. Id. The district court found
the unions in contempt of the earlier restraining order
because its plain language barred “any strike.” Id. at 43–
TIVO v. ECHOSTAR 14
44. On appeal, the Second Circuit reversed the contempt
finding. Id. at 51. The court concluded that “despite the
broad language” of the order, the order clearly “was
meant to apply and should only be applied to the [dispute
occurring at the time of its issuance].” Id. at 46. Addi-
tionally, the court noted that “[e]ven if we considered the
restraining order’s scope to be a closer issue, several
policy considerations [e.g., the clarity requirements of
Rule 65(d)] counsel us to resolve all ambiguities in favor
of the unions.” Id. at 48.
In Common Cause v. Nuclear Regulatory Commission,
674 F.2d 921, 924 (D.C. Cir. 1982), the district court held
that the Nuclear Regulatory Commission had acted
unlawfully in closing a budget meeting to the public. The
district court issued an injunction enforcing the Sunshine
Act, 5. U.S.C. § 522b (1976), and prohibiting the Commis-
sion “from closing future meetings of a similar nature.”
Id. The court later found the Commission in contempt for
closing a series of budget meetings. Id. at 925. On ap-
peal, the District of Columbia Circuit reversed the con-
tempt finding because the injunction was “susceptible to
more than one interpretation” because it did not “identify
the characteristics of a future meeting ‘of a similar na-
ture.’” Id. at 926.
In NBA Properties, Inc. v. Gold, 895 F.2d 30, 32 (1st
Cir. 1990), a consent decree barred a group of franchisors,
from “[p]assing off, inducing, or enabling others to sell or
pass off any heat transfers, garments and/or other items
which are not genuine NBA products as and for genuine
NBA products.” The district court found the franchisors
in contempt. Id. at 31. The franchisees’ had sold counter-
feit merchandise, and the district court concluded that, by
granting franchises, the franchisors had “enabled” the
franchisees to sell the counterfeit merchandise. Id. at 32–
33. The First Circuit reversed the contempt finding,
15 TIVO v. ECHOSTAR
declining to read the term “enabling” to “encompass the
simple granting of the franchise itself” when doing so
would require “reading [the decree] rather strongly
against, rather than ‘to the benefit of[,] the person
charged with contempt.’” Id. at 33 (quoting Ford v. Kam-
merer, 450 F.2d 279, 280 (3d Cir. 1971)).
In Perez v. Danbury Hospital, 347 F.3d 419, 422 (2d
Cir. 2003), a consent decree prohibited the hospital from
“tak[ing] . . . action, directly or indirectly, to limit, pre-
clude or obstruct the plaintiffs . . . from practicing neona-
tology at Danbury Hospital . . . .” (emphasis added). The
district court found the hospital in contempt of the decree
because doctors practicing at the hospital had “encour-
aged obstetricians in two private practice groups” to
obstruct the plaintiffs and thus had “indirectly” ob-
structed them. Id. On appeal, the Second Circuit re-
versed the contempt finding because, while the decree
clearly prohibited the hospital from “indirectly” obstruct-
ing the plaintiffs from practicing neonatology, it did not
require that the hospital “tak[e] steps to prevent other
doctors from interfering with the [plaintiff] physicians’
practice.” Id. at 424–25.
In Imageware, Inc. v. U.S. West Communications, 219
F.3d 793, 794 (8th Cir. 2000), a protective order stated
that information designated as confidential may only be
used in “preparing for and conducting . . . proceedings in
this action and for no other purpose.” The district court
found Imageware in contempt because it submitted copies
of documents containing confidential information to the
Federal Communications Commission in another proceed-
ing. Id. at 795–96. On appeal, the Eighth Circuit re-
versed the contempt finding because “a reasonable person
could have read the order as a whole” not to prohibit
Imageware’s conduct. Id. at 797. In reaching this conclu-
sion, the court relied on a provision not addressed in the
TIVO v. ECHOSTAR 16
parties’ briefs which permitted confidential information to
be “offered into evidence in open court unless the Desig-
nating Party obtains an appropriate protective order from
the Court.” Id. at 795, 797. The court concluded that,
based on this provision, the alleged contemnors “could
reasonably, even if perhaps erroneously, have believed
that [the documents in question] were not subject to [the
protective order]” because they were offered into evidence
in open court without objection. Id. at 797.
In each one of these cases, the language of the injunc-
tion could be read to cover the accused conduct, but the
court of appeals held that the accused infringer could
reasonably interpret it as not covering the accused con-
duct. These cases establish that contempt cannot be
based on an order susceptible to two reasonable readings,
one of which does not cover the accused conduct. There
are numerous additional circuit cases in which courts
have reversed a contempt finding because the injunction
or decree does not clearly prohibit the accused conduct. 4
4 See, e.g., United States v. Saccoccia, 433 F.3d 19,
29 (1st Cir. 2005) (reversing a contempt finding because
“the Order, when issued, could have been interpreted in
various ways”); Gilday v. Dubois, 124 F.3d 277, 285–86
(1st Cir. 1997) (narrowly construing a consent decree in
favor of the alleged contemnor and reversing a contempt
finding because the consent decree was “susceptible to
various reasonable interpretations”); Gates v. Shinn, 98
F.3d 463, 467–72 (9th Cir. 1996) (reversing a contempt
finding because the consent decree lacked specificity,
which “is a predicate to a finding of contempt”); Harris v.
City of Phila., 47 F.3d 1342, 1349, 1352 (9th Cir. 1995)
(noting that “[s]pecificity in the terms of consent decrees
is a predicate to a finding of contempt,” and reversing a
contempt finding because consent decree did not contain
“an unambiguous provision” requiring the conduct form-
ing the basis of the contempt allegation); Dollar Rent A
Car v. Travelers Indem. Co., 774 F.2d 1371, 1376 (9th Cir.
17 TIVO v. ECHOSTAR
With respect, these numerous Supreme Court and
Court of Appeals cases directly refute the majority’s
manifestly incorrect statement that “the burden was
clearly on EchoStar to seek clarification or modification
from the district court.” Maj. Op. at 28. In many of the
cases discussed above no such challenge was even at-
tempted before the contempt proceeding. 5 And even in
cases where there was an attempt to clarify prior to
contempt proceedings, the court reversed the contempt
finding without attributing any significance to the at-
tempt to clarify. 6 None of these cases held or suggested
1985), (reversing a contempt finding because it was not
“reasonably inferrable” from the injunction that the
accused conduct was a violation); see also Salazar v. D.C.,
602 F.3d 431, 442 (D.C. Cir. 2010) (“Civil contempt may
be imposed only when the underlying order is clear and
unambiguous.”); H.K. Porter Co., Inc. v. Nat’l Friction
Prods. Corp., 568 F.2d 24, 27 (7th Cir. 1977) (refusing to
hold the defendants in contempt because the order did not
“describe in reasonable detail . . . the act or acts sought to
be restrained”); Doe v. Gen. Hosp. of D.C., 434 F.2d 423,
424–25 (D.C. Cir. 1970) (refusing to hold the defendants
in contempt because of a “possible confusion” regarding
the meaning of the preliminary injunction).
5 See Granny Goose, 415 U.S. 423; Salazar, 602
F.3d 431; Imagewear, 219 F.3d 793; Gilday, 124 F.3d 277;
Gates, 98 F.3d 463; Harris, 47 F.3d 1342; NBA Props., 895
F.2d 30; Common Cause, 674 F.2d 921; N.Y. Tel. Co., 445
F.2d 39; Doe, 434 F.2d 423.
6 See Int’l Longshoremen’s, 389 U.S. at 70–71, 76
(mentioning that the alleged contemnors unsuccessfully
attempted to obtain clarification, but not linking this
attempt to the court’s ability to enforce the clarity re-
quirement); Abbott, 503 F.3d at 1377, 1382–83 (mention-
ing that the issuance of the injunction was appealed, but
not linking this event to the court’s ability to enforce the
clarity requirement); Saccoccia, 433 F.3d at 30–31 (men-
TIVO v. ECHOSTAR 18
that the failure to take an appeal or seek modification
before the contempt proceeding constituted a waiver of
the requirement that the injunction clearly prohibit the
accused conduct. Indeed, in our own decision in Abbott,
such an appeal had been taken, and the injunction had
been affirmed, yet we reversed the contempt finding on
the ground that the injunction did not clearly prohibit the
conduct on which the contempt allegation was founded.
See 503 F.3d at 1377. Thus, the burden lies on the party
seeking to enforce the order to “establish that . . . the
order the contemnor failed to comply with is clear and
unambiguous . . . ,” King v. Allied Vision Ltd., 65 F.3d
1051, 1058 (2d Cir. 1995), 7 and “[t]he failure of the equity
court to spell out in a decree’s text the specific obligations
resting upon the defeated litigant is fatal to any contempt
proceeding,” H.K. Porter, 568 F.2d at 27.
tioning the alleged contemnor’s attempts to clarify the
meaning of the injunction with the U.S. Attorney, but not
linking these attempts to the court’s ability to enforce the
clarity requirement); Perez, 347 F.3d at 422, 423–25
(mentioning the alleged contemnor’s motion to clarify the
scope of the injunction, but not linking this attempt to
clarify to the court’s ability to enforce the clarity require-
ment); Dollar, 774 F.2d at 1374, 1376 (mentioning the
alleged contemnor’s appeal of the preliminary injunction,
but not linking the appeal to the court’s ability to enforce
the clarity requirement).
7 See also Latino Officer’s Ass’n City of N.Y., Inc. v.
N.Y.C., 558 F.3d 159, 164 (2d Cir. 2009) (“The movant
must establish that . . . the order the contemnor failed to
comply with is clear and unambiguous . . . .”) (emphasis
omitted); Saccoccia, 433 F.3d at 26 (same); Perez, 347
F.3d at 423 (same); F.T.C. v. Affordable Media, 179 F.3d
1228, 1239 (9th Cir. 1999) (same); Gilday, 124 F.3d at 282
(same); Porrata v. Gonzalez-Rivera, 958 F.2d 6, 8 (1st Cir.
1992) (same).
19 TIVO v. ECHOSTAR
Apart from its reliance on McComb, the majority at-
tempts to deal with this established authority in part by
discussing cases dealing with the validity of an overly
broad injunction, which are distinct from cases involving
the requirement that the injunction clearly prohibit the
accused conduct. For example, in Walker v. Birmingham,
388 U.S. 307, 317 (1967), the Supreme Court rejected a
validity challenge, but affirmed the contempt finding
because “[t]he injunction in all events clearly prohibited
[the accused conduct].” Id. at 317. 8 Here we are dealing
with a challenge to the application of the injunction, not a
challenge to its validity. Where the majority does discuss
the cases recognizing that lack of clarity is a defense to
contempt, it is unable to meaningfully distinguish them. 9
8 See also, Szabo v. U.S. Marine Corp., 819 F.2d
714, 716–18 (7th Cir. 1987), in which the alleged contem-
nor challenged the validity, not the clarity, of an injunc-
tion. The court affirmed the contempt finding, holding
that the validity of the injunction was not a defense to
contempt. Id. at 718–21.
9 The majority attempts to distinguish both Saccoc-
cia and New York Telephone on the ground that they
involved “ex parte orders being enforced against non-
parties to the order.” Maj. Op. at 32. This is simply not
true. In Saccoccia, the injunction was specifically di-
rected at the defendants “and their agents and attorneys.”
433 F.2d at 22. The attorneys were later held in con-
tempt. Id. In New York Telephone, the union, which was
a party to the original dispute, was the party later found
in contempt. 445 F.2d at 41–43. Further, the majority’s
suggestion that consent decrees are somehow more sus-
ceptible to attack on vagueness grounds is surprising both
because the parties themselves draft the language of a
consent decree and thus control the clarity with which it
is drafted, and because there is no authority to support
this proposition.
TIVO v. ECHOSTAR 20
Ironically, nothing more clearly demonstrates the ma-
jority’s error than the fact that the very circuit cases on
which the majority relies recognize the essential principle
that contempt is improper where the injunction does not
clearly prohibit the accused conduct. The cases even
characterize this principle as “well settled.” See Perfect
Fit Indus., Inc. v. Acme Quilting Co., Inc., 646 F.2d 800,
808 (2d Cir. 1981). For example, in Perfect Fit, Acme
argued that contempt was improper because it had no
knowledge of the terms of the injunction, not having
received the copies of the injunction mailed by the court.
Id. The Second Circuit rejected Acme’s argument, noting
(in the language quoted by the majority at page 21) that
“a litigant has a duty to follow the progress of an action
and to inform himself of the terms of an order [entered
against him].” Id. at 805. But at the same time, the court
explicitly recognized that “[i]t is indeed well settled that a
person cannot be held in contempt of an order . . . if the
terms of the order are unclear or ambiguous.” Id. at 808
(emphasis added). In support, the court cited Interna-
tional Longshoremen’s, 389 U.S. at 75–76, and its own
prior decision in Powell v. Ward, 643 F.2d 924, 931 (2d
Cir. 1981), which similarly recognized that “the [con-
tempt] power may properly be exercised only if the order
is clear and unambiguous. Applying this standard, the
court in Perfect Fit affirmed the contempt finding only
because it found that the order was not “too vague.” 646
F.2d at 809–10.
Similarly, the court in Chaganti & Assocs., P.C. v.
Nowotny, 470 F.3d 1215, 1223 (8th Cir. 2006) (cited by the
majority at page 21), stated that “[a] contempt order must
be based on a party’s failure to comply with a clear and
specific underlying order.” (emphasis added and internal
quotation marks omitted). In support, the court cited its
own prior decision in International Brotherhood of Electri-
21 TIVO v. ECHOSTAR
cal Workers v. Hope Electrical Corp., 293 F.3d 409, 418
(8th Cir. 2002), which also specifically recognized that
“contempt orders must be based on a party’s failure to
comply with a clear and specific underlying order,” and
affirmed the contempt finding because it could “find no
lack of clarity within . . . the underlying orders sought to
be enforced.” In Chaganti, the finding of contempt was
affirmed only after the court found that “the district
court’s settlement order had the clarity and specificity
required to be enforced by contempt sanctions.”
Chaganti, 470 F.3d at 1224. 10 The Sixth Circuit, in Polo
Fashions, Inc. v. Stock Buyers Int’l, Inc. 760 F.2d 698, 700
(6th Cir. 1985) (cited by the majority at page 21), recog-
nized that “the validity of the injunction is not an issue in
. . . contempt [proceedings],” but also that an injunction
must be “sufficiently clear and specific to provide the
basis for . . . contempt.” The finding of contempt was
affirmed only after the court found that “the preliminary
injunction was sufficiently clear and specific.” Id. In Gulf
King Shrimp Co. v. Wirtz, 407 F.2d 508, 517 (5th Cir.
1969) (cited by the majority at page 23), the court explic-
itly recognized the clarity requirement and affirmed the
contempt finding only after determining that the re-
quirement was met. Specifically, the court stated:
We also find that the injunction conformed to
the requirements of F.R.Civ.P. 65(d). Rule 65(d)
10 The language relied upon by the majority appears
in a confusing footnote, in which the court erroneously
cites Perfect Fit for the proposition that the alleged con-
temnor “had an obligation to seek clarification of the
court’s order.” Id. at 1224 n.2. This footnote is inconsis-
tent with both the text of the opinion and Perfect Fit, both
of which explicitly recognize that contempt is improper
where the order does not clearly reach the accused con-
duct.
TIVO v. ECHOSTAR 22
requires that an injunction have specificity so that
those constrained to follow it will not want for
guidance. The injunction in question is not lack-
ing in clarity. Its interdiction of oppressive child
labor is not vague, and its command that Gulf
King keep and preserve records is clearly under-
standable.
Id. at 517 (internal citations omitted). It was only after
finding the injunction sufficiently clear that the court
noted the possibility of an appeal of the injunction. Id.
Finally, the majority urges that permitting clarity to
be addressed in contempt proceedings “would indeed
impose an unnecessarily heavy burden on district courts
to draft immaculate orders.” Maj. Op. at 30. I do not
suggest that the district court must draft perfect orders,
but that it be required to draft orders that are sufficiently
clear to provide notice of “what the court intends to re-
quire and what it meant to forbid.” Int’l Longshoremen’s,
389 U.S. at 76. Such a requirement, which is itself re-
flected in Rule 65(d), in no way alters the burden already
placed on district courts. Not only is this level of clarity
required in injunctions generally, but it is especially
important in the context of patent infringement injunc-
tions where the need to ensure that injunctions remain
enforceable must be balanced against the need to incen-
tivize design-around innovation.
In sum, TiVo was obligated to show that the injunc-
tion clearly prohibited the substitution of new non-
infringing software. It did not remotely satisfy this
burden. Under such circumstances, contempt is improper
because there is at least a fair ground of doubt as to the
wrongfulness of EchoStar’s conduct.
23 TIVO v. ECHOSTAR
II
The majority vacates the district court’s finding of
contempt for violation of the infringement provision and
remands to the district court to determine colorable
differences and infringement. In my view, remand is
wholly unnecessary because it is clear that there are
colorable differences between the features relied upon to
establish infringement and the modified features of the
newly accused products.
The majority correctly describes the colorable differ-
ences requirement as involving a comparison between the
specific features relied upon to establish infringement and
the modified features of the newly accused product on a
limitation-by-limitation basis. The party seeking to
enforce the injunction bears the burden of demonstrating
what products and features of those products were found
to infringe. Here, it is undisputed that the feature found
to satisfy the “parsing” limitation—the start-code-
detection feature—was removed from EchoStar’s modified
products. Further, TiVo does not argue that the start-
code detection feature was merely replaced with a solu-
tion that was known in prior art. The statistical-
estimation feature, which replaced the start-code-
detection feature, was not present in original software
and was not earlier viewed by TiVo as being capable of
performing the required function. In fact, TiVo had
earlier characterized the start-code detection feature,
which was removed, as “required for a viable DVR.” J.A.
1556. Therefore, it is clear that the statistical-estimation
feature is more than substantially different from the
start-code-detection feature.
Because the sole feature accused of satisfying the
parsing limitation was removed from the modified product
and replaced with a feature that is both substantially
TIVO v. ECHOSTAR 24
different and a solution not known in the prior art, the
two products are necessarily more than colorably different
on the basis of the parsing limitation alone. As a result,
the infringement provision of the injunction was not
violated and there is no need for a remand.
III
My final disagreement with the majority lies in the af-
firmance of the $90 million sanctions award despite the
fact that the award is based on a finding of contempt that
the majority reverses. The majority nonetheless affirms
the district court’s sanctions award in its entirety because
it concludes that the “award was made on alternative
grounds, i.e., for violation of either of the two separate
provisions of the injunction.” Maj. Op. at 35. The con-
tempt judgment and the sanctions imposed by the district
court, however, rest on two separate and distinct findings
of contempt, neither of which standing alone is sufficient
to sustain the sanctions award.
In its motion for sanctions, TiVo calculated damages
based on both the models listed in the injunction and
EchoStar’s “VIP models” (a group of products that were
not adjudged to infringe nor listed in the permanent
injunction). See Decl. of Keith R. Ugone, Ph.D. In Support
of TiVo’s Motion for Sanctions for Contempt at 3–5 and
Ex. 4, TiVo, Inc. v. Dish Network Corp., 655 F. Supp. 2d
661 (E.D. Tex. 2009), ECF No. 947 [hereinafter TiVo’s
Sanctions Calculations]. TiVo apparently viewed
EchoStar’s activities with respect to the VIP models as a
violation of the infringement provision because the VIP
models were “no more than colorably different” from the
models found to infringe. The district court specifically
referenced and relied on TiVo’s calculations when it
awarded sanctions. TiVo, Inc. v. Dish Network Corp., 655
F. Supp. 2d 661, 666 (E.D. Tex. 2009) (relying on the
25 TIVO v. ECHOSTAR
calculations submitted by TiVo’s expert (“Dkt. No. 947”),
which included the VIP models in its calculations, to
support the court’s estimation of the total award at a rate
of $2.25 per DVR subscriber). Because the VIP models
were not specifically listed in the injunction, there is no
plausible argument that EchoStar’s activities with respect
to these models constituted a violation of the disablement
provision. Thus, the portion of the sanctions award with
respect to the VIP models was based solely on EchoStar’s
alleged violation of the infringement provision.
Additionally, the disablement provision applied only
to those products “that [had] been placed with the end
user or subscriber” at the time the injunction issued. J.A.
162. But the sanctions award was based in part on DVR
subscribers acquired after the date the injunction became
effective. See TiVo, 655 F. Supp. 2d at 666; TiVo’s Sanc-
tions Calculations at Ex. 4. Those later sanctions were
obviously based on the alleged violation of the infringe-
ment provision of the injunction, not the disablement
provision. However, the majority reversed the contempt
finding with respect to the infringement provision; thus, it
is inappropriate to affirm sanctions for violation of that
provision. 11
Because it is clear that the sanctions award was based
in large part on EchoStar’s alleged violation of the in-
11 The majority confusingly suggests that the district
court imposed sanctions for violation of the portion of the
injunction prohibiting the enablement of DVR functional-
ity in any new placements of the Infringing Products.
Maj. Op. at 35 n.10. Nowhere does the district court,
however, suggest that EchoStar violated the injunction by
improperly enabling the DVR functionality in new place-
ments of the Infringing Products. See generally Contempt
Opinion, 640 F. Supp. 2d 853; TiVo, Inc. v. Dish Network
Corp., 655 F. Supp. 2d 661.
TIVO v. ECHOSTAR 26
fringement provision, the award cannot be sustained
based on the alleged violation of the disablement provi-
sion alone. Even under the majority’s view, a remand is
essential to recalculate the sanctions award.
APPENDIX
TIVO v. ECHOSTAR ii
iii TIVO v. ECHOSTAR