Tech Rumor of the Day: TiVo, Dish

TiVo (TIVO Quote) won a patent case against EchoStar (SATS Quote), but the 47% stock rise Wednesday may reflect a far too bullish scenario.

A federal court shot down EchoStar's argument that it had created a successful solution that works around TiVo's DVR technology. In the decision, the court awarded TiVo $103 million, which is on top of the $105 million payment that EchoStar parent Dish Network(DISH Quote) made to TiVo a year ago.

Barclays Capital analysts wrote Wednesday that they expect Dish to settle with TiVo, taking about 3 cents from the company's bottom line this year and another 9 cents per share next year.

But analysts who have followed TiVo and Dish for some time say it may be too early to expect a settlement and that Dish, which has already said it plans to appeal, will drag the patent dispute out much longer. Also, the dramatic stock price jump implies that the ruling against Dish would apply to all set-top DVR makers like Cisco's (CSCO Quote) Scientific-Atlanta and Motorola (MOT Quote).

TiVo's DVR technology is "fundamentally different" from the approach Scientific Atlanta and Motorola have been working with for two years," says independent industry analyst Brian Coyne.

It would be wrong to assume that TiVo will now try to apply this ruling to all DVR makers. If anything, TiVo isn't out to make enemies with everyone, says Coyne.

TiVo made a splash in 2000 when DirecTV offered its set-top DVR boxes that allowed TV viewers to record and replay programs as well as skip commercials. Those features became common on competing boxes and were offered as DVR services by cable, phone and satellite shops.