TiVo Shares Set for Takeoff

A patent ruling looks likely to spark a rally in the shares.
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TiVo

(TIVO) - Get Report

shares were set for takeoff Monday after a federal jury in Texas awarded it $73 million in a patent case.

Barron's

also said the company could draw suitors.

In premarket trading, the stock was up $1.27, or 15.8%, to $9.32.

On Thursday, a U.S. District Court jury in Texas ordered

EchoStar

(DISH) - Get Report

to pay TiVo about $73 million for lost profits and royalties, finding it violated a patent governing simultaneous operations in digital video recorders.

The lawsuit, which alleged that EchoStar stole TiVo's technology, was filed in January 2004, and centers around the TiVo patent that involves a "multimedia time warping system," which decides how TiVo's technology records programs while playing others.

"This decision recognizes that our intellectual property is valuable and will ensure that moving forward, EchoStar and any others that want to use our patented technology will be required to provide us with compensation," it said.

On Saturday,

Barron's

quoted analysts who said the ruling could make TiVo an acquisition candidate, perhaps for a computer company seeking to enforce the patents.

For now, TiVo intends to use the verdict in trying to block EchoStar from shipping its own DVRs. EchoStar has vowed to appeal.

The patent, "as interpreted in this case, is overly broad given the technology in existence when TiVo filed its patent," EchoStar said, adding that it "looks forward" to the trial of its DVR patent case against TiVo in February 2007.

EchoStar shares were recently off 39 cents, or 1.3%, to $29.58.