EchoStar, DirecTV in New Legal Tangle Over Search Engine Use

EchoStar filed suit after DirecTV threatened legal action for trademark infringement and dilution and unfair competition unless the satellite service provider halted use of its name as a keyword. EchoStar argued that the “widespread practice of using competitive marks” doesn’t represent “trademark use” and isn’t “likely to lead to consumer confusion” -- a test for infringement. “It is akin to comparative advertising which fosters competition and aids consumers in making informed marketplace choices,” EchoStar said.

DirecTV maintained in a Nov. 3 letter that it’s the exclusive owner of the DirecTV trademark. EchoStar bought several DirecTV-related keywords to promote competing products, Michael Williams, an attorney for DirecTV, said in the letter. EchoStar’s actions are “clearly designed to deceive, confuse, mislead the consumers regarding the origins of the goods and serves being offered by [EchoStar’s] Dish Network.” Consumers searching on Google for DirecTV were instead directed to a link to the Dish Networks website suggesting that DirecTV services can be obtained by clicking on it, DirecTV said.

Besides threatening to seek a court order barring EchoStar from using its name as a search keyword, DirecTV argued that it’s “entitled to an award” of Dish Networks’ profits, any lost profits, costs for “corrective” advertising and attorneys fees. “DirecTV would prefer to resolve this matter without resorting to litigation,” Williams wrote. “However, if litigation cannot be avoided,” DirecTV “will not hesitate to vigorously enforce its rights in court.”

EchoStar has bought more than 1,500 keywords on Google and other search engines, the company said. The “vast majority” of the keywords include the names of EchoStar- related products or “constitute general terms associated with similar services such as ‘direct’ or ’television’ or ‘TV,’ EchoStar said. Some keywords contain the names of other brands and competitors in Europe, EchoStar said. “The use of keywords in this manner is a form of comparative advertising,” EchoStar said. “When consumers seek a satellite network and enter either ‘DirecTV’ or ‘EchoStar’ as their search term, they are presented with competitive, but differing products from the plaintiff and defendant, clearly identifiable as originating from different sources.”

EchoStar also said the DirecTV name is a “relatively weak [trade]mark conceptually,” simply describing the service the company provides. “Partially because of that conceptual nature, DirecTV cannot claim or maintain a monopoly over the keywords ‘Direct TV’ or similar words or phrases, because that would foreclose a substantial portion of available or potential competition,” EchoStar said.

DirecTV fired back that through “extensive advertising” its trademark “has become famous” for “superior digital satellite television service.” The quality of DirecTV’s service combined with “fair dealings” with customers has resulted in its name being associated with “quality and dependability,” the company said.

EchoStar and DirecTV have engaged in a number of court battles over the years. DirecTV sued EchoStar in 2004 (CED June 23/04 p5) accusing it of “false and misleading” ads claiming that 1.1 million Pegasus Communications customers would lose their service once a contract ended that Aug.

Meanwhile, U.S. Dist. Judge David Folsom, Beaumont, Tex. Mon. rejected EchoStar’s motions for judgment and new trial in a patent infringement suit filed by TiVo. Among other things, Folsam turned aside EchoStar’s argument that some claims contained in the TiVo patent at the heart of the suit were “indefinite.” Though claims within the patent applying to MPEG streams were “indefinite of their face,” they could be found definite if “the meaning of the claim would be reasonably understood by persons of ordinary skill in the art when read in the light of the specifications,” Folsam wrote. EchoStar had argued it wasn’t clear which of the MPEG streams identified in the patent referred to input and to output.

In April, a jury awarded TiVo $74 million after finding EchoStar marketed PVRs that infringed “time warp” technology used for pausing live TV and recording one show while watching another. Folsom later ordered EchoStar to pay $89.6 million in damages. The case moves to the U.S. Appeals Court, Federal Circuit, which temporarily blocked Folsom’s order that EchoStar disable about 4 million of its set-top boxes. EchoStar didn’t expect Folsom to reverse earlier rulings against a new trial, an EchoStar spokeswoman said. “Now that the last phase of the trial is complete our appeal can proceed,” the spokeswoman said: “We look forward to ultimate vindication through that process.”

EchoStar’s countersuit against TiVo and Humax is pending in U.S. Dist. Court, Texarkana, Tex., where it’s set for a Feb. 2007 trial. The suit claims the companies infringed 4 patents held by EchoStar’s Tex.-based subsidiary, EchoStar Technology Corp. EchoStar is claiming TiVo infringed its patents covering pausing live TV and recording, storing and formatting it. The patents were granted 1998-2003.