Does Wall Street Follow Oral Arguments?

Tivo 5-Year Stock Price

Tivo 5-Year Stock Price

I’ve been curious whether there is any indication that institutional investors follow the oral arguments of patent cases at the Federal Circuit. The litigation between Tivo and Echostar finally presented an opportunity to explore this further.

As you can see from the chart above and the following court events in the Tivo/Echostar litigation, the price of Tivo’s stock has reacted quite significantly to the Tivo/Echostar litigation:

A: August 17, 2006, Judge Folsom issues an injunction against Echostar.

B: October 4, 2007, the Federal Circuit hears oral argument in the appeal of the injunction.

C: January 31, 2008, the Federal Circuit reverses-in-part (hardware infringement) and affirms-in-part (software infringement, damages, injunction) Judge Folsom’s decision.

D: June 2, 2009, Judge Folsom issues a contempt ruling in regard to Echostar’s design around design.

E: November 2, 2009, the Federal Circuit hears oral argument in the appeal of the contempt ruling.

F: March 4, 2010, a three member panel affirms the contempt ruling.

G: May 14, 2010, the Federal Circuit grants en banc review of contempt ruling.

A better graphic would show that Tivo’s stock price reacted significantly following events A, C, D, F, and G. It did not appear to react significantly in response to the oral arguments. Obviously, this offers just a couple of data points; but, it may indicate that institutional investors are not taking full advantage of their opportunities to evaluate patent litigation.

Regardless of the outcome of the Tivo/Echostar litigation, Tivo’s stock performance is a strong reminder that some investors value the power of patents.

(For the record, none of the above should be considered investment advice.)

One Response to “Does Wall Street Follow Oral Arguments?”

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