TiVo Goes To War

As many of you know, the next two weeks are critical in determining TiVo Inc’s future. If they are able to prevail in defending their “time warp” patent versus Dish Network, with court proceedings beginning today, TiVo should be able to work out royalty arrangements with other DVR providers – in or out of the courtroom.

Reuters says: TiVo Chief Executive Tom Rogers last month said a Tivo victory in the case could open the door to either a bounty of payments, since TiVo could then file similar suits against other DVR distributors, or more licensing agreements. “It will certainly cause people to think long and hard not only about Tivo’s brand … and the best of our engineering, but on a whole different level of what we mean in the mix if our intellectual property is upheld in the courts,” Rogers said at the Reuters Global Technology, Media and Telecoms Summit.

Satellite providers have used DVRs, which allow viewers to pause live television and record dozens of hours of programing, to woo customers away from cable companies. In turn, more and more cable providers are placing cable boxes with DVRs in their subscribers’ homes. A court win might empower TiVo to challenge the technology in other DVRs. However, EchoStar, a far larger company than Tivo whose 2005 revenue of over $8 billion is more than 40 times that of its rival, could perhaps outlast TiVo during an extended appeals process, even if it doesn’t defeat TiVo in court.

9 thoughts on “TiVo Goes To War”

  1. For those of us who haven’t been paying attention:

    Exactly what DVR functionality is being contested here? Time shifting? Trick play? Subscriptions (season pass) or wishlists?

  2. TiVo received a fairly broad DVR-related patent in 2001 (filed in 98) that states: A multimedia time warping system. The invention allows the user to store selected television broadcast programs while the user is simultaneously watching or reviewing another program. If the patent is taken at face value, it pretty much describes fundamental DVR functionality which is why a win could be huge. It’s worth mentioning little TiVo may not have the resources to fight an extended battle and Dish has also counter-sued TiVo regarding one of their patents.

    I’ve seen two reports that suggest TiVo has a better than even shot of winning, but I’m not willing to wager in the stock market. I’ll save that for Vegas. ;) Meanwhile, TiVo stock is up almost 40% over the last three months… perhaps in anticipation of this ruling.

  3. Im having trouble understanding how the recent stock price movement can be attributed to anticipation of a positive trial verdict. The Echostar lawsuit was originally supposed to be held in mid-October ’05 (it was postponed to March ’06) – TiVo’s stock price actually dropped from around 6ish to 4ish from August to the end of October ’05 (-20%). No new information regarding the case has surfaced – the analysts were predicting the same 70% chance that TiVo would win the case back in the August ’05 timeframe as well…

  4. I freely admit I’m not a stock tracker or guru — as I mentioned, several articles have speculated TiVo’s recent surge could be attributed to a positive outcome. This Reuters write-up is one example.

    Perhaps a working Series 3 and backroom Comcast Moto demo at CES combined with the recent pricing changes have influenced the stock price as well. If I were an investor, I’d probably act on that type of concrete info rather than gambling on a verdict.

  5. Without knowing all the technical and procedural details, my first take is that they’re quite audacious… Remotely hosting recorded content may be a somewhat subtle but significant difference in DVR technology and could fall into the realm of “on demand” services. So I’m not sure how the networks (or their lawyers) will react to recording and retransmitting content on demand without any compensation. However, if Cablevision can pull it off… it seems like the service would be efficient and economical for both them and their subscribers who have basic DVR needs.

  6. Not sure what caused this post to re-surface in the current news section of TiVo’s Google Finance page but I thought it would be appropriate to post a comment that the Dish/Echostar battle of this”war” is finally over. Now we’ll see what happens on the other fronts – Verizon/Motorola and AT&T/Microsoft.

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