Patent

On a few separate occasions over the last couple weeks, I’ve received both inquiries and accusations suggesting that DirecTV is  out to get TiVo… given their underwhelming new DirecTV TiVo DVR. From our writeup last month:

It’s everything we expected, but nothing we hoped for. The unit features TiVo’s original standard definition user interface, now branded as their “Classic” UI, running on outdated DirecTV hardware. So it’s neither the best TiVo experience, nor is it the best DirecTV DVR.

Christopher Price of PhoneNews cornered TiVo at CES and pitched us with the provocative theory that “DTV is sabotaging TiVo by making their boxes inferior to DTV.” From his write-up lamenting DirecTV’s lack of TiVoToGo:

Representatives for TiVo blamed DirecTV squarely for not offering the technology on their units. TiVo even went as far as to say that they had offered DirecTV a solution that would ensure copy protection requirements for DirecTV, but that the service provider still mandated that TiVo remove TiVoToGo from the new generation of DirecTV-enabled TiVo HD units.

While many agree that this new DirecTV TiVo DVR isn’t very compelling, I find Chris’ theory of sabotage highly unlikely – verging on the preposterous. First, DirecTV and TiVo are not competitors. Second, DirecTV will take a bath if the deal doesn’t work out as they bankrolled development of this product and “has obligations to nationally market [TiVo], and those obligations are substantial.”  

After decades of DVR patent litigation, the court’s most recent decision has forced EchoStar (SATS) and DISH Network into a $500 million settlement with TiVo. Above and beyond the court-sanctioned penalty of $100+ million paid in 2008.

As the story goes, TiVo approached DISH way back when to partner and dropped off an early DVR for evaluation. Well, a deal didn’t get done and that DVR was never seen (by TiVo) again. Yet the underlying tech was reverse engineered, finding its way into EchoStar’s own DVR offerings. And, thus, TiVo filed suit. It’s been a long and winding road. Including a sleep-inducing visit to the US Courts of Appeals by yours truly. While most other corporate entities would probably have settled sooner at a smaller cost, DISH/Echo CEO Charlie’s Ergen’s strategy appears to have been dragging litigation out as long as possible until they either caught a lucky break or TiVo ceases to exist. Heck, TiVo challenged the courts to do the right thing and wrap this up in a timely fashion. It didn’t happen, DISH/Echo were found in contempt (again), and here we are. $500 million isn’t the $1 billion (!) TiVo was posturing for. However, for a company that has very rarely found profitability by actually selling its own product, this is a huge windfall and the respective parties can finally put it to bed. Assuming the courts let them.

Some details of the settlement from a joint announcement:

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