After more than seven years of doing the Time Warp ad nauseum, TiVo has finally prevailed against Dish Network and EchoStar — winning a $500 million settlement from Charlie Ergen & Co. (see Dish, EchoStar Will Pay TiVo $500 Million To Settle Patent Litigation).
TiVo’s legal team, after clinking their Champagne flutes, will now turn their attention to three other big targets to try to extract patent-licensing payments and/or reach some kind of commercial deal: Time Warner Cable, AT&T and Verizon.
TWC and Cablevision Systems are the two major cable operators that haven’t done any deals with TiVo to date, while AT&T and Verizon are targets of TiVo patent-infringement suits (and both telcos have countersued). (See TiVo Sues Verizon, AT&T For Patent Infringement and TiVo Faces Patent-Infringement Countersuits By AT&T, Verizon.)
In August 2009, when TiVo announced the telco lawsuits, CEO Tom Rogers said TiVo had conducted discussions with Time Warner Cable about a deal but he declined to provide details. “It’s clear that there are many ways to craft an arrangement that we think is beneficial for both us and the cable operator, and [we] continue to be quite open to pursuing those arrangements,” he said at the time.
Regarding Cablevision, it’s not clear what TiVo’s negotiating position is. TiVo, in its most recent 10-K filing, said the MSO’s network-based DVR (formerly known as the RS-DVR) is a potential source of competition.
“We are aware of at least one U.S. cable operator, Cablevision, which is deploying server-based DVR products,” TiVo said in the filing. “To the extent that cable operators offer regular television programming as part of their server-based VOD offerings and DVR technology, consumers may prefer not to acquire an independent set-top based DVR through retail channels.”
The win against Dish reinforces the strength of TiVo’s Time Warp patent, U.S. Patent No. 6,233,389 (”Multimedia Time Warping System”), which describes a DVR system that allows for simultaneous storage and playback of TV programming from a cable or satellite source.
Dish had twice challenged the patent before the U.S. Patent & Trademark Office — and struck out both times. Last October the USPTO affirmed the validity of the Time Warp DVR patent, reversing an earlier ruling that the patent was invalid because some of the claims were covered in two prior patents (see U.S. Patent Office Affirms TiVo ‘Time Warp’ Patent Is Valid).
In suits related to the Verizon and AT&T litigation, Microsoft — which counts AT&T as its biggest IPTV customer — has filed two lawsuits against TiVo alleging patent infringement. Motorola Mobility, which sells set-tops to both AT&T and Verizon, initiated a patent lawsuit against TiVo in February.
The pay-TV operators in TiVo’s good graces that have already entered into commercial deals of one type or another include: Comcast, DirecTV, Charter Communications, Cox Communications, Suddenlink Communications, RCN and Virgin Media.
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