The personal video-recording patent obtained by TiVo Inc. could set off legal battles in a nascent but rapidly growing sector, industry observers said.
Cable operators interested in PVR capabilities are keeping an eye out, but don't yet seem overly worried about TiVo following the example of litigious electronic program guide maker Gemstar-TV Guide International Inc.
On May 15, TiVo said the U.S. Patent and Trademark Office had granted it a patent for several elements that cover PVR software and hardware design. That patent (No. 6,233,389) is for a "Multimedia Timewarping System" TiVo originally filed in 1998.
The patent covers a time-shifting method for recording one program while playing back another or watching a program as it is being recorded; a method for processing and synchronizing several streams in a digital signal, such as video, audio and closed-captioning; and "Trickplay" capabilities that allow viewers to pause a live TV show or fast-forward and rewind digitally recorded video.
The USPTO also issued TiVo a patent for methods designed to imbed data within a TV signal to survive analog-to-digital and digital-to-analog conversions, as well as hardware and software features related to its partnership with DirecTV Inc., which markets a satellite receiver with an on-board PVR.
TiVo also has applied for a patent covering the "end-to-end" features and functions of the company's PVR service.
TiVo's pause patent could come in handy, considering last month's news that PVR technology firm Gotuit Media Corp. won a contract to become the exclusive marketing agent for Pause Technology LLC, which holds a patent that also enables viewers to pause live TV programs.
A run on PVR patents caused some to question whether TiVo might aspire to Gemstar's example of demanding royalties for its interactive and electronic program guide patents.
Comments TiVo chief technical officer Jim Barton made in a recent Los Angeles Times
story added fuel to that fire. Barton told the Times
that Microsoft Corp.'s UltimateTV service and technology could possibly be infringing on TiVo's intellectual property.
TiVo officials said Barton wasn't available for comment. But in a press release, Barton said, "From the inception of the company, we have placed great emphasis on developing and protecting our intellectual properties, including patents, copyrights, trademarks and trade secrets."
Still, industry observers believe it's much too early for a Gemstar-like party to emerge in the PVR arena.
In the PVR space, "you won't see a Gemstar patent that brings competitors to their knees," said Sean Badding, vice president of business development at The Carmel Group. "It's more of a marketing move than a technology advancement.
"You can argue that there's a patent war coming, but it's still wide open and these patents will continue to come out and improvements will be make to their existing technology," he said.
"I don't believe that [TiVo's] service is unique enough based on what they've patented," added Adi Kishore, an analyst with the Yankee Group. "There are ways for others to work around those patents," he said, noting that there's a "hair's breadth difference" between some PVR patents.
Kishore said, though, he "will be very surprised if we don't see a whole bunch of lawyers being kept very busy over the next couple of years."
Meanwhile, cable operators didn't believe PVR patent disputes would have much impact on their current business plans with respect to the technology.
Cox Communications Inc., which owns about 240,000 shares in TiVo, isn't concerned about running into any intellectual property obstacles involving the TiVo patents if the company deploys set-tops containing PVR technology, according to Dallas Clement, the MSO's senior vice president of strategy and development.
Clement said it would be up to the company's hardware vendors, such as Scientific-Atlanta Inc., to license the patents from TiVo. He said he doesn't believe Cox itself would be required to license the technology.
"TiVo ought to work with other companies that will try to sell an integrated box to us, but it doesn't really have an impact on an MSO who is providing the service," Clement said.
Cox conducted a trial on its Las Vegas system that required use of a second set-top, Clement said. But based on feedback from subscribers, the MSO will look for a one-box solution when it deploys a PVR service, he added.
Charter Communications Inc. has been covering its PVR bases with a multitude of partners, including Motorola Broadband Communications Sector, which has an arrangement with PVR-software firms SonicBlue and Gotuit.
TiVo's patents aren't "the silver bullet that will kill the werewolf," predicted Charter vice president of corporate development Jim Henderson. What those patents could do for TiVo is strengthen its plan to license its intellectual property and open up another revenue stream, he added. Henderson said Charter has had discussions with TiVo.
Badden agreed that MSOs shouldn't be too concerned about PVR patents and potential lawsuits. "Those issues will work themselves out. The true issue is, what does this mean for the PVR businesses in general, which can't move ahead without support from the MSOs."
It's still not clear how some other technology companies pursuing PVR services may be affected by the TiVo patents, as most refused to discuss the TiVo patent.
A representative for Microsoft Corp.'s UltimateTV service released a prepared statement that said the company doesn't comment "on the specific patents its competitors receive. However, Microsoft has an extensive portfolio of patents of its own that protects its products."
While Microsoft has been assigned more than 1,000 U.S. patents, a search of the U.S. Patent and Trademark Office database found no Microsoft patents involving PVR technology, or for technology that records one program while playing back or watching another show.
Motorola Broadband Communications Sector, which is working with Gotuit and SonicBlue, "takes patents very seriously," a spokeswoman said. "We study it carefully, and if we think it's appropriate, we'll take a license"